Reply Brief — Powerex Corp. v. Reliant Energy Services, Inc.

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No. 05-85

IN THE

Supreme Court of the United States

POWEREX CORP..

Petitioner,

RELIANT ENERGY SERVICES, INC.. ET AL..

Respondents.

On Writ of Certiorari

to the United States Court of Appeals

for the Ninth Circuit

REPLY BRIEF FOR PETITIONER

DAVID C. FREDERICK

Counsel of Record

SCOTT H. ANGSTREICH

BRENDAN J. CRIMMINS

KELLOGG, HUBER, HANSEN,

TODD, EVANS & FIGEL, P.L.L.C.

1615 M Street. N.W., Suite 400

Washington, D.C. 20036

(202) 326-7900

April 6, 2007 Counsel for Powerex Corp.

CORPORATE DISCLOSURE STATEMENT

Petitioner’s Rule 29.6 Statement was set forth at page

vii of its opening brief, and there are no amendments to

that Statement.

il

TABLE OF CONTENTS

Page

CORPORATE DISCLOSURE STATEMENT ..................04. i

ee ee Ce icinttiincninncdeticisiniiclsianiienintininiiesel in

I sinhaiiinia iia andikiaiaalie ae easel calnlaeaaeii teil 1

I. POWEREX IS AN “ORGAN” UNDER THE ©

IRE See RS RE ETO ORC a re EEO l

A. Respondents’ Two-Part Test For Organ

Status Conflicts With The FSIA...................... 2

B. The Record Evidence Requires Reversal......... 5

Il. SECTION 1447(d) DOES NOT APPLY

_____ EEEREES ev Senet a OR RIND aN ONS a ee nea 10

A. The Immunity Of BPA, WAPA, And BC

Hydro Did Not Require Remand Under

Be I itsibnetaiiisdieabtiheiiabiiehh initia Naa calla 11

B. The District Court Never Lost Jurisdic-

tion Over The Claims Against Powerex ........ 15

C. Section 1447(d) Does Not Apply To

Discretionary Remands Of Supplemental

CE CEE Ne ee On a ath oe aN ROOD 16

D. The District Court Did Not Clearly

Purport To Remand For Lack Of Subject-

Matter Jurisdiction Under § 1447(c) ............. 19

IE vccinanncnicesissennecieasietssbtniahipleieinanianiijaaphtoapitse 20

ADDENDUM

ill

TABLE OF AUTHORITIES

Page

CASES

Adkins v. Illinois Cent. R.R. Co., 326 F.3d 828

EERIE: eee Ae ene Re RDN 16

Air Crash Disaster, In re, 96 F.3d 932 (7th Cir. 1996) ...... 4

Arango v. Guzman Travel Advisors Corp., 621 F.2d

BERT AEE So 2a aa POS ae Re 15

Arbaugh v. Y & H Corp., 1268S. Ct. 1235 (2006) ....... 15, 16

Autoridad de Energia Electrica de Puerto Rico v.

Ericsson Inc., 201 F.3d 15 (1st Cir. 2000) 20.00.00... 17

Board of Regents v. Nippon Tel. & Tel. Corp.,

478 F.3d 274 (5th Cir. 2007) ......................c00000 3, 5, 7,8

Booth v. Churner, 532 U.S. 731 (2001) ......... cece cece cece eeeeeee 4

Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343

TER See ee ESE A PS ae ORO 11, 16, 17, 20

Cedar Rapids Cmty. Sch. Dist. v. Garret F. ex rel.

Charlene F., 526 U.S. 66 (1999) ...... eee ceeeeeeeeeeee 18

Colorado v. Symes, 286 U.S. 510 (1932) 0.0.0.0... eeeeeeee 14

Davis v. McCourt, 226 F.3d 506 (6th Cir. 2000) .............. 12

District of Columbia v. MSPRB, 762 F.2d 129

I aa a at a 12, 15

Dole Food Co. v. Patrickson, 538 U.S. 468 (2003).......... 3, 7

Edwards v. U.S. Dept of Justice, 43 F.3d 312

I aa A a ce al three) 14

EIE Guam Corp. v. Long Term Credit Bank of

Japan, Ltd., 322 F.3d 635 (9th Cir. 2003) ..........00....5, 7

Elko County Grand Jury, In re, 109 F.3d 554

SIS laa a i 14

Emplovers Reinsurance Corp. v. Bryant, 299 U.S.

Sas a ccicibincsiacsntiniitieiiaiilbiapiiieaeainiadahianeidasiiaiinine 18

iv

Exxon Mobil Corp. v. Allapattah Servs., Inc.,

Ss i atccaliata isc icictitcednttalaraiiaailiie ein 12

FDIC v. Meyer, 510 U.S. 471 (1994) 2.0.0.0... ccc cccceeeceeeeeeeees 13

)

Filler v. Hanvit Bank, 378 F.3d 213 (2d Cir. 2004) ........... x

First Natl City Bank v. Banco Para el Comercio

Exterior de Cuba, 462 U.S. 611 (1983) oo. eee 3

First Options of Chicago, Inc. v. Kaplan, 514 U.S.

EEE ER ON On aE ee Oa EE 6

Flood v. Kuhn, 407 U.S. 258 (1972) ..0.....cc.cccccccecseescesesseees 18

Franchise Tax Bd. v. Construction Laborers Vacation

I A 12

Gaffney v. Cummings, 412 U.S. 735 (1973)............cccceceeeeee 4

Gravitt v. Southwestern Bell Tel. Co., 4830 U.S. 723

SERRA eC rst e eevee Pe ee 14, 15, 20

Grupo Dataflux v. Atlas Global Group, L.P., 541 U.S.

RT SI eh ee nS EEO Seen ae eee 17

Hilton v. South Carolina Pub. Rys. Comm'n,

REE tore ee ae OP 18

Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977) «00.0.0... 18

IMFC Profl Servs. of Fla., Inc. v. Latin Am. Home

Health, Inc., 676 F.2d 152 (5th Cir. Unit B 1982)...... 15

Jefferson County v. Acker, 527 U.S. 423 (1999) «00.00... 12

Johnson v. Showers, 747 F.2d 1228 (8th Cir. 1984) ........ 12

Kamen v. Kemper Fin. Servs., Inc., 500 U.S. 90

| EARS FEE ave tie ee ne Re ee a OO ORF a a OR 18

Kasi v. Angelone, 300 F.3d 487 (4th Cir. 2002).........00..... 14

Kircher v. Putnam Funds Trust, 126 S. Ct. 2145

ERE NSS Eee Se eT nO 14, 15, 17, 19, 20

Kloeb v. Armour & Co., 311 U.S. 199 (1940)... 18

Vv

Lambert Run Coal Co. v. Baltimore & Ohio R.R. Co..,

Se Ta SUE Corer usissiecientstennesisceninnsiasinadeiataiamainiadaiamamenan 14

Lebron v. National R.R. Passenger Corp., 513 U.S.

Pe eee icniitntiasecinibinsneidatiimnmepienibieiaionaanianaaias 2,8

McCreary County v. ACLU, 545 U.S. 844 (2005)............. 10

Montana-Dakota Utils. Co. v. Northwestern Pub.

