BP v. Baltimore Provides a Lengthy Escape Hatch From State Court

Step 1: File notice of removal. Step 2: Appeal remand order. Step 3: Seek rehearing of affirmance of remand order. Step 4: Seek certiorari from denial of rehearing en banc. Step 5: Go back to state court three years after complaint was filed.

Often, when Plaintiffs file a suit in state court, the Defendants would prefer to be in federal court. And the Defendants can seek to remove the case to federal court. At that point, the district court can (a) agree that the federal court has jurisdiction or (b) remand the case to the state court. Generally, remand orders are not appealable. But there are two important, but obscure exceptions to this rule.

28 U.S.C. § 1447(d) permits appellate review of a remand order when removal was sought pursuant to 28 U.S.C. § 1442 or § 1443.

An order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise, except that an order remanding a case to the State court from which it was removed pursuant to section 1442 or 1443 of this title shall be reviewable by appeal or otherwise.

The latter provision, Section 1443, has historically been invoked in civil rights actions:

Any of the following civil actions or criminal prosecutions, commenced in a State court may be removed by the defendant to the district court of the United States for the district and division embracing the place wherein it is pending:

(1) Against any person who is denied or cannot enforce in the courts of such State a right under any law providing for the equal civil rights of citizens of the United States, or of all persons within the jurisdiction thereof;
(2) For any act under color of authority derived from any law providing for equal rights, or for refusing to do any act on the ground that it would be inconsistent with such law.

Indeed, Congress made remand orders under Section 1443 appealable as part of the landmark Civil Rights Act of 1964. A predecessor version of this statute was at issue in Strauder v. West Virginia. Strauder sought to remove his criminal prosecution to federal court in light of the state law that mandated an all-white jury. Apparently, he was able to appeal a remand order, and the Supreme Court ruled in his favor.

The former provision, Section 1442, is a bit of a grab bag.

(a)A civil action or criminal prosecution that is commenced in a State court and that is against or directed to any of the following may be removed by them to the district court of the United States for the district and division embracing the place wherein it is pending:

(1)The United States or any agency thereof or any officer (or any person acting under that officer) of the United States or of any agency thereof, in an official or individual capacity, for or relating to any act under color of such office or on account of any right, title or authority claimed under any Act of Congress for the apprehension or punishment of criminals or the collection of the revenue.
(2) A property holder whose title is derived from any such officer, where such action or prosecution affects the validity of any law of the United States.
(3) Any officer of the courts of the United States, for or relating to any act under color of office or in the performance of his duties;
(4)Any officer of either House of Congress, for or relating to any act in the discharge of his official duty under an order of such House.

The history of this statute was fascinating. During Reconstruction, state officers would often arrest federal officers (especially tax collectors), and seize their property. This statute would allow any such cases to be removed to federal court, where they could be dismissed.

I have some experience with 28 U.S.C. § 1442(a)(2). I have long represented Defense Distributed. In 2018, the New Jersey Attorney sued my clients in state chancery court. After some litigation, we removed the case to federal court. We relied on general federal question jurisdiction under 28 U.S.C. § 1331. We also invoked Section 1442(a)(2). The federal government had given us a settlement agreement. We argued that this contract was a form of "property" from the federal government. And New Jersey's suit "affect[ed] the validity" of federal law.

Our motion acknowledged that it was unclear whether we could appeal the remand order in light of this mixed posture--we relied on both Sections 1331 and 1442. Ultimately, the case fizzled out in District Court, so we never resolved the removal issue.

Yesterday, the Supreme Court ruled that a remand order in our case would have been appealable. Justice Gorsuch wrote the majority opinion in BP p.l.c. v. Mayor and City Council of Baltimore. The city sued the oil company for contributing to climate change. BP removed the case to federal court on multiple grounds. The district court remanded the issue. The Fourth Circuit held that it could only hear the parts of the removal that invoked Sections 1442 or 1443; it could not hear the parts of the removal premised on Section 1331. The Supreme Court reversed.

