Atlantic National Trust LLC v. Mt. Hawley Insurance

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

ATLANTIC NATIONAL TRUST LLC, a 

Florida limited liability company,

Plaintiff-Appellee,

v.

MT. HAWLEY INSURANCE COMPANY,

a Delaware corporation,

Defendant-Appellant,

LEBANON HARDBOARD LLC, an No. 09-35716

Oregon limited liability company;

TRITALENT FUNDING GROUP, LLC,  D.C. No.

6:09-cv-06054-TC

an Oregon limited liability

company, OPINION

Defendants-Appellees,

and

CRUMP INSURANCE SERVICES, INC., a

Texas corporation; CHAMBERLAIN

INSURANCE AGENCY LLC, an

Oregon limited liability company,

Defendants.



Appeal from the United States District Court

for the District of Oregon

Ann L. Aiken, Chief District Judge, Presiding

Argued and Submitted

May 7, 2010—Portland, Oregon

Filed September 2, 2010

Before: Andrew J. Kleinfeld, Carlos T. Bea and

Sandra S. Ikuta, Circuit Judges.

13325

13326 ATLANTIC NATIONAL TRUST v. MT. HAWLEY INSURANCE

Opinion by Judge Ikuta

13328 ATLANTIC NATIONAL TRUST v. MT. HAWLEY INSURANCE

COUNSEL

Brian E. Sims, Morison Holden Derekwetzky & Prough, LLP,

Walnut Creek, California, for appellant Mt. Hawley Insurance

Co.

John Folawn, Folawn Alterman Richardson LLP, Portland,

Oregon, for appellee Atlantic National Trust, LLC.

Paul G. Dodds, Brownstein, Rask, Sweeney, Kerr, Grim,

DeSylvia & Hay, LLP, Portland, Oregon, for appellee Trita-

lent Funding Group, LLC.

Dean D. DeChaine, Miller Nash LLP, Portland, Oregon, for

appellee Lebanon Hardboard, LLC.

OPINION

IKUTA, Circuit Judge:

Today we hold that we lack appellate jurisdiction to review

a federal district court order remanding a case to state court

ATLANTIC NATIONAL TRUST v. MT. HAWLEY INSURANCE 13329

based on a ground colorably characterized as a “defect” for

purposes of 28 U.S.C. § 1447(c). See 28 U.S.C. § 1447(d);

Powerex Corp. v. Reliant Energy Servs., Inc., 551 U.S. 224

(2007).

I

In October 2008, a fire caused over $10 million in damage

to buildings and property owned by Lebanon Hardboard,

LLC. Atlantic National Trust, LLC (“Atlantic”) had loaned

money to Lebanon Hardboard secured by interests in the

buildings and property. The loan agreements required Leba-

non Hardboard to maintain fire insurance on the property for

the benefit of Atlantic, and to assign all insurance proceeds to

Atlantic. Tritalent Funding Group, LLC (“Tritalent”) had also

loaned money to Lebanon Hardboard and had likewise

obtained a security interest in the buildings and property.

Before the fire, Lebanon Hardboard submitted an applica-

tion for fire insurance to Crump Insurance Services, Inc.

(“Crump”) and Chamberlain Insurance Agency LLC

(“Chamberlain”), both of which were agents of Mt. Hawley

Insurance Company (“Mt. Hawley”). Mt. Hawley issued an

insurance binder (the actual policy was not delivered until

after the fire) to Lebanon Hardboard with a $4 million per

occurrence limit, but the binder did not designate Atlantic or

Tritalent as mortgagees or loss payees.