Serv. Co., 341 U.S. 246 (1081).......ccccccsccsccsscscecsecsseesesees 4

Norsyn, Inc. v. Desai, 351 F.3d 825 (8th Cir. 2003)......... 13

Ornelas v. United States, 517 U.S. 690 (1996)........0....... 6

Osborn v. Haley, 127 S. Ct. 881 (2007)...........ccccceeeeee 11, 12,

13, 17, 20

Pasquantino v. United States, 544 U.S. 349 (2005)........... 4

Peninsula Asset Mgmt. (Cayman) Ltd. v. Hankook

Tire Co., 476 F.3d 140 (2d Cir. 2007)...........ccccccsee ees 5, 7

Quackenbush v. Allstate Ins. Co., 517 U.S. 706

Paria cbcecunsasndisinccenmsinesinsesddinbiastnbdeanenmmenain 17, 19, 20

Rockwell Intl Corp. v. United States, No. 05-1272

Sarath: CHUN, Tei: Sele scxccisnsisnitslencinaiecsiiiaiitiiamiundaaipiaaanabaied 12,17

Rosado v. Wyman, 397 U.S. 397 (1970) .........cccecceeeeeeeeeeees 16

Ruggiero v. Compania Peruana de Vapores, 639 F.2d

PE GH A. TUE GD cconcvescocssveniincinicceneiinintinteniambitaassacmanss 4

S&S Mach. Co. v. Masinexportimport, 706 F.2d 411

GP GR. HII ccsnsscscececnscusssdecbitiisnadesianeeciaaiaiaanenens 7

Saudi Arabia v. Nelson, 507 U.S. 3849 (1993)... ceeeeee 7

Schlumberger Indus., Inc. v. National Sur. Corp., 36

FA CO GE Ge, GD cnc cessncisitncsnsittedscitntisiainmmimaeuaiiatan 15

Security Pac. Natl Bank v. Derderian, 872 F.2d 281

(9th Cir. 1989).................. Snconecaiesenneseninshiabiensiadipaaiiiaianaanalial 13

Shepard v. United States, 544 U.S. 13 (2005).....0.0.....000 18

Square D Co. v. Niagara Frontier Tariff Bureau,

UR, Soe Wee Se CD ctcccteisentiinidiieaeaieanieniieinn 18

vi

Surinam Airways Holding Co., In re, 974 F.2d 1255

ER ee ae 15

Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S.

EE ee ea OTR 10, 11,

| 17, 18, 20

Things Remembered, Inc. v. Petrarca, 516 U.S. 124

tite 17

United Parcel Serv., Inc. v. Mitchell, 451 U.S. 56

I hire rene cenetiaticanenetitasnmatitiie 18

United States v. Rice, 327 U.S. 742 (1946)............0000. 18, 19

USX Corp. v. Adriatic Ins. Co., 345 F.3d 190

EEE Ee ec eee eee 3, 5, 7,13

Verlinden B.V. v. Central Bank of Nigeria, 461 U.S.

es 5, 10, 13, 14

Willingham v. Morgan, 395 U.S. 402 (1969) ............00000... 14

STATUTES AND REGULATIONS

U it i St

Foreign Sovereign Immunities Act of 1976, Pub. L.

No. 94-583, 90 Stat. 2891

I atari 13

Te 1, 11, 12, 13, 15, 16

a,

Ee a 3, 7

SE a 7

Securities Litigation Uniform Standards Act of 1998,

Pub. L. No. 105-353, 112 Stat. 3227 ...........cccccccccecceeee 14

Is seeinnineiaeaminl )

Ee 12, 16

Eee 12

vil

I I oie 15, 16

I Na yy Rea 13, 14

OU A i 12, 13

nS Tr I 14

I I iiscictntiteeiteren 2... 1, 10, 11, 13, 14, 15, 16

SN SO OGTR a eR aT 12, 13

ie ine iictiinisintiericicietei deel ciialeelinietentinaeates 15

28 U.S.C. § 1447(€) ....c.ceee 1, 10, 11, 12, 16, 17, 18, 19, 20

28 U.S.C. § 1447(d) ......ceccecceeeee. 1, 10, 11, 16, 17, 18, 19, 20

I, ecient hain nicciiie ce detested 2

itis bia/Canada

Commodity Derivatives by Government Bodies

Regulation, B.C. Reg. 407/2000 .............cccccccccceeeeeeeeeeeee 8

LEGISLATIVE MATERIALS

H.R. Rep. No. 94-1487 (1976), reprinted in 1976

a 4

ADMINISTRATIVE MATERIALS

BC Hydro, Financial Information Act Return (2006),

available at http://www.bchydro.com/rx_files/

pomecewelpettstse4BG 1S. Dal .......sccccoceccccccccccceseccceccecesccceess 9

BPA, Who Are We?, http://www.bpa.gov/corporate/

PELE EON ea ee oe CSTE re Ae 2

vill

Joint Explanatory Statement, Powerex Corp., Docket

Nos. ELO03-166-000 & EL-03-199-000 (FERC filed

Oct. 21, 2003), available at. http://elibrary.ferc.

gov/idmws/common/opennat.asp? file DD=9933358

FDIC, Career Questions and Answers, General Em-

ployment Questions, http://www.fdic.gov/about/

aaa ant

Reorganization Plan No. 3, available at

http://www.epa.gov/history/org/origins/reorg.htm .

United States Dep't of Energy, General Records of

the Department of Energy, http://www.

archives. gov/research/guide-fed-records/groups/

Ge ictoccnicninttnsitiiiadatlinnetinasiaaabanamnnaitintia ii iiainidaiaaes

OTHER MATERIALS

Ralph C.H. Catterall, The Second Bank of the United

States (1903), available at _http://books.

google.com/books?vid=OC LC00894 190&id=Ko-

I a aleeieiasemuntnadaabuaians 3

Dave Flessner, TVA Cuts Employee Bonuses, Chat-

tanooga Times (Free Press, TN), Dec. 16, 2006,

ee See Ie ccpriccnstccnncsiinrndinneneithegninnineneneen 9

16 James Wm. Moore, Moore’s Federal Practice

Fe ie See cietnictnncinitiammccnennienmapeepaneniameeininniuiees 16

Jacqueline Trescott & James V. Grimaldi, Smith-

sonian’s Small Quits in Wake of Inquiry, Wash.

RE ae eae i)

Webster's Third New International Dictionary (2002)....... 4

14B Charles Alan Wright, Arthur R. Miller &

Edward H. Cooper, Federal Practice and Proce-

I Sa hd

ix

14C Charles Alan Wright, Arthur R. Miller &

Edward H. Cooper, Federal Practice and Proce-

dure:

Under the multi-factor approach adopted by every court

of appeals except the Ninth Circuit, Powerex Corp. is an

“organ” of British Columbia within the meaning of the

Foreign Sovereign Immunities Act of 1976 (“FSIA”).

Instead of defending the Ninth Circuit's rigid three-part

test, respondents offer their own restrictive two-part test,

which no court has adopted. The Court should reverse

and hold that an entity is an organ when, considering all

relevant factors, it serves a public purpose and that

Powerex meets that standard.

Respondents devote the bulk of their brief to advancing

a novel approach to subject-matter jurisdiction under the

federal-officer and FSIA removal statutes that lacks sup-

port in this Court’s cases. Under well-settled precedent,

the district court had subject-matter jurisdiction upon the

proper removal of the case under 28 U.S.C. §§ 1441(d) and

1442. The court did not lose that jurisdiction when it con-

cluded that the Bonneville Power Administration (“BPA”),

Western Area Power Administration (““WAPA”), and BC

Hydro were entitled to immunity. Accordingly, the dis-

trict court did not remand the case for lack of subject-

matter jurisdiction under 28 U.S.C. § 1447(c), and 28

U.S.C. § 1447(d) therefore does not apply.

