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SCOTUS: Case Removed on Federal Question Grounds Must Be Remanded if Federal Claim Is Dismissed
Read Time: 4 minsIn a seminal opinion, the United States Supreme Court held that a case removed on federal question grounds is properly remanded when the plaintiff amends his or her complaint and dismisses the federal claims.
What is the case about?
Royal Canin U.S.A., Inc. v. Wullschleger began as a case about dog food but ended up setting crucial precedent for civil litigators handling matters of federal question jurisdiction. The plaintiff asserted claims against Royal Canin related to a price markup on dog food and asserted both state and federal claims for violations of the Missouri Merchandising Practices Act, state antitrust law, and the Federal Food, Drug, and Cosmetic Act (FDCA). Royal Canin removed the case to federal court on the basis of federal question jurisdiction regarding the FDCA claims and also argued that the district court had supplemental jurisdiction over the state law claims.
In response, the plaintiff engaged in some procedural maneuvering and amended her complaint to withdraw the FDCA claim. She then sought to remand the case back to state court on the basis that there were no more federal questions involved. The District Court denied the plaintiff’s request, but the Eighth Circuit Court of Appeals reversed and ordered the case remanded to state court. The Eighth Circuit reasoned that the amended complaint was the only operative source from which it could determine jurisdiction. As the amended complaint did not present any federal question, the district court had no basis to claim supplemental jurisdiction over the state-law claims. Royal Canin appealed to the Supreme Court, which granted certiorari.
What did the Supreme Court decide?
The Court began its opinion with an overview of federal court jurisdiction. In addition to the “case and controversy” requirement under Article III of the Constitution, the jurisdiction of all lower federal courts is limited by statute. Most importantly, federal courts can hear diversity cases between citizens of different states under 28 U.S.C. § 1332(a) and cases that present a federal question under 28 U.S.C. § 1331. A plaintiff can bring a claim directly in federal court by properly establishing the basis for the court’s jurisdiction in its complaint. The plaintiff can also bring their same claims in state courts, which are not restricted in their jurisdiction to the same extent as federal courts.
However, if a case before a state court falls properly within federal jurisdiction, a defendant can seek to remove the case from state to federal court. If a case before a federal court is properly within federal question jurisdiction, then the court can generally exercise supplemental jurisdiction over any claims rooted in state law, so long as those claims are derived from the same nucleus of operative fact as the federal claim (a rule originated in Mine Workers v. Gibbs, then codified as 28 U.S.C. § 1367).
But what happens when a federal court properly accepts removal on federal question jurisdiction, only to have that same federal question amended away?
Royal Canin pointed first to the text of § 1367 as granting supplemental jurisdiction over “all other claims” within the case or controversy unless “expressly provided otherwise” by Congress. As Royal Canin argued, since Congress has not expressly provided that amending a complaint to remove federal claims eliminates supplemental jurisdiction, such an amendment cannot divest a district court of supplemental jurisdiction. In other words, if a case has already been removed to federal court, and that court determined that it holds supplemental jurisdiction over state-law claims, then any post-removal amendment to the complaint should not affect the already-granted supplemental jurisdiction.
But the Supreme Court disagreed, emphasizing that the very text on which Royal Canin relied from § 1367 does not differentiate between cases removed to federal court and cases originally filed there. As such, the Court ruled that everything in § 1367 applies to both removed and original cases—and the Supreme Court has already addressed this same issue in original cases.
In Rockwell Int’l Corp. v. United States, the Court found that “when a plaintiff files a complaint in federal court and then voluntarily amends the complaint, courts look to the amended complaint to determine jurisdiction.” Applying that now-established rule, “when the plaintiff in an original case amends her complaint to withdraw the federal claims, leaving only state claims behind, she divests the federal court of adjudicatory power.” To avoid contradicting this undisputed rule, Royal Canin took the position that its amended-complaint rule is specific to cases removed to federal court, not cases originally filed there. But as the Court found, that proposition finds no support in the text of § 1367.
To emphasize that point further, the Court looked at subsection (c) under § 1367, which establishes a select set of circumstances under which a federal court may decline to exercise supplemental jurisdiction where it may otherwise be applicable. The majority of those circumstances hinge on whether the state law claims are of more importance to the case than the federal claims—if the federal claims are sufficiently minor compared to the state law claims, then a federal court can remand the case.
Following that logic, the Supreme Court reasoned that Congress could not have intended an amended complaint, which presents no federal question at all, to be within the federal court’s jurisdiction in the first place. “[T]here is no discretion to decline supplemental jurisdiction here because there is no supplemental jurisdiction at all. Once the plaintiff has ditched all claims involving federal questions, the leftover state claims are supplemental to nothing—and § 1367(A) does not authorize a federal court to resolve them.”
The Supreme Court concluded its analysis by providing many examples of the general rule that courts must consider amended complaints as controlling jurisdiction and cannot conclude their jurisdictional analysis based on the complaint as it was presented at the time of original filing or removal. “So in a removed no less than an original case, the rule that jurisdiction follows the operative pleading serves a critical function. It too ensures that the case, as it will actually be litigated, merits a federal forum.”
So, what does it all mean?
Defendants should assert all grounds for federal question jurisdiction in its removal paperwork to avoid a scenario that befell Royal Canin. Indeed, if a case is appropriate for removal on the basis of both federal question jurisdiction and diversity jurisdiction, the removing party can raise both grounds to protect itself from any subsequent loss of federal question.
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