	ROMINGER LEGAL
		Fifth Circuit Court of Appeals Opinions - 5th Circuit
					Need Legal Help?
					Need Legal Help?
LEGAL RESEARCH CENTER
LEGAL RESEARCH CENTER			LEGAL HEADLINES - CASE LAW - LEGAL FORMS	NOT FINDING WHAT YOU NEED? -CLICK HERE

This opinion or court case is from the Fifth Circuit Court or Appeals. Search our site for more cases - CLICK HERE

Revised November 29, 2000
UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 99-31341
PATRICIA HEATON,
Plaintiff-Appellee,
VERSUS
MONOGRAM CREDIT CARD BANK OF GEORGIA,
Defendant-Appellant.
Appeal from the United States District Court
for the Eastern District of Louisiana
November 2, 2000
Before DUHÉ, EMILIO M. GARZA and DeMOSS, Circuit Judges.
DUHÉ, Circuit Judge:
1
Monogram Credit Card Bank of Georgia ("Monogram") appeals the
2
district court's order remanding this case to state court pursuant
3
to 28 U.S.C. § 1447(c). Because Congress has specifically excluded
4
this type of remand order from appellate review, we conclude that
5
we lack jurisdiction and therefore DISMISS Monogram's appeal.
6
BACKGROUND

7
We summarize only the facts relevant to the issues in dispute
8
in this appeal. Monogram, a Georgia credit card bank, issued a
9
credit card to Patricia Heaton ("Heaton") to finance purchases from
10
a retail store called Campo Appliances. Heaton brought a class
11
action lawsuit in state court, alleging that Monogram charged late
12
fees on the card in excess of the limit provided under the
13
Louisiana Consumer Credit Law ("LCCL"), La. R.S. 9:3527. Heaton
14
also alleged breach of contract.
15
Monogram removed the suit. It argued that there was a basis
16
for federal subject matter jurisdiction because Heaton's claims
17
were completely preempted by Section 27 of the Federal Deposit
18
Insurance Act ("FDIA"), 12 U.S.C. § 1831d. Section 27 of the FDIA
19
authorizes federally-insured "state banks" (as defined under
20
Section 3(a)(2) of the FDIA, 12 U.S.C. § 1813(a)(2)) to charge late
21
fees permitted by the laws of their home states. Georgia law
22
provides for a higher late fee limit than the LCCL. Monogram also
23
argued that the parties were diverse and, pursuant to In re Abbott
24
Laboratories, 51 F.3d 524 (5th Cir. 1995), Heaton's demand for
25
attorney's fees under the LCCL caused the amount in controversy to
26
exceed $75,000.
27
Heaton sought remand, arguing that Monogram could not invoke
28
complete preemption because it was not a "state bank" under the
29
definition contained in Section 3(a)(2) of the FDIA. Section
30
3(a)(2) defines state banks as those which are "engaged in the
31
business of receiving deposits" and which are incorporated under
2

32
state law. Part of Heaton's argument was that because Monogram
33
accepts deposits only from its parent company and not from its
34
customers, it could not be engaged in the business of receiving
35
deposits. She also contended that In re Abbott Laboratories was
36
inapplicable,
and
therefore
the
court
lacked
diversity
37
jurisdiction.
38
Judge Porteous denied Heaton's motion, concluding that under
39
the plain language of the FDIA, Monogram was a "state bank." He
40
also cited a letter from the Federal Deposit Insurance Corporation
41
("FDIC") in which the FDIC stated that it considered Monogram to be
42
a state bank. Therefore, Heaton's claims were completely
43
preempted.1 Less than a week after the denial of remand, the case
44
was re-assigned to Judge Barbier. Judge Barbier denied Heaton's
45
petition for an interlocutory appeal of the denial of remand,
46
finding that there was no "substantial ground for difference of
47
opinion as to whether the defendant is a state bank." Heaton v.
48
Monogram Credit Card Bank of Georgia, No. 98-1823 (E.D. La. Nov.
49
25, 1998) (minute entry denying permission to appeal).
50
Thereafter, Heaton moved to amend her petition to assert a
51
federal claim under the Truth in Lending Act ("TILA"), specifically
52
15 U.S.C. § 1637(c)(3)(B). This claim was not related to the
53
credit card late fees. A magistrate judge denied this motion, but
54
Judge Barbier vacated the magistrate judge's order and allowed
1The judge's order did not address the question of diversity
jurisdiction.
3

