Petition for Writ of Certiorari — Brookshire Bros. Holding, Inc. v. Day-Co Productions, Inc., 129 S. Ct. 2865 (2009) (No. 08-1233)

Supreme Ce US.

FIL

/

WV ( 081233 APR 6 - 2009

CF PCE OF THE CLERK

No. Wiitam . Suter, Clerk

IN THE

Supreme Court of the Anited States

BROOKSHIRE BROTHERS HOLDING, INC. ET AL,

PETITIONERS

DAYCO PRODUCTS, INC. ET AL, RESPONDENTS

On Petition for Writ of. Certiorari

to the United States Court of Appeals

for the Fifth Circuit

PETITION FOR A WRIT OF CERTIORARI

JOHN A. JEANSONNE, JR. DAVID B. SALMONS

JEANSONNE & REMONDET Counsel of Record

Post Office Box 91530 ROBERT V. ZENER

Lafayette, LA 70509 BINGHAM MCCUTCHEN, LLP

(337) 235-2011 2020 K Street, N.W.

Washington, D.C. 20006

MICHAEL H. SCHWARTZBERG (999) 973 6000

‘*VAMVORAS & SCHWARTZBERG

1111 Ryan Street

Lake Charles, LA 70601

(337) 433-1621

Counsel for Petitioners

i a}

i

QUESTIONS PRESENTED

1. Whether the district court’s order remanding

the case to state court following its discretionary de-

cision to decline to exercise supplemental jurisdiction

under 28 U.S.C. § 1367(c) is barred from appellate

review by 28 U.S.C. § 1447(d).

2. Whether the district court’s order remanding

the case to state court based on its analysis of the

discretionary factors identified in 28 U.S.C. § 1367(c)

is barred from appellate review by 28 U.S.C.

§ 1452(b), where the case had been removed to fed-

eral court solely under 28 U.S.C. §§ 1334 and 1452(a)

on the ground that it related to a bankruptcy proceed-

ing under Chapter 11.

il

LIST OF PARTIES

The following were parties to the proceedings in

the court of appeals:

Plaintiff - Appellees:

Brookshire Brothers Holding, Inc.

Brookshire Brothers Management, Inc.

Brookshire Brothers Ltd.

Defendant - Appellants:

Dayco Products Inc.

Shell Chemical LP

Ticona Polymers Inc.

Mark IV Industries LTD

Underwriters Laboratories Inc.

RULE 29.6 STATEMENT

Petitioners are Brookshire Brothers Holding, inc..,

Brookshire Brothers Management, Inc., and Brook-

shire Brothers Ltd. No publicly held corporation

owns more than 10 percent of any of the petitioners’

stock.

iil

TABLE OF CONTENTS

Page

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TABLE OF AUTHORITIBS ......:ccccsscsessossccosesssnecses Vv

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FE A iisindter ieetieaeetasioendnenpiescenss 1

STATUTORY PROVISIONS INVOLVED.............. 1

STATEMENT OF THE CASE................c.ccssccsssseeees 1

A. Factual Background .................cccccccccssccccess 2

Bh, ERR IW vn coees ikcaccerssinrivnstcrewsoxsncanéss 5

REASONS FOR GRANTING THE WRIT............. 7

I. AT A MINIMUM, THE COURT SHOULD

GRANT THE PETITION, VACATE THE

DECISION BELOW, AND REMAND FOR

FURTHER PROCEEDINGS FOLLOWING

THIS COURT’S DECISION IN CARLS-

BAD TECEINGLOGIES .ncisceccsssnescessssessesessesoees 7

II. LANGUAGE ADDED TO §§ 1447(C) AND

1367 SINCE THERMTRON MAKES

CLEAR § 1367(C) REMANDS ARE SUB-

JECT-MATTER JURISDICTION BASED....10

iv

iil. THE COURT OF APPEALS INDEPEND-

ENTLY LACKED JURISDICTION UN-

jis & Fes Sam ot. ee 14

SPEED ohick Weuninlicthertastinddvascicccai ie saiinent 20

Appendix A — Court of Appeals Opinion............ la

Appendix B — District Court Remand Order ... 15a

Appendix C — Court of Appeals Order Denying

ERR Ream 18a

Appendix D — Statutory Provisions Involved... 20a

TABLE OF AUTHORITIES

Page(s)

CASES

Adair v. Amerus Leasing,

86 Fed. Appx. 736, 2004 WL 239184 (5th

Be I i ch bac cai angicccieaennendseeentaiceibeasidsnianans §

Allied Signal Recovery Trust v. Allied Signal,

Inc.,

298 F.3d 263 (Sd Cir. 2002)............0c000. 15, 17, 18

Batiste v. Island Research, Inc.

LTO 7.26 SUT Cote Cat: TOD)... ne. .cccescccs. 0.50... 8

Carlsbad Tech., Inc. v. HIF Bio, Inc.,

No. 07-1437 (argued Feb. 24, 2008).......... passim

Carnegie-Mellon Univ. v. Cohill,

ee IE wiscid bed cede coaseradebiedakancesieses 11-12

Cathedral of the Incarnation v. Garden City

Co.,

Fae Bee le Ce, BI ivi ccccscscrescosccenesces 15-16

City of Gainesville vu. Brown-Crummer Invest.

Co.,

iia Snencisvrmocctvssverkninbdannccnsinens 19

Colorado River Water Conservation Dist. v.

U.S.,

A Ea I PTE essstinncensereicacsnsiciietwesivinicenaeons 11

Doddy v. Oxy USA, Inc.,

101 F.3d 446 (6th Cir. 1906) ......c.ccccrvrscessseees 8, 18

Engstrom v. First Nat. Bank of Eagle Lake,

47 F.8d 1459 (Gth Cir. 1996)........ccccccvcccssscocceess 8-9

Glidden v. Zdanok,

I oo sean ndennnnnsenbesoneeoeesosenns 19

Guzzino v. Felterman,

191 F.3d 588 (5th Cir. 1999) .............0sccsessceeeee 8,9

Hawking v. Ford Motor Credit Co.,

210 F.3d 540 (5th Cir. 2000)..................200 15, 18

Hernandez v. Brakegate, Lid.,

DU re Fe CIS CIR, TOBE) cn ccccccccacocsccocccsecss 16

HIF Bio, Inc. v. Yung Shin Pharm. Indus. Co.,

508 F.3d 659 (Fed. Cir. 2007), cert. granted....... 6

Landry v. Exxon Pipeline Co.,

Be Bee FP I EB, DOOD)... cn ccecescviniceseccocceceses 4

Mansfield v. Swan,

aa on ss icuscunbhoatetiieevennerreninrs 19

McClellan v. Gronualdt,

166 F.3d GOT (Sth Cir. 1996) ...............c00cc0sccesens. 8

Mendoza v. Murphy,

632 F.3d 342 (Sth Cir. 2008)..........scccccorsressccssseees 8

Metro Fuel Truck Sales v. Ford Motor Co.

145 F.34:320-Gth Cie. 19B6) ................000...00000000. 8

Vii

Mine Workers v. Gibbs,

IE a siicscs scsysncesicssieasecebsiuvoiacs 11-12

Neal v. Sky Chefs,

BP © OG Bad (OC Cae, BODO) onc csscscssscsscaccccccocscsvesss 9

Newport Ltd. v. Sears, Roebuck and Co.,

941 F.2d 302 (Sth Cir. 1992) ..........cccccccccccccscossees 8

Pacor, Inc. v. Higgins,

T4B FB OBA GG GAP. TGB6) ccc ccsccescsisescsscverscenses 17

Parker & Parsley Petroleum Co. v. Dresser

Indus.,

STS F.2G BHO (GER Cie. TOBE) cccscccrcecsecocesccssesens 8,9

Powerex Corp. v. Reliant Energy Servs.,

BAe i et ee EE hacen decade cccnsvnscsctevsncesss 19

Preston v. Tenet Healthsystem Mem Ctr.,

486 F.3d G04 (Gi Cir. 2007) .....cecccccessseesvssseeeess 13

Robertson v. Neuromedical Ctr.,

161 F.Se SOS (Sth Cir. LEGS) ..........:c0s..,crccscrecceess 8

In re Seven Fields Dev. Corp.,

506 F.3d 2397 (Sd Cir. 2007)..........cccscoscccccccsescese 15

Sykes v. Texas Air Corp.

