Appellate Review of Remand Orders Under Section 1443 Removal: The Exception-to-the-Exception Rule

Introduction

Goshen Mortgage, as Separate Trustee for GDBT 1 Trust 2011-1, and Red Stick Acquisitions, LLC (collectively “Red Stick”), filed a foreclosure action in Florida state court against homeowner William P. DeBoskey. DeBoskey removed the case to federal district court invoking 28 U.S.C. §§ 1441, 1443 and 1446. The district court held it lacked subject-matter jurisdiction (both diversity and federal-question) and remanded under 28 U.S.C. § 1447(c). DeBoskey appealed the remand order, arguing (1) Red Stick lacked Article III standing and (2) complete diversity existed. Red Stick countered that appellate courts have no jurisdiction to review § 1447(c) remands. The Eleventh Circuit affirmed, but first confirmed it had appellate jurisdiction by applying the “exception-to-the-exception” for removals under § 1443.

Summary of the Judgment

In a per curiam decision, the Eleventh Circuit held:

Jurisdiction: Ordinarily remand orders based on lack of subject-matter jurisdiction or procedural defects are not appealable under 28 U.S.C. § 1447(d). However, where removal is “pursuant to” § 1443, the appellate court retains jurisdiction to review the entire remand order. DeBoskey’s invocation of § 1443 triggered that exception.
Standing: DeBoskey, who removed to federal court, could not successfully challenge Red Stick’s Article III standing. Red Stick alleged ownership of the mortgage and note, DeBoskey’s default, and sought foreclosure—satisfying injury-in-fact, causation, and redressability.
Subject-Matter Jurisdiction (Diversity): DeBoskey bore the burden of showing complete diversity. He failed to plead the citizenship of every member of Red Stick (an LLC). The district court did not clearly err in finding no evidence that Red Stick lacked Florida-citizen members.
Result: Affirmed. The case was properly remanded to state court for lack of federal jurisdiction.

Analysis

1. Precedents Cited

28 U.S.C. § 1291 – Final decisions are appealable.
28 U.S.C. § 1441(a) – Removal based on original jurisdiction.
28 U.S.C. § 1443 – Removal for denial of equal civil rights.
28 U.S.C. § 1447(c),(d) – Remand for lack of jurisdiction and non-appealability rules.
Hunter v. City of Montgomery, 859 F.3d 1329 (11th Cir. 2017) – Remand orders typically non-appealable.
MSP Recovery Claims, Series LLC v. Hanover Ins. Co., 995 F.3d 1289 (11th Cir. 2021) – § 1447(c) bar on review of jurisdictional remands.
BP P.L.C. v. Mayor & City Council of Baltimore, 141 S. Ct. 1532 (2021) – Exception for § 1442/§ 1443 removals.
Mack v. USAA Cas. Ins. Co., 994 F.3d 1353 (11th Cir. 2021) – Article III standing burden.
Ladies Mem’l Ass’n v. City of Pensacola, 34 F.4th 988 (11th Cir. 2022) – Remand for lack of standing.
Caterpillar Inc. v. Williams, 482 U.S. 386 (1987) – Removal requires original jurisdiction.
Triggs v. John Crump Toyota, Inc., 154 F.3d 1284 (11th Cir. 1998) – Complete diversity rule.
Mallory & Evans Contractors & Eng’rs, Inc. v. Tuskegee Univ., 663 F.3d 1304 (11th Cir. 2011) – LLC citizenship requires listing each member.
ACLU of Fla., Inc. v. City of Sarasota, 859 F.3d 1337 (11th Cir. 2017) – Qualified right to jurisdictional discovery.
United Techs. Corp. v. Mazer, 556 F.3d 1260 (11th Cir. 2009) – Must timely move for jurisdictional discovery.
Thermoset Corp. v. Bldg. Materials Corp. of Am., 849 F.3d 1313 (11th Cir. 2017) – Real party in interest for diversity purposes.

2. Legal Reasoning

The court described a “three-step jurisdictional tap dance”:

Final Decision Rule (§ 1291): Generally, remand orders are final decisions appealable to the circuit.
Remand Bar (§ 1447(c)): Remands based on procedural defects (other than lack of subject-matter jurisdiction) or lack of jurisdiction are not appealable.
Exception to the Exception (§ 1447(d)): If removal was “pursuant to” § 1442 or § 1443, appellate courts retain jurisdiction over the remand order.

DeBoskey’s notice of removal explicitly invoked § 1443, satisfying the “pursuant to” requirement from BP P.L.C. As a result, the Eleventh Circuit could review the remand order on jurisdictional grounds.

On standing, the court reiterated that the party invoking federal jurisdiction (DeBoskey) cannot challenge the plaintiffs’ standing in order to defeat removal—he would only secure the same remand he challenges on appeal.

On diversity, the court applied strict LLC-citizenship rules: Red Stick’s members and their citizenship must be pleaded by the removing party. DeBoskey offered no evidence showing all members were non-Florida citizens. His buried request for jurisdictional discovery did not preserve a timely motion to support discovery; hence, no error in denying it.

3. Impact

This decision reinforces several key principles:

Strategic Removal: Defendants seeking appellate review of remand orders should expressly invoke § 1443 (or § 1442) to preserve an appeal.
Strict Standing Jurisprudence: Removal proponents bear standing burdens and cannot use standing attacks to undermine removal.
LLC Citizenship Disclosure: Removing parties must meticulously plead citizenship of each LLC member or risk remand.
Limited Discovery: Jurisdictional discovery must be the subject of a timely motion, not a brief footnote, or courts will deny it.

Future litigants will look to this case when planning removal tactics, particularly those alleging denial of civil-rights rights under § 1443. Lower courts will see renewed clarity on when remand orders are appealable and how to handle citizenship pleadings for LLCs.

Complex Concepts Simplified

Remand vs. Removal: Removal moves a case from state to federal court; remand sends it back.
Final Decision Rule (§ 1291): Most district court orders that end the case can be appealed.
Remand Bar (§ 1447(c)): Orders remanding for lack of jurisdiction or certain defects normally can’t be appealed.
Exception (§ 1447(d)): If removal is “pursuant to” §§ 1442 or 1443, the appeal bar does not apply.
Article III Standing: A party must show injury, causation, and redressability to invoke federal jurisdiction.
Diversity Jurisdiction (§ 1332): Requires complete diversity (no overlap of state citizenship) and > $75,000 in controversy.
LLC Citizenship: An LLC is a citizen of every state where any of its members is a citizen.
Jurisdictional Discovery: A party must file a separate motion seeking discovery on jurisdictional facts.

Conclusion

Goshen Mortgage v. DeBoskey establishes that an appeal from a remand order is permissible when removal invoked 28 U.S.C. § 1443, carving out an “exception to the exception” under § 1447(d). It reaffirms that defendants bear the burdens of Article III standing and complete diversity when removing cases. Finally, it underscores the importance of proper pleading of LLC citizenship and timely motions for jurisdictional discovery. This decision will guide practitioners in crafting removal notices, anticipating remand risks, and preserving appellate rights.