Alert

Let SCOTUS Decide: Can an Amended Complaint ‘Remove’ Removal Jurisdiction?

October 25, 2024

On October 7, 2024, the Supreme Court heard arguments to answer two longstanding questions on removal jurisdiction: (1) Whether amending a complaint to eliminate the only federal questions destroys federal subject-matter jurisdiction under 28 U.S.C. § 1331; and (2) whether a post-removal amended complaint precludes a district court from exercising supplemental jurisdiction over state law claims under 28 U.S.C. § 1367.

Background

In February 2019, Plaintiffs filed a putative class action in Missouri state court relating to the alleged misleading nature of “prescription” dog medication. In sum and substance, the Complaint argued that the “prescription” label, to which Plaintiffs’ dogs were prescribed, is misleading because the Food and Drug Administration never actually evaluated the product. Yet owners whose dogs are “prescribed” such medication pay higher prices than regular dog food despite no special medication actually being included in the product. The original Complaint included only state-law claims reflecting these theories regarding the misleading nature of the product.

Shortly thereafter, in March 2019, Defendants Royal Canin and Purina removed the action to the U.S. District Court of the Western District of Missouri. However, initially the district court denied subject matter jurisdiction and remanded the case to the Missouri state court in which the case was originally filed. Defendants then appealed to the Eighth Circuit Court of Appeal.

On March 13, 2020, the Eighth Circuit reversed the district court’s decision, stating that the lower federal court did hold subject matter jurisdiction because certain allegations relating to antitrust and unjust enrichment claims contained important federal ingredients that could not be adjudicated without reliance on and explication of federal law.

Upon remand to federal district court, Plaintiffs then amended their complaint by removing all references to federal law and abandoning the antitrust and unjust enrichment entirely. Upon doing so, Plaintiffs moved to remand back to state court. This time, however, the district court denied the request and promptly dismissed the amended complaint for failure to state a claim.

The case then went back to the Eighth Circuit Court of Appeals. However, like the district court, the Eighth Circuit then changed course in the opposite direction – now stating that no federal subject matter jurisdiction existed! In doing so, the court stated that the thrust of the federal claims was all but gone, and “[a]ll that remains are the Missouri Merchandising Practices Act claims, which do not necessarily raise a substantial federal issue.”

Just on the face of the amended complaint, the answer today is as clear as it can be. Only the carryover claims and their civil-conspiracy counterpart remain, and neither one presents a federal question. It is no longer possible to say that “dependence on federal law permeates the allegations” of Wullschleger’s complaint. In fact, the opposite is true: there is nothing federal about it. [internal citations omitted.]

Moreover, according to the court, an amended complaint supersedes an original complaint and renders it without legal effect – it does not matter whether the case was in federal court through removal proceedings.

As to whether the federal court could retain the case due to supplemental jurisdiction, the Eighth Circuit denied this argument for similar reasons. Simply put, the original complaint was without legal effect, and the possibility of supplemental jurisdiction “vanished right alongside the once-present federal questions.”

SCOTUS Arguments

At oral arguments, Royal Canin argued that the Eighth Circuit’s decision is an extreme outlier conflicting with the text and structure of § 1367 and over 100 years of precedent, dating back to Chief Justice Marshall’s decision in Mollan v. Torrance in 1824, arguing that once a federal court’s jurisdiction is vested, it cannot be divested by subsequent events. 22 U.S. 537 (1824). They appeared to rely primarily on § 1367, rather than (or in addition to) § 1331 – stating “the text of Section 1367 says there is supplemental jurisdiction unless Congress has expressly provided otherwise.” Section (c)(3) makes clear that you don’t have to have a federal question throughout the proceedings in order for there to continue to be supplemental jurisdiction; (c)(2) expressly addresses situations like this one, where the federal law claims have fallen out. In that situation, the state-law claims would substantially predominate. Moreover, they further argued that a complaint at the time of removal that has federal claims simply cannot be stripped of federal jurisdiction.

Conversely, class counsel argued for a more pragmatic approach: a suit arises under the law that creates the cause of action. Counsel argued that although Royal Canin professes a textualist argument – in reality, their argument is one of public policy that falls woefully short: “We can’t have these mischievous plaintiffs lawyers shopping around for their judges…” Counsel additionally brought forth textualist arguments of their own, stating, “If we amend out those federal claims, they’re no longer in the action. There’s no relationship. And so, there’s no supplemental jurisdiction. That’s 1367(a). That’s the requirement to establish supplemental jurisdiction. You don’t get to the exceptions in (b) or(c) unless you establish jurisdiction under (a).”

Notably, a number of amici also submitted briefs in support of both sides’ positions. For example, the Center for Litigation & Courts and others argued that a decision in favor of the putative class would frustrate Rule 15 on Amended and Supplemental Pleadings and, in turn, waste judicial resources. Twenty-two separate states, however, wrote in support of the class, stating that a ruling in favor of Royal Canin would harm states’ abilities to interpret their own laws – and, in turn, damage the constitutional balance between state and federal courts.

The Potential Impact

The decision will have a wide-reaching impact on forum-shopping and jurisdiction, potentially in all aspects of civil litigation and practice areas. Up until the Eighth Circuit’s opinion, every federal court of appeal had held that plaintiffs could not avoid federal jurisdiction by amending their pleadings in cases removed from state to federal court. For the Plaintiffs’ bar, no doubt this decision will impact how Complaints must be plead – no matter which way the Court rules. For the Defense bar, the longstanding strategy of immediate removal of any potential federal claims may be in jeopardy.

For now, we anxiously await the Court’s decision.