834 F.2d 488 (5th Cir. 1987) ...................... 17, 18

Thermtron Products, Inc. v. Hermansdorfer,

423 U.S. 386 (1976) ......ceccecoccscscsesees 10, 11, 12, 14

Things Remembered v. Petrarca,

UU TOE CIID visssivsesssescisenssscavesssscosers passim

Vili

Tortuga Bay v. Arnold Dev.,

20 F.BG 1070 (Gth Cir. 1904) .........ccsccoccscssvoscesees 9

U.S. v. Rice,

BON le, RE CI cies dcscccecccessousasosvorsgenvecancs 12-13

U.S. v. Storer Broad. Co.,

EE ID piciicacipsaccsasatedecekadccneccsncnovdice 19

Waste Systems Inc. v. Clean Land Air Water

Corp.,

683 F.2d 927 (Gth Cir. 1982) ................cccccccsesssess 9

STATUTES AND OTHER AUTHORITIES

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es PY wiasicseictsahoencstinvccseiackadadaiaiiees 15

Ei Ge, ee eae 13

Be es eo hicthichetnisakssvscsesenessxvinnviwrcsationees 13

ee Pe I ichitcnds davisssiusereeschcaioneaveddnsnioann passim

Fe FI iis ictatiesinsccatscssoncceees 10-11, 12, 14

Be ee I co aibandcss cisdskccntcaisveevrdanassiers passim

BE UR. & Be csc ccteseea ieee ae a adicsdakecseiverececcess 6

SB UAC. DIET ccccacekee eae tetbtedicescinneee 1,14

OB EE. S Sa irises passim

2B U5... 5 TT certain tates dtatiadescstseceicis passim

BER Rae By” Re See 13

SE UALS Bisel as ei rsechiccinds passim

2S U.S.C. § 245 a) .seccocecsecorsecsnsavsoscovese 3, 16, 17, 18

BAR Rae Bo Rey 6 CN passim

28 UB.C..5 Rs eee eeteetixiicienses 13-14

Pub. L. 100-72, Title X, § 1016(c), 102 Stat.

GTO. 0: svissccnsecsdiiam Aaa Resadéstinsessereee 12

Pub. L. 104-219, § 1, 110 Stat. BOB .............0000000. 12

H.R. Rep. No. 95-595 (1977) scccccccsesssssseccssssseesssssessssvensee 19

U.S. Code Cong. & Adm. News 1978, .......cccccccceesseeseeee, 19

Gressman, et al., Supreme Court Practice 468

oe Me is; eee 0 os 19

PETITION FOR A WRIT OF CERTIORARI

Brookshire Brothers Holding, Inc., Brookshire

Brothers Management, Inc., and Brookshire Broth-

ers Ltd. respectfully petition for a writ of certiorari

to review the judgment of the United States Court of

Appeals for the Fifth Circuit in this case.

OPINIONS BELOW

The opinion of the court of appeals (App., infra,

la-14a) is reported at 554 F.3d 595. The remand or-

der of the district court (App., infra, 15a-17a) is un-

reported.

JURISDICTION

The judgment of the court of appeals was entered

on January 6, 2009. A petition for rehearing was

denied on February 9, 2009. The jurisdiction of this

Court is invoked under 28 U.S.C. § 1254(a).

STATUTORY PROVISIONS INVOLVED

The relevant provisions of 28 U.S.C. §§ 1334,

1367, 1447, and 1452 are set forth in the Appendix.

App., infra, 20a-22a.

STATEMENT OF THE CASE

This case presents two questions related to the

court of appeals’ lack of subject matter jurisdiction.

The first is the same question presented in Carlsbad

Tech., Inc. v. HIF Bio, Inc., No. 07-1437 (argued Feb.

24, 2008). Based on that question, the Court should

hold the petition pending the decision in Carlsbad

Technologies and then grant the petition, vacate the

decision below, and remand the case to the court of

appeals for further proceedings following its deci-

2

sion. Such a remand is particularly appropriate

given the court of appeals’ record of review of discre-

tionary decisions regarding whether to exercise sup-

plemental jurisdiction.

The second question presented relates to an inde-

pendent jurisdictional defect based on 28 U.S.C.

§ 1452(b)’s prohibition of appellate review of deci-

sions regarding whether to remand claims to State

court “on any equitable ground” in bankruptcy-

related cases. While that distinct limitation on ap-

pellate review was not raised in the court of appeals,

§1452(b) was raised as a basis for remand in the dis-

trict court, and by its terms it clearly applies in this

case. Because the court of appeals’ lack of jurisdic-

tion under § 1452(b) is clear, the Court should vacate

the decision below and remand with instructions to

dismiss the appeal. In the alternative, the Court

should grant the petition and either resolve the

§ 1452(b) question, or vacate the decision below and

remand the case to the court of appeals to consider

the § 1452(b) jurisdictional defect in the first in-

stance, along with the Court’s decision in Carlsbad

Technologies.

A. Factual Background

This is a products liability suit in which the peti-

tioner companies (collectively, “Brookshire Broth-

ers”) allege that they sustained damage due to leak-

age from defective pipes installed at their gas sta-

tions in Texas and Louisiana to connect under-

ground storage tanks to gas pumps. Brookshire

Brothers brought suit in Louisiana state court

against the manufacturer of the pipes (Total Con-

tainment, Inc. or “TCI”), its insurers, manufacturers

of component parts, and providers of raw materials.

3

Some six months later, TCI filed for bankruptcy.

TCl’s primary insurer then removed the case to the

United States District Court for the Western District

of Louisiana on the ground that it “related to” TCI’s

bankruptcy. Under 28 U.S.C. § 1452(a), a party may

remove any case to a district court that has jurisdic-

tion under 28 U.S.C. § 1334, which confers on dis-

trict courts “original but not exclusive jurisdiction of

all civil proceedings arising under title 11 or arising

in or related to a case under title 11.” The relation

to the manufacturer’s bankruptcy was the sole basis

for the removal. App., infra, 2a.

Brookshire Brothers eventually settled with TCI

and TCI’s primary insurer. The district court also

granted motions for summary judgment dismissing

the majority of the remaining TCI insurers, while

Brooxsnire Brothers dismissed the remaining few

whose policies provided no coverage. Brookshire

Brothers then moved to remand the case to state

court, arguing that the claims against the remaining

defendants no longer meaningfully related to any

bankruptcy proceeding. The motion expressly relied

on two independent grounds for remand.

The first ground was 28 U.S.C. § 1447(c), which in

all cases removed from State court requires a re-

mand “[ijf at any time before final judgment it ap-

pears that the district court lacks subject matter ju-

risdiction.” The next subsection, 28 U.S.C. § 1447(d),

provides that, except for certain civil rights cases,

“faJn order remanding a case to the State court from

which it was removed is not reviewable on appeal or

otherwise.” Brookshire Brothers argued that the

post-removal dismissal of all claims against TCI and

its insurers made it impossible for the suit to have

any effect on the bankruptcy estate of TCI. It con-

4

tended that, because the remaining claims no longer

related to any bankruptcy proceeding, the district

court lost its “related to” jurisdiction. Since its “re-

lated to” jurisdiction was the sole basis for the re-

moval (i.e., all of the claims in the case have always

been based solely on State law), the loss of “related

to” jurisdiction left the court with no subject matter

jurisdiction, and it was required to remand the case

under § 1447(c). Mem. in Support of Mot. to Re-

mand at 3-6.

The second ground for the remand motion was 28

U.S.C. § 1452(b), which, apart from the general re-

mand authority of § 1447(c), authorizes district

courts to remand any claim or cause of action over

which it has jurisdiction under 28 U.S.C. § 1334 (1.e.,

claims related to bankruptcy proceedings) “on any

equitable ground.” Section 1452(b) further provides

that such a bankruptcy-related remand order “is not

reviewable by appeal or otherwise.” Brookshire

Brothers contended that remand was appropriate

under § 1452(b) based on discretionary factors that

had been identified by the district court in Landry v.

Exxon Pipeline Co., 260 B.R. 769, 801-802 (M.D. La.

2001). Those factors include the suit’s degree of re-

latedness to and likely effect on the bankruptcy pro-

ceedings. Mem. in Support of Mot. to Remand at 7.

They also include factors similar to those identified

in 28 U.S.C. § 1867(c) for declining supplemental ju-

risdiction, such as “the extent to which state law is-

sues predominate over bankruptcy issues’; “the diffi-

culty or unsettled nature of the applicable state law’;

“the jurisdictional basis, if any, other than 28 U.S.C.

§ 1334”; and “the presence of a related proceeding

commenced in state court.” Mem. in Support of Mot.

to Remand at 7.

5

Respondents resisted the motion and urged the

district court to exercise supplemental jurisdiction

under 28 U.S.C. § 1367(c). See Joint Mem. in Opp. to

Mot. to Remand at 3-6.

B. Decisions Below

On November 27, 2007, the district court granted

Brookshire Brothers’ motion to remand. App., infra,

16a-17a. While the court noted at the outset of the

order that “Brookshire Brothers maintains that an

event post-removal can destroy subject matter juris-

diction and require remand under 28 U.S.C.

§ 1447(c),” the court’s analysis focused exclusively on

the factors identified in § 1367(c) governing the exer-

cise of supplemental jurisdiction. Id. The court con-

cluded that “each factor militates in favor of re-

mand.” Jd. “There is no doubt,” the court explained,

“that this products liability case involves complex

issues of State law, nor is there any doubt that the

only reason this case was removed to federal court

was because it was related to a bankruptcy proceed-

ing which is no longer relevant to the instant case.”

Id. It further found “that the suit ... contains only

issues of State law, and in the interest of comity,

these State law issues would be more properly de-

cided by a State forum.” Id. Based on those reasons,

the court “ORDERED that the motion and order to

remand is hereby GRANTED,” and that “[t]he cause

is remanded to the 14th Judicial District Court for

the Parish of Calcasieu, State of Louisiana.” Jd.

