Monday, December 15, 2008

Remanding "matters" in which State Law Predominates under 1441(c)

The Fifth Circuit recently reversed a district court's finding that even though a suit involved a federal question, the entire case should be remanded to state court because most of the plaintiff's claims arose under state law.  The plaintiff in the case asserted state law claims involving misrepresentation, fraud, and breach of contract.  Additionally, the plaintiff asserted a violation under the federal Fair Labor Standards Act ("FLSA").  The district court found that under 1441(c) all claims, including the federal question, should be decided in state court.  As framed by the Fifth Circuit panel, the appeal presented the following question:  "[D]oes 28 U.S.C. § 1441(c) permit a district court to remand federal claims conferring removal jurisdiction where those claims are part of a case 'predominated' by state law?" 

The court first pointed out that although other courts have interpreted the word "matters" in 1441(c) to refer to an entire action, the court's precedent required a different result.  The plaintiff argued that several Fifth Circuit cases permitted the district court to remand the entire action, including the federal claims, if the state law claims predominate.  The court declared most of the statements in the cited cases dicta, and further dispensed with the argument by stating it was not necessary to "navigate the murky waters between alternate holding and dicta..."  The court then utilized an older case than those relied upon by the plaintiff to declare that the district court had no authority to remand the plaintiff's FLSA claim.

Read the full opinion here.


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