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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 2009

## Text

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
Ce Se MINIT ochre csinicicsieswinsessessvntodeasnceasdansnads 1
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

OO ee Oe I rknctn ecsssccidicccisacicevactscaiessiswinicscis 1
goods srcinorivsacucouodaivestcomecons 13
Be FO osiesithcninsiicscetscissssoicncsssscxicneaues 13
ee ii ccc dhcccknkdes saceeteuniessicisssaen passim
I ee circ ccsicecn esvcsesacccicear onsen 17
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.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386017_0362%3A1. Public record. Not legal advice.