Civil-Rights Removal Revisited: Invoking 28 U.S.C. § 1443 Permits Full Appellate Review of Remand Orders, but ADA-Based Arguments Do Not Qualify

Civil-Rights Removal Revisited: Invoking 28 U.S.C. § 1443 Permits Full Appellate Review of Remand Orders, but ADA-Based Arguments Do Not Qualify

Introduction

This commentary analyzes the Third Circuit’s non-precedential decision in Horizon Blue Cross Blue Shield of New Jersey v. Chryssoula Arsenis (No. 24-2009, Sept. 2, 2025). The appeal followed a second attempt by a pro se defendant, Chryssoula Arsenis (and her company, Speech & Language Center, LLC), to remove a state-court insurance-fraud dispute with Horizon Blue Cross Blue Shield of New Jersey to federal court. The District Court remanded for lack of subject-matter jurisdiction, declined to reach certain motions in light of that jurisdictional ruling, and issued an order to show cause why a filing injunction should not enter. Arsenis appealed.

Two core issues framed the appeal:

  • Whether the Third Circuit could review the remand order in light of the appellate-review bar in 28 U.S.C. § 1447(d), given that the notice of removal invoked 28 U.S.C. § 1443 (civil-rights removal).
  • Whether removal was proper under federal-question, diversity, ERISA complete preemption, or § 1443.

The panel dismissed the appeal in part for lack of jurisdiction (as to the show-cause order) and otherwise affirmed the remand.

Summary of the Judgment

The Third Circuit held:

  • Appellate jurisdiction existed to review the remand order because the notice of removal expressly invoked 28 U.S.C. § 1443, bringing the case within the § 1447(d) exception recognized by the Supreme Court (BP P.L.C. v. Mayor & City Council of Baltimore). When § 1443 is invoked, the entire remand order is reviewable.
  • The District Court correctly remanded: there was no diversity (both sides are New Jersey citizens), no federal question on the face of the complaint, and no ERISA complete preemption. The § 1443 theory also failed because the asserted rights were not cast in terms of racial equality, and there was no showing that New Jersey courts would inevitably deny enforcement of federal rights as required by § 1443(1).
  • The Court lacked jurisdiction to review the District Court’s order to show cause regarding a potential filing injunction; such an order is not a final, appealable decision.
  • The appellant forfeited any challenge to the District Court’s decision declining to entertain her motions to strike after finding no subject-matter jurisdiction.
  • The Court granted Horizon’s motion to seal the appendix for 25 years under 3d Cir. L.A.R. 106.1(a) to protect sensitive personal information.

Analysis

Precedents Cited and Their Roles

  • 28 U.S.C. § 1447(d) and Hudson United Bank v. LiTenda Mortgage Corp., 142 F.3d 151 (3d Cir. 1998): Establish the general bar to appellate review of remand orders.
  • BP P.L.C. v. Mayor & City Council of Baltimore, 141 S. Ct. 1532 (2021): A pivotal decision holding that when removal is effected “pursuant to” § 1442 or § 1443, a court of appeals may review the entirety of a remand order. The Third Circuit applied this to conclude it had jurisdiction here because Arsenis cited § 1443.
  • Davis v. Glanton, 107 F.3d 1044 (3d Cir. 1997): Confirms § 1443 is a narrow exception to the well-pleaded complaint rule and outlines the stringent two-prong test for § 1443 removal.
  • Georgia v. Rachel, 384 U.S. 780 (1966); City of Greenwood v. Peacock, 384 U.S. 808 (1966); Johnson v. Mississippi, 421 U.S. 213 (1975): The Supreme Court’s foundational § 1443(1) jurisprudence. These cases require that the right be stated in terms of racial equality and that state law or its formal expression will inevitably deny the right in state court.
  • Home Depot U.S.A., Inc. v. Jackson, 587 U.S. 435 (2019): Reinforces that removal depends on whether the case could have originally been brought in federal court (federal question or diversity).
  • Caterpillar Inc. v. Williams, 482 U.S. 386 (1987): Articulates the well-pleaded complaint rule for federal-question jurisdiction.
  • Johnson v. SmithKline Beecham Corp., 724 F.3d 337 (3d Cir. 2013): Explains complete diversity (no plaintiff may share a state of citizenship with any defendant).
  • Krashna v. Oliver Realty, Inc., 895 F.2d 111 (3d Cir. 1990); Maglioli v. Alliance HC Holdings LLC, 16 F.4th 393 (3d Cir. 2021): Address “complete preemption,” emphasizing that it is rare.
  • Pascack Valley Hospital v. Local 464A UFCW Welfare Reimbursement Plan, 388 F.3d 393 (3d Cir. 2004): Provider claims for payment under separate agreements are generally not completely preempted by ERISA because providers typically lack § 502(a) standing absent a valid assignment.
  • Hobbs v. Blue Cross Blue Shield of Alabama, 276 F.3d 1236 (11th Cir. 2001), citing Cagle v. Bruner, 112 F.3d 1510 (11th Cir. 1997): Providers are usually neither “participants” nor “beneficiaries” under ERISA, undermining complete preemption.
  • Dukes v. U.S. Healthcare, Inc., 57 F.3d 350 (3d Cir. 1995): A federal defense cannot create federal-question jurisdiction for removal.
  • Erie Insurance Exchange by Stephenson v. Erie Indemnity Co., 68 F.4th 815 (3d Cir. 2023): The removing party bears the burden of establishing federal jurisdiction.
  • Hapgood v. City of Warren, 127 F.3d 490 (6th Cir. 1997): State courts have concurrent jurisdiction over ADA claims, undermining § 1443 removal predicated on ADA rights.
  • Weitzman v. Stein, 897 F.2d 653 (2d Cir. 1990): An order to show cause is not an appealable final order.
  • M.S. ex rel. Hall v. Susquehanna Township School District, 969 F.3d 120 (3d Cir. 2020): Forfeiture for failure to raise issues in the opening brief.
  • Simbraw v. United States, 367 F.2d 373 (3d Cir. 1966): Corporations and LLCs must appear through counsel in federal court.

