Vaillancourt sued a mortgage servicer, the substitute trustee for a foreclosure, and her husband. The defendants removed, claiming fraudulent joinder of the in-state defendants, and the district court rejected that argument and remanded. In so doing, it declined to exercise supplemental jurisdiction over the accompanying state-law claims. Vaillancourt v. PNC Bank, N.A., No. 14-40303 (Nov. 5, 2014). A good exam question for a Federal Courts class resulted.
Because the district court based its remand order on its decision to decline supplemental jurisdiction, the Fifth Circuit (under its prior precedents) had appellate jurisdiction over that ruling, which necessarily included review of the predicate ruling about original jurisdiction. The Court noted that this result “is in some tension with 28 U.S.C. § 1447(d)’s command that ‘[a]n order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise,’ which the Supreme Court has construed to insulate from appellate review remands made on the basis of subject matter jurisdiction.”
The Court went on to reverse the ruling about fraudulent joinder, finding no cognizable claim pleaded against the trustee or the husband. Accordingly, because “‘the district court had diversity jurisdiction over the state law claims at the time of remand,’ and ‘the exercise of that jurisdiction is mandatory,'” it reversed the remand order.