Respondents appealed, and the court of appeals

reversed. App., infra, la-14a). The court of appeals

first held that it had jurisdiction over the appeal.

The court concluded that 28 U.S.C. § 1447(d), bar-

ring appeal of remand orders, applies only to re-

mands for lack of subject matter jurisdiction or for a

6

defect in the removal procedure. It held that a re-

mand based on declining supplemental jurisdiction

is neither. Jd. at 8a-9a. The court declined to follow

the Federal Circuit’s contrary decision in HIF Puo,

Inc. v. Yung Shin Pharm. Indus. Co., 508 F.3d 659

(Fed. Cir. 2007), cert. granted October 14, 2008 (No.

07-1437). Id. at 7a-8a.

No party raised 28 U.S.C. § 1452(b)’s independent

prohibition of appellate review for remands in bank-

ruptcy-related cases before the court of appeals, and

the court’s decision does not address it. Instead, the

parties and the court focused solely on the applica-

bility of § 1447(d) and the question whether a discre-

tionary remand under § 13867(c) constitutes a re-

mand for lack of subject matter jurisdiction under

§ 1447(c). From the arguments made below, how-

ever, it was both clear and undisputed that (1) the

case was removed to federal court under §§ 1334,

1446, and 1452 solely because of its purported rela-

tion to the bankruptcy proceeding of TCI, and (2) the

district court ordered remand, in part, because it

found that the bankruptcy proceedings were “no

longer relevant” to the case and that “in the interest

of comity,” the sole remaining State law issues

“would be more properly decided by a State forum.”

Mot. to Dismiss Appeal at 2, 5; Appellee’s Br. at 4-7.

After concluding that it had jurisdiction, the court

of appeals held that the district court had abused its

discretion in ordering remand. App., infra, 14a. The

principal ground for the court’s conclusion was that

the case had been in litigation for four years and ex-

tensive discovery had taken place. Jd. at 13a. The

court expressed little regard for the district court’s

finding that “[t]here was no doubt that this products

liability case involves complex issues of State law,”

7

stating that in its view “the remaining state-law is-

sues ... do not appear to be particularly novel or

complex.” Jd. The court also expressed concern that

Brookshire Brothers would “attempt to re-litigate in

state court rulings made against it by the district

court.” Jd. at 13a-14a.!

REASONS FOR GRANTING THE WRIT

I. AT A MINIMUM, THE COURT SHOULD

_ GRANT THE PETITION, VACATE THE

DECISION BELOW, AND REMAND FOR

FURTHER PROCEEDINGS FOLLOWING

THIS COURT’S DECISION IN CARLSBAD

ECHNOLOGIES

This / case presents the same issue (Question 1)

presented by a case currently before the Court.

Carlsbad Tech., Inc. v. HIF Bio, Inc., No. 07-1437

(argued Feb. 24, 2008). Both this case and Carlsbad

Technology present the question whether a district

court’s decision in a removed case to decline the ex-

ercise of supplemental jurisdiction under 28 U.S.C. §

1367(c), after subsequent events have undermined

the basis for original jurisdiction, falls within the bar

on appellate review under 28 U.S.C. § 1447(d). With

one qualification (relating to 28 U.S.C. § 1452(b)’s

independent bar on appellate review in bankruptcy-

related cases, discussed at Part III, infra), this case

likely will be controlled by this Court’s decision in

Carlsbad Technologies. Accordingly, the Court

should hold this petition pending the Court’s deci-

sion in Carlsbad Technologies, and then grant the

1 On January 23, 2009, the court of appeals granted respon-

dent's request to enjoin all state court proceedings related to

the case. 01/23/09 Order at 2.

8

petition, vacate the decision below, and remand the

case for further proceedings in light of this Court’s

decision.

_ If the Court agrees with the respondent in Carls-

bad Technologies and holds that § 1367(c) remands

are subject to § 1447(d)’s bar on appellate review,

then this Court should vacate the decision below,

which reaches the opposite conclusion, and remand

the case to allow dismissal of the appeal.

The same is true, even if the Court holds that

§ 1447(d) does not categorically bar appellate review

of § 1867(c) remands. In issuing such a holding, the

Court may provide guidance on the exercise of appel-

late jurisdiction in this context. As the Fifth Cir-

cuit’s decisions in this and other cases demonstrate,

the Court’s guidance on that issue is surely needed.

Since the supplemental jurisdiction statute went

into effect in 1990, the Fifth Circuit has heard nu-

merous appeals of discretionary decisions on

whether to exercise supplemental jurisdiction, with

varying results and rationales. ? In this case, for ex-

2 District court’s decision not to exercise supplemen-

tal jurisdiction was abuse of discretion: Batiste v. Island

Research, Inc. 179 F.3d 217 (5th Cir. 1999); Newpori Ltd. v.

Sears, Roebuck and Co., 941 F.2d 302, 308 (5th Cir. 1991).

District court’s decision to exercise supplemental ju-

risdiction was abuse of discretion: Parker & Parsley Petro-

leum Co. v. Dresser Indus., 972 F.2d 580, 588 (5th Cir. 1992);

McClellan v. Gronwaldt, 165 F.3d 507, 519-21 (5th Cir. 1998).

District court decision affirmed: Mendoza v. Murphy,

532 F.3d 342, 346 (5th Cir. 2008); Guzzino v. Felterman, 191

F.3d 588, 595 (5th Cir. 1999); Robertson v. Neuromedical Ctr.,

161 F.3d 292, 296 (5th Cir. 1998); Metro Fuel Truck Sales v.

Ford Motor Co. 145 F.3d 320, 328 (5th Cir. 1998); Doddy v. Oxy

USA, Inc., 101 F.3d 448 (6th Cir. 1996); Engstrom v. First Nat.

9

ample, the court of appeals disregarded its prior de-

cisions recognizing that discovery and other pretrial

matters are readily transferable to State court and,

therefore, the fact that they have occurred during

the federal proceedings is generally not a ground for

overturning an order declining to exercise supple-

mental jurisdiction.? It also showed little or no re-

gard for the trial court’s specific finding that several

of the remaining State law issues were complex and

novel and better resolved by the State court.

Bank of Eagle Lake, 47 F.3d 1459 (5th Cir. 1995); Neal v. Sky

Chefs, 39 F.3d 321 (table); 1994 WL 612799 (5th Cir. 1994);

Tortuga Bay v. Arnold Dev., 20 F.3d 1070 (table) (5th Cir.

1994); Adair v. Amerus Leasing, 86 Fed. Appx. 736, 2004 WL

239184 (5th Cir. 1994).

3 In the decision below, the court of appeals stressed that ex-

tensive discovery had already taken place in federal court and

cited other decisions also referring to the parties’ investment in

federal court discovery as one reason not to remand. Slip op. 8-

10. By contrast, in Guzzino v. Felterman, 191 F.3d 588, 595

(5th Cir. 1999), the court concluded that remand was justified

even though “substantial pretrial activity was had following

removal,” because other reasons supported remand, much of

the trial court’s involvement related to failed claims, and “the

parties’ work product could be taken, with little loss, to the

state litigation.” In another case holding that the district court

abused its discretion by retaining jurisdiction where some dis-

covery had already occurred, the court of appeals observed that

“the most expensive element of the trial preparation, discovery,

was largely usable in the state proceeding.” Parker & Parsley

Petroleum Ltd. v. Dresser Indus., 972 F.2d 580, 588 (6th Cir.

1992). The court relied on a previous decision reversing the

district court’s refusal to remand back to a Louisiana state

court, where the court of appeals observed that “no trial has

taken place” and “any discovery could be utilized in a state

court proceeding.” Waste Systems Inc. v. Clean Land Air Water

Corp., 683 F.2d 927, 931 (5th Cir. 1982).

10

Even if the Court holds that § 1447(d) does not

categorically bar review of remand orders in this

context, the scope of that review should be limited

and deferential to carry out Congress’s obvious goal

of facilitating remands and avoiding time-consuming

appeals on such matters. A remand following this

Court’s decision in Carlsbad Technologies will pro-

vide the court of appeals with an opportunity to

align its approach to review in these cases with this

Court’s decision.

II. LANGUAGE ADDED TO §§ 1447(C) AND

1367 SINCE THERMTRON MAKES

CLEAR § 13867(C) REMANDS ARE SUB-

JECT-MATTER JURISDICTION BASED

During the oral argument in Carlsbad Technolo-

gies, several Justices asked whether a federal court

is able to divest itself of subject matter jurisdiction

by its own discretionary acts. See 07-1437 Oral Arg.

Tr. 35-38. Several Justices also inquired into

whether there was a rational way to reconcile this"

Court’s holding in Thermtron Products, Inc. v. Her-

mansdorfer, 423 U.S. 336 (1976), that § 1447(d)’s

ban on appeal of remand orders extends only to re-

mands authorized by §1447(c), with a holding that

§ 1867(c) remands are barred by § 1447(d). See 07-

1437 Oral Arg. Tr. 12-19. The answer to both ques-

tions is yes, as confirmed by language Congress

added to §§ 1447(c) and 1367 after this Court’s deci-

sion in Thermtron.