After the fire, Atlantic demanded payment under the policy

from Lebanon Hardboard and Mt. Hawley. Mt. Hawley

denied that Atlantic was covered by the insurance policy or

that it had any obligation to pay Atlantic. On February 20,

2009, Atlantic filed a complaint for damages and declaratory

relief against Mt. Hawley, Crump, Chamberlain, Lebanon

Hardboard, and Tritalent in Oregon state court. Atlantic

sought, among other things, reformation of the contract and a

declaration that Atlantic’s rights to the insurance proceeds

were superior to Tritalent’s and Lebanon Hardboard’s. Atlan-

13330 ATLANTIC NATIONAL TRUST v. MT. HAWLEY INSURANCE

tic gave Lebanon Hardboard and Mt. Hawley courtesy copies

of the complaint on February 25, 2009.

The next day, Mt. Hawley removed the case to federal

court without the consent of the other defendants. At that

time, neither Mt. Hawley nor any of the other defendants had

been served. Lebanon Hardboard and Tritalent waived service

on March 3.

On March 19, 21 days after Mt. Hawley removed the case,

Lebanon Hardboard and Tritalent filed a motion in district

court to remand the case to state court. The next day, Atlantic

joined the motion to remand.

A magistrate recommended that the district court remand

the action because Lebanon Hardboard and Tritalent had not

consented to removal and they timely exercised their right

under 28 U.S.C. § 1448 to choose a state forum.1 The magis-

trate reasoned that removal of a complaint to federal court is

subject to the “unanimity rule” set forth in Chicago Rock

Island & Pacific Railway Co. v. Martin, 178 U.S. 245, 248

(1900), which holds that all defendants must consent to or

join in a removal, and here Mt. Hawley had violated that rule

by failing to obtain the consent of its co-defendants. The dis-

trict court adopted the magistrate’s findings and recommenda-

tion and remanded the case to state court.2 This timely appeal

followed.

1

28 U.S.C. § 1448 provides that after a case has been removed to federal

court, the plaintiff may complete or perfect service on a defendant who

had not been properly served before removal, but states that “[t]his section

shall not deprive any defendant upon whom process is served after

removal of his right to move to remand the case.”

2

Because the district court adopted the magistrate’s findings and recom-

mendation in full, we use the term “district court” to refer to both the dis-

trict court’s and the magistrate’s conclusions.

ATLANTIC NATIONAL TRUST v. MT. HAWLEY INSURANCE 13331

II

The issue in this case is whether we have appellate jurisdic-

tion to consider the appeal of the district court’s remand

order. As always, “we have jurisdiction to determine whether

we have jurisdiction to hear the case.” Aguon-Schulte v.

Guam Election Comm’n, 469 F.3d 1236, 1239 (9th Cir. 2006).

Because the scope of our authority to review an allegedly

erroneous remand order is not entirely clear, we begin with a

review of the legal framework.

A

[1] “The beginning point of statutory interpretation must

be the language of the statute.” Am. Bird Conservancy v.

F.C.C., 545 F.3d 1190, 1193 (9th Cir. 2008) (internal quota-

tion marks omitted). Under 28 U.S.C. § 1447(d), “[a]n order

remanding a case to the State court from which it was

removed is not reviewable on appeal or otherwise . . . .”3 The

Supreme Court has interpreted this section more narrowly

than its plain language would indicate. See Thermtron Prods.

Inc. v. Hermansdorfer, 423 U.S. 336, 343 (1976), superseded

by statute on other grounds, 28 U.S.C. § 1447(c). As

explained in Thermtron, § 1447(d) prohibits review only of

remand orders issued pursuant to a ground enumerated in

§ 1447(c). Id. At the time Thermtron was decided, § 1447(c)

stated, in part: “If at any time before final judgment it appears

that the case was removed improvidently and without jurisdic-

tion, the district court shall remand the case, and may order

the payment of just costs.” Thermtron, 423 U.S. at 342.

Thermtron indicated that the case at issue had not been

removed “improvidently” because there was “no express stat-

3

Section 1447(d) provides an exception to this prohibition on appellate

review, for “an order remanding a case to the State court from which it

was removed pursuant to section 1443 of this title . . . .” The cited section,

28 U.S.C. § 1443, refers to certain civil rights cases, and therefore does

not apply in this case.

