Opposition Brief — Brookshire Bros. Holding, Inc. v. Day-Co Productions, Inc., 129 S. Ct. 2865 (2009) (No. 08-1233)

VD er:

No. 08-1233 MAY 23 2009

OFFICE OF THE CLERK

IN THE

Supreme Court of the United States

BROOKSHIRE BROTHERS HOLDING, INC., et al.,

Petitioners,

v.

DAYCO PRODUCTS, INC., et al.,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES Court OF APPEALS FOR THE Firtu CIirRcuIT

BRIEF IN OPPOSITION FOR. RESPONDENTS TICONA POLYMERS, INC.,

SHELL CHEMICAL Lp, AND UNDERWRITERS LABORATORIES INC.

PauLa W. HINTON Pau M. O’Connor ITI

SANDRA RODRIGUEZ Counsel of Record

VINSON & ELKINS LLP SETH A. MoskowITz

2300 First City Tower KasowWITZ, BENSON, TORRES

1001 Fannin Street & FRIEDMAN LLP

Houston, TX 77002-6760 1653 Broadway

(713) 758-4494 New York, NY 10019

Attorneys for Respondent (212) 506-1700

Shell Chemical LP Attorneys for Respondent

Ticona Polymers, Inc.

JOHN FEF: OLINDE

Doucuas L. GRUNDMEYER

CuaFFE McCaLt, L.L.P

2300 Energy Centre

1100 Poydras Street

New Orleans, LA 70163-2300

(504) 585-7000

Attorneys for Respondent

Underwriters Laboratories Inc.

1

QUESTIONS PRESENTED FOR REVIEW

Whether the district court’s order remanding the

case to state court following its discretionary

decision 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)?

Whether the district court’s order remanding

the case to state court under 28 U.S.C. § 1367(c)

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

§ 1452(b), even though the district court’s remand

order relied exclusively upon 28 U.S.C. § 13867(c) and

never cited 28 U.S.C. § 1452(b)?

a1

LIST OF PARTIES AND RULE 29.6 NOTATION

The following persons were parties to the

proceedings in the court of appeals:

Plaintiffs-appellees-petitioners:

Brookshire Brothers Holding, Inc.

Brookshire Brothers Management, Inc.

Brookshire Ltd.

Defendants-appellants-respondents:

Dayco Products, Inc.

Mark IV Industries, Inc.

Shell Chemical LP

Ticona Polymers, Inc.

Underwriters Laboratories Inc.

Respondent, Dayco Products, Inc. (“Dayco”), is a

wholly owned subsidiary of its parent, Mark IV

Industries, Inc. (“Mark IV”). No publicly held company

owns 10% or more of Dayco’s stock. Respondent, Mark

IV, is a wholly owned subsidiary of its parent, MIV

Holdings, S.A., a Luxembourg Company. No publicly

held company owns 10% or more of Mark IV’s stock. On

April 30, 2009, Dayco and Mark IV filed voluntary

petitions for relief in the United States Bankruptcy

Court for the Southern District of New York under

11 U.S.C. §§ 101 et seg. As such, all claims against Dayco

and Mark IV are automatically stayed pursuant to

11 U.S.C. § 361(a).

Respondent, Shell Chemical LP is a Delaware

limited partnership whose general partner is Shell Oil

Company and whose limited partner is SCOGI, LP Its

general partner, Shell Oil Company, is a wholly owned

subsidiary of its parent, Shell Petroleum Inc., which in

turn is owned by Shell Petroleum N.V. Two publicly held

companies, Royal Dutch Petroleum Company and

The “Shell” Transport and Trading Company, plc,

respectively own 60% and 40% of the stock of Shell

Petroleum N.V.

Respondent, Ticona Polymers, Inc., now known as

Ticona, is a business of Celanese Corporation, a publicly

traded company.

Respondent, Underwriters Laboratories Inc., is an

independent, not-for-profit corporation which has no

parent. No publicly held company owns 10% or more of

Underwriters Laboratories Inc.’s stock.

iv

TABLE OF CONTENTS

Page

Questions Presented for Review .............. i

List of Parties and Rule 29.6 Notation ........ ii

ed pay we owen es iv

eee OE Ce PPROTTIION . ok ok so once ec baw vi

ISS hae ne Oe ea 1

Counterstatement of the Case ............... 3

I, Friai Court Proceedings .........0055: 4

Il. The Fifth Circuit’s Decision ........... 5

III. Brookshire’s Conduct Following The

Fut COC BS BEMEN n on 5 i wee a's 7

Reasons for Denying the Petition ............. 8

I. Brookshire’s First Question Presented

States No Valid Ground For Review In

Light Of This Court’s Recent Holding In

Carlsbad Technology, Inc. v. HIF Bio,

PO a Ga eos Grae ee eae e aes 8

II. The Statutory Bar Under 28 U.S.C.

§ 1452(b) Against Appellate Review Of

Orders Remanding Cases “Related To”

