May 04, 2009

Supreme Court Decides Carlsbad Technology, Inc. v. HIF Bio, Inc.

On May 4, the Supreme Court decided Carlsbad Technology, Inc. v. HIF Bio, Inc., No. 07-1437.

After a district court dismissed the only federal claims in a case, it faced the question what to do with the state-law claims that remained. The district court declined to exercise supplemental jurisdiction over those claims under 28 U.S.C. § 1367(c), and remanded the claims back to state court. The defendant appealed to the U.S. Court of Appeals for the Federal Circuit, arguing that the district court should have exercised supplemental jurisdiction because the state-law claims implicated federal patent-law rights. The Federal Circuit held that the district court's order could "be colorably characterized as a remand based on lack of subject matter jurisdiction" and therefore could not be reviewed under 28 U.S.C. § 1447(c) & (d), which, as interpreted by the Court in Thermtron Products, Inc. v. Hermansdorfer, 423 U.S. 336 (1976), bar appellate review of remand orders that are based on jurisdictional grounds.

The Supreme Court reversed the Federal Circuit, holding that the district court's remand order was not based on subject-matter jurisdiction, as nobody disputed that the district court had jurisdiction over the federal claim and supplemental jurisdiction over the state-law claims. The district court simply declined to exercise that supplemental jurisdiction, which it was allowed to do under 28 U.S.C. § 1367. Thus, the remand was not barred by 28 U.S.C. § 1447 and Thermtron.

A significant issue raised by the majority and concurring opinion is whether Thermtron will survive. Justice Thomas's opinion for the Court made it very clear that neither party had asked the Court to overrule Thermtron, but in a way that hinted that the Court might take up that issue if asked. Justice Stevens's concurring opinion strongly implied that Thermtron was wrongly decided, but concurred in the decision on the ground that Thermtron is stare decisis and hailed the majority's decision as "a welcome departure from its sometimes singled-minded focus on literal [statutory] text." Justice Scalia's concurring opinion, meanwhile, openly called Thermtron "ripe for reconsideration" and remarked that if Thermtron and the rules it has spawned "represent[t] a welcome departure from the literal text, the world is mad."

Justice Thomas delivered the opinion for a unanimous Court. Justices Stevens filed a concurring opinion. Justice Scalia filed a concurring opinion. Justice Breyer filed a concurring opinion, in which Justice Souter joined.

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