First, after this Court decided Thermtron, Con-

gress enacted 28 U.S.C. § 1367, which defines the

scope of federal court supplemental jurisdiction. The

plain terms of § 1867(a) expressly limit Congress’s

grant of federal subject matter jurisdiction over sup-

plemental claims to only those circumstances where

11

the federal court has determined it would be appro-

priate to exercise supplemental jurisdiction. Thus, it

confers supplemental subject matter jurisdiction

over all claims that are within the same case or con-

troversy as a claim within the court’s original juris-

diction, “except as provided in subsections (b) and

(c).” 28 U.S.C. § 1867(a) (emphasis added).

The district court’s decision to decline to exercise

supplemental jurisdiction under § 1367(c) brings the

case within § 1367(a)’s explicit exception to its grant

of subject matter jurisdiction. By § 1367's express

terms, the district court’s decision did not leave sub-

ject matter jurisdiction in place (although unexer-

cised); rather, it removed the case from § 1367(a)’s

grant of subject matter jurisdiction. At that point,

the court “lack[ed] subject matter jurisdiction” and

was required to remand the case under § 1447(c).

Accordingly, this case and Carlsbad Technologies fall

within the literal language of § 1447(c) and, under

Thermtron, fall within the appeal bar of § 1447(d).

In other contexts, this reading could be challenged

as in tension with the usual rule that subject matter

jurisdiction is not discretionary but must be exer-

cised if properly invoked. See Colorado River Water

Conservation Dist. v. U.S., 424 U.S. 800, 817 (1976),

describing “the virtually unflagging obligation of the

federal courts to exercise the jurisdiction given

them.” However, there are exceptions to the usual

rule, of which supplemental jurisdiction is a promi-

nent example. Supplemental jurisdiction is clearly a

form of subject matter jurisdiction. But just as

clearly the district court does not have to exercise it.

Like its predecessor, pendent jurisdiction, it is a

“doctrine of discretion, not of plaintiffs right.”

Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350

12

(1988), quoting Mine Workers v. Gibbs, 383 U.S. 715,

726 (1966). In that context, the presence of discre-

tionary elements does not make the district court’s

remand decision non-jurisdictional. Instead, the dis-

trict court’s decision is jurisdictional under the clear

language of § 1367(a), which confers supplemental

jurisdiction on the district court “except” if it de-

clines to exercise jurisdiction under §1367(c).

Second, after Thermtron, Congress amended

§ 1447(c) twice, with the effect of extending statutory

remand authority to situations where events subse-

quent to removal undermine the basis for federal ju-

risdiction.4 These amendments extend the statutory

remand authority to situations covered by § 1367’s

grant of authority to the district courts to consider

whether the passage of time since removal has cre-

ated equitable and other considerations counseling

against remand. Alli this was done in light of “the

established practice of denying review of orders re-

manding causes removed from state courts.” U.S. v.

Rice, 327 U.S. 742, 752 (1946). Congress “must be

taken to have been aware of the universality of that

practice.” IJbid., quoted in Things Remembered v.

4 When Thermtron was decided, § 1447(c) authorized re-

mand if “it appears that the case was removed improvidently

and without jurisdiction.” Thermtron, 423 U.S. at 342. In

1988, the statute was amended to require a motion to remand

on the basis of any defect in removal procedure to be made

within 30 days, and to provide that the case shall be remanded

“lif at any time before final judgment it appears that the dis-

trict court lacks subject matter jurisdiction.” Pub.L. 100-72,

Title X, § 1016(c), 102 Stat. 4670. In 1996, the statute was

amended to provide that a motion to amend on the basis of any

defect other than lack of subject matter jurisdiction must be

made within 30 days. Pub.L. 104-219, § 1, 110 Stat. 3022.

13

Petrarca, 516 U.S. 124, 128 (1995). There is no evi-

dence Congress wanted to lift the long-standing bar

on appeals of remand orders simply because the

events undermining federal jurisdiction took place

after rather than before removal.

Moreover, supplemental jurisdiction is not the

only situation where a decision to remand by the dis-

trict court is not reviewable on appeal. See 28 U.S.C.

§§ 1334(c)(1),(2), 13834(d), & 1452(b). Nor is it the

only instance in which Congress has enacted juris-

dictional provisions with discretionary elements.

Section 1447(e) is another example. Under that pro-

vision, the district court has discretion whether to

join additional parties and remand if they destroy

jurisdiction, or to deny joinder and preserve jurisdic-

tion. 28 U.S.C. § 1447(e).

The Class Action Fairness Act of 2005 (“CAFA”)

also contains a jurisdictional provision with discre-

tionary elements. CAFA gives federal courts subject

matter jurisdiction over certain class actions despite

lack of complete diversity, except that in some cases

the district court has discretion to decline to exercise

jurisdiction based om certain broadly-worded criteria.

28 U.S.C. § 1332; see Preston v. Tenet Healtsystem

Mem Cir., 485 F.8d 804, 810-12 (5th Cir. 2007).5

CAFA also provides that § 1447 governs removal of

class actions, except that, “notwithstanding section

1447(d),” an expedited appeal from an order granting

5 In certain circumstances, the district court may, “in the in-

terests of justice and looking at the totality of the circum-

stances,” decline to exercise jurisdiction based on several fac-

tors, including whether the claims involve “matters of national

or interstate interest,” and whether the forum has “a distinct

nexus with the class members, the alleged harm, or the defen-

dants.” 28 U.S.C. § 1332(d)(3).

14

or denying a remand is allowed. 28 U.S.C. § 1453(c).

Congress clearly thought that without a special ex-

ception, the discretionary remand of a CAFA case

would be a remand for lack of subject matter juris-

diction, subject to § 1447(d)’s appeal bar.

In: short, the district court’s decision to decline to

exercise supplemental jurisdiction, which necessarily

occurred before the entry of final judgment, denied

the district court of subject matter jurisdiction. All

agree that at that time no other form of jurisdiction

existed; indeed, inherent in the district court’s appli-

cation of § 1367(c) is a conclusion, unchallenged on

appeal, that it lacked any other ground for federal

court jurisdiction. And, for the reasons explained,

§ 1367(a)’s grant of supplemental subject matter ju-

risdiction no longer applied. Accordingly, at that

time, the district court lacked all subject matter ju-

risdiction and was required to remand the case un-

der § 1447(c). Appellate review is therefore barred

by the plain terms of § 1447(d), and so holding would

be entirely consistent with Thermtron’s reasoning.

Ill. THE COURT OF APPEALS INDEPEND-

ENTLY LACKED JURISDICTION UNDER

28 U.S.C. § 1452(b)

As explained, 28 U.S.C. § 1452(b) authorizes dis-

trict courts to remand bankruptcy-related cases “on

any equitable ground,” and provides that any such

remand order “is not reviewable by appeal or other-

wise.” Here, the court of appeals recognized, and it

is undisputed, that the sole basis for removal in this

case was its purported relation to TCI’s bankruptcy

proceedings. See App., infra, 2a. The court of ap-

peals also recognized, and it is undisputed, that at

the time Brookshire Brothers moved to remand the

case, the bankruptcy proceedings were no longer

15

relevant to any remaining claim—TCI and its insur-

ers having been dismissed. Jd. at 2-3. The court of

appeals also understood that in ordering remand,

the district court considered the lack of any mean-

ingful connection to bankruptcy proceedings, the

State-law basis for the claims, and interests of com-

ity—all of which are “equitable ground|s]” for re-

manding the case. See Id. at 8a-9a & n.3. Thus, as a

matter of law, the court of appeals lacked jurisdic-

tion under § 1452.

First, it is clear as a matter of law that the

§ 1367(c) factors relied on by the district court in de-

termining that a remand was appropriate constitute

“equitable ground[s]” under § 1452(b). As Justice

Ginsburg explained, those are “capacious words”

that are not limited to the traditional distinctions

between law and equity, but instead include all ap-

propriate grounds. Things Remembered, Inc. v. Pet-

rarca, 516 U.S. 124, 132 (1995) (Ginsburg, J., con-

curring). In Things Remembered, a timeliness defect

in the removal motion was, in Justice Ginsburg’s

view, within the broad language of § 1452(b). Deci-

sions of the courts of appeals, in accordance with her

reasoning, have held § 1452(b) applicable to remands

based on a broad range of grounds, and on that basis

have held the remand orders non-appealable. See,

e.g., In re Seven Fields Dev. Corp., 505 F.3d 237, 246-

47 (3d Cir. 2007) (improper filing of notice of re-

moval); Allied Signal Recovery Trust v. Allied Sig-

nal, Inc., 298 F.3d 263 (8d Cir. 2002) (abstention

based on discretionary factors of § 1334(c)(1)); Hawk-

ing v. Ford Motor Credit Co., 210 F.3d 540, 544-45

(5th Cir. 2000) (remand of state law claim after fed-

eral court gave judgment in related claim of trustee

seeking recovery of bankrupt’s assets); Cathedral of

the Incarnation v. Garden City Co., 90 F.3d 28, 32

16

(2d Cir. 1996) (remand on ground that removed case

was not a core bankruptcy proceeding and thus was

subject to mandatory abstention). Moreover, even if

remand orders under § 1452(b) based on legal con-

siderations were not deemed “equitable,” the type of

discretionary balancing involved in the district

court’s consideration of § 1367(c) factors would still

constitute quintessentially equitable grounds, cov-

ered by even a narrow reading of § 1452(b).