Bankruptcy Matters Is Inapplicable Here

Contents

Page

A. Brookshire Failed To Preserve This Issue

For Review By The Court .............. 13

B. The District Court’s Remand Order Was

Exzpressly And Unambiguously Under

§ 1367(c), And Thus § 1452(b)’s Bar On

Appellate Review Is Irrelevant ........ 15

C. Brookshire’s Argument Does Not

Warrant Review By This Court ........ 18

PE SELES IR ONL ONL AE nD 19

Appendix — Opinion Of The United States Court

Of Appeals For The Fifth Circuit Filed

I Os oe ok os kas va wp hse ee wees la

vi

TABLE OF CITED AUTHORITIES

Page

Cases

Allied Signal Recovery Trust

v. Allied Signal, Inc.,

298 F.3d 263 (Grd Cir. 2002) ...........se0. 16

Arbaugh v. Y&H Corp.,

i MS EE 5 i cee cece seweseceseus 14

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

556 U.S. _, 129 S.Ct. 1862 (May 4, 2009) ... passim

Carnegie Mellon v. Cohill,

EE eer 16, 17

Cathedral of the Incarnation v. Garden City Co.,

oe ee ee 16

Certain Underwriters at Lloyds

v. Warrantech Corp.,

461 F.3d 568 (Sth Cir. 2006) ................ 15

City of Gainesville

v. Brown-Crummer Invest. Co.,

ee ee pbc bse veaseeee eae 14 -

Cooper Indus., Inc. v. Aviall Servs., Inc.,

ee i kk ed deeeewesers 14

Delta Airlines, Inc. v. August,

ge G4): ee rr ee 14

vii

Cited Authorities

Page

Doddy v. Oxy USA, Inc.,

101 F.3d 448 (Sth Cir. 1996) ... cc cecsesees 17

Glidden v. Zdanok,

ME I occ pv esccccsesensepaeen 14

Hawking v. Ford Motor Co.,

210. F060 GE (GER Cir. 2000)... ccc cceees 16

Heaton v. Monogram Credit Card

Bank of Georgia,

231 F:3d 994 (Sth Cir. 2000) ............266:- 15

In re Adelphia,

BR ee NR a | 4 16

In re Cuyahoga Equipment Corp.,

Be ae Fa Ge GA SED ne ccc ccesescece 17

In re Seven Fields Dev. Corp.,

BOG Fac Gs Ge Cir, BOOT) own cece cncccces 16

Kircher v. Putnam Funds Trust,

547 U.S. 633 (2006) (Scalia, J., concurring) .. 15

Mansfield v. Swan,

SRE UTE does ss csbconvwcecdces es 14

Powell v. Nevada,

511 U.S. 79 (1994) (Thomas, J., dissenting) .. 18

vill

Cited Authorities

Page

Powerex Corp. v. Reliant Energy Servs., Inc.,

ee A ED ob ceed debe cevenesccs 11

Quackenbush v. Allstate Ins. Co.,

Oe Si. PONE) hoe ce veh awnsvetareeeeee 11

Security Farms v. Int’s Brotherhood of Teamsters,

124 F.8d 999 (Sth Cir. 1997) ....cccccccccee 17

Thermtron Products, Inc. v. Hermansdorfer,

I Rs RETO) | & 000k boss cd wees cwoscces li, 12

Things Remembered, Inc. v. Petrarca,

ee Oe PD cc cca casesaceeece sa 31. 36 37

TRW Inc. v. Andrews,

ee Ea va Kadas ods eo wees eda 14

United States v. Storer Broad. Co.,

ee Oe UR i cum ches ab uecanvecses 14

Youngblood v. West Virginia,

547 U.S. 867 (2006) (Scalia, J., dissenting)... 14

ix

Cited Authorities

Page

Statutes

20 U.BAs. FF Pe eee ctcneces passim

28 U.S. 3 GGT ee ee ase 2, 6, 11, 12

28 U.S.C. 9 1GGHe son ce ce enesces i, 2, 9, 11, 18

$8 U.S.C. 9 Se ee erase ecece ss passim

Rules

Sap. Ct. He. TD 5 cra veweecccess 18

Other Sources

1-3 Collier on Bankruptcy, p. 3.07[5]

CAGthh ech, TO Fe ee es evens cece. 16

]

INTRODUCTION

The Petition for a Writ of Certiorari filed by

Brookshire Brothers Holding, Inc., Brookshire Brothers

Management, Inc., and Brookshire Brothers Ltd.

(collectively, “Brookshire”) concerns the identical issue

which the Court recently resolved in Carlsbad

Technology, Inc. v. HIF Bio, Inc.,556 U.S. __, 129 S.Ct.

1862 (May 4, 2009). There, like here, the question

presented was whether a federal court of appeals has

jurisdiction to review a district court’s order remanding

a case to state court after declining to exercise

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

This Court held unequivocally that a federal court of

appeals may review such a remand order because

“C(wjhen a district court remands claims to a state court

after declining to exercise supplemental jurisdiction, the

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

jurisdiction for purposes of §§ 1447(c) and (d).” 129 S.Ct.

at 1867. The result should be no different here.

This case was removed from Louisiana state court

to federal court in May 2004 on the ground that it was

“related to” the bankruptcy of one of the defendants.

At the time of removal, Brookshire did not move to

remand the case to state court. To the contrary,

Brookshire admitted that federal subject matter

jurisdiction existed and that the case had been properly

removed to federal court. However, more than three

years later and just months before the case was

scheduied for trial in federal court, Brookshire moved

to remand the case to state court, arguing that the

claims relating to the bankrupt entity had been

resolved.

2

Despite the impending trial date and despite

devoting enormous resources to the case, the federal

court declined to exercise supplemental jurisdiction

over the remaining state law claims under 28 U.S.C.