13332 ATLANTIC NATIONAL TRUST v. MT. HAWLEY INSURANCE

utory provision forbidding the removal” of the action and the

case had been “timely removed in strict compliance with 28

U.S.C. § 1446.” Id. at 344 & n.8. Moreover, the case had not

been removed “without jurisdiction” because the case could

have been filed initially in the district court pursuant to 28

U.S.C. § 1331. Id. at 344.

[2] According to Thermtron, “[i]f a trial judge purports to

remand a case on the ground that it was removed ‘improvi-

dently and without jurisdiction,’ his order is not subject to

challenge in the court of appeals.” Id. at 343. As the Supreme

Court later explained, “[w]here the order is based on one of

the enumerated grounds, review is unavailable no matter how

plain the legal error in ordering the remand.” Briscoe v. Bell,

432 U.S. 404, 413 n.13 (1977); see also Gravitt v. Southwest-

ern Bell Tel. Co., 430 U.S. 723 (1977) (per curiam). Never-

theless, an appellate court can review a remand order when a

trial judge “exceeded his statutorily defined power” by

remanding “a properly removed case on grounds that he had

no authority to consider.” Thermtron, 423 U.S. at 351. In the

matter before it, Thermtron noted that the district court had

remanded the case based on its concern about its “heavy

docket,” which the district court “thought would unjustly

delay plaintiffs in going to trial on the merits of their action.”

Id. at 344. Because docket congestion was not a ground enu-

merated in § 1447(c), Thermtron held that there was appellate

jurisdiction to review and reverse the district court’s decision.

Id. at 345.

B

[3] After Thermtron, Congress amended § 1447(c) several

times. See Powerex, 551 U.S. at 229-30. At present, § 1447(c)

states, in relevant part:

A motion to remand the case on the basis of any

defect other than lack of subject matter jurisdiction

must be made within 30 days after the filing of the

ATLANTIC NATIONAL TRUST v. MT. HAWLEY INSURANCE 13333

notice of removal under section 1446(a). If at any

time before final judgment it appears that the district

court lacks subject matter jurisdiction, the case shall

be remanded.

In Powerex, the Court stated that it would “assume for pur-

poses of this case” that the post-Thermtron amendments to

§ 1447(c) were “immaterial to Thermtron’s gloss on

§ 1447(d),” so that § 1447(d)’s bar on appellate review is lim-

ited to remands based on subject matter jurisdiction and non-

jurisdictional defects. Powerex, 551 U.S. at 230 (citing

Quackenbush v. Allstate Ins. Co., 517 U.S.706, 711-12

(1996)). This assumption is consistent with the Court’s prac-

tice of applying Thermtron’s rule despite the changes in statu-

tory language. See, e.g., Carlsbad Tech. Inc. v. HIF Bio, Inc.,

129 S. Ct. 1862, 1865-66 (2009); Kircher v. Putnam Funds

Trust, 547 U.S. 633, 640-41 (2006); Quackenbush, 517 U.S.

at 711-12; Things Remembered, Inc. v. Petrarca, 516 U.S.

124, 127-28 (1995); Briscoe, 432 U.S. at 413 n.8; Gravitt, 430

U.S. at 724. Our cases have followed the Court’s lead in

assuming that amendments to § 1447(c) are immaterial to

Thermtron’s gloss on § 1447(d). See, e.g., Kamm v. ITEX

Corp., 568 F.3d 752, 754 (9th Cir. 2009) (applying Thermtron

to the present form of § 1447(c) without addressing the

changed statutory language); Executive Software N. Am., Inc.

v. U.S. Dist. Ct., 24 F.3d 1545, 1549 (9th Cir. 1994) (same for

1988 amendments to § 1447(c)).