55
Heaton to assert the TILA claim.
56
Later, Heaton discovered that Monogram had participated in the
57
preparation of the FDIC letter that Judge Porteous had cited in his
58
order denying the motion to remand. Heaton then moved for a
59
reconsideration of her motion. Judge Barbier granted the motion
60
and remanded the case to state court, citing 28 U.S.C. § 1447(c).
61
The judge rejected Monogram's argument that Heaton had waived her
62
objection to the earlier denial of remand by amending her petition
63
to add the TILA claim. On the same day that he signed the remand
64
order, Judge Barbier granted Heaton's voluntary motion to dismiss
65
that claim with prejudice, and noted the dismissal in a footnote in
66
the remand order.
67
In granting the motion to remand, Judge Barbier concluded that
68
Monogram was not a "state bank" because it was not "engaged in the
69
business of receiving deposits" under Section 3(a)(2). He reasoned
70
that because Monogram only receives deposits from its parent
71
company, under a plain reading of the FDIA, it could not be engaged
72
in the business of receiving deposits from its customers. As a
73
result, the judge concluded that "this Court does not have federal
74
question jurisdiction, and there is no federal preemption." Heaton
75
v. Monogram Credit Card Bank of Georgia, No. 98-1823 (E.D. La. Nov.
76
22, 1999) (minute entry ordering remand). The judge also found
77
diversity lacking, and noted that "if there is any doubt as to
78
federal subject matter jurisdiction, the court should resolve the
79
doubt in favor of remand." Id.
4

80
Monogram appealed. Heaton moved to dismiss the appeal for
81
lack of appellate jurisdiction.
82
DISCUSSION
83
We begin with 28 U.S.C. § 1447(d), which provides: "An order
84
remanding a case to State court from which it was removed is not
85
reviewable on appeal or otherwise." Notwithstanding this broad
86
language, the Supreme Court has explained that this provision is to
87
be interpreted in pari materia with § 1447(c), such that only
88
remand orders issued under § 1447(c) and "invoking the grounds
89
specified therein" are immune from review. Thermtron Prods., Inc.
90
v. Hermansdorfer, 423 U.S. 336, 345-46, 96 S. Ct. 584, 590, 46 L.
91
Ed. 2d 542 (1976), abrogated on other grounds by Quackenbush v.
92
Allstate Ins. Co., 517 U.S. 706, 116 S. Ct. 1712, 135 L. Ed. 2d 1
93
(1996); Smith v. Texas Children's Hosp., 172 F.3d 923, 925 (5th
94
Cir. 1999). Lack of subject matter jurisdiction is one basis for
95
remand under § 1447(c). A § 1447(c) remand is not reviewable on
96
appeal even if the district court's remand order was erroneous.
97
Thermtron, 423 U.S. at 343, 96 S. Ct. at 589; Smith, 172 F. 3d at
98
925; Giles v. NYLCare Health Plans, Inc., 172 F.3d 332, 336 (5th
99
Cir. 1999). "Reviewable non-§ 1447(c) remands constitute a narrow
100
class of cases, meaning we will review a remand order only if the
101
district court 'clearly and affirmatively' relies on a non-§
102
1447(c) basis." Copling v. Container Store, Inc., 174 F.3d 590,
103
596 (5th Cir. 1999); Giles, 172 F.3d at 336. The justification for
104
this rule is "to prevent delay in the trial of remanded cases by
5