As the Seventh Circuit explained, in a case hold-

ing non-appealable a remand order based on the dis-

trict court’s conclusion that the case was not “related

to” a bankruptcy, Congress had excellent reasons not

to make remand orders in bankruptcy-related cases

appealable. “Remand orders are effective immedi-

ately, so state courts may get back to work on the

cases.” Hernandez v. Brakegate, Ltd., 942 F.2d 1223,

1226 (7th Cir. 1991). But “[a]n appellate order a

year or more later may render this effort wasted—

and the prospect of this waste may induce state

judges to sit tight, leaving the case in limbo.” 7d.

“Such a specter might be acceptable if a substantial

proportion of remands were erroneous, but remands

on procedural and jurisdictional grounds are largely

mechanical, and ‘equitable’ remands are discretion-

ary so that appellate review would be deferential.”

Id. Asa result, the court concluded, appeals of re-

mands “may be designed to achieve little more than

a self-help continuance.” Id.

Second, because this case was removed solely as a

“related to” case under 28 U.S.C. §§ 1334 and

1452(a), it is clear as a matter of law that the re-

mand falls under § 1452(b), even though the district

court failed to cite § 1452 or identify any particular

source for its remand authority. Again, as Justice

17

Ginsburg explained in Things Remembered, “it

‘make[s] little sense’ to rest reviewability vel non on

the tag the trial court elects to place on its ruling.”

Things Remembered, 516 U.S. at 134, quoting Sykes

uv. Texas Air Corp. 834 F.2d 488, 492 (5th Cir. 1987).

The Fifth Circuit itself held in the Sykes decision re-

lied upon by Justice Ginsburg that any other result

makes reviewability turn on “what the district court

says it is doing.” 834 F.2d at 492. Under such an

approach, “reviewability [would} turn[] on incanta-

tion, and the district court [would have] absolute

discretion to permit or to deny review of its order.”

Id.6 Accordingly, a remand on an equitable ground

of a case removed under § 1452(a) is necessarily a

§ 1452(b) remand, regardless of whether—or how—

the district court characterizes its remand order.

Moreover, the district court’s application of § 1367

does not remove this case from the scope of

§ 1452(b). Section 1334 grants district court’s origi-

nal but not exclusive jurisdiction over “all civil pro-

ceedings ... arising in or related to cases under title

11.” 28 U.S.C. § 1334(b). Section 1452(a) permits a

party to “remove any claim or cause of action ... if

[the] district court has jurisdiction of such claim or

cause of action under section 1334.” 28 U.S.C.

§ 1452(a). Section 1452(b) then provides that “[t]he

court to which such claim or cause of action is re-

moved may remand such claim or cause of action on

any equitable ground.” 28 U.S.C. § 1452(b) (empha-

ses added). All of the claims in this case were within

the district court’s jurisdiction under § 1334 at the

6 The contrary decision of the Third Circuit in Pacor, Inc. v.

Higgins, 743 F.2d 984, 990-93 (3d Cir. 1984), discussed by Jus-

tice Ginsburg in Things Remembered, is no longer followed in

Third Circuit. Allred Signal, 298 F.3d at 268 n.6.

18

time of removal, because they were part of a “civil

proceeding ... related to” TCI’s bankruptcy case.

Because all of the claims were removed under

§ 1452(a), they were all subject to remand under

§ 1452(b), even though post-removal events elimi-

nated the remaining claims’ relationship to the

bankruptcy proceedings. Under the plain meaning

of the terms of § 1452, any claim removed under

§ 1452(a) may be remanded under § 1452(b) for “any

equitable ground.” That is precisely what happened

here.?

7 Notwithstanding the plain meaning of § 1452, the Fifth

Circuit in Doddy v. Oxy, U.S.A., 101 F.3d 448, 455 n.3 (5th Cir.

1996), stated that, when post-removal events eliminate the “re-

latedness” of removed claims to the bankruptcy proceedings, a

district court’s “remand authority switches from that under

§ 1452 to that under § 1367.” However, without citing Doddy,

the Fifth Circuit later reached the opposite result in Hawking

u. Ford Motor Credit Co., 210 F.3d 540 (5th Cir. 2000), also in-

volving a remand of state claims that lost their bankruptcy re-

latedness after removal because the claim against the bankrupt

was dismissed Without citing Doddy (although the case was

discussed in the briefs), the Fifth Circuit concluded that

§ 1452(b) “authorize[ed] th[e] remand” and “preclude[d] appel-

late review of such orders in bankruptcy cases.” Hawking, 210

F.3d at 550. The court relied solely on Sykes v. Texas Air Corp.,

834 F.2d 488 (5th Cir. 1987), which held non-appealable a re-

mand order based on the case’s lack of bankruptcy relatedness

at the time of removal. It is therefore not clear how the Fifth

Circuit would view the § 1452(b) issue in this case.

Nonetheless, for the reasons described, the plain meaning of

§ 1452(b) confirms the lack of appellate jurisdiction, as does the

reasoning of other courts of appeals. See, e.g., Allied Signal,

298 F.3d at 269 (holding that the remand of a bankruptcy-

related case “based on state law concerns,” while not “meeting

the criteria for remand under § 1447(c) and for the non-

reviewability provisions of § 1447(d),” nonetheless “falls under

§ 1452(b) . . . and is not reviewable”). That conclusion is also

19

For these reasons, the court of appeals plainly

lacked jurisdiction under § 1452(b) to review the dis-

trict court’s remand order. However, while § 1452(b)

was raised in the district court as an independent

and sufficient basis for the remand, see Mem. in Sup-

port of Mot. to Remand at 6-11, it was not argued to

the court of appeals as a basis for its lack of jurisdic-

tion. Instead, the parties and the court focused on

whether a discretionary remand under the supple-

mental jurisdiction statute constituted a subject

matter-jurisdiction based remand under 28 U.S.C.

§ 1447(c), and the impact on that question of this

Court’s decision in Powerex Corp. v. Reliant Energy

Serus., 127 S. Ct. 2411, 2418-19 (2007).

The failure to raise the § 1452 jurisdictional defect

below does not preclude this Court from granting re-

view of that question and vacating the decision of the

court of appeals for its clear lack of subject matter

jurisdiction. See, e.g., United States v. Storer Broad.

Co., 351 U.S. 193, 197 (1956); Glidden v. Zdanok,

370 US 530 (1962); City of Gainesville v. Brown-

Crummer Invest. Co., 277 US 54, 59 (1928);

Mansfield v. Swan, 111 US 379 (1884); see generally,

Gressman, et al., Supreme Court Practice 468 (9th

ed. 2007) (“Jurisdictional issues, of course, can al-

ways be considered, even sua sponte, whether or not

raised below.”). Doing so here, moreover, would fur-

ther Congress’s manifest intent in enacting § 1452(b)

consistent with Justice Ginsburg’s observation that “Congress

meant to enlarge, not to rein in, federal trial court re-

moval/remand authority for claims related to bankruptcy

cases” and “wanted bankruptcy forum remands to be ‘unre-

viewable.” IJd., quoting Things Remembered, 516 US. at 132

(Ginsburg, J., concurring), quoting H.R. Rep. No. 95-595, p. 51

(1977), U.S. Code Cong. & Adm. News 1978, pp. 5787, 6013.

20

in the first place, which is to permit bankruptcy-

related cases to proceed as quickly as possible in

State court once a district court orders remand “on

any equitable ground.”

Accordingly, the Court should grant the petition,

vacate the decision below, and remand the case with

instructions to dismiss the appeal for lack of jurisdic-

tion. In the alternative, the Court could grant re-

view of the § 1452(b) question or remand the case to

the court of appeals to consider its jurisdictional de-

fect under § 1452(b) in the first instance, along with

this Court’s decision in Carlsbad Technologies.

CONCLUSION

For the foregoing reasons, the petition for a writ of

certiorari should be granted, the decision below

should be vacated, and the case should be remanded

to the court of appeals with instructions to dismiss

the appeal for lack of jurisdiction. In the alternative,

the case should be remanded for further proceedings

in light of this Court’s decision in Carlsbad Tech.,

Inc. v. HIF Bio, Inc., No. 07-1437 (argued Feb. 24,

2008), and to permit the court of appeals in the first

instance to consider its jurisdictional defect under 28

U.S.C. § 1452(b).

21

Respectfully submitted,

JOHN A. JEANSONNE, JR. DAVID B. SALMONS

JEANSONNE & REMONDET Counsel of Record

Post Office Box 91530 ROBERT V. ZENER

Lafayette, LA 70509 BINGHAM MCCUTCHEN, LLP

(337) 235-2011 2020 K Street, N.W.

Washington, D.C. 20006

MICHAEL H. SCHWARTZBERG (202) 373-6000

VAMVORAS & SCHWARTZBERG

1111 Rvan Street

Lake Charles, LA 70601

(337) 433-1621

Counsel for Petitioners

April 6, 2009

APPENDIX

la

APPENDIX A

IN THE UNITED STATES COURT OF

APPEALS FOR THE FIFTH CIRCUIT

Filed: January 6, 2009

No. 07-31154

BROOKSHIRE BROTHERS HOLDING, INC., et al.

