W.R. Huff Asset Management Co. v. Kohlberg, Kravis, Roberts & Co.

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
FILED
No. 07-13114 U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
APRIL 29, 2009
D. C. Docket No. 07-00687 CV-VEH-2 THOMAS K. KAHN
CLERK

W R HUFF ASSET MANAGEMENT CO., L.L.C.,
as investment advisor and as attorney-in-fact
on behalf of certain Beneficial Owners of
10 ½% Senior Subordinated Notes,

Plaintiff-Appellee,

versus

KOHLBERG, KRAVIS, ROBERTS & CO., L.P.,
A Delaware limited partnership,
KKR ASSOCIATES LP,
a limited partnership,
KKR PARTNERS II LP,
CRIMSON ASSOCIATES LP,
RONALD G. BRUNO, an individual,
ROBINSON HUMPHREY COMPANY, L.L.C.,
A Delaware corporation,
MURRAY DEVINE & CO.,
a corporation,

Defendants-Appellants,

WILLIAM J. BOLTON, an individual,
et al.,

Defendants.
 ________________________

Appeal from the United States District Court
for the Northern District of Alabama
_________________________

Before MARCUS, ANDERSON and CUDAHY,* Circuit Judges.

ANDERSON, Circuit Judge:

Defendant-Appellants Kohlberg Kravis Roberts & Co. (“KKR”), Robinson

Humphrey Co. (“Robinson Humphrey”) and Murray Devine & Company, Inc.

(“Murray Devine”) (collectively “Appellants”) appeal the district court’s order

granting Plaintiff-Appellee W.R. Huff Asset Management Co. (“Huff”) leave to file

the Fourth Amended Complaint. For the reasons set forth below, we conclude that

we lack appellate jurisdiction. Accordingly, we dismiss the appeal.

I. PROCEDURAL POSTURE

Huff is an investment management company. In 1995, Huff invested

approximately $290,000,000 on behalf of its clients in subordinated notes

(“Notes”) issued in connection with the leveraged recapitalization of an Alabama

grocery chain, Bruno’s, Inc. (“Bruno’s”). KKR engineered Bruno’s

recapitalization. Robinson Humphrey issued a fairness opinion related to the

*
Honorable Richard D. Cudahy, United States Circuit Judge for the Seventh
Circuit, sitting by designation.

2
recapitalization and Murray Devine issued a solvency opinion in connection with

the recapitalization. Roughly two-and-a-half years later, Bruno’s filed for

bankruptcy in Delaware. On August 6, 1999, Huff filed suit in Alabama state court

for fraudulent transfer, breach of fiduciary duty, aiding and abetting, and

conspiracy. KKR removed the case to the Bankruptcy Court for the Northern

District of Alabama. In October of 1999, Bruno’s bankruptcy examiner released a

report, prepared for KKR in May of 1995, which cited numerous, material

accounting flaws in financial statements approved by Bruno’s accountants, Arthur

Andersen. As a result, on May 25, 2000, Huff filed a second amended complaint

(“Second Amended Complaint”) asserting state law claims based on material

misrepresentations and omissions in Bruno’s public filings. Huff brought the

action as an investment advisor and attorney-in-fact on behalf of certain beneficial

owners of the Notes. Huff’s federal securities fraud claims were already barred by

a three year statute of repose. See 15 U.S.C. § 78r(c).

Thereafter, the Alabama bankruptcy court returned the action to Alabama

state court. Appellants removed the case to federal court on the grounds that

Huff’s state law claims were precluded1 by the Securities Litigation Uniform

1
“The preclusion provision is often called a preemption provision; [SLUSA],
however, does not itself displace state law with federal law but makes some state-law claims
nonactionable through the class action device in federal as well as state court. See Merrill Lynch,

3
Standards Act of 1998 (“SLUSA”).2 Two weeks later, in an explicit attempt to

avoid SLUSA preclusion, Huff filed a third amended complaint (“Third Amended

Complaint”) asserting only claims for misrepresentations made after Bruno’s stock

was de-listed from the NASDAQ. Huff also dropped defendants Murray Devine

and Robinson Humphrey because they were involved only in misrepresentations

made prior to de-listing. The district court did not rule on the Third Amended

Complaint for three years and three months.

