Interlocutory Appeals & Removal Jurisdiction

Interlocutory appeals can show up in a variety of contexts on the MBE.  A difficult issue to look out for is one that involves both interlocutory appeals and removal of a case from state court to federal court.

Imagine a situation in which federal jurisdiction is based entirely on a claim arising under federal law rather than on diversity of citizenship of the parties.  Further assume that a 2nd claim is added to the first that would not on its own have an independent jurisdictional basis but because it arises out of the same transaction or occurrence as the first claim it would be allowable in federal court under supplemental jurisdiction. The plaintiff brings the case in state court but the case is properly removed by the defendant to federal court. The federal court then dismisses the first claim (the federal claim) leaving only the 2nd claim (the claim that had no independent basis for federal jurisdiction). The federal court then remands the 2nd claim back to state court from which the case was removed. Plaintiff who now would prefer the case to remain in federal court appeals the decision to remand the case and defendant moves to dismiss the appeal for lack of appellate jurisdiction.

Plenty of interesting jurisdictional issues above but the purpose of this post is to focus on whether the plaintiff's appeal of the decision to remand the case back to state court is proper. If not, then the appellate court lacks jurisdiction to hear that appeal.  And the answer is that it depends.

Remand orders that are based on a defect in the removal procedure or a lack of federal jurisdiction are not appealable. Those claims never should have been in federal court. In contrast, if a district court chooses not to exercise supplemental jurisdiction over a claim and therefore remands that claim back to state court, that decision was discretionary since it could have exercised jurisdiction over the claim even though the federal claim that was the basis for jurisdiction had been dismissed. That discretionary decision to remand is immediately appealable for abuse of discretion.

As such, under the facts as stated here, the appellate court would not lack jurisdiction to hear the appeal.

A tricky issue with a tricky distinction. Worth noting since it comes up in questions.