Carlsbad Technology, Inc. v. HIF Bio, Inc.

(Slip Opinion) OCTOBER TERM, 2008 1

Syllabus

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is

being done in connection with this case, at the time the opinion is issued.

The syllabus constitutes no part of the opinion of the Court but has been

prepared by the Reporter of Decisions for the convenience of the reader.

See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES

Syllabus

CARLSBAD TECHNOLOGY, INC. v. HIF BIO, INC.,

ET AL.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR

THE FEDERAL CIRCUIT

No. 07–1437. Argued February 24, 2009—Decided May 4, 2009

Respondents filed a state-court suit alleging that petitioner had vio

lated state and federal law in connection with a patent dispute. After

removing the case to Federal District Court under 28 U. S. C.

§1441(c), which allows removal if the case includes at least one claim

over which the federal court has original jurisdiction, petitioner

moved to dismiss the suit’s only federal claim, which arose under the

Racketeer Influenced and Corrupt Organizations Act (RICO). Agree

ing that respondents had failed to state a RICO claim upon which re

lief could be granted, the District Court dismissed the claim; declined

to exercise supplemental jurisdiction over the remaining state-law

claims under §1367(c)(3), which allows such a course if the court “has

dismissed all claims over which it has original jurisdiction”; and re

manded the case to state court. The Federal Circuit dismissed peti

tioner’s appeal, finding that the remand order could be colorably

characterized as based on a “lack of subject matter jurisdiction” over

the state-law claims, §1447(c), and was therefore “not reviewable on

appeal,” §1447(d).

Held: A district court’s order remanding a case to state court after de

clining to exercise supplemental jurisdiction over state-law claims is

not a remand for lack of subject-matter jurisdiction for which appel

late review is barred by §§1447(c) and (d). With respect to supple

mental jurisdiction, a federal court has subject-matter jurisdiction

over specified state-law claims, see §§1367(a), (c), and its decision

whether to exercise that jurisdiction after dismissing every claim

over which it had original jurisdiction is purely discretionary, see,

e.g., Osborn v. Haley, 549 U. S. 225, 245. It is undisputed that when

this case was removed, the District Court had original jurisdiction

2 CARLSBAD TECHNOLOGY, INC. v. HIF BIO, INC.

Syllabus

over the federal RICO claim under §1331 and supplemental jurisdic

tion over the state-law claims, which were “so related to claims . . .

within such original jurisdiction that they form[ed] part of the same

case or controversy,” §1367(a). On dismissing the RICO claim, the

court retained its statutory supplemental jurisdiction over the state

law claims. Its decision not to exercise that statutory authority was

not based on a jurisdictional defect, but on its discretionary choice.

See Chicago v. International College of Surgeons, 522 U. S. 156, 173.

Pp. 3–6.

508 F. 3d 659, reversed and remanded.

THOMAS, J., delivered the opinion for a unanimous Court. STEVENS,

J., and SCALIA, J., filed concurring opinions. BREYER, J., filed a concur

ring opinion, in which SOUTER, J., joined.

Cite as: 556 U. S. ____ (2009) 1

Opinion of the Court

NOTICE: This opinion is subject to formal revision before publication in the

preliminary print of the United States Reports. Readers are requested to

notify the Reporter of Decisions, Supreme Court of the United States, Wash

ington, D. C. 20543, of any typographical or other formal errors, in order

that corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES

_________________

No. 07–1437

_________________

CARLSBAD TECHNOLOGY, INC., PETITIONER v. HIF

BIO, INC., ET AL.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE FEDERAL CIRCUIT

[May 4, 2009]

JUSTICE THOMAS delivered the opinion of the Court.

In this case, we decide whether a federal court of ap

peals has jurisdiction to review a district court’s order that

remands a case to state court after declining to exercise

supplemental jurisdiction over state-law claims under 28

U. S. C. §1367(c). The Court of Appeals for the Federal

Circuit held that appellate review of such an order is

barred by §1447(d) because it viewed the remand order in

this case as resting on the District Court’s lack of subject

matter jurisdiction over the state-law claims. We disagree

and reverse the judgment of the Court of Appeals.

I

In 2005, respondents filed a complaint against peti

tioner and others in California state court, alleging that

petitioner had violated state and federal law in connection

with a patent dispute. Petitioner removed the case to the

United States District Court for the Central District of

California pursuant to §1441(c), which allows removal of

an “entire case” when it includes at least one claim over

which the federal district court has original jurisdiction.

