United States Court of Appeals For the First Circuit
No. 20-1784
FORTY SIX HUNDRED LLC,
Plaintiff, Appellee,
v.
CADENCE EDUCATION, LLC, d/b/a NEXT GENERATION CHILDREN'S CENTERS,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Timothy S. Hillman, U.S. District Judge]
Before
Thompson, Selya, and Hawkins,* Circuit Judges.
Paul B. Lewis, with whom Bruce E. Falby and DLA Piper LLP were on brief, for appellant. Douglas T. Radigan, with whom Jared A. Fiore and Bowditch & Dewey LLP were on brief, for appellee.
September 30, 2021
* Of the Ninth Circuit, sitting by designation. SELYA, Circuit Judge. This appeal, which rises like the
mythical phoenix from the ashes of an eviction action removed from
a Massachusetts state court, poses a series of gnarly questions
related to the propriety of the district court's abstention-based
remand order and the premature return of the underlying action to
the state court. After sifting through the parties' arguments, we
conclude that the district court erred in ordering the remand. We
further conclude that the court's premature return of the case to
the state court does not constrain our ability to remedy this
error. Accordingly, we reverse the remand order and direct the
district court to retrieve the removed action and resume
jurisdiction over it. We also offer some guidance to district
courts generally, aimed at avoiding the unnecessary shuttling of
removed cases back and forth between state and federal courts.
I
We start by rehearsing the relevant facts and travel of
the case. In 1997, defendant-appellant Cadence Education, LLC
(Cadence) and plaintiff-appellee Forty Six Hundred LLC (FSH)
executed a lease through which Cadence, as lessee, rented a
property in Westborough, Massachusetts from FSH, as lessor. The
lease arrangement was uneventful for more than two decades. The
relationship soured, though, when (according to FSH) Cadence
failed to pay the rent due for the months of April, May, and June
2020.
- 2 - On June 10, 2020, FSH served Cadence with a pleading
styled as a "Summary Process (Eviction) Summons and Complaint."
The original complaint was filed in a Massachusetts state court
(the Westborough District Court), where it would have been governed
by the Massachusetts Trial Court Uniform Summary Process Rules
(the Uniform Rules) and the provisions of chapter 239 of the
Massachusetts General Laws. The action sought both to evict
Cadence for nonpayment of rent and to recover $83,553.90 in damages
(for rent arrearages).
On July 9, Cadence seasonably removed the action to the
federal district court, alleging the existence of diversity
jurisdiction.1 See 28 U.S.C. §§ 1332, 1441(b). FSH countered by
moving to remand the action to the state court. In its motion
papers, FSH did not dispute that the action satisfied the statutory
imperatives for federal diversity jurisdiction but, rather, argued
(as pertinent here) that the federal district court was entitled
to abstain from adjudicating the action under Burford abstention
principles. See Burford v. Sun Oil Co., 319 U.S. 315, 334 (1943).
Cadence opposed this motion.
1 Cadence is a Delaware limited liability company, and FSH is a Massachusetts limited liability company. Cadence has represented that there is no overlap between the state(s) of which its members are citizens and the state(s) of which FSH's members are citizens, and FSH has not challenged this representation. Money damages are sought, and the amount in controversy exceeds $75,000.
- 3 - On August 10, 2020, the district court granted FSH's
motion to remand. See Forty Six Hundred LLC v. Cadence Educ.,
LLC, 478 F. Supp. 3d 84, 87 (D. Mass. 2020). Although the court
acknowledged that federal courts may have original jurisdiction
over removed summary eviction proceedings, it concluded that "this
is the rare ca[s]e where abstention is appropriate." Id. at 86.
In order "to preserve the state statutory scheme" — a reference to
the applicable Massachusetts rules of summary process for eviction
cases — the court declined to exercise jurisdiction over the
action. Id. at 87.
On the same day that the district court entered its
remand order, Cadence appealed that order. See Quackenbush v.
Allstate Ins. Co., 517 U.S. 706, 715 (1996) (holding that an
abstention-based remand order is appealable under 28 U.S.C.