In applying Thermtron’s rule that § 1447(d) does not pre-

clude all appellate review of remand orders, we have held that

review is appropriate in a number of situations not discussed

in Thermtron. For instance, in order to determine whether we

lack jurisdiction under § 1447(d) in cases where the basis of

a district court’s remand order is unclear, we may “look to the

substance of the order to determine whether it was issued pur-

suant to section 1447(c).” Schmitt v. Ins. Co. of N. Am., 845

F.2d 1546, 1549 (9th Cir. 1988), superseded by statute on

other grounds, 28 U.S.C. § 1447(c). In this vein, we have ana-

13334 ATLANTIC NATIONAL TRUST v. MT. HAWLEY INSURANCE

lyzed the basis of a district court’s remand order where the

district court did not identify the ground for its remand,

United Investors Life Ins. Co. v. Waddell & Reed Inc., 360

F.3d 960, 963-64 (9th Cir. 2004), where the order was ambig-

uous, Schmitt, 845 F.2d at 1549, or where it was not clear that

the ground specified by the district court was a ground enu-

merated in § 1447(c), see Kamm, 568 F.3d at 755, 757 (exam-

ining whether a district court’s remand of a breach of contract

action based on the contract’s forum selection clause fell

within § 1447(c)). In those cases, however, we acknowledged

that if the district court had based its remand on a ground enu-

merated in § 1447(c), we would lack jurisdiction to review

whether the district court’s application of that ground was

correct. See, e.g., United Investors, 360 F.3d at 964.

We have also held that we may review remand orders

where the district court exceeded the procedural limitations in

§ 1447(c), even where a district court purported to remand on

a ground enumerated in that statute. For example, we have

reasoned that the plain language of § 1447(c) precludes a dis-

trict court from issuing a remand order sua sponte for a non-

jurisdictional defect, see Kelton Arms Condo. Owners Ass’n,

Inc. v. Homestead Ins. Co., 346 F.3d 1190, 1193 (9th Cir.

2003), or from remanding for such a defect outside of the pre-

scribed 30-day time period, see N. Cal. Dist. Council of

Laborers v. Pittsburg-Des Moines Steel Co., 69 F.3d 1034,

1038 (9th Cir. 1995).

However, certain statements in our cases have strayed

beyond the limited review permitted under Thermtron. Most

notably, we have held that “we are not bound by the district

court’s characterization of the basis for its remand order.”

Reddam v. KPMG LLP, 457 F.3d 1054, 1058 (9th Cir. 2006)

(citing Abada v. Charles Schwab & Co., Inc., 300 F.3d 1112,

1117 (9th Cir. 2002)). Thus, even when the district court pur-

ported to remand an action on jurisdictional grounds, we have

held that we can look behind the district court’s ruling to

determine whether the court correctly characterized the basis

ATLANTIC NATIONAL TRUST v. MT. HAWLEY INSURANCE 13335

for its remand. In Reddam, for example, two defendants had

removed a state action on the ground that the underlying dis-

pute was subject to an arbitration agreement between the par-

ties. Id. at 1057. When the arbitrator subsequently determined

that it lacked authority to arbitrate, the plaintiffs moved to

remand. Id. The district court granted the motion on the

ground that it lacked subject matter jurisdiction under

§ 1447(c) because of the arbitrator’s determination. Id. Rather

than holding that Thermtron’s construction of § 1447 prohib-

ited our review, we instead held that we were not bound by

the district court’s characterization. Id. at 1058. We justified

our review of the district court’s remand order because its rea-

soning “plainly indicate[d] that the later occurring events [the

arbitrator’s post-removal refusal to arbitrate] were the basis

for the decision,” and such post-removal events “cannot be a

basis for a § 1447(c) remand order.” Id. at 1059. Because we

concluded that the district court erred in holding it lacked sub-

ject matter jurisdiction, we reversed the district court’s

remand order. Id. at 1061; accord Lively v. Wild Oats Mar-

kets, Inc., 456 F.3d 933, 938 (9th Cir. 2006).

