Appeal from the United States District Court for the District of New Jersey. D.C. Civil No. 91-04178
Before: Stapleton, Alito and Seitz, Circuit Judges.
On Petition for Writ of Mandamus
The historical facts in this case are undisputed. Plaintiff, a woman who uses the pseudonym "PAS," was hired by J.T. Baker, Inc., a subsidiary of Richardson-Vicks, Inc. (collectively "Baker") in 1987. Approximately six months after she was hired, plaintiff became disabled with bipolar disorder,*fn1 a disability which is apparently continuing. Plaintiff initially received disability benefits from a health insurance plan paid for by Baker and supplied through the Travelers Insurance Company ("Travelers"). Subsequently, Travelers terminated plaintiff's benefits under a policy provision that generally limits coverage for mental illnesses to two years.
Plaintiff brought a four-count action in the Superior Court of New Jersey seeking, inter alia, to have the policy provision under which her benefits were terminated declared void as contrary to New Jersey law and to have Travelers ordered to restore her coverage. Travelers and Baker removed the action to federal district court because it contained claims that they were undisputedly entitled to have resolved in a federal forum under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001-1461.
Plaintiff concedes that Travelers and Baker are entitled to a federal forum for resolution of three of her four claims. However, plaintiff moved for a remand to state court of her claim that the termination of her insurance coverage violated two New Jersey statutes. See N.J. Stat. Ann. § 17:29B-4(7)(b) (West 1985); N.J. Stat. Ann. § 17B:30-12(d) (West 1985). Baker and Travelers opposed plaintiff's request for remand, arguing that remand was unwarranted because the two New Jersey statutes were preempted by ERISA.
In addressing plaintiff's motion for remand, the district court first concluded that the New Jersey statutes were not preempted by ERISA. Next, the court reasoned that, because it had only supplemental jurisdiction over the state law claim, it was free to exercise its discretion under 28 U.S.C. § 1367(c)(1) when deciding whether to remand that claim to state court. It thereupon concluded that, because the claim involved a "novel and complex issue of state law," it should be remanded to the Superior Court of New Jersey. (J.A. at 113).
Subsequently, the district court concluded that the state court action "[might] become dispositive of the [federal] litigation . . . ." (J.A. at 127). Accordingly, it ordered that the federal action be administratively terminated "without prejudice to the right of the parties to reopen the proceedings at any time, for good cause shown . . . ." (J.A. at 127).
Travelers filed a motion for reconsideration of the district court's order of remand. The district court denied that motion and Travelers thereupon filed both a notice of appeal and petition for a writ of mandamus.*fn2 This court ordered that Travelers' appeal and petition for mandamus be consolidated for Disposition.
A. Bar of 28 U.S.C. § 1447(d)
We must first consider whether we have jurisdiction to entertain the appeal or the petition seeking a writ of mandamus directing the district court to vacate its remand order. The remanded claim is based on state law. The first jurisdictional issue is created by 28 U.S.C. § 1447(d), which provides:
(d) 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 1443 of this title shall be reviewable by appeal or otherwise. [Section 1443 is not involved.]
In Thermtron Prod., Inc. v. Hermansdorfer, 423 U.S. 336, 46 L. Ed. 2d 542, 96 S. Ct. 584 (1976), the Supreme Court interpreted the limitations in subsection 1447(d) to be restricted to cases remanded under § 1447(c). Cases may be remanded under § 1447(c) for (1) lack of district court subject matter jurisdiction or (2) a defect in the removal procedure. Clearly, the remand order here was not based on either such ground. Rather, the district court, in the exercise of its admitted discretion, remanded the claim under its supplemental jurisdiction found in 28 U.S.C. § 1367(c)(1): the claim raised a novel or complex issue of state law. Thus, the statutory bar to appellate review does not apply here. See Aliota v. Graham, 984 F.2d 1350, 1354-55 (3d Cir. 1993); 1A Moore's Federal Practice P 0.169 [2.-1]. The Eleventh Circuit has ...