In the interim, in light of developments in a related proceeding, Huff moved

for leave to file a fourth amended complaint (“Fourth Amended Complaint”).

Again, Huff acknowledged that the Fourth Amended Complaint was an attempt to

avoid SLUSA preclusion. SLUSA provides for the removal of “covered class

actions.” 15 U.S.C. § 77p(c). The term “covered class action” includes “any single

lawsuit” involving “a covered security” in which “one or more named parties seek

to recover damages on a representative basis on behalf of themselves and other

Pierce, Fenner & Smith Inc. v. Dabit, 547 U.S. 71, 87, 126 S. Ct. 1503, 1514, 164 L. Ed. 2d 179
(2006) (‘[SLUSA] does not deny any individual plaintiff, or indeed any group of fewer than 50
plaintiffs, the right to enforce any state-law cause of action that may exist’).” Kircher v. Putnam
Funds Trust, 547 U.S. 633, 637, 126 S. Ct. 2145, 2151, 165 L. Ed. 2d 92 (2006).
2
SLUSA states: “No covered class action based upon the statutory or common law
of any State or subdivision thereof may be maintained in any State or Federal court by any
private party alleging– (1) an untrue statement or omission of a material fact in connection with
the purchase or sale of a covered security; or (2) that the defendant used or employed any
manipulative or deceptive device or contrivance in connection with the purchase or sale of a
covered security.” 15 U.S.C. § 77p(b).

4
unnamed parties similarly situated.” Id. §§ 77p(c), (f). However, SLUSA only

governs actions filed by fifty or more individually named plaintiffs. 15 U.S.C. §

77p(f)(2)(A)(i)(I). Thus, Huff sought to substitute as plaintiffs forty-six individual

Note holders. The Fourth Amended Complaint also re-listed Murray Devine and

Robinson Humphrey as defendants.

On February 7, 2006, the district court denied leave to file the Fourth

Amended Complaint and dismissed the case with prejudice. The district court

stated that the proposed amendment: (1) violated a prior judicial order; (2) was

untimely; (3) was unduly burdensome on KKR; and (4) was a waste of judicial

resources. On appeal, a prior panel of this Court vacated and remanded. The panel

rejected the reasoning of the district court but explicitly reserved judgment on

whether there were alternate, legitimate reasons to deny leave to amend. On June

22, 2007, after remand, the district court issued an order granting leave to file the

Fourth Amended Complaint under the liberal amendment provision in Federal Rule

of Civil Procedure 15(a). Immediately thereafter, the district court observed that

SLUSA was the only asserted basis for federal jurisdiction, and SLUSA being

inapplicable to the Fourth Amended Complaint, the district court remanded to state

court for lack of subject matter jurisdiction. Appellants filed the instant appeal.

In this appeal, Appellants challenge the district court’s ruling granting leave

5
to file the Fourth Amended Complaint. The amendment permitted a substitution of

plaintiffs, eliminating Huff in his representative capacity and substituting therefor

forty-six individual plaintiffs. The amendment also re-listed Murray Devine and

Robinson Humphrey as defendants, thus abandoning the attempt in the Third

Amended Complaint to drop these two defendants. Appellants raise several issues,

including, inter alia: (1) whether Huff is the sole real party in interest; (2) whether

Huff is an indispensable party; (3) whether the district court erred in allowing the

addition of two defendants after Huff deliberately dropped them in the proposed

Third Amended Complaint; (4) whether the statute of limitations prevents the re-

listing of these defendants; and (5) whether the district court erred in allowing the

amendment because it constituted a circumvention of SLUSA. The foregoing will

be referred to in this opinion as the “merits issues.” However, we must first

determine whether we have appellate jurisdiction to entertain these merits issues.