105
protracted litigation of jurisdictional issues." Thermtron, 423
106
U.S. at 351, 96 S. Ct. at 593. As a result, we have stated that
107
"the district court is the final arbiter of whether it has
108
jurisdiction to hear the case." Smith, 172 F.3d at 925.
109
A plain and common sense reading of the Judge Barbier's remand
110
order reveals that he stated a § 1447(c) basis for remand. The
111
judge specifically concluded that "this Court does not have federal
112
question jurisdiction" and that "there is no federal preemption."
113
He also specifically mentioned that doubt as to whether there is
114
subject matter jurisdiction should be resolved in favor of remand.
115
He then invoked § 1447(c) in ordering the remand. Even if Judge
116
Barbier's conclusions that Monogram was not a state bank and that
117
there was therefore no preemption were erroneous, we cannot review
118
his remand order.
119
Monogram argues, however, that despite the clear language of
120
the remand order, the true basis for the order was 28 U.S.C. §
121
1367(c)(3). Monogram thus concludes that we have jurisdiction in
122
this case because remand orders pursuant to § 1367(c) are subject
123
to appellate review. Hook v. Morrison Milling Co., 38 F.3d 776,
124
780 (5th Cir. 1994). Under § 1367(c)(3), a district court may
125
decline in its discretion to exercise supplemental jurisdiction
126
over supplemental (formerly "pendent") state law claims when the
127
court has dismissed all claims giving rise to original
128
jurisdiction. Monogram asserts that Judge Barbier's dismissal of
129
Heaton's federal TILA claim, which he noted in his remand order,
6

130
was the predicate for the remand of what Judge Barbier considered
131
to be remaining state law claims. Heaton's addition of the TILA
132
claim, according to Monogram, formed an independent basis for
133
federal question jurisdiction, and Judge Barbier's dismissal of the
134
claim with prejudice demonstrated that he thought he had subject
135
matter jurisdiction over that claim. Therefore, Monogram argues
136
that the remand order was necessarily pursuant to § 1367(c)(3), and
137
Judge Barbier simply mislabeled the order as one pursuant to §
138
1447(c).
139
In making this argument, Monogram relies on our decision in
140
Bogle v. Phillips Petroleum Co., 24 F.3d 758 (5th Cir. 1994). In
141
that case, a panel of this Court stated:
142
The critical distinction for determining appealability is
143
the presence of federal subject matter jurisdiction prior
144
to the order of remand. In a Section 1447(c) remand,
145
federal jurisdiction never existed, and in a non-Section
146
1447(c) remand, federal jurisdiction did exist at some
147
point in the litigation, but the federal claims were
148
either settled or dismissed.
149
Id. at 762. Monogram asserts that because the TILA claim conferred
150
federal question jurisdiction on the district court, federal
151
jurisdiction "did exist at some point" in the suit and therefore
152
the remand could not have been based on § 1447(c).
153
We reject Monogram's argument. In Bogle, the district court's
154
remand order concluded that "'[t]his case does not contain a
7

155
federal claim.'" Id. However, the court also went on to discuss
156
the discretionary factors set forth in Carnegie-Mellon University
157
v. Cohill, 484 U.S. 343, 108 S. Ct. 614, 98 L. Ed. 2d 720 (1988),
158
which district courts should consider in remanding supplemental
159
state law claims. Therefore, because the remand order in Bogle was
160
at first glance somewhat ambiguous, our elucidation of the grounds
161
for remand was required in order to determine the district court's
162
reasons for remanding. We concluded that the district court's
163
discussion of the discretionary factors did not taint its
164
conclusion that subject matter jurisdiction was lacking, and
165
therefore § 1447(c) formed the basis for the order. Bogle, 24 F.3d
166
at 762.
167
In the instant case, however, we see no ambiguity whatsoever
168
in Judge Barbier's remand order. Although brief, the order clearly
169
and affirmatively stated a § 1447(c) reason for remand, because
170
Judge Barbier concluded that he lacked subject matter jurisdiction.
171
His citation of § 1447(c) is clearly not a "mislabeling" of the
172
basis for remand. Nowhere in the order did the judge discuss the
173
discretionary factors set forth in Carnegie-Mellon, nor did he cite
174
§ 1367(c)(3) or any other basis for remand.2 In Smith, this Court
2But see Giles v. NYLCare Health Plans, Inc., 172 F.3d 332, 336
(5th Cir. 1999) (where the remand order was reviewable on appeal
because "[t]he court specifically noted that 'this is an appealable
order because the basis of my ruling is an exercise of discretion
to remand pendent state law claims."); and Hook v. Morrison Milling
Co., 38 F.3d 776, 780 (5th Cir. 1994) (the remand order was
reviewable because "[t]he district court below made clear that it
was remanding Hook's state law negligence claim, i.e., her only
8

