Remand orders in ERISA cases: when are they reviewable in the 11th Circuit?

AuthorEasley, Dorothy F.
PositionAppellate Practice and Advocacy

In Thermtron Products, Inc. v. Hermansdorfer, 423 U.S. 336 (1976), the Supreme Court held that 28 U.S.C. [section] 1447(d)'s prohibition against review of a federal district court order remanding a previously-removed case back to state court applied only to orders invoking [section] 1447(c). This article discusses Thermtron Products and the later-reported federal cases addressing the quagmire of when an order remanding to state court a case arising under the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1001, et seq. is reviewable in the 11th Circuit, notwithstanding the prohibitions.

ERISA Background

ERISA is a comprehensive federal law enacted by Congress to regulate employee welfare benefit plans. Section 514(a) of ERISA concerns "conflict preemption"; it provides that ERISA's provisions "shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan" governed by ERISA. 29 U.S.C. [section] 1144(a). The reach of ERISA conflict preemption under the "relate to" rubric is "deliberately expansive, and designed to 'establish pension plan regulation as exclusively a federal concern."' Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 46 (1987) (quoting Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 523 (1981)).

While ERISA conflict preemption is a state supremacy clause issue, ERISA "complete preemption" is a federal jurisdictional one. Metropolitan Life Ins. v. Taylor, 481 U.S. 58, 65 (1987). The 11th Circuit, in Butero v Royal Maccabees Life Ins. Co., 174 F.3d 1207 (11th Cir. 1999), articulated a four-part test for determining when state claims are completely preempted by ERISA:

[T]here is complete preemption when four elements are satisfied. First there must be a relevant ERISA plan.... Second, the plaintiff must have standing to sue under that plan.... Third, the defendant must be an ERISA entity.... Finally, the complaint must seek compensatory relief akin to that available under Section 1132(a); often this will be a claim for benefits due under a plan.

Id. at 1212 (citations omitted).

This means that, under ERISA's exception to the "well-pleaded complaint" rule, complaints in state court may be removed, despite the absence of a federal question appearing on the face of the plaintiff's "well-pleaded complaint," if a defendant, upon removal, can show complete preemption. (1) By contrast, conflict preemption does not provide the jurisdictional basis for removal per se; "the fact that a plaintiff's state claims may he preempted because they 'relate Wan ERISA plan under [section] 514 does not necessarily mean that they will fit within the scope of ERISA's [section] 502 civil enforcement provision." (2) Accordingly, some state claims (excluding direct negligence and contract claims) may interfere with the plan's administration or delivery of benefits without implicating ERISA's civil enforcement scheme and may remain in state court for determination of the preemption issue. Gonzalez-Garcia v. Williamson-Dickie Mfg. Co., 99 F.3d 490, 491 (1st Cir. 1996).

The tug-of-war between [section] 502 complete preemption (case may remain in federal court) and [section] 514 conflict preemption (case may be remanded to state court) is significant in that cases removed to federal court "on the jurisdictional wings" of [section] 502 complete preemption may be remanded, at least in part, if the district court concludes that at least some claims are only "conflict preempted" under [section] 514. Those remand decisions create a plethora of appellate issues concerning reviewability, and do so to an even greater extent when they include dismissal of some, but not all, claims.

Federal Statutes Controlling Appellate Review of Remand Orders

Title 28 U.S.C. 1447(c) and (d) set forth the procedures and general nonreviewability of remand orders after a case has been removed from state to federal court. Section 1447(c) contains two general categories in "which a district court may--and in one case must--order a remand: when there is 1) a lack of subject matter jurisdiction or 2) a defect other than a lack of subject matter jurisdiction [such as removal]." Snapper, Inc. v. Redan, 171 F.3d 1249, 1252-53 (11th Cir. 1999) (emphasis added). Thus, pursuant to [section] 1447(c),

[a] motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction must be made within 30 days after the filing of the notice of removal under section 1446(a) [28 U.S.C.A. [section] 1446(a)]. If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.

Id.

Under [section] 1447(d), federal appellate courts are barred from reviewing remand orders issued under [section] 1447(c) (lack of subject matter jurisdiction), whether by appeal, mandamus, or otherwise, even if the district court's order is erroneous: "(d) An order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise [, except when civil rights cases removed under [section] 1443 are involved.]"

The rationale is that allowing federal appeal of remand orders would simply delay justice in state courts. See New v. Sports & Recreation, Inc., 114 F.3d 1092 (11th Cir. 1997).

Section 1447(d)'s language would, therefore, seemingly bar appellate review of any ERISA remand decision by a district court. The simplicity of the statutory language, however, is misleading. In fact, a number of judicially-created exceptions provide for appellate review of remand decisions. As a result, "'straightforward' is about the last word judges attach to [section] 1447(d) these days...." (3)

History of Remand Order Reviewability

In 1976, the Supreme Court in Thermtron Products identified a narrow exception to the strict bar to appellate review of remand orders: A remand order may be reviewed on petition for writ of mandamus where the district court has remanded a case "on grounds not authorized by the removal statutes." 423 U.S. at 336. The Court held that [section] 1447(d)'s review prohibition applied only to remand orders rendered under the district court's [section] 1447(c) statutory authority and invoking the grounds for remand specified under [section] 1447(c); remands based on grounds not appearing in [section] 1447(c) were open to writ of mandamus review.

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