Plaintiffs-Appellees

¥.

DAYCO PRODUCTS, INC., et al.

Defendants-Appellants

Appeal from the United States District Court

for the Western District of Louisiana

Before HIGGINBOTHAM, BENAVIDES, and

STEWART, Circuit Judges. FORTUNATO P.

BENAVIDES, Circuit Judge:

The defendants-appellants appeal the district

court’s remand of this case to Louisiana state court.

The plaintiffs—appellees assert that this Court lacks

jurisdiction to hear this appeal. We find that we

possess jurisdiction over this appeal, REVERSE the

ruling of the district court, and REMAND the case

for further proceedings.

2a

I. Background

This suit stems from the allegedly defective

manufacture of flexible thermoplastic pipe (“flex-

pipe”) used to connect underground storage tanks to

above-ground dispensers at retail gas stations.

Brookshire Brothers Holding, Inc., Brookshire

Brothers Management, Inc., and Brookshire Broth-

ers Ltd. (together, “Brookshire”) brought this suit on

August 15, 2003 against the manufacturer of the

flexpipe systems and its insurers and the manufac-

turers of component parts and providers of raw ma-

terials used in the flexpipe systems (together, the

“flexpipe defendants”), seeking damages stemming

from the installation of flexpipe in sixty-five gas sta-

tions in Texas and three gas stations in Louisiana

that are owned and operated by Brookshire.

On March 3, 2004, Total Containment, Inc.

(“TCI”), the manufacturer of the flexpipe systems,

filed for Chapter 11 bankruptcy, and on May 26,

2004, Commerce & Industry Insurance Co. (“C&I”),

TCI’s primary liability insurer, removed the instant

suit to the U.S. District Court for the Western Dis-

trict of Louisiana on the basis that it “related to” the

bankruptcy of TCI. Brookshire concedes that the

case was properly removed and that the district

court had jurisdiction over the suit at the time of

removal.

The iitization in federal court lasted more than

three years, generating more than 1,300 entries in

the district court docket. The district court decided

forty-one dispositive motions, fourteen Daubert mo-

tions, and seven other motions in limine. Discovery

had closed and the parties were making final prepa

rations for trial. Trial was originally set for October

3a

17, 2005, but was continued four times. The most re-

cent trial setting was February 11, 2008.

On July 17, 2007, Brookshire, TCI, and C&I filed

a joint stipulation of dismissal, dismissing Brook-

shire’s claims against TCI and C&I due to a settle-

ment agreement, and on November 2, 2007, Brook-

shire moved to remand this suit to Louisiana state

court. On November 27, 2007, the court granted

Brookshire’s motion to remand.

Brookshire argues that 28 U.S.C. § 1447(d) de-

prives this Court of jurisdiction to hear this appeal

because the district court’s order remanding this suit

to Louisiana state court can be colorably character-

ized as being based on lack of subject matter juris-

diction under 28 U.S.C. § 1447(c). Alternatively,

Brookshire argues that even if the order of remand

was based on the district court’s refusal to retain

supplemental jurisdiction under 28 U.S.C. § 1367(c),

appellate review is still barred by 28 U.S.C. §

1447(d). In the event that this Court finds that it

does possess jurisdiction over this appeal, Brook-

shire asserts that the district court’s refusal to exer-

cise pendant jurisdiction was not an abuse of discre-

tion. The remaining flexpipe defendants assert that

this circuit’s precedent is clear that this Court pos-

sesses jurisdiction over this appeal and that the dis-

trict court abused its discretion in declining to exer-

cise supplemental jurisdiction.

II. Jurisdiction To Review The Order Of

Remand

Section 1447(d) states that “[a]n order remand-

ing a case to the State court from which it was re-

moved is not reviewable on appeal or otherwise, ” 28

U.S.C. § 1447(d), but the Supreme Court has held

4a

that this prohibition applies only when an order of

remand is based on one of the grounds specified in

section 1447(c): lack of subject matter jurisdiction or

a defect in removal procedure, see Schexnayder uv.

Entergy La., Inc., 394 F.3d 280, 283 (5th Cir. 2004)

(citing Quackenbush v. Allstate Ins. Co., 517 U.S.

706, 711—12 (1996)). This Court has held that a clear

and affirmative use of Section 1367(c) discretion to

remand and not exercise supplemental jurisdiction

does not involve either of the grounds specified in

section 1447(c), and therefore is reviewable on ap-

peal for an abuse of discretion. Regan v. Starcraft

Marine, LLC, 524 F.3d 627, 631 (5th Cir. 2008) (cit-

ing Thomas v. LTV Corp., 39 F.3d 611, 616 (5th Cir.

1994)).! Most of our sister circuits have similarly

found that a remand order based on declining sup-

plemental jurisdiction is not within the class of re-

mands described in section 1447(c) and is thus not

subject to the jurisdictional bar of section 1447(d).

See, e.g., Trans Penn Wax Corp. v. McCandless, 50

F.3d 217, 223-24 (3d Cir. 1995) (citing precedents in

the Fourth, Fifth, Sixth, Seventh, Eighth, Ninth,

Tenth, and Eleventh Circuits). In support of that

proposition, this and other circuits have cited the

Supreme Court’s statement in Carnegie-Mellon Uni-

versity v. Cohill, 484 U.S. 343, 355 n.11 (1988), that

“{Section] 1447(c) ... dofes] not apply to cases over

which a federal court has pendent jurisdiction. Thus,

the remand authority conferred by the removal! stat-

1 See also Giles v. NYLCare Health Plans, Inc., 172 F.3d

332, 339 (6th Cir. 1999) (“We review a discretionary remand of

supplemental state law claims for abuse of discretion.”); Hook

v. Morrison Milling Co., 38 F.3d 776, 780 (5th Cir. 1994) (“[I]f

the court provides a reason unrelated to § 1447(c), such as pen-

dent jurisdiction, then we may properly review that order.”).:

Sa

ute and the remand authority conferred by the doc-

trine of pendent jurisdiction overlap not at all.” See

Hook v. Morrison Milling Co., 38 F.3d 776, 780 (5th

Cir. 1994) (citing Cohill, 484 U.S. at 355 n.11);

McCandless, 50 F.3d at 223—24 (same).

The Supreme Court recently cast some doubt on

the proposition that a remand order based on declin-

ing supplemental jurisdiction under section 1367(c)

does not fall within the class of remands described in

section 1447(c), stating in Powerex Corp. v. Reliant

Energy Services, 127 S. Ct. 2411 (2007), that “[ijt is

far from clear . . . that when discretionary supple-

mental jurisdiction is declined the remand is not

based on lack of subject-matter jurisdiction for pur-

poses of § 1447(c) and § 1447(d),” and that the Court

had “never passed on whether [such] remands are

subject-matter jurisdictional for purposes of post-

1988 versions of § 1447(c) and § 1447(d).” Id. at

2418-19 & n.4 (citations omitted); see also Regan,

524 F.3d at 631 (noting the Supreme Court’s recent

comments but declining to address the issue). Brook-

shire points out that one circuit that had not ad-

dressed the issue prior to Powerex has cited that de-

cision in support of the proposition that remand or-

ders based on declining supplemental jurisdiction

under section 1867(c) fall within the class of re-

mands described in section 1447(c), specifically re-

mands for lack of subject matter jurisdiction. In HIF

Bio, Inc. v. Yung Shin Pharmaceuticals Industrial

Co., 508 F.3d 659 (Fed Cir. 2007), the Federal Cir-

cuit found that “[b]y .. . undercutting the persuasive

force of the decisions of the other Courts of Appeals

relying on Cohill, Powerex appears to reopen the

question of whether § 1367(c) remands are barred

from review under §§ 1447(c) and (d).” Jd. at 666.

The court went on to hold that “because every

6a

§ 1367(c) remand necessarily involves a predicate

finding that the claims at issue lack an independent

basis of subject matter jurisdiction, a remand based

on declining supplemental jurisdiction can be colora-

bly characterized as a remand based on lack of sub-

ject matter jurisdiction. Accordingly, a remand based

on declining supplemental jurisdiction must be con-

sidered within the class of remands described in §

1447(c) and thus barred from appellate review by §

1447(d).” Id. at 667.2

2 The Third Circuit has succinctly explained why remands

authorized by section 1367(c) and section 1447(c) are treated

differently for the purposes of appellate review:

Although the sharp distinction between remands au-

thorized by § 1367(c) and remands authorized by §

1447(c) is often misunderstood, the reason behind their

different treatment is clear. Review of § 1447(c) remands

is barred to keep parties to state actions from making

dubious allegations of federal jurisdiction in order to fore-

stall the prompt resolution of state cases, Thus, § 1447(c)

remands are warranted only when a federal court has no

rightful authority to adjudicate a state case that has

been removed from state court. In such cases, the statute

provides a quick, permanent, and mandatory remedy to

return a state case to state court.