175
initially reviewed the first of two remand orders in that case.
176
Because the district judge granted summary judgment against the
177
plaintiff on some of her claims but remanded a remaining state law
178
claim, the Court interpreted the order as a discretionary remand of
179
pendent state law claims. Smith v. Texas Children's Hosp., 84 F.3d
180
152, 154 (5th Cir. 1996). On remand to the federal district court,
181
the district judge entered a second order remanding the case to
182
state court. Despite our interpretation of the first remand order,
183
the second remand order stated: "This court does not and has never
184
had jurisdiction over Smith's claim." The judge then ordered the
185
remand pursuant to § 1447(c). Smith v. Texas Children's Hosp., 172
186
F.3d 923, 925 (5th Cir. 1999). On the appeal of this second order,
187
we concluded that the order did not affirmatively state a non-§
188
1447(c) ground for remand, and therefore § 1447(d) barred appellate
189
review. Id. at 927. Likewise, in the instant case, even if Judge
190
Barbier's conclusion that he lacked subject matter jurisdiction was
191
clearly erroneous, he did not state a non-§ 1447(c) ground for
192
remand and we cannot review his order.
193
Monogram relies on decisions of other circuits in asserting
194
that the "mere incantation" of § 1447(c) or the words of subject
195
matter jurisdiction does not automatically render the remand order
196
unreviewable. Further, Monogram urges us to conduct an independent
197
review of the remand order to determine the "true" basis for the
remaining claim, pursuant to its discretion.").
9

198
remand. However, we note that in Bogle, looking at the face of the
199
remand order we stated: "The magic words 'this case does not
200
contain a federal claim' rendered the district court's remand order
201
unreviewable." Bogle, 24 F.3d at 762.3
202
Monogram also argues that we must apply our decision in In re
203
Digicon Marine, Inc., 966 F.2d 158 (5th Cir. 1992) and conclude
204
that we are not bound by Judge Barbier's "erroneous
205
characterization" of his reasons for remanding. However, Digicon
206
Marine supports, rather than contradicts, our holding today. In
207
that case, the trial court granted a motion to remand based on the
208
lack of authority to remove a maritime case under 28 U.S.C. §
209
1441(b). Id. at 159. Later, in an order denying reconsideration,
210
it stated that the earlier ruling was based upon a lack of subject
3See also McDermott Int'l, Inc. v. Lloyds Underwriters of London,
944 F.2d 1199, 1201 n.1 (5th Cir. 1991) (noting that the grounds
for reviewing remand orders have expanded, and admonishing district
courts to "take care to explain their reasons for remanding cases"
because "the availability and means of appellate review turns
exclusively on the district court's reason for remand."); Tillman
v. CSX Transp., Inc., 929 F.2d 1023, 1026 (5th Cir. 1991)
("Reviewability of a remand order depends entirely upon the trial
court's stated grounds for its decision to remand."); Richards v.
Federated Dep't Stores, Inc., 812 F.2d 211 & n.1 (5th Cir. 1987)
(the remand order "is proof against review even if it merely
'purports' to remand on the ground quoted."); and In re Merrimack
Mut. Fire Ins. Co., 587 F.2d 642, 644 (5th Cir. 1978) ("If . . .
the remand order states that it is based on 1447(c) statutory
grounds, it is immune from review by an appellate court.").
Monogram suggests these decisions may be inapplicable because
they dealt with cases originated before the December 1, 1990
effective date of § 1367. However, the Supreme Court clearly
approved discretionary remands of pendent state law claims as early
as 1988 in Carnegie-Mellon. Moreover, because of our holding today
that Judge Barbier's order was based solely on § 1447(c) grounds,
we see no reason why these cases are inapposite.
10