C

[4] In 2007, the Supreme Court issued its opinion in

Powerex, narrowing the scope of appellate jurisdiction to

review allegedly erroneous remand orders where the district

court purported to remand under § 1447(c). In Powerex, two

foreign defendants (including Powerex Corp.) and two federal

defendants removed a state court action, alleging that the dis-

trict court had subject matter jurisdiction under 28 U.S.C.

§ 1441(d) (authorizing removal by a “foreign state” as defined

in the Foreign Sovereign Immunities Act) and 28 U.S.C.

§ 1442(a) (authorizing removal by federal agencies).

Powerex, 551 U.S. at 227. After dismissing the two federal

defendants and one of the foreign defendants on immunity

grounds, the district court determined that Powerex Corp. was

not a “foreign state.” Id. Accordingly, the district court

remanded for lack of subject matter jurisdiction. Id. at 228,

13336 ATLANTIC NATIONAL TRUST v. MT. HAWLEY INSURANCE

232-33. Powerex Corp. sought review of the district court’s

allegedly erroneous holding that it was not a foreign sover-

eign. Id. at 228. The Supreme Court held, however, that as a

threshold matter there was no appellate jurisdiction to con-

sider this issue. See id. at 234, 239.

[5] First, Powerex rejected the argument that post-removal

events can never constitute a defect in subject matter jurisdic-

tion for purposes of § 1447(c). Id. at 230. The Court explained

that “[n]othing in the text of § 1447(c) supports the proposi-

tion that a remand for lack of subject-matter jurisdiction is not

covered so long as the case was properly removed in the first

instance.” Id. Rejecting the proposed “narrowing construction

of § 1447(c)’s unqualified authorization of remands for lack

of ‘subject matter jurisdiction,’ ” Powerex held that “when a

district court remands a properly removed case because it

nonetheless lacks subject-matter jurisdiction, the remand is

covered by § 1447(c) and thus shielded from review by

§ 1447(d).” Id. at 230-31.

[6] Second, Powerex enunciated the general principle “that

review of the District Court’s characterization of its remand

as resting upon lack of subject-matter jurisdiction, to the

extent it is permissible at all, should be limited to confirming

that that characterization was colorable.” Id. at 234. The rea-

sons for so narrowly limiting any “look behind the district

court’s characterization,” the Court explained, was to avoid

“[l]engthy appellate disputes about whether an arguable juris-

dictional ground invoked by the district court was properly

such . . . .” Id. at 233-34. Such lengthy disputes would frus-

trate the purpose of § 1447(d), which “reflects Congress’s

longstanding policy of not permitting interruption of the liti-

gation of the merits of a removed case by prolonged litigation

of questions of jurisdiction of the district court to which the

cause is removed.” Id. at 238 (internal quotation marks omit-

ted). In addition, Powerex noted that “the line between mis-

classifying a ground as subject-matter jurisdiction and

ATLANTIC NATIONAL TRUST v. MT. HAWLEY INSURANCE 13337

misapplying a proper ground of subject-matter jurisdiction is

sometimes elusively thin.” Id. at 234.

[7] Applying this reasoning to the facts before it, the Court

stated that “[a]s an initial matter, it is quite clear that the Dis-

trict Court was purporting to remand” on the ground of sub-

ject matter jurisdiction, and indeed, that was the only

“plausible explanation of what legal ground the District Court

actually relied upon for its remand . . . .” Id. at 233 (emphases

omitted). Although the Court had not passed on the legal

question before the district court, “whether, when sovereign

immunity bars the claims against the only parties capable of

removing the case, subject-matter jurisdiction exists to enter-

tain the remaining claims,” the Court noted that “the point is

certainly debatable.” Id. at 233-34. Powerex concluded that

“when, as here, the District Court relied upon a ground that

is colorably characterized as subject-matter jurisdiction,

appellate review is barred by § 1447(d).” Id. at 234. As such,

there was no need to “pass on whether § 1447(d) permits

appellate review of a district-court remand order that dresses

in jurisdictional clothing a patently nonjurisdictional ground

(such as the docket congestion invoked by the District Court

in Thermtron).” Id. (citation omitted).

