Commercial Litigation and Arbitration

Remand Order under 28 U.S.C. § 1447(c) Is “Dispositive” — Magistrate Judge’s Decision Is Subject to De Novo Review by District Court

From Williams v. Beemiller, Inc., 2008 U.S. App. LEXIS 11276 (2d Cir. May 28, 2008):

The question of whether a magistrate judge may order a case remanded to state court under § 1447(c) is one of first impression in this Circuit. All three of our sister circuits that have considered the matter have concluded that such orders are dispositive because they are "functionally equivalent" to an order of dismissal for the purposes of § 636(b)(1)(A) and Rule 72(a). ***

Because a § 1447(c) remand order "determine[s] the fundamental question of whether a case could proceed in a federal court," [citation omitted], it is indistinguishable from a motion to dismiss the action from federal court based on a lack of subject matter jurisdiction for the purpose of § 636(b)(1)(A). A motion to remand is not a "pretrial matter" under § 636(b)(1)(A), and a magistrate judge presented with such a motion should provide a report and recommendation to the district court that is subject to de novo review under Rule 72. The Defendants-Appellants here are entitled to the District Court's de novo review of the Magistrate Judge's report and recommendation regarding Plaintiffs-Appellants' motion to remand.

Separately, the Second Circuit held that it had jurisdiction to entertain the appeal because the question whether the District Court applied the correct standard of review was outside the preclusive scope of 28 U.S.C. § 1447(d).

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