ARGUMENT

I. POWEREX IS AN “ORGAN” UNDER THE FSIA

Under the proper, fact-sensitive analysis, Powerex is an

organ of British Columbia ~ a conclusion that the British

Columbia and Canadian governments have endorsed in

briefs that respondents admit (at 49) are relevant here

See Pet. Br.-20-32: U.S. Br. 20-25: B.C. Br. 11-21; Canada

Br. 4. Respondents purport to agree that courts should

employ a multi-factor, fact-sensitive analysis to evaluate

FSIA organ status and that “[n]ot every factor will be pre.

sent in every case.” Resp. Br. 35-36. But they disregard

the factors that courts universally apply and, instead,

treat as dispositive two criteria — whether the entity per-

forms a “characteristically” governmental function and

whether it is subject to active government supervision.

2

Id. at 35-39. That test finds no support in the FSIA’s text,

structure, purposes, or history.

A. Respondents’ Two-Part Test For Organ Status

Conflicts With The FSIA

1. Although respondents do not specify what is a “gov-

ernmental function” that satisfies the first part of their

test, they apparently concede that Powerex engages in “a

characteristic function of government” — “exploitation of a

country’s natural resources.” Resp. Br. 39. They assert,

however, that an entity’s function is no longer “govern-

mental” when the entity performs the function for profit.

But whether an entity seeks profits cannot be disposi-

tive of its organ status. The FSIA’s text, structure, and

history demonstrate that Congress intended the term

“organ” to include commercial entities. See Pet. Br. 20-22.

Commercial entities, by their nature, seek to take in more

money than they spend. See, e.g., 49 U.S.C. § 24301(a)(2)

(“Amtrak ... shall be operated and managed as a for-

profit corporation”) (emphasis added).

The relevant question therefore is not whether an entity

generates profits; it is whether those profits benefit the

public. See Pet. Br. 21-22, 35. On that issue, to the ex-

tent that Powerex’s income exceeds its costs, the only

beneficiaries are the Province (Powerex’s sole owner

through its statutory agent, BC Hydro) and the Province’s

ratepayers. See id. at 26-28; U.S. Br. 25; B.C. Br. 18-20.

In this way, Powerex is no different from BPA, which

markets power and uses “[mJoney generated from surplus

[power] sales [to] keep power rates ... low,”! and it is

even more governmental than the second Bank of the

United States, which had “shareholders other than the

United States.” Lebron v. National R.R. Passenger Corp.,

' See BPA, Who Are We?, http://www.bpa.gov/corporate/About_BPA/.

That belies respondents’ claim (at 50) that BPA is “quite different”

from Powerex. Both entities were created by their governments to

market locally generated power for public benefit.

3

513 U.S. 374, 387 (1995); see Ralph C.H. Catterall, The

Second Bank of the United States 22 (1903).*

Respondents’ active-supervision requirement similarly

conflicts with the Act’s text. To be an organ, an entity

must be a “separate legal person” and thus have some

level of independence from the government that created

it. 28 U.S.C. § 1603(b)(1). Requiring “active” supervision

would defeat many of the benefits that governments gain

by incorporating separate legal entities to conduct com-

mercial functions for public benefit. See First Nat’ City

Bank v. Banco Para el Comercio Exterior de Cuba, 462

U.S. 611, 624-25 (1983° (“distinctive features” of instru-

mentalities permit them “a greater degree of flexibility

and independence from close political control than is gen-

erally enjoyed by government agencies”). Because organ

status is a contextual inquiry that turns on no single

factor, it makes far more sense to evaluate “the degree of

supervision by the government,” USX Corp. v. Adriatic

Ins. Co., 345 F.3d 190, 209 (3d Cir. 2003), rather than

simply labeling the supervision “active” or “passive.”

2. Respondents’ only attempt to ground their proposed

test in the FSIA’s text is to claim (at 36) that, because this

Court has held that governmental control is not relevant

under the “ownership” prong of § 1603(b)(2), see Dole Food

Co. v. Patrickson, 538 U.S. 468, 477 (2003), governmental

function and control therefore must be relevant under the

“organ” prong. That is a non sequitur. In recognizing

that “[clontrol and ownership ... are distinct concepts,”

id., this Court did not purport to address the meaning of

the FSIA’s organ prong.

Respondents’ principal support for their test comes from

snippets of cases from other contexts and a dictionary

definition. See Resp. Br. 34 & n.22. But each of those

* Board of Regents v. Nippon Telephone & Telegraph Corp., 478 F.3d

274 (Sth Cir. 2007), did not hold (as respondents suggest (at 40)) that

an entity can be dented organ status despite having no private share-

holders; a majority of that entity's shareholders were private. See id.

at 279.

4

sources apparently refers to an “organ” as a part of the

sovereign itself. See Pasquantino v. United States, 544

U.S. 349, 369 (2005) (President of the United States);

Montana-Dakota Utils. Co. v. Northwestern Pub. Serv.

Co., 341 U.S. 246, 261 (1951) (Frankfurter, J., dissenting)

(courts); Webster's Third New Intl Dictionary 1589 (2002)

(“a governmental instrumentality operating as a part of a

larger organization” — e.g., “the cabinet’s function as a

general [organ] of government”); see also Gaffney v. Cum-

mings, 412 U.S. 735, 751 (1973) (“organ[] of state gov-

ernment” created to reapportion legislative districts).

That cannot be the meaning of “organ” Congress intended

in the FSIA because, to be an organ, an entity must be a

“legal person” that is “separate” from the foreign state it-

self. 28 U.S.C. § 1603(b)(1). Cf. Booth v. Churner, 532

U.S. 731, 737-39 (2001) (looking to “broader statutory con-

text” and “statutory history” rather than dictionary

definitions urged by the parties).

In searching for support in the FSIA’s purposes, re-

spondents allude (at 37) to Congress's desire to provide

fairness to plaintiffs by rationalizing the process for de-

termining foreign entities’ entitkement to immunity from

suit. See H.R. Rep. No. 94-1487, at 6 (1976), reprinted in

1976 U.S.C.C.A.N. 6604, 6605; S. Rep. No. 94-1310, at 6

(1976). But they offer no support for the claim that Con-

gress wanted suits against sovereigns brought in state

courts.’ To the contrary, as a trade-off for giving plain-

tiffs the ability to sue foreign states, Congress expressly

granted foreign states their choice of forum, see Ruggiero

v. Compania Peruana de Vapores, 639 F.2d 872, 878 (2d

Cir. 1981) (Friendly, J.), and expressed a strong prefer-

ence for having cases involving foreign states heard in

3 Respondents are mistaken in claiming (at 38) that they could be

deprived of a jury trial by foreign sovereigns they did not even sue.

Respondents’ claims against Reliant and Duke could have been tried to

a jury. See Jn re Air Crash Disaster, 96 F.3d 932, 943 (7th Cir. 1996).

o

federal court, see Verlinden B.V. v. Central Bank of

Nigeria, 461 U.S. 480, 497 (1983).!

3. No court of appeals decision on which respondents

rely (at 35) supports their restrictive two-factor test.