Petitioner then filed a motion to dismiss the only federal

2 CARLSBAD TECHNOLOGY, INC. v. HIF BIO, INC.

Opinion of the Court

claim in the lawsuit, which arose under the Racketeer

Influenced and Corrupt Organizations Act (RICO), 18

U. S. C. §§1961–1968, for failure to adequately allege a

pattern of racketeering. HIF Bio, Inc. v. Yung Shin

Pharmaceuticals Indus. Co., 508 F. 3d 659, 662 (CA Fed.

2007). The District Court agreed that respondents had

failed to state a RICO claim upon which relief could be

granted and dismissed the claim pursuant to Federal Rule

of Civil Procedure 12(b)(6). The District Court also de

clined to exercise supplemental jurisdiction over the re

maining state-law claims pursuant to 28 U. S. C.

§1367(c)(3), which provides that a district court “may

decline to exercise supplemental jurisdiction over a claim”

if “the district court has dismissed all claims over which it

has original jurisdiction.” The District Court then re

manded the case to state court as authorized by this

Court’s decision in Carnegie-Mellon Univ. v. Cohill, 484

U. S. 343 (1988).

Petitioner appealed to the United States Court of Ap

peals for the Federal Circuit, arguing that the District

Court should have exercised supplemental jurisdiction

over the state-law claims because they implicate federal

patent-law rights. 508 F. 3d, at 663. The Court of Ap

peals dismissed the appeal, finding that the remand order

could “be colorably characterized as a remand based on

lack of subject matter jurisdiction” and, therefore, could

not be reviewed under §§1447(c) and (d), which provide in

part that remands for “lack of subject matter jurisdiction”

are “not reviewable on appeal or otherwise.” See id., at

667.

This Court has not yet decided whether a district court’s

order remanding a case to state court after declining to

exercise supplemental jurisdiction is a remand for lack of

subject-matter jurisdiction for which appellate review is

barred by §§1447(c) and (d). See Powerex Corp. v. Reliant

Energy Services, Inc., 551 U. S. 224, 235, n. 4 (2007) (“We

Cite as: 556 U. S. ____ (2009) 3

Opinion of the Court

have never passed on whether Cohill remands are subject

matter jurisdictional for purposes of . . . §1447(c) and

§1447(d)”). We granted certiorari to resolve this question,

555 U. S. ___ (2008), and now hold that such remand

orders are not based on a lack of subject-matter jurisdic

tion. Accordingly, we reverse the judgment of the Court of

Appeals and remand for further proceedings.

II

Appellate review of remand orders is limited by 28

U. S. C. §1447(d), which states:

“An order remanding a case to the State court from

which it was removed is not reviewable on appeal or

otherwise, except that an order remanding a case to

the State court from which it was removed pursuant

to section 1443 of this title shall be reviewable by ap

peal or otherwise.”

This Court has consistently held that §1447(d) must be

read in pari materia with §1447(c), thus limiting the

remands barred from appellate review by §1447(d) to

those that are based on a ground specified in §1447(c).

See Thermtron Products, Inc. v. Hermansdorfer, 423 U. S.

336, 345–346 (1976); see also Powerex, supra, at 229;

Quackenbush v. Allstate Ins. Co., 517 U. S. 706, 711–712

(1996); Things Remembered, Inc. v. Petrarca, 516 U. S.

124, 127 (1995).*

One type of remand order governed by §1447(c)—the

type at issue in this case—is a remand order based on a

——————

* We do not revisit today whether Thermtron was correctly decided.

Neither the brief for petitioner nor the brief for respondents explicitly

asked the Court to do so here, and counsel for both parties clearly

stated at oral argument that they were not asking for Thermtron to be

overruled. See Tr. of Oral Arg. 16, 22; cf. South Central Bell Telephone

Co. v. Alabama, 526 U. S. 160, 171 (1999). We also note that the

parties in Powerex, Quackenbush, and Things Remembered did not ask

for Thermtron to be overruled.

4 CARLSBAD TECHNOLOGY, INC. v. HIF BIO, INC.

Opinion of the Court

lack of “subject matter jurisdiction.” §1447(c) (providing,

in relevant part, that “[i]f at any time before final judg

ment it appears that the district court lacks subject matter

jurisdiction, the case shall be remanded”). The question

presented in this case is whether the District Court’s

remand order, which rested on its decision declining to

exercise supplemental jurisdiction over respondents’ state

law claims, is a remand based on a “lack of subject matter

jurisdiction” for purposes of §§1447(c) and (d). It is not.