In contrast, § 1367(c) serves no such corrective pur-

pose. Remands authorized by § 1367(c) may be entered

only when federal subject matter jurisdiction has been af-

firmatively established, via 28 U.S.C. § 1367(a), and are

entered independently of whether the case originated in

state or federal court. Thus, a district court's decision to

remand pursuant to § 1367(c) does not imply that the

case was improperly filed in federal court. Rather, it re-

flects the court’s judgment, reviewable on appeal for

abuse of discretion, that at the present stage of litigation

it would be best for supplemental jurisdiction to be de-

clined so that state issues may be adjudicated by a state

court. In such circumstances, there is no pressing need to

7a

Although the Supreme Court has indicated that

it considers it an open question whether a discre-

tionary remand under section 1367(c) is based on a

lack of subject matter jurisdiction, and is thus unap-

pealable under section 1447(d), it is not an open

question in this circuit. Powerex made clear that Co-

hill did not, as some courts seem to have found, set-

tle the question, but it does not overrule or directly

undermine the line of cases in this circuit holding

that discretionary remands pursuant to section

1367(c) are appealable. See Cal. Dept. of Water Res.

v. Powerex Corp., 533 F.3d 1087, 1091-92 (9th Cir.

2008) (discussing H/F Bio and stating that “[t]he

Federal Circuit’s disagreement does not give a three-

judge panel in this circuit license to overrule the

binding, authoritative decision of a prior three-judge

panel,” and that “[slimilarly, that the question re-

mains unanswered by the Supreme Court does not

relax our obligation to abide by stare decisis”), The

Supreme Court in Powerex simply confirmed the rule

in this circuit 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),” 127 S. Ct. at 2417, and held that a review-

ing court should find that an order of remand was

based on lack of subject matter jurisdiction if the dis-

trict court “colorably characterized” it as such, a

block the mechanisms of review that are generally af-

forded civil litigants.

Thus, the bar to review codified at § 1447(d) is entirely in-

applicable when the basis of the remand was the district court’s

discretion pursuant to § 1367(c). Hudson United Bank uv.

LiTenda Mortg. Corp., 142 F.3d 161, 157-58 (3d Cir. 1998) (ci-

tations omitted).

8a

standard that is consistent with this Court’s rule

that a district court must clearly and affirmatively

invoke non-section 1447(c) grounds in order to avoid

the bar imposed by section 1447(d), id. at 2418; see

also Smith v. Tex. Children’s Hosp., 172 F.3d 923,

926 (5th Cir. 1999) (citation and quotations omitted)

(“[W]e will only review remand orders if the district

court affirmatively states a non-1447(c) ground for

remand.”).

In this case, the district court’s order of remand

was clearly based on 28 U.S.C. § 1367(c). The district

court summarized Brookshire’s argument that re-

mand was required under 28 U.S.C. § 1447(c) in the

first paragraph of the order, but the court then went

on to analyze the remand issue under the discretion-

ary standard set out in 28 U.S.C. § 1367(c), finding

that “[w]hile it is certainly within our discretion to

retain this case for further proceedings, after exam-

ining the factors enumerated in § 1367(c), the Court

finds that the suit before us contains only issues of

State law, and in the interest of comity, these State

law issues would be more properly decided by a

State forum.” The order of remand cannot be “col-

3 The order of remand stated in relevant part:

Before the Court is a “Motion and Order to Remand”

(doc. #1264) filed by Brookshire Brothers, wherein the

mover seeks to remand the instant case to state court be-

cause the Court lost subject matter jurisdiction when To-

tal Containment Inc. and its insurers were dismissed, ei-

ther voluntarily or involuntarily. Brookshire Brothers

maintains that an event post-remova!l can destroy subject

matter jurisdiction and require remand under 28 U.S.C.

§1447(c).

Under 28 U.S.C. § 1367(c), this Court has discretion

as to whether to keep the current pending claims or re-

9a

orably characterized” as being based on lack of sub-

ject matter jurisdiction under section 1447(c). Cf

Powerex, 127 S. Ct. at 2418-19 (finding that there

was no reason to believe that the district court’s re-

mand was actually based on section 1367(c) because

the court never mentioned the possibility of supple-

mand to State court. 28 U.S.C. § 1367(c) provides the fol-

lowing pertinent language:

The district courts may decline to exercise supplemen-

tal jurisdiction over a claim under subsection (a) if-

(1) the claim raises a novel or complex issue of

State law,

(2) the claim substantially predominates over the

claim or claims over which the district court has origi-

nal jurisdiction,

(3) the district court has dismissed all claims over

which it has original jurisdiction, or

(4) in exceptional circumstances, there are other

compelling reasons for declining jurisdiction.

The Court has considered these factors and concludes

that each factor militates in favor of remand. There is no

doubt that this products liability case involves complex

issues of State law, nor is there any doubt that the only

reason this case was removed to federal court was be-

cause it was related to a bankruptcy proceeding which is

no longer relevant to the instant case. While it is cer-

tainly within our discretion to retain this case for further

proceedings, after examining the factors enumerated in §

1367(c), the Court finds that the suit before us contains

only issues of State law, and in the interest of comity,

these State law issues would be more properly decided by

a State forum. Accordingly,

IT IS ORDERED that the motion and order to remand

is hereby GRANTED. The cause is remanded to the 14th

Judicial District Court for the Parish of Calcasieu, State

of Louisiana.

10a

mental jurisdiction, there was no indication that the

parties ever even argued to the district court that

supplemental jurisdiction was a basis for retaining

the case, and the court explicitly relied upon lack of

subject-matter jurisdiction in its order of remand).

Because the order of remand .was a discretionary

remand pursuant to section 1367(c), that order is re-

viewable on appeal for abuse of discretion. See

Regan, 524 F.3d at 631.

III. Whether The District Court Abused Its

Discretion In Remanding The Suit

In assessing whether a district court abused its

discretion by declining supplemental jurisdiction

over state law claims under 28 U.S.C. § 1367, this

Court is guided by the statutory factors set forth in

section 1367(c) as well as the common law factors of

judicial economy, convenience, fairness, and comity.

Mendoza v. Murphy, 532 F.3d 342, 346 (5th Cir.

2008) (citations omitted). Section 1367 authorizes a

court to decline supplemental jurisdiction over a

state law claim if: (1) the claim raises a novel or

complex issue of state law; (2) the claim substan-

tially predominates over the claim or claims over

which the district court has original jurisdiction; (3)

the district court has dismissed all claims over which

it has original jurisdiction; or (4) in exceptional cir-

cumstances, there are other compelling reasons for

declining jurisdiction. 28 U.S.C. § 1367(c). The gen-

eral rule is that a court should decline to exercise ju-

risdiction over remaining state-law claims when all

federal-law claims are eliminated before trial, but

this rule is neither mandatory nor absolute; no sin-

gle factor is dispositive, and this Court must review

the district court’s decision in light of the specific cir-

cumstances of the case at bar. See Batiste v. Island

lla

Records Inc., 179 F.3d 217, 227 (5th Cir. 1999) (cita-

tions omitted).

Our case law is clear that when a district court

declines to exercise jurisdiction over remaining state

law claims following the dismissal of all federal-law

claims and remands a suit after investing a signifi-

cant amount of judicial resources in the litigation

analogous to that invested by the district court in

this case, that court has abused its discretion under

28 U.S.C. § 13867. See Batiste, 179. F.3d at 227-28

(holding that the district court abused its discretion

in declining to exercise supplemental jurisdiction

over remaining state-law claims due to the absence

of any difficult state-law issue in the remaining

claims andthe district court’s intimate familiarity

with the claims as a result of the fact that the case

had been pending in the district court for almost

three years, produced more than sixteen volumes of

record, resulted in numerous depositions and discov-

ery disputes, and required significant consideration

by the district court of multiple motions to dismiss

claims or grant summary judgment); Newport Ltd. v.

Sears, Roebuck and Co., 941 F.2d 302, 308 (5th Cir.

1991) (holding that the district court abused its dis-

cretion in remanding state law claims because those

claims presented no novel or especially unusual

questions and the litigation in federal court had pro-

ceeded for four years and produced twenty-three

volumes and thousands of pages of record, resulted

in the preparation of a pretrial order exceeding two-

hundred pages, over a hundred depositions, and

nearly two-hundred-thousand pages of discovery

production); see also Mendoza, 532 F.3d at 346—47

(finding that district court did not abuse its discre-

tion in retaining jurisdiction over state law claims

after it had dismissed all claims over which it had

12a

original jurisdiction because the state law issues

were neither novel nor complex; by the time the dis-

trict court ruled on the motion to decline supplemen-

tal jurisdiction, the case against defendants had

been pending for well over a year, the discovery

deadline had passed, and the parties had fully

briefed defendants’ motion for summary judgment;

and it was not unfair to plaintiffs simply because

there was a risk of duplicative litigation in state

court); Doddy v. Oxy USA, Inc., 101 F.3d 448, 456

(5th Cir. 1996) (finding that district court did not

abuse its discretion in retaining jurisdiction over

state law claims because it did not raise any novel or

unsettled issues of state law and, at the time of re-

mand, the lawsuit had been in litigation for more

than two years, the trial date was less than a month

away, the parties had already filed more than 300

pleadings, most of the parties had already prepared

extensive discovery disclosures, and summary judg-

ment motions on behalf of many of the remaining de-

fendants were pending); Parker & Parsley Petroleum

Co. v. Dresser Indus., 972 F.2d 580, 587~—90 (5th Cir.