§ 1291). Cadence also asked the district court to stay its remand
order. The district court denied Cadence's motion to stay without
explanation and proceeded immediately to execute the remand,
returning the action to the state court.2 The action remains
pending in the state-court system.
2 Once the district court denied its stay motion, Cadence filed an emergency motion in this court to stay the remand order pending appeal. After it learned that the district court had remitted the action to the state court, however, it voluntarily withdrew its motion because there was nothing left for this court to stay.
- 4 - II
To begin, Cadence takes aim at the district court's
decision to refrain from exercising jurisdiction over the action.
Its challenge rests primarily on the contention that the Burford
abstention doctrine is inapplicable here. Thus, Cadence says, the
district court's allowance of FSH's motion to remand must be
reversed.
Before grappling with Cadence's argument, we pause to
note an oddity. Although both parties have proceeded in this court
on the understanding that the Burford abstention doctrine lies at
the heart of the matter, the district court never explicitly
mentioned Burford. It falls to us, then, to determine at the
outset whether the district court's decision to abstain was
actually grounded on Burford principles.
A close review of the proceedings below, including the
district court's stated reasoning, reveals that the court did
indulge in Burford abstention. For one thing, the Burford doctrine
was the only basis for abstention put forward by FSH. For another
thing, the district court — in choosing to abstain — relied on the
decision in Glen 6 Associates, Inc. v. Dedaj, 770 F. Supp. 225,
229 (S.D.N.Y. 1991). That court, in turn, supported its abstention
decision by citation to case law applying the Burford abstention
doctrine. See id. at 228. This case law included, for example,
Alabama Public Service Commission v. Southern Railway Co., 341
- 5 - U.S. 341, 345 (1951) (explaining that question sub judice is one
"framed by the Court in Burford"), and Tonwal Realties, Inc. v.
Beame, 406 F. Supp. 363, 364 (S.D.N.Y. 1976) (relying on Burford
as basis for abstention). See Glen 6 Assocs., Inc., 770 F. Supp.
at 228. To cinch the matter, the district court's stated concern
about potential interference with a "comprehensive [state]
legislative scheme," Forty Six Hundred, 478 F. Supp. at 87, tracks
the language we have used to articulate the purpose of the Burford
abstention doctrine, see Sevigny v. Emps. Ins. of Wausau, 411 F.3d
24, 28 (1st Cir. 2005) (noting that "Burford['s] central concern
[is] protecting state-agency schemes"). Given these telltale
signs, the only plausible reading of the district court's rescript
is that it abstained on the basis of the Burford abstention
doctrine.
Having dispelled any uncertainty about the doctrinal
underpinnings of the district court's abstention-based remand
order, we turn to the supportability of that order. A district
court's decision to abstain has two elements. The court first
must determine whether certain preconditions for abstention are
met and, if so, must then determine whether abstention is
appropriate. See DeMauro v. DeMauro, 115 F.3d 94, 99 (1st Cir.
1997). We review de novo the district court's threshold
determination as to "whether the requirements for [Burford]
abstention have been met." Chico Serv. Station, Inc. v. Sol P.R.
- 6 - Ltd., 633 F.3d 20, 30 (1st Cir. 2011) (quoting Guillemard-Ginorio
v. Contreras-Gómez, 585 F.3d 508, 516 (1st Cir. 2009)). If the
decision passes through that screen, we then review the court's
bottom-line decision to abstain for abuse of discretion. See id.;
Vaquería Tres Monjitas, Inc. v. Irizarry, 587 F.3d 464, 474 (1st
Cir. 2009); Sevigny, 411 F.3d at 26-27.
Cadence argues that Burford abstention is inapposite
here. We tee up its arguments by tracing the legal contours of
the Burford abstention doctrine. The baseline rule, of course, is
that "federal courts have a strict duty to exercise the
jurisdiction that is conferred upon them by Congress."