“Subject matter jurisdiction defines the court’s authority

to hear a given type of case,” United States v. Morton, 467

U. S. 822, 828 (1984); it represents “the extent to which a

court can rule on the conduct of persons or the status of

things.” Black’s Law Dictionary 870 (8th ed. 2004). This

Court’s precedent makes clear that whether a court has

subject-matter jurisdiction over a claim is distinct from

whether a court chooses to exercise that jurisdiction. See,

e.g., Quackenbush, supra, at 712 (holding that an absten

tion-based remand is not a remand for “lack of subject

matter jurisdiction” for purposes of §§1447(c) and (d));

Ankenbrandt v. Richards, 504 U. S. 689, 704 (1992) (ques

tioning whether, “even though subject matter jurisdiction

might be proper, sufficient grounds exist to warrant ab

stention from the exercise of that jurisdiction”); Iowa Mut.

Ins. Co. v. LaPlante, 480 U. S. 9, 16, n. 8 (1987) (referring

to exhaustion requirement as “a matter of comity” that

does “not deprive the federal courts of subject-matter

jurisdiction” but does “rende[r] it appropriate for

the federal courts to decline jurisdiction in certain

circumstances”).

With respect to supplemental jurisdiction in particular,

a federal court has subject-matter jurisdiction over speci

fied state-law claims, which it may (or may not) choose to

exercise. See §§1367(a), (c). A district court’s decision

whether to exercise that jurisdiction after dismissing

every claim over which it had original jurisdiction is

Cite as: 556 U. S. ____ (2009) 5

Opinion of the Court

purely discretionary. See §1367(c) (“The district courts

may decline to exercise supplemental jurisdiction over a

claim . . . if . . . the district court has dismissed all claims

over which it has original jurisdiction” (emphasis added));

Osborn v. Haley, 549 U. S. 225, 245 (2007) (“Even if only

state-law claims remained after resolution of the federal

question, the District Court would have discretion, consis

tent with Article III, to retain jurisdiction”); Arbaugh v. Y

& H Corp., 546 U. S. 500, 514 (2006) (“[W]hen a court

grants a motion to dismiss for failure to state a federal

claim, the court generally retains discretion to exercise

supplemental jurisdiction, pursuant to 28 U. S. C. §1367,

over pendent state-law claims”); see also 13D C. Wright,

A. Miller, E. Cooper, & R. Freer, Federal Practice and

Procedure §3567.3, pp. 428–432 (3d ed. 2008) (“Once it has

dismissed the claims that invoked original bases of subject

matter jurisdiction, all that remains before the federal

court are state-law claims. . . . The district court retains

discretion to exercise supplemental jurisdiction [over

them]”). As a result, “the [district] court’s exercise of its

discretion under §1367(c) is not a jurisdictional matter.

Thus, the court’s determination may be reviewed for abuse

of discretion, but may not be raised at any time as a juris

dictional defect.” 16 J. Moore et al., Moore’s Federal Prac

tice §106.05[4], p. 106–27 (3d ed. 2009).

It is undisputed that when this case was removed to

federal court, the District Court had original jurisdiction

over the federal RICO claim pursuant to 28 U. S. C. §1331

and supplemental jurisdiction over the state-law claims

because they were “so related to claims in the action

within such original jurisdiction that they form[ed] part of

the same case or controversy under Article III of the

United States Constitution.” §1367(a). Upon dismissal of

the federal claim, the District Court retained its statutory

supplemental jurisdiction over the state-law claims. Its

decision declining to exercise that statutory authority was

6 CARLSBAD TECHNOLOGY, INC. v. HIF BIO, INC.

Opinion of the Court

not based on a jurisdictional defect but on its discretionary

choice not to hear the claims despite its subject-matter

jurisdiction over them. See Chicago v. International Col

lege of Surgeons, 522 U. S. 156, 173 (1997) (“Depending on

a host of factors, then—including the circumstances of the

particular case, the nature of the state law claims, the

character of the governing state law, and the relationship

between the state and federal claims—district courts may

decline to exercise jurisdiction over supplemental state

law claims”). The remand order, therefore, is not based on

a “lack of subject matter jurisdiction” for purposes of the

bar to appellate review created by §§1447(c) and (d).

