Before: Sloviter, Greenberg, and Cowen, Circuit Judges
The opinion of the court was delivered by: Greenberg, Circuit Judge.
On Petition for a Writ of Mandamus to the United States District Court for the District of New Jersey (Related to D.C. Civ. No. 97-02787)
This matter is before the court on a petition for a writ of mandamus filed by U.S. Healthcare. The plaintiff in the underlying action, Donald Eric Hoyt, filed a complaint in the Superior Court of New Jersey, which he characterized as an action for "medical malpractice," against U.S. Healthcare and various physicians and entities. Prior to any of the other defendants being served with a summons and complaint in accordance with New Jersey practice, U.S. Healthcare removed the matter to the district court pursuant to 28 U.S.C. § 1441(b) and (c) on the ground that Hoyt's claims against it arose under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1101 et seq., so that they were within the district court's original jurisdiction. See 28 U.S.C. § 1331. The notice of removal asserted that even though Hoyt framed the case as a negligence action, it was "removable pursuant to the complete preemption exception to the well-pleaded complaint rule," citing 29 U.S.C. § 1132(a)(1)(B) and Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 107 S.Ct. 1542 (1987). In addition, the notice of removal asserted that Hoyt's claims "relate to" an employee benefit plan under 29 U.S.C. § 1144, and thus ERISA preempts them. After U.S. Healthcare removed the action, it filed cross claims against the other defendants and a counterclaim against Hoyt advancing subrogation rights under Hoyt's employer's ERISA plan which covered Hoyt for medical benefits.
Following the removal, the case was assigned to a district Judge but, in accordance with procedure in the District of New Jersey, was assigned further to a magistrate Judge for pretrial proceedings. The parties, however, did not consent to the magistrate Judge exercising the jurisdiction of a district Judge as provided in 28 U.S.C. § 636(c). Neither Hoyt nor any other party made a motion to remand the case to the state court. Nevertheless, the magistrate Judge on his own motion on October 17, 1997, remanded the case to the Superior Court of New Jersey on the ground that the district court lacked subject matter jurisdiction. See 28 U.S.C. § 1447(c). In remanding the action, the magistrate Judge clearly regarded the remand order as nondispositive pursuant to 28 U.S.C. § 636(b)(1)(A), Fed. R. Civ. P. 72(a), and District of New Jersey Local Rule 72.1. As far as we can ascertain from the district court docket, the district court treated the remand as effective immediately because the court closed the case on October 17, 1997, notwithstanding Local Rule 72.1(c)(1)(C) which provides that:
"The Clerk shall take no action with respect to a Magistrate Judge's order of remand or for transfer of venue until 15 days from the filing of such an order. In the event that a notice of appeal from such an order is filed within such 15-day period, the Clerk shall take no action until the appeal is decided by the Judge."*fn1
Subsequently, without seeking relief in the district court, U.S. Healthcare filed a petition for a writ of mandamus requesting that we vacate the order of remand. The petition's thrust was that the action could not be remanded because no party had made a motion to remand within 30 days after the filing of the notice of removal as required by 28 U.S.C. § 1447(c) in the case of a defect in the removal procedure. Moreover, U.S. Healthcare claimed that the district court had subject matter jurisdiction. Upon receiving the petition we ordered the filing of answers and subsequently we ordered the parties to submit briefs.
U.S. Healthcare has filed a brief asserting that the magistrate Judge "did not have the authority to remand this case to state court" and that "the district court had subject matter jurisdiction over the case at the time it was remanded through [its] counterclaim and, as such, the magistrate Judge's failure to consider this fact was an abuse of discretion." Hoyt has not filed a brief in these proceedings but certain of the defendants in the underlying action have filed a brief asserting that (1) a magistrate Judge does have the authority to remand a case to a state court; (2) 28 U.S.C. § 1447(d) precludes this court from reviewing the order of remand on the merits; and (3) 28 U.S.C. § 636(b)(1)(A) afforded U.S. Healthcare a mechanism to appeal the remand order to the district court so that U.S. Healthcare cannot obtain mandamus relief.*fn2
Initially we consider whether we should characterize the order of remand as dispositive or nondispositive inasmuch as 28 U.S.C. §§ 636(b)(1)(A) and (B) draw a sharp distinction between dispositive and nondispositive matters in determining a magistrate Judge's powers.*fn3 28 U.S.C. § 636(b)(1)(A) provides that a magistrate Judge may "hear and determine any pretrial matter pending before the court, except a motion for injunctive relief, for judgment on the pleadings, for summary judgment, . . . to dismiss or to permit maintenance of a class action, to dismiss for failure to state a claim upon which relief can be granted, and to involuntarily dismiss an action." Thus, in general, a magistrate Judge, without the consent of the parties, has the power to enter orders which do not dispose of the case. The district court may reconsider any pretrial matter "where it has been shown that the magistrate Judge's order is clearly erroneous or contrary to law." A magistrate Judge, without the consent of the parties, may "conduct hearings, including evidentiary hearings and . . . submit to a Judge of the court proposed findings of fact and recommendations for the Disposition, by a Judge of the court, of any" of the dispositive motions we described above.
It is clear that 28 U.S.C. § 636(b)(1)(A) does not in terms preclude a magistrate Judge from hearing and determining a motion to remand a case to a state court. Nevertheless, because a remand order is dispositive insofar as proceedings in the federal court are concerned, the order is the functional equivalent of an order of dismissal for purposes of that section. While we recognize that after a remand a case may go forward in the state court, still the order for remand conclusively terminates the matter in the federal court against the will of the party who removed the case.
In considering this issue we point out that we must take into account "the potential for Art. III constraints in permitting a magistrate to make decisions on dispositive motions." United States v. Raddatz, 447 U.S. 667, 676, 100 S.Ct. 2406, 2412 (1980). Thus, in NLRB v. Frazier, 966 F.3d 812, 816 (3d Cir. 1992), ...