Quackenbush, 517 U.S. at 716; see Colo. River Water Conservation
Dist. v. United States, 424 U.S. 800, 817 (1976) (noting the
"virtually unflagging obligation of the federal courts to exercise
the jurisdiction given them"); Chico Serv. Station, 633 F.3d at 29
(explaining that the "all but unyielding duty to exercise
jurisdiction rests on 'the undisputed constitutional principle
that Congress, and not the Judiciary, defines the scope of federal
jurisdiction within the constitutionally permissible bounds'"
(quoting New Orleans Pub. Serv., Inc. v. Council of New Orleans
(NOPSI), 491 U.S. 350, 359 (1989))).
Though strict, this duty is not absolute. See
Quackenbush, 517 U.S. at 716. The Supreme Court has carved out
certain "exceptional circumstances" — circumstances in which
- 7 - "denying a federal forum would clearly serve an important
countervailing interest" — that may warrant a federal court's
eschewal of jurisdiction. Id. (first quoting Colo. River Water
Conservation Dist., 424 U.S. at 813). Even so, "[t]he
circumstances that fit this mold are rare." Chico Serv. Station,
633 F.3d at 29. And "because abstention runs so firmly against
the jurisprudential grain," we treat abstention as "the exception,
not the rule." Id. (quoting Fragoso v. Lopez, 991 F.2d 878, 882
(1st Cir. 1993)).
The Burford Court identified one such exception to a
federal court's duty to exercise jurisdiction. See 319 U.S. at
334. There, the plaintiff asked a federal court to invalidate,
under state law, an order issued by the Texas Railroad Commission
(the Commission), which had granted the defendant a permit to drill
for oil in a field where hundreds of other producers also had
wells. See id. at 316-17, 319. At the time, the power to decide
who could extract what oil from a commonly drilled field rested
with the Commission. See id. at 320. The Commission's judgments
entailed consideration of a multitude of factors, including the
oil supply, market demand, protection of the individual operators
and the public interest, spacing of the wells, as well as highly
technical geologic data. See id. at 321-22. To achieve
consistency in judgments, to avoid "interminable confusion," id.
at 326 (quoting Tex. Steel Co. v. Fort Worth & Denver City Ry.
- 8 - Co., 40 S.W.2d 78, 82 (Tex. 1931)), and to develop "specialized
knowledge . . . useful in shaping the policy of regulation of the
ever-changing demands in this field," a state statute centralized
direct judicial review in the state district courts of a particular
Texas county, id. at 326-27. Because the intervention of the lower
federal courts "threatened to frustrate the purpose of the complex
administrative system that Texas had established," the Supreme
Court deemed abstention proper. Quackenbush, 517 U.S. at 725
(discussing Burford).
The Court later emphasized that Burford permits a
federal court to abstain "only in extraordinary circumstances."
Id. at 726. "Burford allows a federal court to dismiss a case
only if it presents difficult questions of state law bearing on
policy problems of substantial public import whose importance
transcends the result in the case then at bar, or if its
adjudication in a federal forum would be disruptive of state
efforts to establish a coherent policy with respect to a matter of
substantial public concern." Id. at 726-27 (internal quotations
omitted).
Mindful of these admonitions, we have read Burford and
its progeny narrowly. We have said that "abstention in the Burford
line of cases rested upon . . . the threat . . . that the federal
court might, in the context of the state regulatory scheme, create
a parallel, additional, federal, 'regulatory review' mechanism,
- 9 - the existence of which would significantly increase the difficulty
of administering the state regulatory scheme." Bath Mem'l Hosp.
v. Maine Health Care Fin. Comm'n, 853 F.2d 1007, 1013 (1st Cir.
1988); see Pub. Serv. Co. of N.H. v. Patch, 167 F.3d 15, 24 (1st
Cir. 1998) ("The fundamental concern in Burford is to prevent
federal courts from bypassing a state administrative scheme and
resolving issues of state law and policy that are committed in the
first instance to expert administrative resolution."). That a
case implicates "important state regulatory policies," Chico Serv.