Rather, in each one, the court evaluated at least five fac-

tors, none of them dispositive. See Nippon, 478 F.3d at

279-80; Peninsula Asset Mgmt. (Cayman) v. Hankook Tire

Co., 476 F.3d 140, 143 (2d Cir. 2007); USX, 345 F.3d at

209-13. Those courts did not require that the entity “per-

form a function that the government typically would un-

dertake itself,” as respondents claim (at 35); rather, they

considered “whether the foreign state created the entity

for a national purpose.” Nippon, 478 F.3d at 279; accord

Peninsula, 476 F.3d at 143; USX, 345 F.3d at 209.

Powerex readily meets that standard. See Pet. Br. 25-26.°

To be sure, courts consider “government supervision of the

entity,” id. at 24, and some have used the label “active”

(though not in the way respondents do), but other courts

have not, see USX, 345 F.3d at 209; EIE Guam Corp. v.

Long Term Credit Bank of Japan, Ltd., 322 F.3d 635, 640

(9th Cir. 2003), and there is no basis in the FSIA to em-

ploy it.

B. The Record Evidence Requires Reversal

Respondents’ analysis of the record evidence fares no

better than their proposed test for organ status.

4 Moreover, any fairness inquiry here surely weighs in Powerex’s fa-

vor, as the Federal Energy Regulatory Commission has found no merit

in allegations of wrongdoing by Powerex during California’s “energy

crisis.” See Joint Explanatory Statement at 3, Powerex Corp., Docket

Nos. ELO3-166-000 & ELO3-199-000 (FERC filed Oct. 31, 2003) (find-

ing “no probative evidence that Powerex engaged in or facilitated any”

prohibited trading practices and concluding that “Powerex was a

valuable and reliable supplier of energy and ancillary services to the

California organized markets throughout the period”), available at

° While some of the decisions on which respondents rely concluded

that the foreign entity performed “traditional government functions.”

that was sufficient ~ but not necessary — to demonstrate that the entity

was created “for a national purpose,” Peninsula. 476 F.3d at 143.

-

6

1. Respondents erroneously assert (at 9, 33) that the

Court should not resolve the question on which it granted

certiorari because the lower courts made “factual” find-

ings that Powerex is not an organ of British Columbia.

But the historical facts of this case are reflected in the

record and the lower courts’ opinions, and they are

undisputed. Powerex challenges the lower courts’ misin-

terpretation of the FSIA and their misapplication of the

Act to those facts — issues on which this Court owes no

deference to the lower courts. See Ornelas v. United

States, 517 U.S. 690, 697-98 (1996) (applying de novo re-

view to “control” and “clarify” legal standard that, like or-

gan status, cannot be articulated with precision, but “ac-

quire|s] content only through application”); First Options

of Chicago, Inc. v. Kaplan, 514 U.S. 938, 948 (1995) (ques-

tions of law reviewed de novo); see also Pet. Br. 25 n.24

(citing FSIA cases in which this Court has independently

applied the law to the facts of the case).

2. Respondents contend (at 38-41) that Powerex does

not perform a public activity because it engages in energy

trading. But Powerex’s participation in wholesale elec-

tricity markets within the United States allows the Prov-

ince to maximize the value of its hydroelectric resources

by exporting energy when available and, when necessary,

importing energy to replace depleted Provincial resources.

See Pet. App. 58a (Peterson Decl.); JA 235-37, 238-39 (Pe-

terson Dep.). Indeed, respondents concede (at 39) that, in

maximizing the value of the Province’s natural resources,

Powerex serves a public purpose. See Pet. App. 16a.°

® In seeking to minimize the concededly public nature of that activ-

ity, respondents note (at 40 n.25) that, if Powerex did not exist, BC

Hydro would not take over the function of selling power in the United

States. See Pet. App. 24a, 59a-60a; JA 237-38 (Peterson Dep.). If Pow-

erex did not exist, British Columbia power would be sold at the border

in a less profitable manner. JA 236 (Peterson Dep.). But Powerex dues

exist; the Province ordered its creation; and it has been performing the

public function of exporting provincially generated hydropower for

nearly 20 vears. Respondents also mention (at 40) Powerex’s natyral-

gas transactions, which make up “[l]ess than 5 percent” of Powerex’s

7

Respondents also admit (at 41) that Powerex’s govern-

mentally assigned duties have expanded over the years to

include treaty negotiation and performance on behalf of

Canada and the Province, and subsidization of domestic

industry. Respondents claim, however, that Powerex

bears a burden to demonstrate the “magnitude” of those

roles. They cite no authority for such a burden because

none exists. See S&S Mach. Co. v. Masinexportimport,

706 F.2d 411, 414 (2d Cir. 1983). Moreover, the record

reflects that Powerex has played a substantial — and

ongoing — role in shaping and executing Canada’s and

British Columbia’s obligations to provide power to Seattle

under international pacts. See Pet. Br. 11-12.’

Respondents also assert (at 38, 40) that the circum-

stances of Powerex’s creation are irrelevant to the organ-

status inquiry because in Dole Food the Court considered

the entity's characteristics at the time the suit was filed.

See 538 U.S. at 478. But, there, the Court was interpret-

ing § 1603(b)(2)’s majority-ownership prong, which turns

on an entity’s current ownership structure. On the organ

prong, when (as here) the entity's basic structure and

functions have remained constant, it makes little sense to

ignore relevant evidence of the entity’s creation, as courts

have recognized. See Nippon, 478 F.3d at 279; Peninsula,

476 F.3d at 143; USX, 345 F.3d at 209-11; EJE Guam, 322

F.3d at 640.*

revenues, JA 249 (Peterson Dep.). Some of those purchases are “for the

natural-gas plants in the BC Hydro system,” C.A. E.R. (PWX) 0802

(Peterson Dep.), and thus directly benefit the Province.

‘ Contrary to respondents’ suggestion (at 41 n.26), that role is rele-

vant even though this suit did not arise out of those activities. The

organ-status inquiry includes consideration of all relevant characteris-

tics of the entity at issue. It is unlike the FSIA’s commercial-activity

exception, which explicitly directs the court to consider whether the

suit is “based upon” the commercial activity. 28 U.S.C. § 1605(a)(2):

see Saudi Arabia v. Nelson, 507 U.S. 349, 357-58 (1993) (interpreting

§ 1605(a)(2)).

_ ® Moreover. contrary to respondents’ claim (at 41-42), the creation of

Powerex by a directive of the Province’s Minister of Energy rather than

8

3. In addition, respondents claim (at 42-44) that the

British Columbia government does not adequately super-

vise Powerex. Even if respondents’ active-supervision re-

quirement were consistent with the FSIA, Powerex meets

that requirement, as respondents’ principal authority

shows. Unlike Japan, whose supervision the Fifth Circuit

deemed “not active” in Nippon, British Columbia does not

merely duplicate the oversight “of other governments’

regulatory bodies.” 478 F.3d at 279-80. Instead, provin-

cially appointed BC Hydro directors make up a majority of

Powerex’s board and Powerex must comply with numer-

ous statutes that do not apply to private-sector firms. See

Pet. Br. 29-31; B.C. Br. 17-18. Respondents thus wrongly

claim that “Powerex is regulated like other private energy

companies.” Resp. Br. 44. See also Filler v. Hanvit Bank,

378 F.3d 213, 217 (2d Cir. 2004) (deeming the governmen-

tal supervision “active” simply because the government

appointed the organ’s president and directors, and

“overs[aw]” “many of its operations’).°

4. Respondents make much (at 44-45) of the fact that

Powerex pays performance bonuses to its employees.