II. APPELLATE JURISDICTION

“An order remanding a case to the State court from which it was removed is

not reviewable on appeal or otherwise.” 28 U.S.C. § 1447(d).3 “The policy of

3
In Thermtron Products, Inc. v. Hermansdorfer, the Supreme Court held that §
1447(d) applies only to remand orders made on grounds authorized in 28 U.S.C. § 1447(c). 423
U.S. 336, 346, 96 S. Ct. 584, 590, 46 L. Ed. 2d 542 (1976), abrogated on other grounds by
Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 714-15, 116 S. Ct. 1712, 1720, 135 L. Ed. 2d 1
(1996). Two grounds for removal are listed in § 1447(c): (1) lack of subject matter jurisdiction;
and (2) a defect in the removal process. See Snapper, Inc. v. Redan, 171 F.3d 1249, 1253-54

6
Congress opposes interruption of the litigation of the merits of a removed cause by

prolonged litigation of questions of jurisdiction of the district court to which the

cause is removed.” Kircher v. Putnam Funds Trust, 547 U.S. 633, 640, 126 S. Ct.

2145, 2152, 165 L. Ed. 2d 92 (2006). “For over a century now, statutes have

accordingly limited the power of federal appellate courts to review orders

remanding cases removed by defendants from state to federal court.” Id. The

Supreme Court has “relentlessly repeated that any remand order issued on the

grounds specified in § 1447(c) is immunized from all forms of appellate review,

whether or not that order might be deemed erroneous by an appellate court.”

Kircher, 547 U.S. at 640, 126 S. Ct. at 2153.

Notwithstanding the force of the § 1447(d) bar, the case law has staked out

limited exceptions. Thus, we may review orders “that lead to, but are separate

from, orders of remand and have a conclusive effect upon the ensuing state court

action.” Aquamar, S.A. v. Del Monte Fresh Produce N.A., Inc., 179 F.3d 1279,

1286 (11th Cir. 1999). This doctrine flows from the Supreme Court’s decision in

City of Waco v. United States Fidelity & Guaranty Co., 293 U.S. 140, 55 S. Ct. 6,

(11th Cir. 1999). After Huff substituted forty-six individual Note holders as plaintiffs, the
district court concluded there was no basis under SLUSA for the preclusion of Huff’s state law
claims. Accordingly, the court remanded for lack of subject matter jurisdiction. As a result, §
1447(d) bars appellate review of the remand order in this case.

7
79 L. Ed. 244 (1934). In Waco, the defendant impleaded a third-party and removed

the case to district court on the basis of diversity jurisdiction. The district court

concluded that the third-party was an unnecessary and improper party and

dismissed the cross-complaint. Waco, 293 U.S. at 142, 55 S. Ct. at 7. After the

dismissal, there was no diversity between the remaining parties and the district

court remanded the case to state court for lack of jurisdiction. Id. The defendant

appealed the dismissal of the cross-complaint. The Supreme Court recognized that

no appeal lies from an order of remand. Waco, 293 U.S. at 143, 55 S. Ct. at 7.

However, noting that “the cross-action will be no part of the case which is

remanded to the state court,” the Court concluded that “[i]ndisputably [the order of

dismissal] is the subject of an appeal; and, if not reversed or set aside, is conclusive

upon the petitioner.”4 Id.

In this case, we can assume arguendo (but need not decide) that this appeal

would satisfy Waco, because our case law also requires that the order appealed

from be final under 28 U.S.C. § 1291, and because we hold that the district court’s

order in the instant case is not final. See Flohr v. Mackovjak, 84 F.3d 386, 390

4
Before the adoption of the Federal Rules of Civil Procedure in 1938, “where an
order adjudicated a separate and distinct claim . . . the judgment was final and could ‘be reviewed
without awaiting the determination of the separate matter affecting only the parties to such
particular controversy.’” 10 James Wm. Moore et al., Moore’s Federal Practice § 54App.101 (3d
ed. 2009) (quoting United States v. River Rouge Co., 269 U.S. 411, 414, 46 S. Ct. 144, 145, 70
L. Ed. 339 (1926)); see also Powers v. Southland Corp., 4 F.3d 223, 235 n.12 (3d Cir. 1993).