Station, 633 F.3d at 30 (quoting Vaquería Tres Monjitas, 587 F.3d
at 473), or that "federal action may impair operation of a state
administrative scheme or overturn state policy" does not alone
justify Burford abstention, id.; see NOPSI, 491 U.S. at 362
(explaining that "[w]hile Burford is concerned with protecting
complex state administrative processes from undue federal
interference, it does not require abstention whenever there exists
such a process, or even in all cases where there is a 'potential
for conflict' with state regulatory law or policy" (quoting Colo.
River Water Conservation Dist., 424 U.S. at 816)). Instead,
Burford abstention applies only in "unusual circumstances," where
the federal court risks usurping the state's role as the
"regulatory decision-making center." Vaquería Tres Monjitas, 587
F.3d at 474 (quoting Bath Mem'l Hosp., 853 F.2d at 1012-13); see
Fragoso, 991 F.2d at 882 (noting that Burford abstention is limited
- 10 - to "narrowly circumscribed situations where deference to a state's
administrative processes for the determination of complex, policy-
laden, state-law issues would serve a significant local interest
and would render federal-court review inappropriate").
It is against this backdrop that we measure the fit
between Burford and the case at hand. Cadence asserts that the
Uniform Rules and Massachusetts General Laws chapter 239 do not
constitute the kind of complex state administrative scheme that
engenders protection under Burford. See NOPSI, 491 U.S. at 362
(explaining Burford's concern with protection of "complex state
administrative processes"); Patch, 167 F.3d at 24 (expressing
similar view with respect to "state administrative scheme[s]");
Cnty. of Suffolk v. Long Island Lighting Co., 907 F.2d 1295, 1309
(2d Cir. 1990) (explaining that "intricate state administrative
scheme" is the "sine qua non" of Burford abstention). In arguing
against this assertion, FSH unwittingly makes Cadence's case. We
explain briefly.
The rules and statutes that FSH identifies are merely
rules of procedure designed to expedite summary process eviction
proceedings. See Uniform Rule 1 ("These rules govern procedure in
all summary process actions in the Trial Court of the
Commonwealth."); see also FDIC v. Sweeney, 136 F.3d 216, 219 (1st
Cir. 1998) (describing Massachusetts summary process rules as
"abbreviated procedures"). As FSH points out, the Uniform Rules
- 11 - specify such things as the physical form that must be used to
initiate a summary process action, see Uniform Rule 2(a); the
timing of service of process, see Uniform Rule 2(b) (mandating
service of summons and complaint "no later than the seventh day
nor earlier than the thirtieth day before the entry day," subject
to certain conditions); entry dates, see Uniform Rule 2(c)
(requiring entry dates to be "each Monday"); and the format and
content of a defendant's answer, see Uniform Rule 3 (requiring
that defendant "prepare a written answer containing . . . the
caption 'Summary Process Answer' with the trial date set forth
below the caption[,] . . . deny[ing] every statement in the
complaint which is in dispute[,] . . . [and] stating . . . any
affirmative defense"). These rules also confirm the applicability
of some state procedural imperatives, which apply both to the
Massachusetts summary process scheme and outside that scheme. See,
e.g., Uniform Rule 8 (applying Mass. R. Civ. P. 38); Uniform Rule
13 (applying relevant parts of Mass. R. Civ. P. 60, 62). Even the
court below acknowledged that these summary process rules were,
for the most part, comparable to those applicable in plenary civil
litigation. See Forty Six Hundred, 478 F. Supp. 3d at 86. Simply
put, the Uniform Rules, with their statutory gloss, are no more
than stereotypical rules of procedure, including directives about
when to file and what to title a filing. They do not amount to
"the sort of complex administrative scheme at issue in Burford."
- 12 - Sweeney, 136 F.3d at 219. It follows that, in this instance, there
is no plausible threat of "disrupt[ing] state efforts to establish
coherent policy with respect to a matter of substantial public
concern." NOPSI, 491 U.S. at 361 (quoting Colo. River Water
Conservation Dist., 424 U.S. at 814). Substitution of procedural
rules, which do not themselves amount to a complex administrative
scheme, prevents neither the development of substantive state
policies nor application of those policies by a federal court.