The Court of Appeals held to the contrary based on its

conclusion that “every §1367(c) remand necessarily in

volves a predicate finding that the claims at issue lack an

independent basis of subject matter jurisdiction.” 508 F.

3d, at 667. But, as explained above, §§1367(a) and (c)

provide a basis for subject-matter jurisdiction over any

properly removed state claim. See Osborn, supra, at 245;

Arbaugh, supra, at 514. We thus disagree with the Court

of Appeals that the remand at issue here “can be colorably

characterized as a lack of subject matter jurisdiction.” 508

F. 3d, at 667.

* * *

When a district court remands claims to a state court

after declining to exercise supplemental jurisdiction, the

remand order is not based on a lack of subject-matter

jurisdiction for purposes of §§1447(c) and (d). The judg

ment of the Court of Appeals for the Federal Circuit is

reversed, and the case is remanded for further proceedings

consistent with this opinion.

It is so ordered.

Cite as: 556 U. S. ____ (2009) 1

STEVENS, J., concurring

SUPREME COURT OF THE UNITED STATES

_________________

No. 07–1437

_________________

CARLSBAD TECHNOLOGY, INC., PETITIONER v. HIF

BIO, INC., ET AL.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE FEDERAL CIRCUIT

[May 4, 2009]

JUSTICE STEVENS, concurring.

In his dissenting opinion in Thermtron Products, Inc. v.

Hermansdorfer, 423 U. S. 336, 360 (1976), then-Justice

Rehnquist remarked that he could “perceive no justifica

tion for the Court’s decision to ignore the express directive

of Congress in favor of what it personally perceives to be

‘justice’ in this case.” He began his dissent with a com

ment that is also applicable to the case before us today:

“The Court of Appeals not unreasonably believed that 28

U. S. C. §1447(d) means what it says. It says:

‘An order remanding a case to the State court from

which it was removed is not reviewable on appeal or

otherwise . . . .’ ” Id., at 354.

Today, as in Thermtron, the Court holds that §1447(d)

does not mean what it says.

If we were writing on a clean slate, I would adhere to

the statute’s text. But Thermtron’s limiting construction

applies equally to this case as it did to Powerex Corp. v.

Reliant Energy Services, Inc., 551 U. S. 224, 229–230

(2007), Quackenbush v. Allstate Ins. Co., 517 U. S. 706,

711–712 (1996), and Things Remembered, Inc. v. Petrarca,

516 U. S. 124, 127–128 (1995), and stare decisis compels

the conclusion that the District Court’s remand order is

reviewable notwithstanding §1447(d)’s unambiguous

2 CARLSBAD TECHNOLOGY, INC. v. HIF BIO, INC.

STEVENS, J., concurring

contrary command. The Court’s adherence to precedent in

this case represents a welcome departure from its some

times single-minded focus on literal text. Accordingly, I

join the Court’s opinion.

Cite as: 556 U. S. ____ (2009) 1

SCALIA, J., concurring

SUPREME COURT OF THE UNITED STATES

_________________

No. 07–1437

_________________

CARLSBAD TECHNOLOGY, INC., PETITIONER v. HIF

BIO, INC., ET AL.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE FEDERAL CIRCUIT

[May 4, 2009]

JUSTICE SCALIA, concurring.

The Court today does nothing more than accurately

apply to the facts of this case our holding in Thermtron

Products, Inc. v. Hermansdorfer, 423 U. S. 336 (1976).

Ante, at 3–6.* As the Court notes, neither party has asked

us to reconsider Thermtron, and we thus have no occasion

to revisit that decision here, see ante, at 3, n.

I write separately, though, to note that our decision in

Thermtron was questionable in its day and is ripe for

reconsideration in the appropriate case. Title 28 U. S. C.

§1447(d) states that “[a]n order remanding a case to the

State court from which it was removed is not reviewable

on appeal or otherwise.” The statute provides a single

exception—not remotely implicated in this case—for cer

tain civil rights cases removed under §1443. See §1447(d).

As then-Justice Rehnquist understatingly observed in his

Thermtron dissent, it would not be “unreasonabl[e] [to]

believ[e] that 28 U. S. C. §1447(d) means what it says,”

423 U. S., at 354; and what it says is no appellate review

——————

*Contrary to JUSTICE BREYER’s suggestion, this case does not involve

reading another “exceptio[n]” into 28 U. S. C. §1447(d)’s language. See

post, at 2 (concurring opinion). Not, that is, if you think Thermtron was

rightly decided. Unlike Osborn v. Haley, 549 U. S. 225 (2007), this case

simply involves applying Thermtron’s in pari materia reading of

§1447(d) to the facts of this case.