Powerex pays those bonuses “to be competitive” with the

a statute makes little difference because government instrumentalities

are often created by administrative order. See, e.g., Reorganization

Plan No. 3 of 1970, § 1(a) (“[t]here is hereby established the Environ-

mental Protection Agency”), available at http://www.epa.gov/history/

org/origins/reorg.htm; see also Lebron, 513 U.S. at 388-91. In fact,

Southwestern Power Administration, Southeastern Power Administra-

tion. and Alaska Power Administration all were created by Depart-

ment of Interior Secretarial Orders. See United States Dep't of En-

ergy. General Records of the Department of Energy § 434.3,

http://www.archives.gov/research/guide-fed-records/groups/434.html.

* Respondents note (at 43-44) that the use of a risk-management

committee is not unique to Powerex. But they fail to mention that,

unlike a typical private-sector risk-management committee, Powerex's

committee reports to British Columbia's Ministry of Finance. See Pet.

Br. 29. Moreover, Powerex has that committee because, as a govern-

ment body, it was required to be subject to one in order to transact in

commodity derivatives. See Commodity Derivatives by Government

Bodies Regulation. B.C. Reg. 407/2000 (Pet. Br. Add. 43); Pet. Br. 30.

9

private sector in hiring personnel, while retaining a com-

pensation level for Powerex’s traders that remains only

“at the median of the Canadian market.” JA 242 (Peter-

son Dep.). Many United States governmental entities

similarly compensate employees above the government

pay scale to compete with the private sector in hiring.'°

Moreover, unlike private firms, the compensation paid

to Powerex’s employees is publicly available — placing

Powerex at a competitive disadvantage in retaining high-

performing personnel. See, e.g., BC Hydro, Financial

Information Act Return at 85 (2006), available at http://

www.bchydro.com/rx_files/policies/policies48313.pdf.

5. Finally, Powerex’s relationship with BC Hydro is not

inconsistent with its being an organ of the Province, as

respondents claim (at 45-47). When the two company’s

financial statements are consolidated, transactions be-

tween them are eliminated. See JA 220 (Lambert Dep.)

Moreover, accounting for those transactions enables the

Province to identify inefficiencies as between Powerex and

BC Hydro that would otherwise be obscured. See JA 201

(Minister of Energy testifying that ratepayers will not

10 See, e.g.. 5 U.S.C. § 4802(b) (“{t]he [Securities and Exchange]

Commission may appoint and fix the compensation of such officers,

attorneys, economists, examiners, and other employees as may be nec-

essary for carrying out its functions under the securities laws”); Dave

Flessner, TVA Cuts Employee Bonuses, Chattanooga Times (Free

Press, TN), Dec. 16, 2006 (TVA president compensated $1.6 million for

fiscal year: TVA nuclear chief compensated nearly $1.3 million; TVA

paid $40 million in “year-end performance payments to . . . employees”;

“TVA paid its 143 top executives another $10.5 million in bonuses’);

Jacqueline Trescott & James V. Grimaldi, Smithsonian's Small Quits

in Wake of Inquiry, Wash. Post. Mar. 27, 2007, at Al (head of Smith-

sonian paid $884,733 in salary, plus bonuses, and a $1.15 million hous-

ing allowance over six years); FDIC. Career Questions and Answers,

General Employment Questions (“The FDIC is a government corpora-

tion, and does not follow the pay scales on the General Schedule (GS).

While we are part of the competitive civil service, our positions [are]

paid on our own rate of pay[.J”). http://www.fdic.gov/about/jobs/

jobs_questions.html.

10

subsidize export activity).!' Although the Province con-

sidered other entities to market the power received from

the United States under the Columbia River Treaty, the

Province chose Powerex because of its “superior knowl-

edge of the hydroelectric system in British Columbia and

the Pacific Northwest” and its “mastery of all the details

of the Treaty” — benefits that “outweigh/ed]” the “commer-

cial advantages that the other competitors might have

brought to the table.” JA 231 (Peterson Dep.).'”

Il. SECTION 1447(d) DOES NOT APPLY HERE

The unusual circumstances of this case can be resolved

under well-settled principles of appellate jurisdiction.

Section 1447(d) applies only to cases remanded under 28

U.S.C. § 1447(c). See Thermtron Prods., Inc. v. Hermans-

dorfer, 423 U.S. 336, 345-46 (1976). The district court did

not remand this case under § 1447(c) because, as it ini- |

tially and correctly held (Pet. App. 20a), the entire action

was “properly removed” under the federal-officer removal

statute, 28 U.S.C. § 1442, and the FSIA’s removal provi-

sion, id. § 1441(d). Those removal statutes conferred

subject-matter jurisdiction on the district court over the

entire case, which included the claims against Powerex,

regardless of whether Powerex is independently entitled

to remove under the FSIA. See Pet. Br. 41-42, 45-46.

After the district court resolved the immunity defenses of

the federal agencies and BC Hydro, it had the power to

11 While (as respondents note (at 47 n.30)) the British Columbia

Utilities Commission has accepted Powerex's separate legal status, the

Commission also concluded that “the actions of BC Hydro with respect

to electricity trade are very important to the welfare of ratepayers.” JA

277. Thus, the Commission forcefully underscored the key role Pow-

erex plays in enabling BC Hydro to meet provincial objectives.

'2 Independently, respondents suggest (at 49) that this Court should

not consider the FSLA’s purpose of promoting. harmonious foreign rela-

tions. Although courts need not bow to diplomatic pressure in resolv-

ing particular cases under the Act, see Ver/inden, 461 U.S. at 488, the

statute still must be interpreted in light of its purposes, e.g., McCreary

County v. ACLU, 545 U.S. 844, 861 (2005) (“[e]xamination of purpose is

a staple of statutory interpretation’).

11

decide the remaining claims against Powerex. See id. at

45-46; cf. Osborn v. Haley, 127 S. Ct. 881, 896 (2007).

Because the district court had (amé never lost) statu-

tory subject-matter jurisdiction over the claims against

Powerex, its decision to remand those claims must be un-

derstood as a discretionary decision not to exercise

supplemental jurisdiction conferred on it by § 1442 and

§ 1441(d). Section 1447(d) does not bar appellate review.

of such discretionary remand orders because they are not

based on a lack of subject-matter jurisdiction under

§ 1447(c); rather, they are based on a district court's

discretionary decision to decline to exercise its subject-

matter jurisdiction. See Carnegie-Mellon Univ. v. Cohill,

484 U.S. 343, 355 n.11 (1988); Thermtron, 423 U.S. at

346; Pet. Br. 45-46.

Respondents devote the bulk of their brief to presenting

various claims that the court below lacked appellate

jurisdiction. Those arguments fundamentally misunder-

stand principles of federal jurisdiction applicable in cases

removed by federal agencies and foreign sovereigns.

A. The Immunity Of BPA, WAPA, And BC Hydro

Did Not Require Remand Under § 1447(c)

Respondents contend (at 17-21) that the district court's

remand order must have been issued under § 1447(c)

because federal and foreign sovereign immunity, and the

so-called “derivative-jurisdiction” doctrine, prevented

the district court from acquiring subject-matter juris-

diction over this case when it was removed from state

court. Lack of immunity is not a requirement for statu-

tory subject-matter jurisdiction under either § 1442 or

§ 1441(d). Instead, Congress conferred subject-matter

jurisdiction in those removal provisions based on the type

of entity being sued — foreign sovereign or federal officer —

and not the nature of the claim brought against it. The

court’s resolution of immunity does not divest the court of

jurisdiction under either removal statute.

