When a federal district court remands a case to the state court from which the case was removed, a party typically is not permitted to appeal the district court’s remand order. Recently, however, in Reifer v. Westport Insurance, No. 12-533 (3d Cir. April 29, 2014), the U.S. Court of Appeals for the Third Circuit established a new exception to the standard rule precluding the appealability of remand orders. The court also took the opportunity to clarify several open issues in the jurisprudence surrounding a district court’s decision to decline to exercise jurisdiction under the Declaratory Judgment Act. Practitioners within the Third Circuit would be well advised to become familiar with the contours of this sweeping decision and its illumination of this area of law.
In Reifer, the plaintiff filed an action against an insurance company in the Court of Common Pleas of Lackawanna County seeking a declaratory judgment under state law. The defendant removed the case to federal district court based on diversity jurisdiction. After significant litigation in federal court, the district court then sua sponte declined to exercise jurisdiction pursuant to the federal Declaratory Judgment Act, which confers discretionary jurisdiction upon federal courts to “declare the rights and other legal relations of any interest party seeking such declaration.” The district court remanded the case back to the Lackawanna County court, and the defendant appealed the remand order to the Third Circuit.
