In Ruhlen v. Holiday Haven Homeowners, Inc., 11th Cir. No. 21-90022, 2022 WL 701622 (11th Cir. Mar. 9, 2022), the Eleventh Circuit denied a petition for permission to appeal a district court’s sua sponte remand of a case to state court.
Initially, this case was filed in Florida state court by a group of current and former mobile homeowners and their homeowners’ association. The basis for plaintiffs’ claims were violations of the Florida Antitrust Act and the Americans with Disabilities Act (“ADA”). Plaintiffs characterized their suit as a representative action under Florida Rule of Civil Procedure 1.222, which allows a mobile homeowner’s association to bring a class action suit in a representative capacity.
Subsequently, defendants removed the case to the United States District Court for the Middle District of Florida based on the ADA claim creating federal-question jurisdiction and the Class Action Fairness Act (“CAFA”) allowing for the removal of class actions.
Plaintiffs then amended the complaint to remove their ADA claim. This prompted the district court to sua sponte remand the case to state court because the federal-question jurisdiction no longer existed after the removal of the ADA claim. Only state-law claims remained, and the district court determined that CAFA did not provide jurisdiction because a claim brought in a representative capacity under Florida Rule of Civil Procedure 1.222 is not considered a class action for purposes of CAFA jurisdiction.
Defendants petitioned in the Eleventh Circuit for permission to appeal the district court’s decision. The Eleventh Circuit held that the court lacked jurisdiction to consider the appeal.
As a general rule, a district court’s decision to remand a case for lack of subject-matter jurisdiction cannot be reviewed. However, 28 U.S.C. § 1453(c)(1) provides a statutory exception to that general rule that allows for an appeal “from an order of a district court granting or denying a motion to remand a class action to the State court from which it was removed.”
Thus, the question before the court was whether the exception applied to a district court’s sua sponte remand order. The court determined that the exception does not encompass a district court’s decision to remand sua sponte. The court reasoned that in order for the exception to apply, a party must file a motion for remand that is either granted or denied by the district court. A district court’s supa sponte remand is neither a grant nor a denial of a party’s request, rather the court is acting “on its own motion.” Therefore, the court determined that the statutory exception was inapplicable in this case.
This was an important decision not only because it created an odd result, but it also created a split of authority, which Judge Rosenbaum addressed in the dissenting opinion. Judge Rosenbaum characterized the decision as an “absurd result.” Further, Judge Rosenbaum reasoned that a fair and reasonable interpretation of a sua sponte remand is a court’s “granting … [of] [its own] motion to remand a class action,” meaning that a sua sponte remand would fit under the statutory exception.
Judge Rosenbaum went on to discuss other circuit’s understanding of the statutory exception. The Ninth Circuit has explicitly concluded that an order remanding a case removed based on CAFA jurisdiction does not become unreviewable simply because it was remanded sua sponte. Watkins v. Vital Pharms., Inc., 720 F.3d 1179, 1181 (9th Cir. 2013) (footnotes and citations omitted); see also Kenny v. Wal-Mart Stores, Inc., 881 F.3d 786, 789 (9th Cir. 2018) (“We have jurisdiction to review the district court’s sua sponte remand order pursuant to 28 U.S.C. § 1453(c)(1).” (citing Watkins, 720 F.3d at 1180–81)). Other circuits including the Seventh Circuit and Eighth Circuit have implicitly reached the same conclusion. See Fox v. Dakkota Integrated Sys., LLC, 980 F.3d 1146, 1151 (7th Cir. 2020) (reviewing a sua sponte CAFA remand); Dalton v. Walgreen Co., 721 F.3d 492, 494 (8th Cir. 2013) (same). In an unpublished decision, the D.C. Circuit also acknowledged that a sua sponte remand order was “properly before this court as the remind order falls within section 1453(c)(1).” In re U-Haul Int’l, Inc., No. 08-7122, 2009 WL 902414, at *2 (D.C. Cir. Apr. 6, 2009) (Rogers, J., dissenting from majority’s decision to decline jurisdiction over appeal).