8
(11th Cir. 1996) (addressing a § 1447(d) issue, and after holding that Waco was

satisfied, holding: “We may thus take jurisdiction over Mackovjak’s appeal,

provided that the denial of his motion to substitute is a ‘final order’ within the

terms of 28 U.S.C. § 1291.”);5 see also Aquamar, 179 F.3d at 1287 (holding that

appealability of the district court’s order that led to, but was separate from the

remand order had to satisfy both the Waco doctrine and the finality rule (collateral

order doctrine)); accord Price v. J & H Marsh & McLennan, Inc., 493 F.3d 55, 63

(2d Cir. 2007); Powers v. Southland Corp., 4 F.3d 223, 230 (3d Cir. 1993).

“Section 1291 of the Judicial code generally vests courts of appeals with

jurisdiction over appeals from ‘final decisions’ of the district courts.” Cunningham

v. Hamilton County, 527 U.S. 199, 203 119 S. Ct. 1915, 1919, 144 L. Ed. 2d 184

(1999). The general rule is that a district court order is considered final and

appealable only if it ends the litigation on the merits and leaves nothing for the

court to do but execute the judgment. Catlin v. United States, 324 U.S. 229, 65 S.

Ct. 631 (1945). Obviously, the instant district court order does not end the

litigation on the merits. However, the Supreme Court has “interpreted the term

5
Flohr went on to hold that the appeal satisfied the finality rule because the
proposed substitution of the United States for the federal employee would render the employee
immune, and an order denying immunity qualifies as a collateral order satisfying the finality rule.
84 F.3d at 390.

9
‘final decision’ in § 1291 to permit jurisdiction over appeals from a small category

of orders that do not terminate the litigation. That small category includes only

decisions [1] that are conclusive, [2] that resolve important questions separate from

the merits, and [3] that are effectively unreviewable on appeal from the final

judgment in the underlying action.” 527 U.S. at 204, 119 S. Ct. at 1920 (internal

citations and quotations omitted). This three prong test is referred to as the

collateral order doctrine. The rule of finality is motivated in large part by

considerations similar to those supporting the bar in § 1447(d) to review of remand

orders.

[T]he rule is in accordance with the sensible policy of avoiding the
obstruction to just claims that would come from permitting the
harassment and cost of a succession of separate appeals from the
various rulings to which a litigation may give
rise, from its initiation to entry
of judgment. The rule also
serves the important purpose of
promoting efficient judicial
administration.

Cunningham, 527 U.S. at 203-04, 119 S. Ct. at 1919-20 (internal quotations

omitted).

Thus, we examine whether the district court order for which Appellants seek

review satisfies the collateral order doctrine. Our analysis leads to the conclusion

that the district court’s order is effectively reviewable on appeal from a final
10
judgment in state court. Accordingly, the district court’s order does not satisfy the

third prong of the collateral order doctrine and we have no jurisdiction to review it.

We begin by noting that an order permitting the substitution of plaintiffs is

ordinarily interlocutory and unappealable. See Delta Coal Program v. Libman, 743

F.2d 852, 853 (11th Cir. 1984) (deciding an “interlocutory appeal to challenge the

district court’s . . . order allowing thirty-five individual plaintiffs to be substituted

for a limited partnership”); see also Porter v. Maule, 160 F.2d 1, 3 (5th Cir. 1947)

(concluding that an order substituting plaintiffs was “interlocutory and

unappealable”). Similarly, an order permitting or denying joinder of parties is

typically interlocutory. See United States v. Taylor, 632 F.2d 530, 531 (5th Cir.

Unit A 1980)6 (citing Fowler v. Merry, 468 F.2d 242, 243 (10th Cir. 1972)

(“Although an order refusing or permitting the filing of an amended complaint

joining an additional party is a discretionary action by the trial court and subject to

appellate review as part of an ultimate final judgment, . . . the order itself is not

appealable as such in isolation” )).7 The novel question we must address is whether

6
In Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir. 1981), this Court adopted
as binding precedent decisions of the Fifth Circuit, including Unit A panel decisions of that
circuit, handed down prior to October 1, 1981. See United States v. Todd, 108 F.3d 1329, 1333
(11th Cir. 1997). Accordingly, both Porter and Taylor are binding precedent.
7
“Few problems are encountered in determining the appealability of orders dealing
with party joinder. Ordinarily orders granting or denying joinder or substitution are not final.”

