Federal Defenses and “Expatriation” Cannot Support Removal of State Foreclosure/Ejectment; Municipalities Count for Diversity

Introduction

City of Philadelphia v. Kevin Hand is a non-precedential Third Circuit disposition addressing an increasingly common procedural tactic: a pro se defendant’s attempt to remove routine state-law property actions—here, a tax foreclosure and a subsequent ejectment—into federal court by invoking federal civil-rights theories, asserted federal defenses, and claimed “expatriation” to manufacture diversity.

The underlying disputes arose after the City of Philadelphia foreclosed on Hand’s property for unpaid taxes, the property was sold at a sheriff’s sale to KRR Capital LLC, and KRR later filed an ejectment action. Hand removed both the foreclosure and ejectment matters to the Eastern District of Pennsylvania, citing 28 U.S.C. § 1441 (general removal) and 28 U.S.C. § 1442(a)(1) (federal officer removal), contending that federal questions existed (including via 42 U.S.C. § 1983) and that diversity existed due to his asserted “lawful expatriation.”

The district court remanded sua sponte for lack of subject-matter jurisdiction under 28 U.S.C. § 1447(c) and denied reconsideration. Hand appealed. The Third Circuit affirmed by summary action.

Summary of the Opinion

  • The Third Circuit held the district court correctly remanded because the state-court complaints (foreclosure and ejectment) presented no federal question on their face.
  • Hand’s anticipated federal defenses, counterclaims, and crossclaims (including § 1983 theories) could not create federal-question jurisdiction.
  • Diversity jurisdiction failed because the City of Philadelphia is a Pennsylvania citizen for diversity purposes, defeating complete diversity with Hand (also treated as Pennsylvania).
  • Although the district court did not address § 1442(a)(1), the Third Circuit explained removal was not available under the federal officer removal statute on these facts.
  • The court also explained it had appellate jurisdiction to review the remand order because Hand cited § 1442 in his notice of removal, even if the citation was meritless.

Analysis

Precedents Cited

1) Judicial notice of state-court dockets

The court relied on Orabi v. Att'y Gen., 738 F.3d 535 (3d Cir. 2014) and In re Congoleum Corp., 426 F.3d 675 (3d Cir. 2005) to take judicial notice of the state-court dockets (foreclosure/ejectment), even though those dockets were not part of the district-court record. This matters because removal disputes often turn on the nature of the state pleadings and their procedural posture (e.g., default judgment in ejectment).

2) Appellate review of remand orders when § 1442 is cited

Ordinarily, remand orders are unreviewable on appeal under 28 U.S.C. § 1447(d). The panel applied BP P.L.C. v. Mayor & City Council of Balt., 593 U.S. 230, 141 S. Ct. 1532 (2021), holding that once a defendant cites § 1442 as a basis for removal, appellate jurisdiction attaches to review “the whole of” the remand order. Practically, this is a procedural gateway: even a thin or incorrect invocation of § 1442 can open the door to appellate review, though it does not improve the merits of removal.

The court also cited Agostini v. Piper Aircraft Corp., 729 F.3d 350 (3d Cir. 2013) for the related principle that appellate jurisdiction over an order denying reconsideration of a remand typically rises or falls with jurisdiction to review the remand itself.

3) The well-pleaded complaint rule and limits on “defense-based” federal jurisdiction

The core jurisdictional reasoning tracked the well-pleaded complaint rule:

  • Caterpillar, Inc. v. Williams, 482 U.S. 386 (1987): federal-question jurisdiction exists only when a federal question appears on the face of the plaintiff’s properly pleaded complaint.
  • Louisville & Nashville R. Co. v. Mottley, 211 U.S. 149 (1908): a federal issue anticipated as a defense is insufficient.
  • Vaden v. Discover Bank, 556 U.S. 49 (2009): federal jurisdiction cannot be predicated on an actual or anticipated defense or counterclaim.
  • Holmes Grp., Inc. v. Vornado Air Circulation Sys., Inc., 535 U.S. 826 (2002): counterclaims cannot serve as the basis for “arising under” jurisdiction in removal analysis.

These cases collectively foreclosed Hand’s theory that his intended § 1983 defenses/counterclaims could transform state foreclosure/ejectment complaints into removable federal cases.

4) Municipal citizenship for diversity purposes

Hand argued the City is not a “citizen” for diversity. The panel relied on Moor v. Alameda County, 411 U.S. 693 (1973), which explains that a political subdivision is a citizen of the state for diversity purposes unless it is merely an “arm or alter ego” of the state. Applying Moor, the court treated the City of Philadelphia as a Pennsylvania citizen, defeating complete diversity because Hand was also effectively treated as Pennsylvania.