Justice Gorsuch's analysis is straightforward:

Here, the relevant portion of §1447(d) provides that "an order remanding a case to the State court from which it was removed pursuant to section 1442 or 1443 of this title shall be reviewable by appeal."To our minds, the first telling clue lies in the statute's use of the term "order." Whether we look to the time of §1447(d)'s adoption or amendment, a judicial "order" meant then what it means today: a "written direction or command delivered by . . . a court or judge."¹ So an "order remanding a case" was (and is) a formal command from a district court returning the case to state court. In this case, the district court's remand order rejected all of the defendants' grounds for removal  . . . . From this it would seem to follow that, when a district court's removal order rejects all of the defendants' grounds for removal, §1447(d) authorizes a court of appeals to review each and every one of them. After all, the statute allows courts of appeals to examine the whole of a district court's "order," not just some of its parts or pieces. . . . Here, everyone admits the defendants' notice of removal did just that by citing §1442 as one of its grounds for removal. Once that happened and the district court ordered the case remanded to state court, the whole of its order became reviewable on appeal.

The upshot of this decision is that litigants can keep cases out of state court for a very long time. Here is the gameplan:

• Step 1: File notice of removal.
• Step 2: Appeal remand order.
• Step 3: Seek rehearing of affirmance of remand order.
• Step 4: Seek certiorari from denial of rehearing en banc.
• Step 5: Go back to state court three years after complaint was filed.

This strategy is especially powerful if the plaintiffs are seeking injunctive relief under state law. The defendant can keep the case in the federal system solely on the removal question. By the time the Supreme Court finally denies cert after three years of litigation, the original grounds for injunctive relief may have become moot. Baltimore identified this policy concern:

The City concludes by asking us to consider the policy consequences that follow from giving the text its ordinary meaning. Barring appellate review of remand orders, the City says, serves the worthy goal of allowing the parties to get on with litigating the merits of their cases in state court. Meanwhile, the City submits, allowing exceptions to this rule promises only to impair that efficiency interest. 

…

That leaves the City to argue about different consequences. It warns that our interpretation will invite gamesmanship: Defendants may frivolously add §1442 or §1443 to their other grounds for removal, all with an eye to ensuring appellate review down the line if the case is remanded.

However, Justice Gorsuch rejected this policy concern based on the plain text of the statute. (Stop me if you've heard this one before). The vote was 7-1. Justice Alito recused, I think, because he owns BP stock.

Justice Sotomayor was the lone dissenter. She explains the likely outcome here:

The first possibility is that §1447(d) permits appellate review of any asserted basis for removal so long as the suit was removed in part pursuant to §1442 or §1443. That is the interpretation urged by petitioners and adopted by the Court today. See ante, at 5–6. The problem with this interpretation is that it stretches the exception in §1447(d) too far. It allows defendants to bootstrap their entire case for removal into the court of appeals simply by tacking on an argument under §1442 or §1443. Indeed, under this interpretation, a defendant could formally abandon its argument under §1442 or §1443 and seek an appeal exclusively of other grounds for removal. See Tr. of Oral Arg. 34–36, 40–41. That bizarre outcome, inexplicable in light of the manifest objective of limiting the exceptions in §1447(d), cautions heavily against this interpretation. 

…

Unfortunately, I fear today's decision will reward defendants for raising strained theories of removal under §1442 or §1443 by allowing them to circumvent the bar on appellate review entirely. 

….

Petitioners no longer advance their argument under §1442, calling it only "substantial." Brief for Petitioners 35. Yet that argument somehow opens a back door to appellate review that would otherwise be closed to them. Meanwhile, Baltimore, which has already waited nearly three years to begin litigation on the merits, is consigned to waiting once more. 

Section 1442 will soon become less obscure. Corporations will try to fit within every nook and cranny of that statute to stay out of state court. I think our creative "property" argument could become salient. Rule 11 and attorney's fees will not serve as enough deterrence for creative arguments based on Section 1442. This decision is really, really significant. Definitely one of the term's sleeper cases for corporations.

Congress can change the law here. Or not.