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April 21, 2016

Per the 5th Circuit - a motion to remand is a dispositive motion

On April 19, 2016, the 5th Circuit ruled on an issue of first impression in that Circuit, holding that a motion to remand is a dispositive motion and thus a magistrate’s order is only a recommendation—the District Court must review it de novo. Davidson v. Georgia-Pacific, LLC, Case No. 14-30925. This case is an asbestos matter with a long and complicated history that is not material to the legal issue discussed in this article, which, in essence, concerns the Constitutional limits of a non-Article III judge’s authority.

The issue of whether remand is dispositive or not arises because the Federal Magistrates Act, 28 U.S.C. § 636(b)(1)(A) does not list remand as one of motions in which the Magistrate may only issue a recommendation, yet every court of appeals that has considered the question has held a remand motion should be treated as dispositive and thus a Magistrate can only make a recommendation, not an order. A number of district courts in the 5th Circuit, however, have held it is a non-dispositive motion. Orders by a Magistrate Judge that are considered as non-dispositive are reviewable by the district court only for being “clearly erroneous or contrary to law” rather than de novo. The 5th Circuit agreed with the other circuits that allowing Magistrates to enter remand orders at a minimum approaches the constitutional line because it is dispositive insofar as proceedings in federal court are concerned and would be the functional equivalent of an order of dismissal. The court cited a number of other reasons noted by its sister circuits then joined them in holding a Magistrate should only enter a remand recommendation to a district court, subject to de novo review.

The district court had disagreed with the magistrate who had issued an order remanding the case. The district court held certain of the defendants had been improperly joined, thus it denied the remand and ultimately it dismissed the claims of plaintiffs on the merits. Plaintiffs appealed the denial of the remand motion. The remainder of the 5th Circuit’s opinion is an interesting discussion of the now-typical analysis of the 5th Circuit’s en banc Smallwood standard: “the test for fraudulent joinder is whether the defendant has demonstrated that there is no possibility of recovery by the plaintiff against an in-state defendant,” (385 F. 3d 568, 573) is not the same as the summary judgment standard in which an absence in plaintiff’s proof alone can be fatal. Anyone dealing with removal and remand issues must be versed in the Smallwood case and it progeny and this newest case is helpful to such an understanding of how it all works.