Stare decisis applies to wrongly decided cases
26 July 2024
Yesterday, the U.S. Fifth Circuit rendered an interesting decision touching on both the binding effect of precedent and appellate jurisdiction of a remand order. The long and short of it is, “We think our precedent is wrong, but we have to follow it.” Abraham Watkins Nichols Agosto Aziz & Stogner v. Festeryga, No. 23-20337 (5th Cir. July 25, 2024).
Here’s the skinny version of what happened. A law firm sued one of its former lawyers, alleging that he attempted to take firm clients and files with him to a new firm. The law firm filed its suit in state court. The lawyer moved to dismiss the suit under state law, which suspended the expedited discovery sought by the law firm. The lawyer and the law firm then agreed on a protective order, and the lawyer agreed to produce certain document by a specified date.
Before that date arrived, however, the lawyer removed the case to federal court, alleging diversity jurisdiction. The law firm moved to remand, arguing that diversity was lacking and (more pertinently here) that the lawyer waived his right to remove by litigating in state court (i.e. filing the motion to dismiss and agreeing to the protective order). The district court remanded on the second ground—waiver—without reaching the lack-of-diversity issue.
The lawyer appealed the remand, which raised the question whether the Fifth Circuit had appellate jurisdiction to review the remand. This is where things started to get complicated. Under 28 U.S.C. § 1447(d), a remand order ordinarly “is not reviewable on appeal or otherwise ....” But caselaw interprets § 1447(d) in conjunction with neighboring § 1447(c), which authorizes remand for lack of subject-matter jurisdiction or a defect in the removal procedure. Caselaw holds that § 1447(d)’s prohibition of appellate review applies only to remands under § 1447(c), and not to remand orders based on discretionary grounds outside of § 1447(c).
One would think that a waiver-based remand is a non–§ 1447(c) remand: it’s not based on lack of jurisdiction or a defect in the removal procedure, and it involves some exercise of the district court’s discretion. The Abraham Watkins panel thought so, which would mean that it had appellate jurisdiction to review the remand order. But there was a problem with ruling that way: the court’s precedent in In re Weaver, 610 F.2d 335 (5th Cir. 1980). The Abraham Watkins panel “reluctantly” read Weaver “to say that a waiver-based remand order is jurisdictional under § 1447(c) and thus ‘immune from review under § 1447(d).’” Slip op. at 7. Result: the panel dismissed the appeal for lack of appellate jurisdiction.
We probably haven’t heard the last of Abraham Watkins. Judge Duncan wrote a concurring opinion inviting the losing appellant to apply for en banc rehearing: “The proper course is for our en banc Court to unweave Weaver.” Id. at 12. If an en banc Fifth Circuit does not overrule Weaver, that will leave “a 2–2 circuit split on the question whether waiver-based remand orders are reviewable on appeal.” Id. at 7. That would make this case a prime candidate for certiorari by the U.S. Supreme Court.
p.s. Hat tip to Tad Bartlett. If you want to know everything about what’s going on at the U.S. Fifth Circuit, you should subscribe to his blog, Take the Fifth.