2 CARLSBAD TECHNOLOGY, INC. v. HIF BIO, INC.

SCALIA, J., concurring

of remand orders. See also Osborn v. Haley, 549 U. S. 225,

263 (2007) (SCALIA, J., dissenting). Since the District

Court’s order in this case “remand[ed] a case to the State

court from which it was removed,” it should be—in the

words of §1447(d)—“not reviewable on appeal or other

wise.” Q. E. D.

Over the years, the Court has replaced the statute’s

clear bar on appellate review with a hodgepodge of juris

dictional rules that have no evident basis even in common

sense. Under our decisions, there is no appellate jurisdic

tion to review remands for lack of subject-matter jurisdic

tion, see Powerex Corp. v. Reliant Energy Services, Inc.,

551 U. S. 224, 232 (2007), though with exception, see

Osborn v. Haley, supra, at 243–244; there is jurisdiction to

review remands of supplemental state-law claims, and

other remands based on abstention, see Quackenbush v.

Allstate Ins. Co., 517 U. S. 706, 711–712 (1996), though

presumably no jurisdiction to review remands based on

the “defects” referenced in §1447(c). See also post, at 2

(BREYER, J., concurring) (discussing similar anomalies). If

this muddle represents a welcome departure from the

literal text, see ante, at 2 (STEVENS, J., concurring), the

world is mad.

This mess—entirely of our own making—does not in my

view require expert reexamination of this area of the law,

see post, at 2 (BREYER, J., concurring). It requires only the

reconsideration of our decision in Thermtron—and a wel

come return to the Court’s focus on congressionally en

acted text.

Cite as: 556 U. S. ____ (2009) 1

BREYER, J., concurring

SUPREME COURT OF THE UNITED STATES

_________________

No. 07–1437

_________________

CARLSBAD TECHNOLOGY, INC., PETITIONER v. HIF

BIO, INC., ET AL.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE FEDERAL CIRCUIT

[May 4, 2009]

JUSTICE BREYER, with whom JUSTICE SOUTER joins,

concurring.

I join the Court’s opinion. I write separately to note an

anomaly about the way 28 U. S. C. §1447 works. In this

case, we consider a District Court’s decision not to retain

on its docket a case that once contained federal law issues

but now contains only state law issues. All agree that the

law grants the District Court broad discretion to deter

mine whether it should keep such cases on its docket, that

a decision to do so (or not to do so) rarely involves major

legal questions, and that (even if wrong) a district court

decision of this kind will not often have major adverse

consequences. We now hold that §1447 permits appellate

courts to review a district court decision of this kind, even

if only for abuse of discretion.

Contrast today’s decision with our decision two Terms

ago in Powerex Corp. v. Reliant Energy Services, Inc., 551

U. S. 224 (2007). In that case, we considered a District

Court’s decision to remand a case in which a Canadian

province-owned power company had sought removal—a

matter that the Foreign Sovereign Immunities Act of 1976

specifically authorizes federal judges (in certain instances)

to decide. See §§1441(d); 1603(a). The case presented a

difficult legal question involving the commercial activities

of a foreign sovereign; and the District Court’s decision (if

2 CARLSBAD TECHNOLOGY, INC. v. HIF BIO, INC.

BREYER, J., concurring

wrong) had potentially serious adverse consequences,

namely preventing a sovereign power from obtaining the

federal trial to which the law (in its view) entitled it. We

nonetheless held that §1447 forbids appellate courts from

reviewing a district court decision of this kind. Id., at

238–239.

Thus, we have held that §1447 permits review of a

district court decision in an instance where that decision is

unlikely to be wrong and where a wrong decision is

unlikely to work serious harm. And we have held that

§1447 forbids review of a district court decision in an

instance where that decision may well be wrong and

where a wrong decision could work considerable harm.

Unless the circumstances I describe are unusual, some

thing is wrong. And the fact that we have read other

exceptions in the statute’s absolute-sounding language

suggests that such circumstances are not all that unusual.

See Osborn v. Haley, 549 U. S. 225, 240–244 (2007);

Thermtron Products, Inc. v. Hermansdorfer, 423 U. S. 336,

350–352 (1976).

Consequently, while joining the majority, I suggest that

experts in this area of the law reexamine the matter with

an eye toward determining whether statutory revision is

appropriate.