1. Respondents’ contention exploits the familiar con-

fusion surrounding the term “jurisdiction” — “a word of

12

many, too many, meanings.” Rockwell Intl Corp. v.

United States, No. 05-1272, slip op. at 9 (U.S. Mar. 27,

2007) (internal quotation marks omitted). Under the

usual application of § 1447(c), a district court will con-

clude that it lacks subject-matter jurisdiction over a re-

moved action because it could not have exercised original

jurisdiction over the action. See 28 U.S.C. § 1441(a). For

example, a district court lacks jurisdiction when either

the plaintiff's well-pleaded state-court complaint fails to

present a federal question that confers jurisdiction under

28 U.S.C. § 1331, e.g., Franchise Tax Bd. v. Construction

Laborers Vacation Trust, 463 U.S. 1, 27-28 (1983), or

complete diversity is lacking at the time of removal, pre-

cluding jurisdiction under 28 U.S.C. § 1332, see Exxon

Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 564

(2005) (under § 1441(a), “absent complete diversity a case

is not removable”). When the district court undertakes

one of those “threshold inquir{ies],” Osborn, 127 S. Ct. at

895, and determines that the requirements of the removal

statute have not been satisfied, § 1447(c) directs the dis-

trict court to remand the case.

By contrast, the federal-officer and foreign-sovereign

removal provisions entail a different threshold jurisdic-

tional inquiry. If the removing defendant qualifies as a

foreign state or as a federal officer or agency (with a col-

orable federal defense and acting under color of office, see

Jefferson County v. Acker, 527 U.S. 423, 431 (1999)), then

the requirements for removal are satisfied and the entire

case is properly removed.'* A district court’s decision on

'3 Respondents do not dispute that BPA. WAPA, and BC Hydro

properly invoked § 1442(a) and § 1441(d) or that. when a federal

agency or a foreign state properly removes an action to federal court,

the entire case is removed. See Resp. Br. 25 n.12; Pet. App. 20a.

Courts have so held under both § 1442, see, e.g.. District of Columbia v.

MSPB, 762 F.2d 129, 132 (D.C. Cir. 1985) (per curiam); Johnson v.

Showers, 747 F.2d 1228, 1229 (8th Cir. 1984); 14C Charles Alan

Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and

Procedure § 3727, at 168-69 & nn.74-75, Supp. at 105 n.74 (3d ed. 1998

& Supp. 2006) (“Wright & Miller”) (citing cases from the Second, Fifth,

Ninth, and Tenth Circuits), and § 1441(d), see, e.g.. Davis v. McCourt,

13

an immunity defense occurs only after the court obtains

jurisdiction over the case under § 1442(a) or § 1441(d).

Although sovereign immunity has been described as

“jurisdictional,” FDIC v. Meyer, 510 U.S. 471, 475 (1994),

nothing in the text of either § 1442 or § 1441(d) requires

that the removing defendant lack immunity from suit as a

precondition for statutory subject-matter jurisdiction to

attach under those provisions. Unlike § 1441(a), neither

provision requires that the case could have been brought

originally in federal court. Rather, when a sovereign de-

fendant removes under § 1442 or § 1441(d) and asserts

immunity, the district court has subject-matter jurisdic-

tion to resolve the entire case (although before proceeding

on the claims against the removing defendant it must re-

solve the substantive question whether that defendant is

immune from suit). That conclusion comports with this

Court’s cases recognizing that the resolution of an immu-

nity defense requires the application of substantive fed-

eral law. See Osborn, 127 S. Ct. at 896; Verlinden, 461

U.S. at 493-94, 497.'4

2. Respondents’ theory, by contrast, requires the

absurd conclusion that § 1447(c) mandates a district court

to remand a suit against an immune sovereign to state

court. That rule would defeat § 1442’s and § 1441(d)'s

purpose of permitting federal agencies and foreign sover-

eigns to have their immunity defenses adjudicated in a

226 F.3d 506, 509-11 (6th Cir. 2000) (citing cases from four other

circuits); see also Norsyn, Inc. v. Desai, 351 F.3d 825, 827 n.2 (8th Cir.

2003), USX, 345 F.3d at 197, 216.

14 Respondents rely (at 19-20, 25) on a Ninth Circuit decision, Secu-

rity Pacific National Bank v. Derderian, 872 F.2d 281 (9th Cir. 1989),

that fundamentally misinterpreted the FSLA by holding that the

requirements of the Act's original-jurisdiction provision, § 1330(a).

must be met for the district court to have subject-matter jurisdiction

under § 1441(d). See 872 F.2d at 283-84 & n.6. Unlike § 1330(a),

§ 1441(d) does not limit jurisdiction to claims “with respect to which

the foreign state is not entitled to immunity.” 28 U.S.C. § 1330(a).

Compare Reply Br. Add. 1 (§ 1330) with Pet. Br. Add. 4 (§ 1441).

14

federal forum,'> because the state court would be free to

revisit and reject that defense on remand, see Kircher v.

Putnam Funds Trust, 126 S. Ct. 2145, 2157 (2006).

3. Nothing about the “discredited doctrine of derivative

jurisdiction,” 14C Wright & Miller § 3727, at 170, on

which respondents rely (at 17-18), justifies the result they

urge. Congress has eliminated the doctrine in cases re-

moved under § 1441. See 28 U.S.C. § 1441(f). To the

extent it retains validity in cases under § 1442, the upshot

is that a district court should dismiss — not remand — a

case removed from state court when the state court did

not have jurisdiction to adjudicate it. See Lambert Run

Coal Co. v. Baltimore & Ohio R.R. Co., 258 U.S. 377, 382-

83 (1922), superseded by statute, 28 U.S.C. § 1441(f).®

4. Contrary to respondents’ assertions (at 21, 24), sov-

ereign immunity is unlike the jurisdictional issues that

this Court faced in Kircher and Gravitt v. Southwestern

Bell Telephone Co., 430 U.S. 723 (1977) (per curiam).

Under the Securities Litigation Uniform Standards Act

(“SLUSA”) at issue in Kircher, a case is removable only if

the Act precludes the suit from being brought at all. See

126 S. Ct. at 2155. Thus, SLUSA preclusion is a pre-

requisite for statutory subject-matter jurisdiction under

SLUSA’s removal provision. Whether SLUSA precludes a

'° See Verlinden, 461 U.S. at 489, 497; Willingham v. Morgan, 395

U.S. 402, 407 (1969); see also Colorado v. Symes, 286 U.S. 510, 517

(1932) (federal-officer removal statute is “to be liberally construed”).

'® See also, e.g.. 14B Wright & Miller § 3721, at 304 (“The effect of

the [derivative-jurisdiction doctrine’s] application was a dismissal of

the action by the district court.”). None of the cases cited by re-

spondents even suggests that remand was appropriate. See Kasi v.

Angelone, 300 F.3d 487, 503-04 (4th Cir. 2002) (describing a prior cir-

cuit decision in which the court affirmed a district court's entry of

judgment on the merits in favor of the government in a case removed

under § 1442); In re Elko County Grand Jury, 109 F.3d 554, 555 (9th

Cir. 1997) (affirming district court's refusal to remand case removed

under § 1442); Edwards v. U.S. Dept of Justice, 43 F.3d 312, 314-17

(7th Cir. 1994) (affirming the district court's entry of judgment on the

merits in favor of the government in a case removed under § 1442).