[8] Although Powerex involved a remand based on subject

matter jurisdiction under § 1447(c), the Court’s reasons for

holding that “review of the District Court’s characterization of

its remand . . . should be limited to confirming that that char-

acterization was colorable,” id., are equally applicable to

remands relying on a non-jurisdictional defect. Neither the

plain language of § 1447(d) nor Thermtron’s gloss on that

section distinguishes between orders based on jurisdictional

and non-jurisdictional grounds. See Thermtron, 423 U.S. at

343; see also Briscoe, 432 U.S. at 413 n.13. Moreover, appel-

late review of a district court’s characterization of a remand

based on a non-jurisdictional defect would frustrate Con-

gress’s intent to avoid “interruption of the litigation of the

merits of a removed case by prolonged litigation” of proce-

13338 ATLANTIC NATIONAL TRUST v. MT. HAWLEY INSURANCE

dural questions. Powerex, 551 U.S. at 238; see also Osborn

v. Haley, 549 U.S. 225, 243 (2007) (holding that § 1447(d) is

an “antishuttling” provision aimed at preventing “prolonged

litigation of questions of jurisdiction of the district court to

which the cause is removed” (internal quotation marks omit-

ted)). And as with jurisdictional defects considered in

Powerex, it is equally difficult to distinguish the line between

“misclassifying a ground” as a defect, and correctly classify-

ing an issue as a defect but then misapplying the law to the

facts of the case. See Powerex, 551 U.S. at 234. Accordingly,

in light of Powerex, when a district court remands a case pur-

porting to rely on a ground enumerated in § 1447(c), we have

appellate jurisdiction to look behind the district court’s char-

acterization of its basis for remand only to determine whether

the ground was “colorable.”

III

[9] In light of these precedents, we must determine

whether we have jurisdiction to review the district court’s

allegedly erroneous remand order. We first consider whether

the district court remanded purporting to rely on a ground

enumerated in § 1447(c). Thermtron, 423 U.S. at 343. We

conduct this part of our review de novo. Kamm, 568 F.3d at

754. In this case, the district court identified the defendant

unanimity rule as the basis for its remand. Because we have

held that a violation of the unanimity rule is a defect under

§ 1447(c), Aguon-Schulte, 469 F.3d at 1240, we conclude that

the district court purported to rely on a legal ground enumer-

ated in § 1447(c) even though the district court did not cite

that statute.

[10] We must next consider whether the district court’s

characterization of the defect in this case was “colorable.”

Powerex, 551 U.S. at 234. The district court reasoned that

under § 1448, a later-served defendant who opts to exercise

its right to choose the state court forum within the 30-day

period provided in § 1447(c) may force a remand to state

ATLANTIC NATIONAL TRUST v. MT. HAWLEY INSURANCE 13339

court. Because Lebanon Hardboard and Tritalent made a

timely motion to remand, the district court concluded that a

remand to state court was appropriate. The district court’s rea-

soning establishes that it based the remand order on defendant

non-unanimity; indeed, that is the only “plausible explanation

of what legal ground the District Court actually relied upon

for its remand in the present case.” Powerex, 551 U.S. at 233.

As in Powerex, although we have not passed on the question

whether the defendant non-unanimity rule applies in the pre-

cise circumstances of this case, “the point is certainly debat-

able.” Id. at 233-34. Nor is there any concern here that the

district court has “dressed up” a ground patently not within

§ 1447(c). See Powerex, 551 U.S. at 234. Indeed, Mt. Hawley

does not argue that the district court’s remand order was

based on a ground patently not enumerated in § 1447(c), such

as docket congestion or abstention. Given that the district

court purported to remand the case on the basis of a defect

under § 1447(c), and that characterization of the remand is

colorable, we lack appellate jurisdiction to review this remand

order. See Powerex, 551 U.S. at 234.

