Appealing Waiver-Based Remands

In Abraham Watkins Nichols Agosto Aziz & Stogner v. Festeryga, the Fifth Circuit held that it lacked jurisdiction to review an order that remanded a removed action because the defendant had waived the right to remove. But the panel doubted that doing so was correct. Indeed, the panel seemed almost certain that its decision was wrong. But it was bound by the Fifth Circuit’s decision in In re Weaver, which held that 28 U.S.C. § 1447(d) barred review of such a remand.

The Waiver-Based Remand

Only a little background is necessary. Abrams Watkins started as a Texas state court action involving a variety of business torts. The defendant responded in state court with an anti-SLAPP motion that sought dismissal of the action.

About two weeks later, the defendant removed the action to federal court. But the district court remanded the action after concluding that the defendant waived the right to removal. According to the district court, waiver occurred because the defendant invoked the state court’s jurisdiction by moving to dismiss the action.

The defendant then appealed. But the Fifth Circuit concluded that § 1447 deprived it of appellate jurisdiction.

The Limits on Remand Appeals

With exceptions irrelevant to the present discussion, 28 U.S.C. § 1447(d) generally bars appeals from remand orders:

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 remanding a case to the State court from which it was removed pursuant to section 1442 or 1443 of this title shall be reviewable by appeal or otherwise.

The statute’s language would seem to bar all remand appeals. But the Supreme Court has long held that § 1447(d) must be read in the context of the rest of § 1447. So in Thermtron Products, Inc. v. Hermandsdorfer, the Court held that § 1447(d)’s prohibition on remand appeals applied only to remands authorized by the neighboring § 1447(c). And § 1447(c) addresses remands for (1) a lack of subject matter or (2) a procedural defect in removal. Putting subsections (c) and (d) together, the courts of appeals still have jurisdiction to review any other type of remand.

The Fifth Circuit Precedent on Waiver-Based Remand Appeals

The remand in Watkins Nichols was based on waiver: the district court determined that the defendant waived the right to remove by participating in the state court action. The Fifth Circuit recognized that, at least at first (and perhaps also last) look, this remand was not one of those addressed in § 1447(c). So the court would seem to have jurisdiction to review the remand order.

But in 1980’s In re Weaver, the Fifth Circuit said that waiver-based remands are jurisdictional:

Even though the specific language of § 1447(c) was not used, it seems apparent that at the time of the remand order, [the district-court judge] believed the case was not removable, leading to the logical inference that he felt jurisdiction was lacking. Such a holding is within the guidelines of § 1447(c).

Because the waiver-based remand in Watkins Nichols was jurisdictional, § 1447(d) barred review. And no intervening change in law undermined Weaver.

Doubts About Weaver

The Fifth Circuit thus “reluctantly” followed Weaver and dismissed the appeal. But the court (and a concurring judge) doubted that Weaver was correct, going so far as to say that the decision “misunderstood the niceties of waiver, jurisdiction, and their relation to § 1447(c).”

The Fifth Circuit also explained that courts of appeals have split on this issue. The Ninth Circuit agrees with the Fifth. But the Tenth Circuit has rejected Weaver, noting that it could “fathom no explanation” for Weaver’s holding. A divided Seventh Circuit did, too, calling Weaver’s rationale “unsound,” “illogical,” and “unpresuasive.”

So Watkins Nichols might be headed for en banc review. Or it might be a good (and easy) candidate for cert.

Abraham Watkins Nichols Agosto Aziz & Stogner v. Festeryga, 2024 WL 3533052 (5th Cir. July 25, 2024), available at the Fifth Circuit and Westlaw