§ 1367(c), and remanded the case to the Louisiana state

court. On appeal, the Fifth Circuit reversed, holding

that: (1) it had jurisdiction to review the remand order;

and (2) the district court had abused its discretion in

declining to exercise supplemental jurisdiction under

28 U.S.C. § 13867(c) because of, among other things, the

significant investment of judicial resources and the

likelihood that defendants would be prejudiced by

remand to state court.

Brookshire’s Petition states no valid ground for this

Court to grant review of the Fifth Circuit’s decision.

Brookshire claims only that the Fifth Circuit did not

have jurisdiction to review the remand order because

(i) remands for lack of subject matter jurisdiction are

not reviewable under 28 U.S.C. §§ 1447(c) and (d); and

(ii) 28 U.S.C. § 1452(b) bars review of orders remanding

cases “related to” a bankruptcy. As shown below, both

arguments are meritless.

First, as Brookshire admits, this case concerns the

very same issue which the Court decided in Carlsbad

Technology. As the Court made clear in Carlsbad

Technology, the statutory bar under 28 U.S.C. § 1447(d)

against appellate review of remand orders for lack of

subject matter jurisdiction is inapplicable where, as

here, the remand was issued under 28 U.S.C. § 1867(c).

Thus, consistent with Carlsbad Technology, the Fifth

Circuit properly exercised its appellate jurisdiction to

review the district court’s remand order under § 1367(c)

for an abuse of discretion.

3

Second, the statutory bar under 28 U.S.C. § 1452(b)

against appellate review of orders remanding cases

“related to” bankruptcy matters is inapplicable here.

Neither the parties nor the Fifth Circuit raised the issue

on appeal, and thus it is not properly before this Court.

Moreover, even if Brookshire had properly preserved

the issue, the district court’s remand order was based

expressly and solely upon § 1367(c), and the courts below

never cited or referenced § 1452(b). Finally, Brookshire

argues simply and erroneously that the Fifth Circuit

may have been incorrect in reviewing the remand order.

Such an argument does not warrant review by this

Court, which requires (among other things) a conflict

with a decision of this Court or another United States

court of appeals, or an important, but unresolved,

question of federal law — none of which is even alleged

here.

COUNTERSTATEMENT OF THE CASE

Respondents — Ticona Polymers, Inc., Shell

Chemical LP and Underwriters Laboratories Inc. —

adopt and incorporate by reference the Fifth Circuit’s

statement of the factual background and procedural

history as set forth in its published opinion.!'

(See Brookshire’s Appendix A, at la-14a.) Set forth

below are only those facts salient to the matter now

before this Court.

1. In light of their recent bankruptcy filing, Dayco and

Mark IV have not joined this Opposition. However, counsel for

Dayco and Mark IV have provided written assurances that they

have no objection to the filing of this Opposition.

4

I. Trial Court Proceedings

On August 15, 2008, Brookshire filed this products

liability action in Louisiana state court against multiple

defendants (including Respondents), alleging damage

from leaking underground pipes at gasoline stations in

Texas and Louisiana. (/d. at 2a.) Thereafter, on May 26,

2004, the action was removed to the United States

District Court for the Western District of Louisiana (the

“District Court”) pursuant to 28 U.S.C. §§ 1334(b) and

1452 on the ground that it was “related to” the

bankruptcy of one of the defendants, Total Containment,

Ine. (“TCI”). Ud.) In the courts below, Brookshire

“concede[d] that the case was properly removed and that

the district court had {subject matter] jurisdiction over

the suit at the time of removal.” (/d.)

Following removal, this case was actively litigated

in the District Court for more than three years,

generating in excess of 1,300 entries in the District

Court’s docket. Jd. During that time, the District Court

decided 41 dispositive motions, as well as 14 Daubert

and 7 in limine motions related to proposed expert

testimony. (Jd.) The District Court also addressed

several procedural and substantive issues in the case

under Texas and Louisiana law, including choice of law

and the statute of limitations. (/d. at 2a & 13a.)

After discovery had closed and as the parties were

making final preparations for the February 11, 2008 trial

date, Brookshire, TCI, and TCI’s insurers settled their

disputes and filed a joint stipulation dismissing

Brookshire’s claims against those defendants. (/d. at 3a.)

Shortly thereafter, on November 2, 2007, Brookshire

moved to remand the case to Louisiana state court. (/d.)

5

On November 27, 2007, the District Court granted

Brookshire’s motion, specifically declining to exercise

supplemental jurisdiction over the remaining state law

claims under § 1367(c). (Brookshire’s Appendix B, at

15a-17a.) The language of the District Court’s order is

clear and unambiguous. Not only does the remand order

quote § 1367(c) in its entirety and cite the statute several

times, but it cites no other authority. Indeed, in declining

to exercise supplemental jurisdiction, the remand order

provides expressly that “[uJnder 28 U.S.C. § 1367(c),

this Court has discretion as to whether to keep the

current pending claims or remand to State court.”

(Id. at 15a.) The District Court then ruled that “{wJhile

it is certainly within our discretion to retain this case

for further proceedings, after examining the factors

enumerated in § 1367(c) .. . [this case] would be more

properly decided by a State forum.” (Jd. at 16a.)

Thereafter, Respondents timely filed a notice of appeal.

Il. The Fifth Circuit’s Decision

Soon after Respondents filed their notice of appeal,

Brookshire moved to dismiss the appeal solely on the

ground that the Fifth Circuit lacked jurisdiction under

28 U.S.C. § 1447. Following briefing on the matter, on

February 6, 2008 the Fifth Circuit denied that motion.