5) Standards of review and summary affirmance

The court stated the governing review standards and summary action authority:

  • Maglioli v. All. HC Holdings LLC, 16 F.4th 393 (3d Cir. 2021) (de novo review of a remand for lack of subject-matter jurisdiction).
  • United States v. Dupree, 617 F.3d 724 (3d Cir. 2010) and Max's Seafood Café ex rel. Lou-Ann, Inc. v. Quinteros, 176 F.3d 669 (3d Cir. 1999) (abuse-of-discretion review for reconsideration).
  • Murray v. Bledsoe, 650 F.3d 246 (3d Cir. 2011) (summary affirmance when no substantial question is presented).

Legal Reasoning

  1. No federal question on the face of the complaints: The “face” of the state-court pleadings mattered. Foreclosure and ejectment, as pleaded, were routine Pennsylvania-law causes of action. Because the plaintiffs’ claims did not arise under federal law, 28 U.S.C. § 1331 was not satisfied.
  2. Federal defenses and § 1983 counter-theories do not create removal jurisdiction: The panel treated Hand’s § 1983 and other federal theories as defensive or responsive, not elements of the plaintiffs’ claims. Under Caterpillar, Mottley, Vaden, and Holmes Grp., that cannot supply federal-question jurisdiction.
  3. Diversity failed because the City counts and destroys complete diversity: Even assuming the amount in controversy and KRR’s citizenship were favorable to Hand, the City’s presence was jurisdictionally fatal. Under Moor, the City is a Pennsylvania citizen; with Hand also treated as Pennsylvania, complete diversity was absent.
  4. § 1442(a)(1) did not apply on these facts: The panel noted that § 1442(a)(1) protects the United States, its officers, and persons acting under them for actions connected to federal office. Nothing about Hand’s posture as a private property owner defending state foreclosure/ejectment, nor his “federal land patent authority” speculation, fit the statutory conditions. Thus, even if considered, § 1442 could not support removal.
  5. Reconsideration was properly denied: Once remand issued for lack of jurisdiction, the district court lacked a continuing federal case in which to provide the relief Hand sought, and the panel found no abuse of discretion.

Impact

Although designated “NOT PRECEDENTIAL,” the decision is instructive in several practical ways:

  • Removal limits in property disputes: Defendants in state foreclosure/ejectment actions cannot create federal jurisdiction by repackaging grievances as § 1983 defenses or counterclaims. The plaintiff’s complaint remains the jurisdictional touchstone.
  • Municipal entities often defeat diversity: When a municipality is a plaintiff (e.g., tax foreclosure), it will typically be treated as a citizen of the state, frequently preventing complete diversity.
  • Procedural nuance under § 1447(d) after BP: A cited § 1442 ground can make the entire remand order reviewable on appeal, even if the ground is weak; however, this case illustrates that expanded appellate review does not translate into expanded removal power.
  • Channeling of claims into separate federal civil-rights suits: The opinion’s footnote referencing Hand’s later-filed federal complaint underscores a typical division: removal fails, but independent federal civil-rights claims (if viable) may proceed separately—subject to doctrines like claim/issue preclusion, Rooker-Feldman constraints, and abstention (not addressed here).

Complex Concepts Simplified

  • Removal vs. remand: “Removal” moves a case from state to federal court. “Remand” sends it back because federal jurisdiction is missing or removal was defective.
  • Well-pleaded complaint rule: Federal-question jurisdiction depends on what the plaintiff’s complaint claims—not on what the defendant plans to argue.
  • Complete diversity: Diversity jurisdiction usually requires every plaintiff to be from different states than every defendant. One shared state citizenship defeats it.
  • Municipality as a “citizen”: Cities and counties are generally citizens of their state for diversity purposes (unless they are merely an arm of the state itself).
  • Federal officer removal (§ 1442): A specialized removal route designed to protect federal officers (and those acting under them) from being sued in state court for federal-duty conduct.
  • Non-precedential opinion: The decision resolves the parties’ dispute but, under the court’s internal procedures, does not bind future panels as controlling precedent.

Conclusion

The Third Circuit affirmed a straightforward jurisdictional principle in the removal context: state-law foreclosure and ejectment actions do not become removable merely because the defendant asserts federal defenses, § 1983 theories, or counterclaims. It also reaffirmed that municipalities like the City of Philadelphia are citizens of their state for diversity purposes, often defeating diversity removal when they are parties. Finally, the case highlights a post-BP P.L.C. procedural reality: citing § 1442 can open appellate review of a remand order, but it cannot cure the absence of federal jurisdiction where the statute does not apply.