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Preston v. Nagel

United States Court of Appeals, Federal Circuit

June 1, 2017

JOHN PRESTON, DIRECTLY AND DERIVATIVELY, AS SHAREHOLDER OF ELECTROMAGNETICS CORPORATION, A DELAWARE CORPORATION, CONTINUUM ENERGY TECHNOLOGIES, LLC, A DELAWARE LIMITED LIABILITY COMPANY, Plaintiffs-Appellees
v.
CHRISTOPHER NAGEL, IDL DEVELOPMENT, LLC, Defendants-Appellants

         Appeal from the United States District Court for the District of Massachusetts in No. l:15-cv-13592-WGY, Judge William G. Young.

          Joseph M. Cacace, Todd & Weld LLP, Boston, MA, argued for plaintiffs-appellees. Also represented by Howard M. Cooper.

          Kevin Paul Martin, Goodwin Procter LLP, Boston, MA, argued for defendants-appellants. Also repre- sented by Roberto M. Braceras; Michael Gavin Strapp, DLA Piper U.S. LLP, Boston, MA.

          Before Dyk, Taranto, and HUGHES, Circuit Judges.

          HUGHES, CIRCUIT JUDGE.

         The district court remanded this case to state court for a lack of subject-matter jurisdiction. Because 28 U.S.C. § 1447(d) bars review of the district court's decision to remand, we dismiss this appeal.

         I

         Plaintiffs (collectively, Preston) filed a complaint against Defendants (collectively, Nagel) in Massachusetts Superior Court alleging fifteen state-law claims. Nagel answered the complaint and filed eleven counterclaims under the Declaratory Judgment Act seeking declarations of non-infringement of several patents held by plaintiff Electromagnetics Corporation. Nagel also removed the case to the United States District Court for the District of Massachusetts under 28 U.S.C. § 1441, the general removal statute, and 28 U.S.C. § 1454, the patent removal statute. Preston moved to remand. The court determined that it lacked subject-matter jurisdiction because Preston's state-law claims did not arise under federal law and Nagel's patent counterclaims did not present a justiciable case or controversy under Article III. It therefore remanded the case to Massachusetts Superior Court. Nagel timely appealed.

         II

         A

         Nagel seeks review of the district court's decision to remand this case. Under 28 U.S.C. § 1447(d), "[a]n order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise, " sub- ject to statutory exceptions not applicable here. This reviewability bar "applies equally to cases removed under the general removal statute, § 1441, and to those removed under other provisions." Kircher v. Putnam Funds Tr., 547 U.S. 633, 641 (2006). Because § 1447(d) is to "be read in pari materia with § 1447(c), " it "preclude[s] review only of remands for lack of subject matter jurisdiction and for defects in removal procedure." Powerex Corp. v. Reliant Energy Servs., Inc., 551 U.S. 224, 229-30 (2007); see Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 711-12 (1996); Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S. 336, 345-46 (1976). As the district court found no procedural flaws, [J.A. 131-34], we must determine if it "relied upon a ground that is colorably characterized as subject-matter jurisdiction." Powerex, 551 U.S. at 234. If it did, "appellate review is barred by § 1447(d)." Id.

         Here, the district court remanded the case because it found that it lacked subject-matter jurisdiction over Preston's state-law claims and that Nagel's patent counterclaims did not present an Article III case or controversy because they failed to satisfy the immediacy requirement of Medlmmune, Inc. v. Genentech, Inc., 549 U.S. 118, 126-27 (2007).[1] At oral argument, Preston conceded that this was a remand based on subject-matter jurisdiction. Oral Argument at 13:10-13:21, http://oralarguments.cafc.uscourts.gov/default.aspx?fl=20 16-1524.mp3. Thus, § 1447(d) facially controls, and we are precluded "from second-guessing the district court's jurisdiction determination regarding subject matter, " Vermont v. MPHJ Tech. Invs., LLC, 763 F.3d 1350, 1353 (Fed. Cir. 2014), "no matter how plain the legal error in ordering the remand, " Briscoe v. Bell, 432 U.S. 404, 413 n.l3(1977).

         B

         Recognizing that § 1447(d) would ordinarily bar reviewability here, Nagel asks us to hold that an exception exists "where, as here, defendants invoked § 1454 to remove patent claims over which federal courts have exclusive jurisdiction." Appellants' Br. at 17. In support, Nagel relies on Osborn v. Haley,549 U.S. 225 (2007), to ...


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