In its brief on the merits, Brookshire argued only

that the Fifth Circuit should (i) dismiss the appeal for

lack of jurisdiction under 28 U.S.C. § 1447; and (ii) affirm

the District Court’s discretionary remand under

28 U.S.C. § 1367(c). Brookshire never argued, much less

suggested, that the Fifth Circuit lacked jurisdiction

under 28 U.S.C. § 1452(b). (Brookshire’s Appendix A,

at 3a.)

6

Consistent with established jurisprudence, on

January 6, 2009 the Fifth Circuit rejected each of

Brookshire’s arguments and reversed the District

Court’s discretionary remand order, holding:

That appellate jurisdiction existed to review the

remand order because the District Court did not

remand the case on any of the grounds specified

in § 1447(c) for lack of subject matter

jurisdiction or for a defect in removal procedure.

(/d. at 3a-4a.) Rather, the Fifth Circuit explained

that the District Court expressly based its

remand order on § 1367(c) and that the remand

order could not be, as Brookshire argued,

“colorably characterized” as a remand for lack

of subject matter jurisdiction under § 1447(c).

(Jd. at 8a-9a.) As a discretionary remand under

§ 13867(c), the District Court’s order was

therefore reviewable on appeal for abuse of

discretion, and was not barred under §§ 1447(c)

and (d). (/d. at 10a); and

That under the statutory factors set forth in

§ 13867(c) and the common law factors of judicial

economy, convenience, fairness and comity, the

District Court had abused its discretion by

declining supplemental jurisdiction over the

remaining state law claims and remanding the

case to state court. (/d. at 10a-14a.) In so ruling,

the Fifth Circuit noted that the District Court

had invested a significant amount of resources

in the case over the course of three years and

that the remaining issues of state law were not

novel or complex. (/d. at 13a.) The Fifth Circuit

7

further recognized that there was “a significant

risk that Brookshire will attempt to re-litigate

in state court rulings made against it by 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.” (/d. at 13a-14a.)

As a result, the Fifth Circuit remanded the case

to the District Court for all further proceedings.

(Id. at 14a.) Brookshire then filed a petition for rehearing

en banc, which the Fifth Circuit denied on February 5,

2009. (Brookshire’s Appendix C, at 18a-19a.)

III. Brookshire’s Conduct Following The Fifth

Circuit’s Ruling

The Fifth Circuit’s concerns about Brookshire’s

litigation tactics were well-founded. On January 7, 2009

—- the day after the Fifth Circuit’s decision —

Brookshire’s counsel sent a letter to the Louisiana state

court judge, asserting that the state court could

proceed with a previously scheduled hearing on January

26, 2009 concerning numerous pending motions. In

response, the Louisiana state court judge sent a letter

to all counsel, stating that he would proceed with the

case, including the January 26 hearing. Thereafter, on

January 16, 2009, Brookshire filed numerous pleadings

in the Louisiana state court requesting, among other

things, that the state court revisit many of the federal

District Court’s prior rulings on summary judgment and

other substantive issues. As a result, Respondents

moved to stay all further proceedings in the state court.

That motion was denied by the state court.

8

Subsequently, on January 20, 2009, Respondents filed

an emergency motion in the Fifth Circuit to, among other

things, enjoin all proceedings in the Louisiana state court.

Following briefing, on January 23, 2009 the Fifth Circuit

granted Respondents’ motion. (See Respondents’

Appendix A, attached hereto.) The Fifth Circuit did so in

aid of its own jurisdiction, to prevent the Louisiana state

court from interfering with the District Court’s authority,

and to protect Respondents’ rights to proceed in a federal

forum consistent with the Fifth Circuit’s decision.

(Id. at 2a-3a.) As the Fifth Circuit explained, “{plermitting

the state court to rule on dispositive motions in this suit,

which, as our opinion made clear, is properly before the

federal district court, would seriously interfere with the

federal district court’s consideration of the case and

deprive the defendants-appellants of their right to proceed

in a federal forum.” (Jd. )

REASONS FOR DENYING THE PETITION

I. Brookshire’s First Question Presented States No

Valid Ground For Review In Light Of This Court’s

Recent Holding In Carlsbad Technology, Inc. v.

HIF Bio, Inc.

Brookshire admits that its Petition raises the

identical question presented in Carlsbad Technology,

Inc. v. HIF Bio, Inc., 556 U.S. _, 129 S.Ct. 1862 (May

4, 2009), and has urged this Court to “hold” the Petition

“pending the decision” in that case. (Pet. at 1.) This

Court has now rendered its opinion in Carlsbad

Technology, which all members of the Court joined and

which conclusively determines Brookshire’s first

Question Presented. As the Court held in Carlsbad

9

Technology: “When a district court remands claims to

state court after declining to exercise supplemental

jurisdiction, the remand order is not based on a lack of

subject-matter jurisdiction for purposes of §§ 1447(c)

and (d),” and therefore appellate review of such an order

is not barred by 28 U.S.C. § 1447(d). 129 S.Ct. at 1867.

The Fifth Circuit’s decision at issue here is fully

consistent with Carlsbad Technology, and Brookshire

states no reason for this Court to grant review of the

same question definitively resolved in that case.