FSH's argument to the contrary rests heavily on the
notion that the summary process rules are "complex." But for that
proposition, FSH relies on the decision in Adjartey v. Central
Division of Housing Court Department, 120 N.E.3d 297 (Mass. 2019).
This reliance is misplaced. Although the Massachusetts Supreme
Judicial Court (the SJC) did use the adjective "complex" in
describing the summary process scheme, id. at 304, Adjartey hardly
can be said to support federal abstention. There, the SJC
described summary process cases as "complex," particularly for pro
se tenants confronted by "landlords who are represented by
attorneys." Id. at 304, 306. The SJC did not deem the procedure
"complex" as compared to the wide universe of state administrative
schemes. Moreover, it is apparent to us that the summary process
rules and the scheme that they elaborate are straightforward, and
Adjartey does not undercut this assessment.
- 13 - In a variation on the same theme, FSH contends that the
summary process rules constitute a "specialized procedure," which
would be "unavailable in the federal court." This contention
proves too much: all removed actions are subject to the Federal
Rules of Civil Procedure. See Fed. R. Civ. P. 81(c)(1); Rinsky v.
Cushman & Wakefield, Inc., 918 F.3d 8, 17 (1st Cir.), cert. denied,
140 S. Ct. 455 (2019). Those rules invariably displace the
procedural rules that would have governed the removed action had
that action remained in the state-court system. We do not think
that this rule-displacement mechanism is capable of
transmogrifying previously applicable state procedural rules into
state administrative schemes worthy of Burford protection. Any
other conclusion would make the act of removal alone sufficient to
trigger abstention — a result wholly inconsistent with the Supreme
Court's cabining of Burford abstention to "extraordinary
circumstances." Quackenbush, 517 U.S. at 726.
What is more, the substance of summary process cases
independently shows that there is no threat of interference with
state policymaking sufficient to warrant Burford abstention. The
Burford doctrine guards against federal interference with a
state's resolution of "difficult and consequential questions of
state law or policy." Chico Serv. Station, 633 F.3d at 26 n.9
(citing NOPSI, 491 U.S. at 361); see Sweeney, 136 F.3d at 219
(requiring "difficult, complex questions of state law"); Fragoso,
- 14 - 991 F.2d at 883 (declining to abstain when appeal "frame[d] no
difficult question of state law bearing on significant public
policy issues" (quotations omitted)). The adjudication of an
eviction action does not involve the kinds of difficult and
unsettled questions of state substantive law that can suffice to
trigger abstention.
As we explained nearly two decades ago, "there [is]
nothing unusual about the federal court . . . appl[ying]
Massachusetts law regulating the possession of real property."
Sweeney, 136 F.3d at 219. Unlike in Burford — where the state
specifically sought to develop and apply a state agency's technical
expertise in evaluating complex issues of geology and economics,
see 319 U.S. at 326-27 — real property rights, though derived
mainly from state law, are routinely enforced in federal as well
as state courts. Especially in light of this historical pattern,
we discern no principled reason for concluding that the state's
interests would be jeopardized by allowing a federal court to
resolve a garden-variety eviction action.3 Sweeney, 136 F.3d at
219.
The incidence of the ongoing COVID-19 pandemic does not 3
alter this conclusion. "In a variety of ways, federal courts enforce rights created by state law," Sweeney, 136 F.3d at 219, and there is no reason to believe that federal courts cannot apply whatever eviction-related policies may have evolved in response to the COVID-19 pandemic. We add, moreover, that the district court's concern over the difficulty of "anticipat[ing]" state-court exceptions to eviction proceedings is wide of the mark. Forty Six
- 15 - We add a coda. A centerpiece of FSH's argument in
support of abstention is the decision in Federal Home Loan Mortgage
Corporation v. Briggs, 556 F. App'x 557 (8th Cir. 2014) (per
curiam). Briggs, however, is too flimsy to support the weight
that FSH loads upon it.