211
matter jurisdiction. Id. We concluded that "[d]espite the
212
district court's description of the remand as one based on a lack
213
of subject matter jurisdiction in its order on reconsideration, the
214
district court's original remand order clearly indicates on its
215
face that the remand was not based upon lack of original subject
216
matter jurisdiction . . . ." Id. at 160. In the instant case,
217
Judge Barbier did not discuss his reasons for remanding in any
218
order outside the remand order itself. Just as in Digicon Marine,
219
in this case we need only look to the face of the remand order to
220
determine his reasons for remanding. We cannot read the remand
221
order to say that the court "clearly and affirmatively" relied on
222
a non-§ 1447(c) basis as required by Copling v. Container Store,
223
Inc., 174 F.3d 590, 596 (5th Cir. 1999) and Giles v. NYLCare Health
224
Plans, Inc., 172 F.3d 332, 336 (5th Cir. 1999). The face of the
225
order clearly states a § 1447(c) basis for remand.4
226
We think adopting Monogram's position that we interpret the
227
remand order as one pursuant to § 1367(c)(3) would basically
228
require us to conclude that Judge Barbier remanded the case for the
229
wrong reasons. That approach would essentially amount to an
230
appellate review of the order, which Congress has clearly forbidden
4Moreover, we note that Digicon Marine points out that when a
remand is reviewable on appeal, a district court may reconsider and
vacate its own order. Digicon Marine, 966 F.2d 158, 160-61,
quoting In re Shell Oil Co., 932 F.2d 1523, 1528 (5th Cir. 1991).
However, Monogram did not seek a reconsideration or amendment of
Judge Barbier's order to reflect its position that the order was
really based on § 1367(c)(3).
11

231
us to do under § 1447(d). Monogram urges that "[p]ublic policy
232
considerations strongly militate in favor of allowing this appeal
233
to be maintained." Appellant's Reply Brief at 10. It argues that
234
allowing district courts to insulate their remand orders from
235
appellate review by "intoning the words 'subject matter
236
jurisdiction'" would unleash "unreviewable mischief" and deny
237
litigants their right of appeal of § 1367(c)(3) remand orders. Id.
238
Although we seriously doubt Monogram's prediction, we think the
239
"public policy" decision is one for Congress to make, and one which
240
it has already made in the plain language of § 1447(d). In
241
enacting § 1447(d), "Congress struck the balance of competing
interests in favor of judicial economy." Smith, 172 F.3d at 925.5
242
243
We recognize that the merits of this case present significant
244
questions of law concerning the interpretation of the FDIA and the
245
ability of courts to "second-guess" the FDIC's determinations about
246
whether financial institutions are "state banks" under the FDIA.
247
However, we note that because we construe the remand order as
248
jurisdictional in nature, the district court's determinations as to
249
Monogram's substantive preemption defense will have no preclusive
5See also Tramonte v. Chrysler Corp., 136 F.3d 1025, 1027 (5th
Cir. 1998) ("[T]he [Supreme] Court has recognized that § 1447(d)
intends to insulate from appellate review a district court's
determinations as to its subject matter jurisdiction . . . ."); and
Tillman v. CSX Transp., Inc., 929 F.2d 1023, 1024 (5th Cir. 1991)
("The trial court brought its remand order within the absolute
immunity from review of 28 U.S.C. § 1447(c) by expressly referring
to a lack of jurisdiction as one of the bases of its decision to
remand.").
12

250
effect on the state court. Smith v. Texas Children's Hosp., 172
251
F.3d 923, 926 (5th Cir. 1999).
252
We think Judge Barbier clearly intended to base his order on
253
§ 1447(c). Having concluded that he lacked subject matter
254
jurisdiction over the case, however, Judge Barbier lacked
255
jurisdiction to grant Heaton's motion for voluntary dismissal with
256
prejudice. Such a ruling is a judgment on the merits. See
257
Boudloche v. Conoco Oil Corp., 615 F.2d 687, 688 (5th Cir. 1980).
258
In Bogle, the district court remanded the case because it believed
259
that it lacked subject matter jurisdiction, yet it granted the
260
plaintiff a partial nonsuit with prejudice of the claims that
261
formed the basis of the defendant's removal petition. Bogle v.
262
Phillips Petroleum Co., 24 F.3d 758, 762 (5th Cir. 1994). We held
263
that order was void and of no effect. We reach the same conclusion
here. The order dismissing Heaton's TILA claim is void.6
264
265
CONCLUSION
266
Because we have concluded that we lack jurisdiction in this
267
case, we DISMISS Monogram's appeal pursuant to 28 U.S.C. § 1447(d).
268
APPEAL DISMISSED.
6We realize that because of our holding today, Monogram may file
another petition for removal based on the TILA claim once this case
is returned to state court. We are aware that this result may
conflict with the policy of judicial economy embodied in § 1447(d).
However, we are constrained by the language of Judge Barbier's
remand order that he felt he had no subject matter jurisdiction in
this case, and therefore we can reach no other result but that
Judge Barbier was not empowered to render a ruling on the merits.
13