In Carlsbad Technology, the Court addressed the

following question: “Whether a district court’s order

remanding a case to state court following its

discretionary decision to decline to exercise the

supplemental jurisdiction accorded to federal courts

under 28 U.S.C § 1367(c) is properly held to be a remand

for a ‘lack of subject matter jurisdiction’ under 28 U.S.C.

§ 1447(c) so that such remand order is barred from any

appellate review by 28 U.S.C. § 1447(d).” (Brief for the

Petitioner in Carlsbad Technology at ii; 129 S.Ct. at 1864,

1866.) As Brookshire admits, “[t]his case presents the

same issue... presented by... Carlsbad Tech., Inc. v.

HIF Bio, Inc.” (Pet. at 7; see also id. at i, Question

Presented #1 (“Whether the district court’s order

remanding the case to state court following its

discretionary decision 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)”).)

As Brookshire also admits, “this case likely will be

controlled by this Court’s decision in Carlsbad

Technologies.” (Pet. at 7.)

10

It is not just “likely” that this Court’s holding in

Carlsbad Technology controls the outcome of this case —

it is certain. The facts of this case as alleged by Brookshire

are consistent with the facts of Carlsbad Technology. Both

cases involved properly removed claims over which the

district court had subject matter jurisdiction, as well as

supplemental state law claims under 28 U.S.C. § 1867(a).

See Pet. at 3 (removal of “related-to” bankruptcy claims

under 28 U.S.C. §§ 1334 and 1452(a), as well as state law

claims); 129 S.Ct. at 1865 (removal of Racketeer Influenced

& Corrupt Organizations Act (“RICO”) claim under

28 U.S.C. §§ 1961-1968, as well as state law claims). In both

cases, the federal claim that existed at the time of removal

was later disposed of in the federal court, leaving only the

supplemental state law claims remaining. See Pet. at 3

(Brookshire settled with the party which had filed for

bankruptcy, and that party’s insurers were either

dismissed on summary judgment, dismissed by Brookshire,

or settled with Brookshire; state law claims remained

against the other parties); 129 S.Ct. at 1865 (RICO claim

dismissed pursuant to Fed. R. Civ. P 12(b)(6); state law

claims remained). And in both cases, the district court

declined to exercise supplemental jurisdiction under

28 U.S.C. § 1367(c) over the remaining state law claims

and remanded the case to state court. See Brookshire’s

Appendix B at 16a (declining to exercise supplemental

jurisdiction under § 1367(c), and remanding the case to

state court); 129 S.Ct. at 1865 (“The District Court also

declined to exercise supplemental jurisdiction over the

remaining state-law claims pursuant to 28 U.S.C. §

1367(c)(3)....”).

Moreover, just like the petitioner in Carlsbad

Technology, Brookshire argues that because the

bankruptcy-related claims had been disposed of at the time

1]

the District Court considered the motion to remand under

§ 1367(c), the District Court lacked subject matter

jurisdiction and was required to remand the case under

§§ 1447(c) and (d). (Pet. at 14.) However, in Carlsbad

Technology, the Court squarely addressed and rejected

that argument. The result should be no different here.

First, in Carlsbad Technology, the Court reaffirmed

its holding in Thermtron Products, Inc. v. Hermansdorfer,

423 U.S. 336, 345-46 (1976), that the prohibition on review

of remand orders contained in § 1447(d) must be read 2n

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

barred from appellate review by § 1447(d) to those which

are based on a ground specified in § 1447(c).? 129 S.Ct. at

2. As this Court has repeatedly recognized for the more

than three decades since Thermtron, § 1447(d) prohibits

appellate review of remand orders only where, unlike here, the

district court specifies a ground for remand within the scope of

28 U.S.C. § 1447(c) for lack of subject matter jurisdiction or for

a timely raised defect in removal procedure. See Powerex Corp.

v. Reliant Energy Servs., Inc., 551 U.S. 224, 231 (2007) (“[W]hen

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)”); Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 711-

12 (1996) (explaining that Ҥ 1447(d) must be read in pari

materia with § 1447(c), so that only remands based on grounds

specified in § 1447(c) are immune from review under §

1447(d)”); Things Remembered, Inc. v. Petrarca, 516 U.S. 124,

127-28 (1995) (“As long as a district court’s remand is based on

a timely raised defect in removal procedure or on lack of

subject-matter jurisdiction — the grounds for remand

recognized by § 1447(c) — a court of appeals lacks jurisdiction

to entertain an appeal of the remand order under § 1447(d)”).

12

1865-66.° Second, this Court made clear in Carlsbad

Technology that there is a distinction between (1) whether

a court has subject matter jurisdiction over a claim, and

(2) whether a court chooses to exercise that jurisdiction.

Id. at 1866. Applying that distinction, this Court explained

that with respect to supplemental jurisdiction, a federal

court has subject matter jurisdiction over state law claims,

but has discretion in determining whether to exercise such

jurisdiction. Jd. “A district court’s decision whether to

exercise that [supplemental] jurisdiction after dismissing

every claim over which it had original jurisdiction is purely

discretionary.” Jd. (citation omitted). As a result, a district

court’s exercise of its discretion under § 1867(c) is not a

jurisdictional matter. Jd. at 1867. Because that decision is

discretionary (not jurisdictional), a § 1367(c) remand order

“is not based on a ‘lack of subject matter jurisdiction’ for

_ purposes of the bar to appellate review created by

§§ 1447(c) and 1447(d).” Jd. The Fifth Circuit’s decision

at issue here, which reviewed the District Court’s

discretionary remand order under § 1367(c), is fully

consistent with this Court’s reasoning.’ See Brookshire’s

Appendix A at 1a-14a.