In Briggs, a panel of the Eighth Circuit upheld a
district court's decision to abstain — on Burford grounds — from
adjudicating an eviction action controlled by state procedures
similar to those at issue here. See id. at 558. The Briggs court,
though, did not have the benefit of briefing on the complexity or
lack of complexity of the state procedural scheme and relied only
on the lower court's analysis, see id. at 557-58, and we have found
the lack of such complexity to be dispositive. In all events,
Briggs is not controlling precedent even in the circuit of its
birth, see 8th Cir. R. 32.1A, and we decline to follow it.
To say more about the abstention question would be to
paint the lily. We conclude, without serious question, that the
Massachusetts summary process scheme is not the kind of state
administrative scheme that demands the protective shield of
Hundred, 478 F. Supp. at 87. Presumably, eviction cases heard in state court will outnumber those removed to federal court, and state law will develop with only negligible interruption. Besides, the very nature of those few eviction cases that may satisfy the statutory prerequisites for removal — such as this commercial eviction dispute — makes them less likely to implicate those questions.
- 16 - Burford abstention. As we have said, it is not an intricate or
complex state administrative scheme, nor does it pose difficult
and unsettled questions of state law. Given these conclusions and
given the undisputed fact that FSH's suit against Cadence satisfied
all the prerequisites for federal diversity jurisdiction, the
district court was not entitled to shirk its duty to exercise
jurisdiction over that suit. See Quackenbush, 517 U.S. at 726-
27; Chico Serv. Station, 633 F.3d at 29-30.
III
Our reversal of the remand order ordinarily would
require nothing more than a simple instruction to the district
court to exercise its jurisdiction and adjudicate the action that
FSH has brought against Cadence. Here, however, there is a
possible wrench in the works: because the district court already
has returned the action to the state court and the case has
progressed (albeit modestly) in that forum, a question arises as
to whether the ordinary remedy is still available. Some background
helps to put this question in perspective.
In In re La Providencia Development Corp., 406 F.2d 251
(1st Cir. 1969), we said that, in removal proceedings, "the state
court proceedings are to be interfered with once" and only once.
Id. at 252. We subsequently reiterated this admonition in FDIC v.
Santiago Plaza, 598 F.2d 634 (1st Cir. 1979) (per curiam), stating
that "once a district court has decided to remand a case and has
- 17 - so notified the state court, the district judge is without power
to take any further action." Id. at 636. These prescriptive
statements — which also give us pause to consider our authority to
review the remand order — are context-specific. As we explain
below, they do not apply in this case.
The quoted statements were made in, and applied only to,
cases that fall within the compass of 28 U.S.C. § 1447(d) — a
provision that forbids appellate review of certain remand orders.4
Once the state court has resumed jurisdiction in such a case, a
defendant is barred even from bringing a motion for
reconsideration. See id.
That one-shot rule, see In re La Providencia Dev., 406
F.2d at 253, does not inform our inquiry in this case. After all,
where section 1447(d) is not in play, following the one-shot rule
would make little sense. So it is here: while section 1447(d)
generally bars appellate review of remand orders "premised on a
lack of subject matter jurisdiction or a defect in removal
procedure," BP P.L.C. v. Mayor of Balt., 141 S. Ct. 1532, 1541
(2021) (explaining Court's holdings in Carlsbad Technology, Inc.
v. HIF Bio, Inc., 556 U.S. 635, 638 (2009), and Thermtron Products,
Section 1447(d) provides, with limited exceptions, that 4
"[a]n order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise . . . ." 28 U.S.C. § 1447(d); see BP P.L.C. v. Mayor of Balt., 141 S. Ct. 1532, 1536-37 (2021).