1992) (finding that the district court abused its dis-

cretion in retaining jurisdiction over state-law claims

following the dismissal of all federal-law claims be-

cause the proceedings were at a relatively early

stage when the district court elected to retain juris-

diction after dismissing all federal claims—the case

had been pending for only nine months and discov-

ery had not been completed—and there was no indi-

cation that the district judge had substantial famili-

arity with the merits of the case; trying the remain-

ing state issues in state court would not impose any

significant additional burdens on the parties such as

repeating the effort and expense of the discovery

process; the relitigation of procedural matters in

13a

state court would not pose any undue hardship; and

the case involved difficult state-law issues that were

best left to the state courts).

Additionally, although the district court stated

in its order of remand that “[t]here is no doubt that

this products liability case involves complex issues of

State law ... and in the interest of comity, these

State law issues would be more properly decided by

a State forum,” the remaining state-law issues in

this case do not appear to be particularly novel or

complex, and many of them may not even require the

application of Louisiana substantive law. Brookshire

points to two remaining issues of Louisiana law that |

“lie at the heart of this case”’—choice of law and pre-

scription—and that a Louisiana state court would be

better equipped to handle. Neither appears to in-

volve anything other than the routine choice of law

or prescription analysis that would arise in any

products liability case. Neither the district court nor

Brookshire has provided any explanation of why

these areas of Louisiana law are particularly diff-

cult to apply in this case. Indeed, the district court

has already addressed these issues in this case, ap-

plying Louisiana prescription law and determining

that Brookshire’s claims against one of the parties

arising in Texas should be governed by Texas sub-

stantive law. Regardless, even if this case involved

novel or complex state law issues, the significant

amount of judicial resources invested by the district

court would lead us to find that the district court

abused its discretion in remanding this case.

Finally, one more reason for reversing the re-

mand order is that, if the order is not reversed, there

is a significant risk that Brookshire will attempt to

re-litigate in state court rulings made against it by

14a

the district court, including those relating to choice

of law, prescription, breach of implied warranty, and

application of Texas’s economic-loss rule, and that

this would cause the flexpipe defendants substantial

prejudice. Cf. Mendoza, 532 F.3d at 347 (“Plaintiffs

complain that by retaining jurisdiction, the district

court ran the risk of duplicating similar litigation in

state court. But Plaintiffs themselves created the

duplicate litigation after having expressly stated in

their federal court pleadings a desire to avoid ‘dual

track litigation.””); Parker & Parsley, 972 F.2d at 588

("[W]e do not expect the relitigation of other matters

to pose undue hardship. The defendants can hardly

contest jurisdiction, and we do not see other obsta-

cles to resolution of the case in the state court, save

those that ought to be there... .”).

Considering the statutory factors set forth in sec-

tion 1867(c) as well as the common law factors of ju-

dicial economy, convenience, fairness, and comity as

applied to this case, we find that the district court

abused its discretion by declining supplemental ju-

risdiction over the remaining state law claims and

remanding this suit to state court. We REVERSE

the ruling of the district court and REMAND the

case for further proceedings.

15a

APPENDIX B

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF LOUISIANA

LAKE CHARLES DIVISION

BROOKSHIRE BROTHERS Docket No. 04-

HOLDING, INC., ET AL 1150

vs. Judge Trimble

TOTAL CONTAINMENT Magistrate Judge

INC., ET AL Wilson

ORDER

Before the Court is a “Motion and Order to Re-

mand” (doc. #1254) filed by Brookshire Brothers,

wherein the mover seeks to remand the instant case

to state court because the Court lost subject matter

jurisdiction when Total Containment Inc.! and its

insurers were dismissed, either voluntarily or invol-

untarily. Brookshire Brothers maintains that an

event post-removal can destroy subject matter juris-

diction and require remand under 28 U.S.C. §

1447(c).

Under 28 U.S.C. § 1367(c), this Court has discre-

tion as to whether to keep the current pending

claims or remand to State court. 28 U.S.C. § 1367(c)

provides the following pertinent language:

1 TCI filed bankruptcy approximately seven (7) months af-

ter Brookshire Brothers filed the instant suit against TCI and

other defendants in State court.

l6a

The district courts may decline to exercise sup-

plemental jurisdiction over a claim under subsection

(a) if -

(1) the claim raises a novel or complex issue of

State law,

(2) the claim substantially predominates over the

claim or claims over which the district court has

original jurisdiction,

(3) the district court has dismissed all claims

over which it has original jurisdiction, or

(4) in exceptional circumstances, there are other

compelling reasons for declining jurisdiction.

The Court has considered these factors and con-

cludes that each factor militates in favor of remand.

There is no doubt that this products liability case in-

volves complex issues of State law, nor is there any

doubt that the only reason this case was removed to

federal court was because it was related to a bank-

ruptcy proceeding which is no longer relevant to the

instant case.2 While it is certainly within our discre-

tion to retain this case for further proceedings, after

examining the factors enumerated in § 1367(c), the

Court finds that the suit before us contains only is-

sues of State law, and in the interest of comity, these

State law issues would be more properly decided by

a State forum. Accordingly,

IT IS ORDERED that the motion and order to

remand is hereby GRANTED. The cause is re-

2 Plaintiffs are not seeking a judgment against Total Con-

tainment, Inc. and all of its insurers have been dismissed either

voluntarily or involuntarily.

17a

manded to the 14 Judicial District Court for the

Parish of Calcasieu, State of Louisiana .

IT IS FURTHER ORDERED that the Clerk of

Court certify a copy of this judgment and forward

the same to the Clerk of the 14% Judicial District

Court for the Parish of Calcasieu, State of Louisiana.

THUS DONE AND SIGNED in Chambers at Al-

exandria, Louisiana, this 27th day of November,

2007.

/3/

JAMES T. TRIMBLE, JR.

UNITED STATES DISTRICT JUDGE

18a

APPENDIX C

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

Filed: February 5, 2009

No. 07-31154

BROOKSHIRE BROTHERS HOLDING, INC.,

BROOKSHIRE BROTHERS MANAGEMENT INC;

BROOKSHIRE BROTHERS LTD

Plaintiffs-Appellees

Vi

DAYCO PRODUCTS INC, SHELL CHEMICAL LP;

TICONA POLYMERS INC; MARK IV INDUSTRIES

LTD; UNDERWRITERS LABORATORIES INC

Defendants-Appellants

Appeal from the United States District Court

for the Western District of Louisiana, Lake Charles

ON PETITION FOR REHEARING EN BANC

Before HIGGINBOTHAM, BENAVIDES, and

STEWART, Circuit Judges.

PER CURIAM:

19a

Treating the Petition for Rehearing En Banc as a

Petition for Panel Rehearing, the Petition for Panel

Rehearing is DENIED. No member of the panel nor

judge in regular active service of the court having

requested that the court be polled on Rehearing En

Banc (Fed. R. App. P. and 5th Cir. R. 35), the Peti-

tion for Rehearing En Banc is DENIED.

ENTERED FOR THE COURT:

/s/

United States Circuit Judge

20a

APPENDIX D

Statutory Provisions Involved

28 U.S.C. § 1334(b):

Except as provided in subsection (e)(2), and not-

withstanding any Act of Congress that confers ex-

clusive jurisdiction on a court or courts other than

the district courts, the district courts shall have

original but not exclusive jurisdiction of all civil

proceedings arising under title 11, or arising in or

related to cases under title 11.

28 U.S.C. § 1367:

(a) Except as provided in subsections (b) and (c) or

as expressly provided otherwise by Federal stat-

ute, in any civil action of which the district courts

have original jurisdiction, the district courts shall

have supplemental jurisdiction over all other

claims that are so related to claims in the action

within such original jurisdiction that they form

part of the same case or controversy under Article

Ill of the United States Constitution. Such sup-

plemental jurisdiction shall include claims that

involve the joinder or intervention of additional

parties.

(c) The district courts may decline to exercise sup-

plemental jurisdiction over a claim under subsec-

tion (a) if —

(1) the claim raises a novel or complex issue of

State law,

2la

(2) the claim substantially predominates over

the claim or claims over which the district court

has original jurisdiction,

(3) the district court has dismissed all claims

over which it has original jurisdiction, or

(4) in exceptional circumstances, there are

other compelling reasons for declining jurisdic-

tion.

28 U.S.C. § 1447:

e+ ev @ @

(c) A motion to remand the case on the basis of

any defect other than lack of subject matter juris-

diction must be made within 30 days after the fil-

ing of the notice of removal under section 1446(a).

If at any time before final judgment it appears

that the district court lacks subject matter juris-

diction, the case shall be remanded. An order re-

manding the case may require payment of just

costs and any actual expenses, including attorney

fees, incurred as a result of the removal. A certi-

fied copy of the order of remand shall be mailed by

the clerk to the clerk of the State court. The State

court may thereupon proceed with such case.

(d) 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 remand-

ing a case to the State court from which it was

removed pursuant to section 1443 of this title

shall be reviewable by appeal or otherwise.