3. This Court stated that it was not revisiting whether

Thermtron was correctly decided and further noted that neither

party had asked the Court to revisit Thermtron. Carlsbad

Technology, 129 S.Ct. at 1865-66 n.*. Brookshire likewise does not

request that this Court overrule its prior opinion in Thermtron.

To the contrary, Brookshire has attempted to “reconcile”

Thermtron’s holding with its arguments, and seeks a result

“consistent with Thermtron’s reasoning.” See Pet. at 10 & 14.

4, Similarly, Brookshire’s argument at pages 10-14 of its

Petition — 7.e., that the 1988 and 1996 amendments to 28 U.S.C.

§ 1447(c) somehow cause the scope of remand orders for which

(Cont'd)

13

Given this Court’s unequivocal decision in Carlsbad

Technology, it is clear that the Fifth Circuit had

jurisdiction to review the District Court’s remand order,

and there are no grounds for this Court to review

Brookshire’s first question presented.

II. The Statutory Bar Under 28 U.S.C. § 1452(b)

Against Appellate Review Of Orders Remanding

Cases “Related To” Bankruptcy Matters Is

Inapplicable Here

Despite Brookshire’s claim (Pet. at 14-20), the

statutory bar under 28 U.S.C. § 1452(b) against

appellate review of orders remanding cases “related to”

bankruptcy matters is inapplicable here, and thus

provides no grounds for this Court to grant certiorari.

A. Brookshire Failed To Preserve This Issue For

Review By The Court

Brookshire admits that it raised this issue for the

first time in its Petition for a Writ of Certiorari, having

never argued that 28 U.S.C. § 1452(b) barred the Fifth

Circuit from reviewing the remand order in its motion

to dismiss Respondents’ appeal for lack of jurisdiction,

its brief on the merits, or its petition for rehearing en

(Cont’d)

appellate review is barred by § 1447(d) to include remand orders

under § 1367(c) — was briefed by the parties in Carlsbad

Technology, raised during oral argument, and rejected by this

Court. See Carlsbad Technology, Brief for Petitioner at 31-41 &

n.6; Brief for Respondents at 12-13 & n.9, 10; Reply Brief for

Petitioner at 23-25; and Oral Argument Transcript at 17 (Feb. 24,

2009).

14

banc. (Pet. at 6, 19.) As this Court has explained, a

question presented for the first time in a petition for

certiorari “is not properly before us.” Delta Airlines,

Inc. v. August, 450 U.S. 346, 362 (1981). See also Cooper

Indus., Inc. v. Aviall Servs., Inc., 548 U.S. 157, 168-69

(2004) (explaining that “| wle ordinarily do not decide in

the first instance issues not decided below’”) (citation

omitted); TRW Inc. v. Andrews, 534 U.S. 19, 34 (2001)

(same).° Given Brookshire’s admission, it is beyond

dispute that this issue was not properly preserved for

review by this Court.

5. Nonetheless, Brookshire cites authority for the

unremarkable proposition that subject matter jurisdiction

cannot be waived. See United States v. Storer Broad. Co., 351

U.S. 193 (1956); Glidden v. Zdanok, 370 U.S. 530 (1962); City of

Gainesville v. Brown-Crummer Invest. Co., 277 U.S. 54 (1928);

Mansfield v. Swan, 111 U.S. 379 (1884). However, subject matter

jurisdiction is not at issue here. To the contrary, the issue

presented by Brookshire concerns only appellate jurisdiction.

Unlike appellate jurisdiction, subject matter jurisdiction

concerns the power of the federal courts to hear a matter in the

first instance. See Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006)

(explaining that subject matter jurisdiction cannot be waived

because “it involves the court’s power to hear a case”) (citation

omitted). By contrast, appellate jurisdiction concerns whether

a court of appeals may review a matter which has already been

litigated in the federal courts. Cf Youngblood v. West Virginia,

547 U.S. 867, 874 (2006) (Sealia, J., dissenting) (““[I]t is the

essential criterion of appellate jurisdiction that it revises and

corrects the proceedings in a cause already instituted. . .””’)

(quoting Marbury v. Madison, 1 Cranch 137, 175 (1803)).

15

B. The District Court’s Remand Order Was

Expressly And Unambiguously Under

§ 1367(c), And Thus § 1452(b)’s Bar On Appellate

Review Is Irrelevant

Even if Brookshire had preserved the issue, its

argument is beside the point and provides no grounds for

the Court’s review of the matter. As Brookshire admits

(Pet, at 15-16), the District Court’s remand order was based

solely and expressly upon § 1367(c), and the courts

below never cited, much less relied upon, § 1452(b).

(See Brookshire’s Appendix B, at 15a-17a.) An appellate

court should not “decipher the tea-leaves of a district

court’s remand order” where, as here, it makes a “clear-

statement” that it was issued under § 1367(c). See Certain

Underwriters at Lloyds v. Warrantech Corp., 461 F'3d 568,

572-73 (5th Cir. 2006); Heaton v. Monogram Credit Card

Bank of Georgia, 231 F.3d 994, 997-98 (5th Cir. 2000)

(same).® Thus, § 1452(b)’s bar to appellate review is

irrelevant here, given (among other things) the clear

statements in the remand order.