11
the district court’s order is effectively unreviewable in light of the remand.

First, we observe that the Supreme Court has strongly endorsed the

following principle, enunciated in the Restatement (Second) of Judgments § 28(1):

Although an issue is actually litigated and determined by a valid and
final judgment, and the determination is essential to the judgment,
relitigation of the issue in a subsequent action between the parties is
not precluded8 in the following circumstances:

(1) The party against whom preclusion is sought could not, as a matter of
law, have obtained review of the judgment in the initial action.

See Kircher, 547 U.S. at 647, 126 S. Ct. at 2156-57 .9 Here, Appellants cannot obtain

review in federal court. Section 1447(d) prevents this Court from reviewing the

remand order itself. Section 1291 prevents this Court from reviewing the district

court’s interlocutory order granting leave to amend. This Court’s prior decision in

W.R. Huff Asset Management Co. v. Kohlberg, Kravis, Roberts, 209 Fed. App’x.

931, 934 n.5 (11th Cir. 2006), did not address any of the merits issues currently

15B Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction 2d § 3914.18.
8
For purposes of clarity, we will refer to this type of preclusion as collateral
estoppel in order to avoid confusion with the preclusion of certain state law claims under
SLUSA.
9
Alabama state courts have also relied on the Restatement (Second) of Judgments
to establish principles of collateral estoppel. See, e.g., Lloyd Noland Found., Inc. v. HealthSouth
Corp., 979 So.2d 784, 795-96 (Ala. 2007) (relying on Restatement (Second) of Judgments §§ 26,
28(3)); Davis v. Hanson Aggregates Se., Inc., 952 So.2d 330, 339 (Ala. 2006) (relying on
Restatement (Second) of Judgments § 27).

12
before us and we do not reach the merits of those claims today.10 Accordingly, we

discern no basis for the application of collateral estoppel in state court, which

therefore cannot be deemed to make the order effectively unreviewable on appeal

from final judgment in state court.

Second, in light of the lack of collateral estoppel, we join the decisions of

several of our sister circuits in finding no reason why the state appellate courts

cannot review the propriety vel non of the district court’s order on appeal from a

final judgment.11 In Powers, the plaintiff filed an action in state court and the

defendant removed to federal court on the basis of diversity jurisdiction. 4 F.3d at

225. The plaintiff then sought leave to amend the complaint to add an additional

defendant under a relation back theory. The district court granted the motion. Id.

The amendment destroyed the court’s diversity jurisdiction and the case was

remanded to state court. Id. at 226. The Third Circuit stated:

10
During the prior appeal, this Court considered the district court’s denial of leave
to amend on the grounds that the amendment: (1) violated a prior judicial order; (2) was
untimely; (3) was unduly burdensome on KKR; and (4) was a waste of judicial resources. We
read our prior opinion as rejecting these, and only these, grounds for denying leave to amend.
W.R. Huff Asset Mgmt. Co. v. Kohlberg, Kravis, Roberts, 209 Fed. App’x. 931, 934 n.5 (11th
Cir. 2006).
11
Because we are addressing the question whether the district court’s merits rulings
are effectively reviewable on appeal from the final judgment, we need not (and we do not)
express an opinion on the ability of the state trial court to consider the merits issues decided by
the federal district court. But see Kircher, 547 U.S. at 646-47, 126 S. Ct. at 2156-57.

13
 [B]ecause we are aware of no doctrine that would bar the state
[appellate] court from reviewing the federal district court’s
interlocutory decision to allow the relation back amendment, and
because we do not believe that there is a right at stake the value of
which effectively will be lost if the order is not immediately
appealable, we conclude that the third prong of the collateral order
doctrine has not been met.

Id. at 237.

