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Removal — District Court Prohibited from Remanding Case Sua Sponte Based on Procedural Defect in Removal Notice — Motion to Remand Required

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In Ellenburg v. Spartan Motors Chassis, Inc., 2008 U.S. App. LEXIS 5076 (4th Cir. March 10, 2008), the Fourth Circuit joined every other Circuit that has considered the issue in holding that a “district court is prohibited from remanding a case sua sponte based on a procedural defect absent a motion to do so from a party.”

The case raised appealability issues under 28 U.S.C. § 1447(d), as that statute generally bars appellate review of remand orders. The Fourth Circuit held that:

1. A sua sponte remand order that does not rely on lack of subject matter jurisdiction but rather on a procedural defect in pleading is not unreviewable under § 1447(d).

2. The district court lacked authority to enter a remand order sua sponte based on a procedural defect in removal — such a defect must be raised by motion.

3. The sufficiency of a Notice of Removal is judged under the notice-pleading requirements of 28 U.S.C. § 1446(a) and, indirectly, Federal Rule of Civil Procedure 8(a).

The appellate court stressed that, “[r]ather than permitting allegations in the Notice of Removal to serve the same role that allegations in a complaint serve, the district court demanded that the Notice of Removal actually demonstrate the factual basis for the allegations in the notice. The district court's selection and application of a legal standard for pleading in a notice of removal thus remains reviewable as a ‘conceptual antecedent’ to the remand order.”

Query what the impact of Twombly is in this analytic framework.

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New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.

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