Faced with the plain language of the remand order,

Brookshire argues erroneously that (1) the § 1367(c)

factors relied upon by the District Court somehow

constitute equitable grounds under § 1452(b); and

(2) the remand order allegedly should be construed under

§ 1452(b) because the case was removed to federal court

under § 1452(a). (Pet. at 15-18.) Brookshire is wrong.

6. While this Court has yet to address the issue, Justice

Sealia recently stated that “appellate courts [should not] look

behind the stated basis for the district court’s remand order.”

Kircher v. Putnam Funds Trust, 547 U.S. 633, 650 (2006) (Scalia,

J., concurring).

16

First, while there may be some overlap in the factors

considered under § 1367(c) and § 1452(b), there are

critical differences. Most significantly, under § 1452(b),

courts must consider various factors that concern

bankruptcy-related issues, including: (1) the existence

of a right to a jury trial; (2) the effect on the efficient

administration of the bankruptcy estate; and (3) the

degree of relatedness or remoteness of the proceeding

to the main bankruptcy case. See In re Adelphia, 285

B.R. 127, 144 (S.D.N.Y. 2002) (citation omitted); 1-3

Collier on Bankruptcy, p. 3.07[5] (15th ed. Rev. 2009).

None of these factors, however, are considered under

§ 1367(c). See Carnegie Mellon v. Cohill, 484 U.S. 348,

350 (1988) (instructing the lower courts to focus on

principles of judicial economy, convenience, fairness

and comity under § 1367(c)). Given the additional,

bankruptcy-related factors under § 1452(b) and the

unambiguous language of the remand order relying

solely upon § 1367(c), it strains credulity for Brookshire

to even argue that the factors the District Court

considered in remanding the case constituted equitable

grounds under § 1452(b).’

Second, there is no basis to construe the remand

order as being under § 1452(b) simply because the case

7. Oddly, Brookshire cites a handful of cases for the non-

controversial proposition that the “equitable” grounds under

§ 1452(b) should be construed broadly. (Pet. at 15.) However,

none of those cases even addresses § 1367(c). See Things

Remembered, 516 U.S. 124; In re Seven Fields Dev. Corp., 505

F.3d 237 (3d Cir. 2007); Allied Signal Recovery Trust v. Allied

Signal, Inc., 298 F.3d 263 (3rd Cir. 2002); Hawking v. Ford Motor

Co., 210 F.3d 540 (5th Cir. 2000); Cathedral of the Incarnation v.

Garden City Co. , 90 F3d 28 (2d Cir. 1996).

17

was originally removed to federal court on “related to”

bankruptey grounds. As this Court has observed,

“(t]here is no express indication in § 1452 that Congress

intended that statute to be the exclusive provision

governing removals and remands in bankruptcy.”

Things Remembered, 516 U.S. at 129. In addition, the

Fifth Circuit has explained that where, as here, a case

is removed under § 1452(a) and the bankruptcy-related

claims are later dismissed, leaving supplemental state

law claims within the court’s jurisdiction, “the court’s

remand authority switches from that under § 1452 to

that under § 1367.” Doddy v. Oxy USA, Inc., 101 F.3d

448, 455 n.3 (5th Cir. 1996) (citing Cohiil, 484 U.S. at

354 n.11 for the proposition that “the remand authority

conferred by the removal statute and the remand

authority conferred by the doctrine of pendent

jurisdiction overlap not at all”).

Further undercutting Brookshire’s argument is that

supplemental jurisdiction under § 1367(c) can indeed

exist over state law claims in a case which is “related

to” a bankruptcy matter. See, e.g., Security Farms v.

Int’s Brotherhood of Teamsters, 124 F.3d 999, 1008 n.5

(9th Cir. 1997) (recognizing that the case was “related

to” a bankruptcy matter, and also included state law

claims over which the federal court had supplemental

jurisdiction); Doddy, 101 F.3d at 455 n.3 (explaining that

where, as here, a case is removed to federal court on

“related to” grounds, the district court also had

supplemental jurisdiction over pendent tort claims);

In re Cuyahoga Equipment Corp., 980 F.2d 110, 115 (2d

Cir. 1992) (“Given an independent jurisdictional source

like that provided by § 1334(b), federal courts possess

supplemental jurisdiction over related claims”).

18

Here, once the claims against the bk .nkrupt entity

and its insurers were resolved by settlement or dismissal

after removal, only the supplemental state law claims

remained against the non-bankrupt defendants. As such,

the District Court’s discretionary remand order was

purely and simply under § 1367(c), not § 1452(b), and

the Fifth Circuit had jurisdiction to review the remand

order consistent with Carlsbad Technology.

C. Brookshire’s Argument Does Not Warrant

Review By This Court

Not only is Brookshire’s argument incorrect, but it

fails to merit review by this Court. Brookshire does not

argue that the Fifth Circuit’s decision conflicted with

any decision of this Court or another United States

court of appeals on the same important matter, or that

the Fifth Circuit decided an important question of

federal law which has not been, but should be, decided

by this Court. See Sup. Ct. R. 10(a) & (b). Rather,

Brookshire argues simply and erroneously that the Fifth

Circuit should not have reviewed the remand order.

Assuming arguendo (and contrary to fact and law) that

the Fifth Circuit was barred from reviewing the remand

order, Brookshire’s argument plainly does not warrant

review by this Court. See Sup. Ct. R. 10 (“A petition for

a writ of certiorari is rarely granted when the asserted

error consists of erroneous factual findings or the

misapplication of a properly stated rule of law”).