15

suit is thus analogous to whether a particular defendant

is a federal agency under § 1442(a)(1) — they are both

requirements for removal. The validity of a federal de-

fense of sovereign immunity, by contrast, is a substantive,

question that the court addresses after determining that

the requisites of the removal statute have been satisfied.

Nor does Gravitt help respondents. There, the basis for

removal was diversity of citizenship. The district court

remanded the case as “improperly removed,” after con-.

cluding that, at the time of removal, the parties were not

completely diverse. 430 U.S. at 723. Thus, like Kircher,

Gravitt remanded on the ground that the requisites of the

removal statute were not met at the time of removal.

B. The District Court Never Lost Jurisdiction

Over The Claims Against Powerex

Respondents suggest (at 26 n.13) that the district court

lost jurisdiction over the claims against Powerex after

concluding that the federal agencies and BC Hydro were

immune from suit. The D.C. Circuit has correctly rejected

that assertion, holding that a district court does not lose

jurisdiction over claims against non-sovereign defendants

simply because a removing federal agency has been dis-

missed as immune. See MSPB, 762 F.2d at 131-33.!7

Respondents’ principal justification for their contention

—a citation to Arbaugh v. Y & H Corp., 126 S. Ct. 1235,

1242 (2006) — does not support them. This Court stated in

Arbaugh that, when a federal court dismisses a federal

claim for lack of subject-matter jurisdiction, it cannot

'7 Other courts also have recognized that principle under both

§ 1442 and § 1441(d). See IMFC Prof! Servs. of Fla., Inc. v. Latin Am.

Home Health, Inc.. 676 F.2d 152, 156, 158-59 (Sth Cir. Unit B 1982)

(§ 1442); 14C Wright & Miller § 3727, at 166-68, 171 (same); In re

Surinam Airways Holding Co., 974 F.2d 1255, 1258-60 (11th Cir. 1992)

(§ 1441(d)); Arango v. Guzman Travel Advisors Corp., 621 F.2d 1371,

1375-78 & n.6 (5th Cir. 1980) (same); 14C Wright & Miller § 3729.1, at

239-43 (same); cf. 28 U.S.C. § 1367. But cf. Schlumberger Indus., Inc.

vu. National Sur. Corp., 36 F.3d 1274, 1284-85 (4th Cir. 1994) (case

must be remanded when plaintiff voluntarily dismisses foreign

sovereign immediately after removal).

16

exercise supplemental jurisdiction under 28 U.S.C.

§ 1367. Id. at 1244-45. But the Court made that state-

ment while analyzing whether a complaint stated a fed-

eral claim that gave rise to jurisdiction under § 1331. The

Court did not purport to address cases such as this one in

which a court possesses and exercises jurisdiction under

§ 1442 or § 1441(d) and concludes that the removing de-

fendant is immune from suit. Cf. Rosado v. Wyman, 397

U.S. 397, 402-05 (1970) (mootness of main claim does not

destroy power to decide supplemental claim).

Furthermore, even if the district court lost jurisdiction

over the claims against Powerex once it resolved the im-

munity defenses of the federal agencies and BC Hydro

(and assuming that Powerex is not an organ of British

Columbia), the district court's remand order would not

have been authorized under § 1447(c) because that provi-

sion authorizes remand only when the district court lacks

subject-matter jurisdiction at the time of removal. See

Pet. Br. 42-45; U.S. Br. 8-11.'* Respondents briefly dis-

pute that point in a footnote (at 27 n.15), but they ignore

the structure and history of § 1447(c) and this Court’s

recognition that subject-matter jurisdiction is determined

when the federal court’s jurisdiction is invoked.

C. Section 1447(d) Does Not Apply To Discre-

tionary Remands Of Supplemental Claims

Respondents’ claim (at 31-33) that this Court should

apply -§ 1447(d) to orders remanding claims within the

court's supplemental jurisdiction — such as in this case

and Cohill - is inconsistent with this Court’s cases and

unsupported by the policy of § 1447(d).

'S Respondents apparently believe that petitioner and the United

States should have cited Adkins v. Illinois Central Railroad Co., 326

F.3d 828 (7th Cir. 2003), cited in 16 James Wm. Moore et al., Moore's

Federal Practice 4 107.44{2}[{a)[iii] (3d ed. 2006). See Resp. Br. 26-27 &

n.14. But that case did not hold that post-remova! events can trigger a

lack of jurisdiction within the meaning of § 1447(c); it held that “[t}he

present case, in our view, is best regarded as one in which the court

never had any jurisdiction over the claim.” Adkins, 326 F.3d at 833. —,

17

Respondenfs cannot dispute that Thermtron held that

“only remand orders issued under § 1447(c) and invoking

the grounds specified therein ... are immune from review

under § 1447(d).” 423 U.S. at 346. Nor can they dispute

that Cohill held that § 1447(c) “do[es] not apply” to discre-

tionary decisions to remand rather than to exercise sup-

plemental jurisdiction. 484 U.S. at 355 n.11. Indeed, to

hold that § 1447(d) applies here,” the Court essentially

would have to overrule Quackenbush v. Allstate Insurance

Co., 517 U.S. 706 (1976), which held that § 1447(d)

was “inapplicable” to a discretionary “abstention-based

remand order” because it “does not fall into either cate-

gory of remand order described in § 1447(c).” Id. at 712.'%

Although respondents assert (at 31) that “a remand of a

supplemental claim is the legal equivalent of a section

1447(c) remand,” the language of § 1447(c) provides no

support for that assertion.” When the federal court has —

jurisdiction — as in the Cohill and abstention contexts — a

remand is not mandatory under § 1447(c) and must there-

fore be discretionary. Cf. Rockwell, slip op. at 1€ 1.6.

Perhaps recognizing that the type of discretionary re-

mand order at issue here is reviewable under settled law,

respondents’ amici urge this Court to overrule Thermtron

— a decision the Court has reaffirmed no less than four

times, most recently this Term. See Osborn, 127 S. Ct. at

893, 895; Kircher, 126 S. Ct. at 2153; Quackenbush, 517

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

U.S. 124, 127-28 (1995). Notably, respondents do not join

that argument. See Resp. Br. 32. For that reason alone,

'9 Although, as respondents note. no party urged the application of

§ 1447(d) in Quackenbush, this Court analyzed and resolved that issue,

see 517 U.S. at 711-12, presumably to satisfy its obligation to ensure its

own jurisdiction, see, e.g.. Grupo Dataflux v. Atlas Global Group, L.P..

541 U.S. 567, 593 (2004).

2° In claiming that § 1447(c) covers all remands, see Public Citizen

Br. 7-8, respondents’ amici read the word “defect” out of the statute by

applying § 1447(c) to all remand orders, even where (as here) there was

no defect in removal. See, e.g.. Autoridad de Energia Electrica de

Puerto Rico v. Ericsson Inc., 201 F.3d 15, 17 (ist Cir. 2000).

18

this Court should decline to accept amici’s invitation to

reexamine its 30-year-old decision in Thermtron.?'

Additionally, the Court should reject amici’s call to re-

examine Thermtron’s settled construction of § 1447(c) and

(d) because of the “special force” that stare decisis has

in inatters of statutory interpretation. Hilton v. South

Carolina Pub. Rys. Comm'n, 502 U.S. 197, 202 (1991) (in-

ternal quotation marks omitted).22. Thermtron held that

§ 1447(c) and (d) “must be construed together.” 423 U.S.

at 345. That rule has its roots in cases decided more than

60 years ago.** Although Congress has twice amended

§ 1447(c) since Thermtron, see Pet. Br. 43-44 & n.52, it

has. taken no action to alter the rule set forth in that deci-

sion. Thus, “Congress has had [more than] 30 years in

which it could have corrected [the Court's] decision in

|Thermtron| if it disagreed with it, and has not chosen to

do so.” Hilton, 502 U.S. at 202.