- 18 - Inc. v. Hermansdorfer, 423 U.S. 336, 345-46 (1976)), the Supreme
Court (in reviewing the history of section 1447) has determined
that "[t]here is no indication whatsoever that Congress intended
to extend the prohibition against review to reach remand orders
entered on grounds not provided by the statute," Thermtron, 423
U.S. at 350; see BP P.L.C., 141 S. Ct. at 1541 (noting that Court
precedent "permitted rather than foreclosed appellate review of
certain remand orders"). The Court's "strong statement" that
remand orders beyond the reach of section 1447 are reviewable
"suggests that it would not countenance a district court evading
review by immediately transmitting its remand order to the state
court." Acad. of Country Music v. Cont'l Cas. Co., 991 F.3d 1059,
1063 (9th Cir. 2021).
The Quackenbush Court determined that abstention-based
remand orders were not only beyond the reach of section 1447(d)
but also immediately appealable under section 1291. See 517 U.S.
at 712-15. In such cases, allowing a district court to render the
permitted appeal nugatory by prematurely returning the case to the
state court would defeat the very purpose of permitting an appeal
and leave a defendant who prevails on appeal holding an empty bag.
Neither Supreme Court precedent nor our own case law demands so
illogical a result.
We are mindful that some modest proceedings have taken
place in state court. Given the inapplicability of the one-shot
- 19 - rule, however, we do not think that this fact alone should either
defenestrate Cadence's entitlement to be heard in federal court or
alter the outcome of this appeal. And although FSH argues that
Cadence has "taken advantage" of the state court's jurisdiction,
that argument comprises more cry than wool.
Importantly, there is no question of waiver or estoppel
here. Cadence has at all times acted expeditiously to preserve
its right to a federal forum. For instance, Cadence promptly asked
the district court to stay its remand order and — when that stay
was denied — promptly asked this court for a stay. That no stay
was ordered by this court was not a function of any lack of
diligence on Cadence's part but, rather, was a function of the
district court's premature return of the action to the state court.
Nor do general considerations of comity seem adequate to override
Cadence's entitlement to a federal forum, especially since the
state-court proceedings are still in their early stages and no
judgment has yet been entered.
Even though we are confident that this case's uneventful
time in state court neither affects the merits of Cadence's appeal
nor the remedy we invoke, we have been unable to identify any
formal procedural mechanism for the retrieval of a removed case
erroneously returned to a state court. We see no reason, though,
why general principles of comity, cooperation, and communication
- 20 - between state and federal courts are inadequate to bridge this
procedural gap.
The case law abounds with examples of federal courts
using informal processes to retrieve improvidently remanded cases
from state courts. An example can be gleaned from our decision in
Connolly v. H.D. Goodall Hospital, Inc., 427 F.3d 127 (1st Cir.
2005). There, the district court ordered a remand, which the clerk
of court then executed. See id. at 128. But when the removing
defendant filed a notice of appeal, the district court "issued a
procedural order vacating its already-effectuated remand as
'premature.'" Id. In addition, the court "direct[ed] its clerk
to recall the case from the state court." Id. Acting on that
directive, "[t]he clerk complied and the state court cooperated,"
and the case was re-docketed in the district court. Id.
So, too, in a case in which a district court had already
transmitted its sua sponte remand order to a state court, the Ninth
Circuit determined both that federal jurisdiction was not
forfeited and that review of the order was not pretermitted by
section 1447(d). See Acad. of Country Music, 991 F.3d at 1070.
It subsequently held that the district court's decision to remand
based on section 1447(c) exceeded the scope of such statutory
authority and vacated the remand order. See id. at 1069-70. The
court did not deem the retrieval of the case to be an
insurmountable obstacle but, rather, concluded its opinion by
- 21 - directing that "[t]he district court shall enter an order recalling
the remand and shall notify the [state court] that the district
court has resumed jurisdiction over the action." Id. at 1070; see
Reddam v. KPMG LLP, 457 F.3d 1054, 1062 (9th Cir. 2006) (entering
similar direction upon reversal of remand order in case prematurely
returned to state court).