Cf. Powell v. Nevada, 511 U.S. 79, 86 (1994) (Thomas,

J., dissenting) (noting that the writ of certiorari should

only be granted “in cases involving principles the

settlement of which is of importance to the public as

distinguished from that of the parties, and in cases where

19

there is a real and embarrassing conflict of opinion

between the circuit courts of appeal”) (citation omitted).

This case presents no such compelling reason or

consideration worthy of this Court’s review.

CONCLUSION

For the foregoing reasons, Respondents — Ticona

Polymers, Inc., Shell Chemical LP and Underwriters

Laboratories Inc. — respectfully request that this

Court deny Brookshire’s Petition for a Writ of Certiorari.

Kkespectfully submitted,

PauLa W. HINTON Pau. M. O’Connor III

SANDRA RODRIGUEZ Counsel of Record

VINSON & ELKINS LLP SETH A. MOSKowITz

2300 First City Tower Kasowltz, BENSON, TORRES

1001 Fannin Street & FRIEDMAN LLP

Houston, TX 77002-6760 1633 Broadway

(713) 758-4494 New York, NY 10019

Attorneys for Respondent (212) 506-1700

Shell Chemical LP Attorneys for Respondent

Ticona Polymers, Inc.

JOHN F. OLINDE

Douc Las L. GRUNDMEYER

CHAFFE McCa tt, L.L.P

2300 Energy Centre

1100 Poydras Street

New Orleans, LA 70163-2300

(504) 585-7000

Attorneys for Respondent

Underwriters Laboratories Inc.

APPENDIX

la

APPENDIX — OPINION OF THE UNITED STATES

COURT OF APPEALS FOR THE FIFTH CIRCUIT

FILED JANUARY 23, 2009

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 07-31154

BROOKSHIRE BROTHERS HOLDING INC;

BROOKSHIRE BROTHERS MANAGEMENT INC;

BROOKSHIRE BROTHERS LTD

Plaintiffs-Appellees

v.

DAYCO PRODUCTS, INC; SHELL CHEMICAL LP;

TICONA POLYMERS INC; MARKIV INDUSTRIES LTD;

UNDERWRITERS LABORATORIES INC

Defendants-Appellants

Appeal from the United States District Court for the

Western District of Louisiana, Lake Charles

Before HIGGINBOTHAM, BENAVIDES, and

STEWART, Circuit Judges. PER CURIAM:

On January 6, 2009, this court found that the federal

district court abused its discretion in remanding this

case to Louisiana state court. After the opinion issued,

the plaintiffs-appellees nonetheless requested that the

state court rule on dispositive motions. The state court

2a

Appendix

has now indicated that it intends to rule on those motions

at a hearing on January 26, 2009. The defendants-

appellants have filed an emergency motion to enjoin the

parties from proceeding in the state court and to have

the panel issue the mandate instanter. We refuse to issue

the mandate instanter because this would interfere with

the right of the plaintiffs-appellees to have the en banc

court consider their en bance request. However, we are

convinced that the request for an injunction should be

granted.

The plaintiffs-appellees contend that the issuance

of an injunction is prohibited by the Anti-Injunction Act,

28 U.S.C. § 2283, which generally bars a federal court

from granting an injunction to stay proceedings in state

court. However, the requested injunctive relief in this

case falls within one of the express exceptions to the

general prohibition contained in the Anti-Injunction Act:

a federal court may enjoin state court proceedings

“where necessary in aid of its jurisdiction.” Jd. The

plaintiffs-appellees argue that this exception does not

apply in this case because of the Supreme Court’s

holding in Kline v. Burke Construction Co., 260 U.S.

226, 230-31 (1922), that the maintenance of a state action .

in personam involving the same subject matter at issue

in a concurrent federal action does not tend to impair

or defeat the jurisdiction of the federal court. However,

the underlying dispute in this case is not the subject of

parallel state and federal actions, but of a single lawsuit

which was brought in state court, removed to federal

court, and later—erroneously—remanded to state court.

Permitting the state court to rule on dispositive motions

3a

Appendix

in this suit, which, as our opinion made clear, is properly

before the federal district court, would seriously

interfere with the federal district court’s consideration

of the case and deprive the defendants-appellants of

their right to proceed in a federal forum. See Atl. Coast

Line R.R. Co. v. Brother 100d of Locomotive Eng’rs, 398

U.S. 281, 295 (1970) (st..iting that the “necessary in aid

of its jurisdiction” exception implies “that some federal

injunctive relief may be necessary to prevent a state

court from so interfering with a federal court’s

consideration or disposition of a case as to seriously

impair the federal courts flexibility and authority to

decide that case”).

Nor is it clear that the Anti-Injunction Act reaches

the relief we today grant. Its operative bite is the same

as an order staying enforcement of an order of a district

court pending review of its validity. Moreover this

equitable relief serves to avoid undue friction between

the federal and state courts and mitigate the costs of

proceedings that will be voided if the present ruling of

this panel stands. And it is unlikely that it will be

overturned. Fed. R. App. P 8 is no bar given the want of

time. While there have been proceedings in the state

court they have not until recently turned to efforts that

will be undone on the vacating of the order of remand.

The motion for injunction is GRANTED, and the

request for immediate issuance of mandate DENIED.