In Price v. J & H Marsh & McLennan, Inc., the Second Circuit reached a

similar conclusion. 493 F.3d 55 (2d Cir. 2007). The plaintiff filed an action in

state court and the defendant removed on the basis of diversity of citizenship. Id. at

57. Several years after the initial removal, the plaintiff filed a motion for leave to

amend the complaint to add an additional plaintiff. Id. The district court granted

the motion, concluded that joinder destroyed diversity, and remanded to state court

for lack of subject matter jurisdiction. Id. at 58. Defendants appealed. The Second

Circuit dismissed the appeal for lack of appellate jurisdiction. Id. at 63. The court

concluded that the order allowing joinder was not final under the collateral order

doctrine, stating “we see no reason why the state appellate court cannot review the

joinder decision on an appeal from a final judgment. . . . Nor can we discern any

reason to excuse Marsh from the usual requirement that it await appellate review of

a final judgment to appeal the joinder ruling.” Id.

We see no reason, on the facts before us, why Appellants cannot raise in the
14
state appellate court all the merits issues they seek to present to us in this appeal.

State courts “possess the authority, absent a provision for exclusive federal

jurisdiction, to render binding judicial decisions that rest on their own

interpretations of federal law.” ASARCO Inc. v. Kadish, 490 U.S. 605, 617, 109 S.

Ct. 2037, 2045, 104 L. Ed. 2d 696 (1989). With respect to the merits issue –

whether allowance of the amendment constituted a circumvention of SLUSA – the

Supreme Court’s Kircher opinion indicates that state courts are entirely competent

to interpret and apply SLUSA. 547 U.S. at 646-48, 126 S. Ct. at 2156-57. With

respect to the other merits issues – at least some of which turned in the district

court on an application of the Federal Rules of Civil Procedure – we note that the

collateral order doctrine asks only whether an order is “effectively unreviewable.”

The Federal Rules of Civil Procedure and the Alabama Rules of Civil Procedure

are “virtually identical.” Ex parte Maple Chase Co., 840 So. 2d 147, 150 (Ala.

2002).12 In fact, “a presumption arises [in Alabama state court] that cases

construing the federal rules are authority for construction of the Alabama rules.”

Id.

12
Under the present circumstances, both Ala. R. Civ. P. 15(a) and Fed. R. Civ. P.
15(a) state that amendment should be allowed “when justice so requires.” Rules 15(c), 17(a),
and 19 are virtually identical under both the Alabama and Federal Rules of Civil Procedure.

15
 Appellants assert that while the remand itself is not reviewable it nonetheless

provides a “final judgment” sufficient to render prior orders of the district court

reviewable. In Quackenbush v. Allstate Insurance Co., 517 U.S. 706, 715, 116 S.

Ct. 1712, 1720, 135 L. Ed. 2d 1 (1996), the Supreme Court held that an order

remanding on grounds of Burford abstention is appealable under § 1291. “When a

district court remands a case to a state court, the district court disassociates itself

from the case entirely, retaining nothing of the matter on the federal court’s

docket.” Quackenbush, 516 U.S. at 714, 116 S. Ct. at 1719; see also Fla. Polk

County v. Prison Health Serv., Inc., 170 F.3d 1081, 1083 (11th Cir. 1999) (“The

district court’s remand orders are final in the sense that they terminated the

controversy in federal court”). Assuming that the remand order itself is final,

Appellants’ argument is nonetheless unavailing. The only issue on which the

remand order is “final” is the remand itself. As noted above, the merits issues can

be reviewed in state court on appeal from final judgment. The policy of Congress

as expressed in § 1447(d), and explicitly endorsed and “relentlessly” enforced by

the Supreme Court, is that litigation proceed to the merits under these

circumstances. Kircher, 547 U.S. at 640, 126 S. Ct. at 2153. Therefore, in light of

the fact that review of the district court’s order granting leave to amend is available

in state court, the order of remand cannot transform an otherwise interlocutory
16
order into an appealable final order. See Doleac ex rel. Doleac v. Michalson, 264