Our decision in Alstom Caribe, Inc. v. Geo. P. Reintjes
Co., 484 F.3d 106 (1st Cir. 2007), involved the possible need for
retrieval of funds improvidently transferred from one federal
district court to another. Although not involving the retrieval
of a case from a state court, this decision furnishes a compelling
analogy. There, the district court ordered the deposit of disputed
funds into its registry and then transferred the funds — but not
the case — to a district court in a different circuit. See id. at
110-11. By the time we heard the appeal, the funds had been
"physically transferred to the Western District of Missouri" and
"that court ha[d] assumed control over them." Id. at 116. We
acknowledged that "we [had] no authority to order a district court
in another circuit" to return previously transferred funds but —
because a party's rights were at stake — "we fe[lt] confident that
we c[ould] rely on the district courts in the two affected
districts to act cooperatively so that the ends of justice w[ould]
be served." Id. We left it up to the district court — should a
retransfer of the funds prove necessary — "to advise the transferee
- 22 - court that the deposited funds were transferred improvidently and
request their return." Id.
These examples point the way toward the appropriate
remedy in this case. As we already have determined, the district
court's remand order was in error. See supra Part II. Thus,
Cadence is entitled to defend against FSH's action in the federal
district court. There is a long and storied history of comity and
cooperation between state and federal courts in this circuit.
Given that history, we are confident that the district court can
enlist the state court's cooperation and restore the action to its
own docket (where the case belongs). In the exercise of our
supervisory authority, we direct the district court to undertake
this retrieval forthwith.
IV
We offer some guidance to district courts to help prevent
a removed case from becoming a shuttlecock, batted back and forth
between a state court and a federal court.
If a motion to remand is granted by the district court
in a removed case and the remand order is appealable, the district
court may wish to avoid immediately certifying the remand order
and returning the case file to the state court until it believes
the specter of shuttling has abated. A district court would be
well-advised, for example, to hold the matter in abeyance for a
brief period or to direct the clerk of court to delay transmittal
- 23 - of the certified remand order. Either course of action would give
the removing party an opportunity to move for a stay, to seek
reconsideration, and/or to appeal the order and request a stay
from the court of appeals.
The variety of approaches in the federal court system
dealing with similar issues illustrates that, although there may
not be a single best method, an important common denominator is
that counsel be made aware of these temporal constraints. The
court may do so either formally (say, by adoption of a local rule
or publicly available operating procedure) or informally (by
acquainting counsel, on an ad hoc case-by-case basis, with its
timeline). The United States District Court for the Eastern
District of Texas, for instance, requires that its clerk of court
wait at least twenty days following entry of a remand order before
returning the case file. See Eastern District of Texas Local Civil
Rule 83(b); see also Gunter v. Jay Ayers, Inc., No. 10-354, 2011
WL 13217086, at *1 n.1 (E.D. Tex. Mar. 8, 2011) (acknowledging
that rule helps avoid a snafu where parties may like to object to
a magistrate judge's ruling on a motion to remand within the time
period allotted for filing objections). Another district court
has promulgated a local rule requiring that its clerk of court
wait fourteen days before transmitting a certified copy of a remand
order pursuant to section 1447(c). See Northern District of
Illinois Local Rule 81.2. Other district courts have devised more
- 24 - informal approaches tailored to the circumstances of particular
cases. See, e.g., Reiber v. Cnty. of Gage, No. 15-3023, 2016 WL
2596025, at *2 n.2 (D. Neb. May 5, 2016) (noting "for the parties'
convenience, that [the] remand order is appealable" and advising
that the court "will, unless notified by all remaining parties
that they wish to expedite remand to state court, stay its
transmittal of the case for 30 business days to permit sufficient
time for an appeal"). In the end, it is the district court's
province to manage its dockets. See United States v. Ottens, 74
F.3d 357, 359 (1st Cir. 1996). And it is that court's charge to
do so fairly and efficiently.
V
We need go no further. For the reasons elucidated above,
we reverse the district court's remand order and remand the matter
to the district court with directions to resume jurisdiction,
retrieve the action forthwith from the state court, and thereafter
to proceed in the ordinary course. Costs shall be taxed in favor
of Cadence.
So Ordered.
- 25 -