Mt. Hawley argues that this conclusion is wrong because

there was no defendant unanimity defect that justified a

remand under § 1447(c), and that we are not bound by the dis-

trict court’s characterization of the basis of remand. In argu-

ing that there was no defendant unanimity defect here, Mt.

Hawley primarily relies on Spencer v. United States District

Court, 393 F.3d 867 (9th Cir. 2004). In Spencer, following

removal to district court, the plaintiffs sought to amend their

complaint to name an additional defendant who was a citizen

of the forum where the complaint had been filed. Id. at 868.

Citing the forum defendant rule, which prohibits removal of

a case when at least one defendant is a citizen of the state in

which the action is filed, see 28 U.S.C. § 1441(b), the plain-

tiffs then moved to remand the action to state court. Spencer,

393 F.3d at 868. We affirmed the district court’s refusal to

remand the case, holding that “[c]hallenges to removal juris-

diction require an inquiry into the circumstances at the time

13340 ATLANTIC NATIONAL TRUST v. MT. HAWLEY INSURANCE

the notice of removal is filed.” Id. at 871. If removal is proper

at the time the notice is filed, “subsequent events, at least

those that do not destroy original subject-matter jurisdiction,

do not require remand.” Id.

Mt. Hawley argues that the defendant unanimity rule in this

case is equivalent to the forum defendant rule in Spencer

because both are non-jurisdictional defects that apply only to

defendants “properly joined and serviced in the action.”

Emrich v. Touche Ross & Co., 846 F.2d 1190, 1193 n.1 (9th

Cir. 1988). As such, Mt. Hawley contends, the principles

enunciated in Spencer and Reddam apply: the validity of

removal is determined by the facts as they existed at the time

of the removal, and subsequent events do not require remand.

See Reddam, 457 F.3d at 1059; Spencer, 393 F.3d at 871. In

light of this principle, Mt. Hawley claims there was no una-

nimity defect at the time this case was removed because nei-

ther Lebanon Hardboard nor Tritalent had been properly

joined and served. See Emrich, 846 F.2d at 1193 n.1. Accord-

ing to Mt. Hawley, § 1448 does not help the defendants

because it gives them only the right to bring a motion for

remand for a defect that existed at the time of the removal, a

situation not present here.

Because in Mt. Hawley’s view there was no defect at the

time of removal, Mt. Hawley concludes that the district

court’s remand order “plainly indicates that the later occurring

events were the basis for the decision.” Reddam, 457 F.3d at

1059. Because “[t]hat cannot be a basis for a § 1447(c)

remand order,” id., the district court erred in remanding based

on § 1447(c), and as in Reddam, Mt. Hawley contends, we

can review and reverse this erroneous holding.

We disagree with this reasoning. Mt. Hawley’s analysis is

based on three propositions: (1) defendant non-unanimity is a

defect under § 1447(c) only at the time of removal; (2) § 1448

does not authorize a defendant who was served after removal

to move to remand the case within 30 days after removal for

ATLANTIC NATIONAL TRUST v. MT. HAWLEY INSURANCE 13341

lack of unanimity; and (3) we can review a district court’s

remand order when it is plainly wrong. Under Powerex, we

must ask whether these propositions are so clear that the dis-

trict court’s characterization of its remand as being based on

a non-jurisdictional defect was not even colorable. See 551

U.S. at 234.