F.3d 470, 491 (5th Cir. 2001) (“Because we do not think Congress intended the bar

in § 1447(d) to turn an otherwise non-collateral, unreviewable interlocutory order

into a collateral, appealable order, we conclude that this amendment does not meet

the requirements of the third prong of the collateral order exception”).13

Appellants also point to the line of cases deriving from the Supreme Court’s

decision in Waco, which hold that the dismissal of a defendant and all the claims

against it are appealable because they are no part of the case remanded to state

court and if not set aside are conclusive upon the petitioner. See, e.g., Armstrong

v. Ala. Power Co., 667 F.2d 1385, 1387 (11th Cir. 1982). However, these cases are

readily distinguishable. “A partial remand of a removed action constitutes, in

effect, a severance of the part that is remanded from that which is retained; and

orders entered as to the part of the action retained should be subject to the usual

principles of appellate review.” 16-107 Moore’s Federal Practice: Civil §

13
Both Quackenbush and Florida Polk County are distinguishable in that in each
case the remand order was not based on lack of subject matter jurisdiction. In Quackenbush, the
district court’s “abstention-based remand order [did] not fall into either category of remand order
described in § 1447(c),” 517 U.S. at 712, 116 S. Ct. at 1718, and thus § 1447(d) was
inapplicable. In Florida Polk County, the remand order was based on a forum selection clause,
and did not implicate § 1447(c) or (d). 170 F.3d at 1083. Thus, § 1447(c) and (d) were simply
inapplicable, and the policy of Congress expressed through § 1447(d) was not operative in those
cases.

17
107App.113; see also Powers, 4 F.3d at 236-37. Here, no severable part of the

action has been dismissed. All claims against the defendants were remanded to

state court. The substituted plaintiffs and all the defendants are before the state

court. The state courts have the competence and authority to determine if the

Fourth Amended Complaint was properly allowed.14

At oral argument, Appellants expressed concern over a possible ping-pong

of the case between federal and state court. If the state court reverses the

substitution order, Appellants claim they will again remove the action to federal

court under 15 U.S.C. § 77p(c). If the federal court persists in permitting

substitution, the case will again be remanded to state court for lack of subject

matter jurisdiction. Appellants assert that such a vicious circle of litigation makes

the substitution order effectively unreviewable. We disagree,

for nothing in [SLUSA] gives the federal courts exclusive jurisdiction
over preclusion decisions. A covered action is removable if it is
precluded, and a defendant can enlist the Federal Judiciary to decide
preclusion, but a defendant can elect to leave a case where the plaintiff
filed it and trust the state court (an equally competent body, see
Missouri Pacific R. Co. v. Fitzgerald, 160 U.S. 556, 583, 16 S. Ct.
389, 40 L.Ed. 536 (1896)) to make the preclusion determination.

14
In contrast, in Armstrong, the state court on remand lacked the competence to
review the district court’s dismissal of the United States and all the claims against it. This was so
because such review would involve the interpretation of the Suits in Admiralty Act, but that Act
provided for exclusive jurisdiction in the federal courts.

18
Kircher, 547 U.S. at 646, 126 S. Ct. at 2156. Appellants have received an

opportunity to litigate in a federal forum. The policy of Congress is that Appellants

now utilize the “equally competent” state courts to resolve the claims against them.

Id. If the state courts determine that substitution was improper, Appellants may ask

the state court to dismiss the action under SLUSA.

III. CONCLUSION

In sum, we conclude that the remand order based on lack of subject matter

jurisdiction is unreviewable under 28 U.S.C. § 1447(d). The district court’s order

granting leave to amend to substitute as plaintiff’s forty-six individual Note holders

and re-list Robinson Humphrey and Murray Devine as defendants is an

unappealable interlocutory order. Appellants may seek review of all the merits

issues before us in the state courts. Accordingly, the appeal is dismissed for lack of

appellate jurisdiction.

DISMISSED.15

15
We also have no jurisdiction to rule on Appellants’ Motion for Judicial Notice
and Appellants’ Motion to Supplement the Record on Appeal.

19