Legal Reasoning

The panel’s reasoning proceeded in three layers: appellate jurisdiction, ordinary removal doctrines (§§ 1331 and 1332), and civil-rights removal (§ 1443).

  • Appellate jurisdiction under § 1447(d) and BP v. Baltimore:

    Although § 1447(d) generally bars review of remand orders, there is an explicit statutory exception for cases removed under § 1443. Relying on BP v. Baltimore, the Court held that once § 1443 is invoked in the notice of removal, the appellate court may review the whole remand order. That remained true even though the notice of removal cited multiple statutes (here, §§ 1441 and 1443).

  • No subject-matter jurisdiction under standard removal principles:
    • Diversity: The parties are not completely diverse because both Horizon and Arsenis are citizens of New Jersey. Thus, § 1332 did not apply.
    • Federal question: Under the well-pleaded complaint rule (Caterpillar v. Williams), Horizon’s complaint alleged only state-law claims (insurance fraud, common-law fraud, breach of contract, unjust enrichment, negligent misrepresentation). A federal defense or counterclaim cannot create federal-question jurisdiction (Dukes).
    • ERISA complete preemption: Arsenis argued that ERISA preempted the state claims. The Court rejected that argument. Complete preemption under ERISA § 502(a) is “rare,” and providers typically lack standing as ERISA “participants or beneficiaries” absent assignment (Pascack Valley). Disputes over allegedly inflated or fraudulent billing by a provider to an insurer generally do not convert state-law claims into federal ERISA claims.
  • Civil-rights removal under § 1443(1) fails:
    • First prong (right must be stated in terms of racial equality): The Supreme Court requires that the right invoked be couched in the specific language of racial equality (Rachel). Arsenis grounded her theory in the Americans with Disabilities Act (ADA). Disability-based rights, while important, are not rights “stated in terms of racial equality” under § 1443(1). Thus, the first prong was not satisfied.
    • Second prong (inability to enforce the right in state court): Removal is proper only if the right will inevitably be denied by the mere act of proceeding in state court, typically due to a formal expression of state law (Peacock; Johnson v. Mississippi). Arsenis offered only generalized assertions that New Jersey courts would not protect her rights. The Sixth Circuit has specifically recognized state courts’ concurrent jurisdiction over ADA claims (Hapgood). No formal state-law bar to enforcement was identified.
  • Procedural posture of other issues:
    • Show-cause order on a filing injunction: Not a final, appealable order (Weitzman). The Third Circuit therefore dismissed the appeal to that extent.
    • Motions to strike: The District Court declined to resolve them after finding it lacked subject-matter jurisdiction; any challenge to that choice was forfeited on appeal (M.S. ex rel. Hall).
    • Representation of the LLC: The opinion reiterates that a company cannot proceed pro se in federal court; it must be represented by licensed counsel (Simbraw).
    • Sealing: The Third Circuit sealed the appendix for 25 years under Local Appellate Rule 106.1(a) due to sensitive personal information.

Impact

Though non-precedential, the decision is an important procedural roadmap in three respects.

  • Appellate review gateway via § 1443:

    The opinion operationalizes BP v. Baltimore in the § 1443 context within the Third Circuit: referencing § 1443 in a notice of removal opens the door for appellate review of the entire remand order. This is significant for litigants who otherwise would be foreclosed by § 1447(d). However, attorneys should not read this as a license to routinely invoke § 1443; as the Court’s merits analysis shows, § 1443 removal remains exceptionally narrow, and misuse can invite sanctions or filing injunctions.