Permitting appellate review of Cohill remand orders

does not conflict with the policy underlying § 1447(d).

Congress intended that provision to prevent “prolonged

litigation of questions of jurisdiction of the district court

to which the cause is removed.” United States v. Rice, 327

U.S. 742, 751 (1946). When, as here, the district court has

subject-matter jurisdiction under two different removal

statutes, the concern articulated in Rice is not present

because the district court’s “jurisdiction” is not in “ques-

2! See. e.g., Kamen v. Kemper Fin. Servs., Inc., 500 U.S. 90, 97 n.4

(1991) (‘we do not ordinarily address issues raised only by amici’);

United Parcel Serv., Inc. v. Mitchell, 451 U.S. 56, 60 n.2 (1981).

* See, e.g., Shepard v. United States, 544 U.S. 13, 23 (2005); Cedar

Rapids Cmty. Sch. Dist. v. Garret F. ex rei. Charlene F . 526 U.S. 66, 78

n.10 (1999); Square D Co. v. Niagara Frontier Tariff Bureau, Inc., 476

U.S. 409, 424 (1986); Illinois Brick Co. v. Ilinois, 431 U.S. 720, 736

(1977); Flood v. Kuhn, 407 U.S. 258, 282-84 (1972).

“5 See. Kloeb v. Armour & Co., 311 U.S. 199, 202 (1940) (the prede- ~

cessors of § 1447(c) and (d) “‘are in pari materia, [and] are to be con-

strued accordingly rather than as distinct enactments’”) (quoting

Employers Reinsurance Corp. v. Bryant, 299 U.S. 374, 380 (1937)).

19

tion{].”. Jd. Here, appellate review ensures that the

district court’s decision not to exercise supplemental

jurisdiction comports with the “strict duty to exercise the

jurisdiction that is conferred upon [federal courts] by

Congress.” Quackenbush, 517 U.S. at 716. That is par-

ticularly true in this case because the federal-officer and

foreign-sovereign removal statutes embody a strong con-

gressional preference for a federal forum. See supra note

15.

D. The District Court Did Not Clearly Purport To

Remand For Lack Of Subject-Matter Jurisdic-

tion Under § 1447(c)

Finally, respondents claim that, regardless of whether

the district court in fact had jurisdiction here, § 1447(d)

bars appellate review because the district court “pur-

ported” to remand for lack of subject-matter jurisdiction.

Although respondents spend three pages dissecting the

remand order (at 12-15), they fail to identify either a

statement by the district court that it was remanding be-

cause it lacked subject-matter jurisdiction or a citation to

§ 1447(c). The remand order contains no clear explana-

tion of why the district court felt compelled to remand the

entire case — which it had held was “properly removed,”

Pet. App. 20a — after concluding that the federal agencies

and BC Hydro were immune from suit and that Powerex

was not an organ of British Columbia.** At most, respon-

dents have established that the order is ambiguous. But,

even if the district court had purported to remand for lack

of subject-matter jurisdiction, it would still be necessary

to inquire further to determine whether the remand order

rd -

24 Compare Kircher, 126 S. Ct. at 2158 (Scalia, J., concurring in part

and in the judgment) (“‘ Because the Court lacks subject matter juris-

diction, the Court REMANDS this action[.]'") (quoting district court

order); id. at 2153 (majority) (“The District Court said that it was re-

manding for lack of jurisdiction{.]”). Although respondents rely heavily

on the district court’s after-the-fact characterizations of its remand

order, they fail to explain how a district court can purport to remand a

case under § 1447(c) by citing that provision only in orders issued more

than a month after the remand order.

20

was based on the resolution of an issue of “subject matter

jurisdiction” within the meaning of § 1447(c). The Court

undertook precisely that kind of analysis in Kircher. See

126 S. Ct. at 2154-55; Pet. Br. 47.25

Respondents and their amici also observe that the re-

mand order does not contain a balancing of the discre-

tionary factors set forth in Cohill. But, because Cohill

did not authorize district courts to remand supplemental

claims without making “a proper determination that re-

taining jurisdiction over the case would be inappropriate,”

484 U.S. at 357, the district court’s failure to conduct

the proper Cohill analysis before remanding makes this

case like Osborn, Quackenbush, and Thermtron, where

this Court reviewed and reversed unauthorized remand

orders. The failure to conduct a balancing does not make

this case anything like Gravitt, where the district court

remanded the case as “improperly removed” after deter-

mining that complete diversity was lacking at the time of

removal — a remand order that was “plainly within the

bounds of § 1447(c).” 430 U.S. at 723 (emphasis added).”°

CONCLUSION

The judgment should be reversed insofar as it held that

Powerex is not an organ of British Columbia.

25 Respondents seize on a sentence in a footnote in Kircher that ob-

served that the district court in that case had understood itself to be

making a jurisdictional ruling. See 126 S. Ct. at 2155 n.12. But the

bulk of that footnote was devoted to bolstering the Court’s conclusion

that SLUSA remands are in fact remands for lack of subject-matter

jurisdiction under § 1447(c). See id. The Court did not hold that the |

district court's characterization of the issue as jurisdictional was dis-

positive. See id. at 2154 (evaluating whether “the District Court was

correct in understanding its remand order to be dictated by its finding *

that it lacked removal jurisdiction”) (emphasis added).

“6 In any event, § 1447(d) does not apply here for the independent

reason that Congress did not intend for that provision to foreclose ap-

pellate review of erroneous decisions denying a foreign governmental

entity's rights under the FSLA. See Pet. Br. 48-50; B.C. Br. 29-27; see

also U.S. Br. 15 n.6. The Court need not reach that broader theory of

appellate jurisdiction to resolve the applicability of § 1447(d) to this

case because § 1447(d) is inapplicable under well-settled principles.

April 6, 2007

Respectfully submitted,

DAVID C. FREDERICK

Counsel of Record

Scott H. ANGSTREICH

BRENDAN J. CRIMMINS

KELLOGG, HUBER, HANSEN,

TODD, EVANS & FIGEL, P.L.L.C.

1615 M Street, N.W., Suite 400

Washington, D.C. 20036

(202) 326-7900

Counsel for Powerex Corp.

ADDENDUM

TABLE OF CONTENTS

Statutory Provisions Involved:

SD UW BS.. 9 WB cccrcrcrssnersimniesnntiiinianiaamean

Add. 1

STATUTORY PROVISIONS INVOLVED

28 U.S.C. § 1330. Actions against foreign states

(a) The district courts shall have original jurisdiction

without regard to amount in controversy of any nonjury

civil action against a foreign state as defined in section

1603(a) of this title as to any claim for relief in personam

with respect to which the foreign state is not entitled to

immunity either under sections 1605-1607 of this title or

under any applicable international agreement.

(b) Personal jurisdiction over a foreign state shall exist as

to every claim for relief over which the district courts have

jurisdiction under subsection (a) where service has been

made under section 1608 of this title.

(c) For purposes of subsection (b), an appearance by a for-

eign state does not confer personal jurisdiction with re-

spect to any claim for relief not arising out of any transac-

tion or occurrence enumerated in sections 1605-1607 of

this title.