However, rather than enunciating clearly established law,

Mt. Hawley’s first two propositions raise unsettled questions

that cannot be the basis for holding that the district court’s

remand order failed the minimum standard of being “color-

able.” Spencer did not resolve the issue raised in Mt. Haw-

ley’s first proposition, whether a defendant unanimity issue

that arises after removal can be a defect for purposes of

§ 1447(c). Neither the unanimity rule nor the authority of a

district court to remand based on post-removal events was

before us in Spencer, because in that case we upheld a district

court’s denial of a remand motion based on the forum defen-

dant rule. 393 F.3d at 869. Mt. Hawley has not cited, and we

have not found, any case directly on point. Moreover, as

explained above, Powerex overruled the doctrine that

§ 1447(c) and (d) do not apply when a remand is based on

events occurring after removal. Powerex, 551 U.S. at 230; see

Blackburn v. Oaktree Capital Mgmt., LLC, 511 F.3d 633, 636

(6th Cir. 2008) (“Accordingly, we recognize that our Sixth

Circuit decisions are overruled to the extent they held that a

remand for lack of subject matter jurisdiction pursuant to

§ 1447(c) was reviewable if it was premised on a post-

removal [event].”); Price v. J & H Marsh & McLennan, Inc.,

493 F.3d 55, 60-61 (2d Cir. 2007) (holding that Powerex

overruled Reddam and other cases recognizing the post-

removal-event doctrine). Although Powerex’s rejection of the

post-removal-event doctrine arose in the context of a remand

order based on lack of subject matter jurisdiction, the question

whether that portion of Powerex’s ruling also extends to

remand orders based on non-jurisdictional defects “is cer-

tainly debatable.” 551 U.S. at 233-34. Accordingly, Powerex

13342 ATLANTIC NATIONAL TRUST v. MT. HAWLEY INSURANCE

mandates that § 1447(d) deprives us of appellate jurisdiction

to review the remand order.

Nor did Spencer address Mt. Hawley’s second proposition,

whether § 1448 authorizes a defendant who was served after

removal to remand the case within 30 days for lack of una-

nimity when that defect did not exist at the time of the

removal. We have not addressed this issue, and neither has the

Supreme Court.

Mt. Hawley’s third proposition, that under Reddam we can

review a remand order when the district court’s reasoning

indicates it made an error of law, is plainly contrary to

Powerex. As explained above, if the district court purports to

remand on a ground enumerated in § 1447(c), we can look

behind the district court’s stated basis for its remand only if

its characterization is not “colorable.” Powerex, 551 U.S. at

234. Where a remand order “is based on one of the grounds

enumerated in 28 U.S.C. § 1447(c),” and that ground is color-

able, then “review is unavailable no matter how plain the

legal error in ordering the remand.” Kircher, 547 U.S. at 642

(brackets and internal quotation marks omitted). To the extent

Reddam and other cases hold otherwise, they are irreconcil-

able with the holding and reasoning of Powerex and are thus

superseded. See Miller v. Gammie, 335 F.3d 889, 900 (9th

Cir. 2003) (en banc).

[11] Here the district court based its remand order on a

lack of defendant unanimity, which we have held to be a

defect for purposes of § 1447(c). See Aguon-Schulte, 469 F.3d

at 1240. Mt. Hawley’s arguments, based on open legal ques-

tions and a superseded rule of law, have not established that

the district court’s remand on this ground failed to meet

Powerex’s “colorability” standard. See 551 U.S. at 234.

Accordingly, we lack jurisdiction to review Mt. Hawley’s

ATLANTIC NATIONAL TRUST v. MT. HAWLEY INSURANCE 13343

appeal. See 28 U.S.C. § 1447(d).4

DISMISSED.

4

Because we decide on this ground, we do not reach appellees’ argu-

ment that we lack subject matter jurisdiction because the parties are not

completely diverse. See Sinochem Int’l Co. v. Malay. Int’l Shipping Corp.,

549 U.S. 422, 431 (2007) (holding that there is “no mandatory ‘sequenc-

ing of jurisdictional issues,’ ” and we have “leeway ‘to choose among

threshold grounds for denying audience to a case on the merits.’ ” (quoting

Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 584, 585 (1999))).