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Carlsbad Technology, Inc. v. HIF Bio

May 4, 2009

CARLSBAD TECHNOLOGY, INC., PETITIONER
v.
HIF BIO, INC., ET AL.



On Writ Of Certiorari To The United States Court Of Appeals For The Federal Circuit Court Below: 508 F. 3d 659

SYLLABUS BY THE COURT

OCTOBER TERM, 2008

Argued February 24, 2009

Respondents filed a state-court suit alleging that petitioner had violated state and federal law in connection with a patent dispute. After removing the case to Federal District Court under 28 U. S. C. §1441(c), which allows removal if the case includes at least one claim over which the federal court has original jurisdiction, petitioner moved to dismiss the suit's only federal claim, which arose under the Racketeer Influenced and Corrupt Organizations Act (RICO). Agreeing that respondents had failed to state a RICO claim upon which relief could be granted, the District Court dismissed the claim; declined to exercise supplemental jurisdiction over the remaining state-law claims under §1367(c)(3), which allows such a course if the court "has dismissed all claims over which it has original jurisdiction"; and remanded the case to state court. The Federal Circuit dismissed petitioner's appeal, finding that the remand order could be colorably characterized as based on a "lack of subject matter jurisdiction" over the state-law claims, §1447(c), and was therefore "not reviewable on appeal," §1447(d).

Held: A district court's order remanding a case to state court after declining to exercise supplemental jurisdiction over state-law claims is not a remand for lack of subject-matter jurisdiction for which appellate review is barred by §§1447(c) and (d). With respect to supplemental jurisdiction, a federal court has subject-matter jurisdiction over specified state-law claims, see §§1367(a), (c), and its decision whether to exercise that jurisdiction after dismissing every claim over which it had original jurisdiction is purely discretionary, see, e.g., Osborn v. Haley, 549 U. S. 225, 245. It is undisputed that when this case was removed, the District Court had original jurisdiction over the federal RICO claim under §1331 and supplemental jurisdiction over the state-law claims, which were "so related to claims ... within such original jurisdiction that they form[ed] part of the same case or controversy," §1367(a). On dismissing the RICO claim, the court retained its statutory supplemental jurisdiction over the state-law claims. Its decision not to exercise that statutory authority was not based on a jurisdictional defect, but on its discretionary choice. See Chicago v. International College of Surgeons, The opinion of the court was delivered by: Justice Thomas

Opinion of the Court

556 U. S. ____ (2009)

In this case, we decide whether a federal court of appeals has jurisdiction to review a district court's order that remands a case to state court after declining to exercise supplemental jurisdiction over state-law claims under 28 U. S. C. §1367(c). The Court of Appeals for the Federal Circuit held that appellate review of such an order is barred by §1447(d) because it viewed the remand order in this case as resting on the District Court's lack of subject-matter jurisdiction over the state-law claims. We disagree and reverse the judgment of the Court of Appeals.

I.

In 2005, respondents filed a complaint against petitioner and others in California state court, alleging that petitioner had violated state and federal law in connection with a patent dispute. Petitioner removed the case to the United States District Court for the Central District of California pursuant to §1441(c), which allows removal of an "entire case" when it includes at least one claim over which the federal district court has original jurisdiction. Petitioner then filed a motion to dismiss the only federal claim in the lawsuit, which arose under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U. S. C. §§1961-1968, for failure to adequately allege a pattern of racketeering. HIF Bio, Inc. v. Yung Shin Pharmaceuticals Indus. Co., 508 F. 3d 659, 662 (CA Fed. 2007). The District Court agreed that respondents had failed to state a RICO claim upon which relief could be granted and dismissed the claim pursuant to Federal Rule of Civil Procedure 12(b)(6). The District Court also declined to exercise supplemental jurisdiction over the remaining state-law claims pursuant to 28 U. S. C. §1367(c)(3), which provides that a district court "may decline to exercise supplemental jurisdiction over a claim" if "the district court has dismissed all claims over which it has original jurisdiction." The District Court then remanded the case to state court as authorized by this Court's decision in Carnegie-Mellon Univ. v. Cohill, 484 U. S. 343 (1988).

Petitioner appealed to the United States Court of Appeals for the Federal Circuit, arguing that the District Court should have exercised supplemental jurisdiction over the state-law claims because they implicate federal patent-law rights. 508 F. 3d, at 663. The Court of Appeals dismissed the appeal, finding that the remand order could "be colorably characterized as a remand based on lack of subject matter jurisdiction" and, therefore, could not be reviewed under §§1447(c) and (d), which provide in part that remands for "lack of subject matter jurisdiction" are "not reviewable on appeal or otherwise." See id., at 667.

This Court has not yet decided whether a district court's order remanding a case to state court after declining to exercise supplemental jurisdiction is a remand for lack of subject-matter jurisdiction for which appellate review is barred by §§1447(c) and (d). See Powerex Corp. v. Reliant Energy Services, Inc., 551 U. S. 224, 235, n. 4 (2007) ("We have never passed on whether Cohill remands are subject-matter jurisdictional for purposes of ... §1447(c) and §1447(d)"). We granted certiorari to resolve this question, 555 U. S. ___ (2008), and now hold that such remand orders are not based on a lack of subject-matter jurisdiction. Accordingly, we reverse the judgment of the Court of Appeals and remand for further proceedings.

II.

Appellate review of remand orders is limited by 28 U. S. C. ...


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