  • Boundary-policing of ERISA “complete preemption”:

    The Court reinforces a well-settled limitation: provider-versus-insurer payment disputes arising from allegedly inflated or fraudulent billing ordinarily do not satisfy ERISA’s complete preemption under § 502(a). Absent a valid assignment or other unusual facts, such state-law claims remain in state court. Expect district courts to scrutinize ERISA-based removal in provider billing disputes and remand where the claim, as pleaded, is grounded in state law and provider standing under ERISA is absent.

  • The narrow channel of § 1443 removal:

    The Third Circuit’s analysis underscores that § 1443(1) is largely confined to rights explicitly framed in terms of racial equality and to situations where a formal state-law barrier makes enforcement in state court impossible. Attempts to shoehorn other civil-rights claims (such as ADA-based allegations) into § 1443 will fail. Defense counsel should resist § 1443 removal unless both prongs are clearly met on the face of law and record.

  • Practical deterrents to serial removal:

    The panel’s mention of an order to show cause concerning a filing injunction signals that district courts will police serial, untimely, or baseless removals. Parties should expect escalating measures—from costs and fees to injunctions—if removal is used to delay or relitigate settled jurisdictional issues.

Complex Concepts Simplified

  • Well-pleaded complaint rule:

    Federal-question jurisdiction exists only if the plaintiff’s complaint, on its face, asserts a federal cause of action. A defendant’s federal defenses or counterclaims cannot create federal jurisdiction for removal.

  • Complete preemption vs. ordinary (conflict) preemption:

    Complete preemption is a rare doctrine where Congress’s statute (like ERISA § 502(a)) is so comprehensive that it converts certain state-law claims into federal claims for jurisdictional purposes. Ordinary preemption is a defense on the merits in state court and does not permit removal.

  • § 1447(d) bar and its exceptions:

    Ordinarily, remand orders cannot be appealed. But if removal was “pursuant to” § 1442 (federal officer) or § 1443 (civil-rights removal), an appellate court may review the entire remand order.

  • § 1443(1) civil-rights removal:

    A narrow path allowing removal only when (1) the defendant asserts rights stated in terms of racial equality and (2) state courts will inevitably deny those rights, typically due to a formal state-law barrier. General allegations of unfair treatment or bias, or rights not tied to racial equality (e.g., ADA), do not qualify.

  • Final orders and appealability:

    A show-cause order is not a final decision and is typically not immediately appealable. Final judgments or certain collateral orders are appealable; interlocutory orders generally are not.

  • Representation of entities:

    Corporations and LLCs must be represented by licensed counsel in federal court; they cannot appear pro se through officers or members.

  • Sealing judicial records:

    Courts may seal records to protect sensitive information. In the Third Circuit, Local Appellate Rule 106.1(a) provides standards; here, the appendix contained personal information about services provided to individuals.

Practical Takeaways for Litigants

  • To preserve appellate review of a remand order, a defendant can invoke § 1443 in the notice of removal, which—under BP—opens review of the entire remand order. But counsel must ensure § 1443 is plausibly applicable; frivolous invocation risks sanctions or injunctions.
  • Provider-insurer billing disputes are unlikely to be completely preempted by ERISA; absent a clear ERISA § 502(a) pathway (e.g., a valid assignment), courts will remand to state court.
  • ADA-based arguments do not satisfy § 1443(1). The statute is focused on rights of racial equality and formal state-law barriers to enforcement.
  • Serial or untimely removal attempts invite remedial measures, including possible filing injunctions after notice and opportunity to be heard.
  • Entity defendants must retain counsel for federal litigation; pro se representation by a non-lawyer officer/member is impermissible.

Conclusion

This decision offers a careful synthesis of removal doctrine and appellate jurisdiction:

  • Invoking § 1443 in a notice of removal allows appellate review of a remand order otherwise barred by § 1447(d), consistent with BP v. Baltimore. That procedural pathway is real, but it is not a substantive shortcut to federal court.
  • On the merits, the Court reaffirmed that federal jurisdiction was absent: no diversity, no federal question on the face of the complaint, no ERISA complete preemption, and no viable § 1443 basis because the ADA is not a racial-equality statute and there was no formal state-law bar to enforcing federal rights.
  • The show-cause order on a potential filing injunction was not appealable. The panel’s handling signals judicial intolerance for repetitive, jurisdictionally baseless removal tactics, while also protecting sensitive personal information through sealing.

In the broader legal context, the ruling clarifies the procedural contours of appellate review under § 1447(d) when § 1443 is invoked and reinforces the substantive narrowness of civil-rights removal. For practitioners, it underscores both the limits of ERISA complete preemption in provider-insurer payment disputes and the importance of aligning removal strategies with well-pleaded jurisdictional foundations.

Case Details

Year: 2025
Court: Court of Appeals for the Third Circuit

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