Case: 22-30436 Document: 00516860884 Page: 1 Date Filed: 08/16/2023
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
____________ FILED
August 16, 2023
No. 22-30436 Lyle W. Cayce
____________ Clerk
Montie Spivey,
Plaintiff—Appellant,
versus
Chitimacha Tribe of Louisiana; Cypress Bayou Casino &
Hotel; April Wyatt; Jacob Darden; Toby Darden;
Jacqueline Junca,
Defendants—Appellees.
______________________________
Appeal from the United States District Court
for the Western District of Louisiana
USDC No. 6:22-CV-491
______________________________
Before Clement, Oldham, and Wilson, Circuit Judges.
Andrew S. Oldham, Circuit Judge:
The question presented in this appeal is whether 28 U.S.C. § 1447(c)
includes an unwritten futility exception. It does not.
I.
Appellant Montie Spivey is the former Chief Financial Officer of the
Cypress Bayou Casino. The Casino is owned by the Chitimacha Tribe of
Louisiana. The Chitimacha Tribe is one of four federally recognized Indian
tribes in Louisiana. The Chitimacha tribal council is the governing body over
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No. 22-30436
all the Tribe’s enterprises including the Casino. Chitimacha tribal law
prohibits a tribal council member from working in the Casino or receiving any
funds in the form of payments from the Casino.
According to the allegations in Spivey’s complaint, the Chitimacha
tribal council authorized Spivey (as CFO of the Casino) to make a $3,900
bonus payment to the then-newly elected chairman of the tribal council,
O’Neil Darden. Chairman Darden was an employee of the Casino until he
took his seat on the tribal council. Spivey made the bonus payment.
Spivey claims that several members of the tribal council turned around
and reported the bonus payment to federal and state law enforcement.
According to Spivey, this was all part of a conspiracy against him by these
councilmembers. And the conspiracy worked. A law enforcement
investigation into the bonus payment led to Spivey’s arrest and the
suspension of his gaming license. This effectively froze Spivey out of the
casino industry.
Spivey initially sued the Tribe, the Casino, and four tribal council
members in federal court under 42 U.S.C. §§ 1983 and 1985 and Louisiana
tort law. The magistrate judge recommended the dismissal of all Spivey’s
claims because tribal sovereign immunity barred them. The district court
adopted the magistrate judge’s recommendation and dismissed the case
without prejudice.
After the magistrate judge made her recommendation but before the
federal court entered the dismissal order, Spivey filed a materially identical
complaint in Louisiana state court. The defendants removed, and Spivey
moved to remand. The same magistrate judge recommended denying
Spivey’s remand motion. She concluded “sua sponte that these claims should
be dismissed with prejudice” because Spivey’s complaint was “essentially
identical to the previous complaint filed in federal court” and “[a]ll claims
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No. 22-30436
are barred by tribal immunity.” The district court, over Spivey’s objections,
again adopted the magistrate judge’s recommendations, denied Spivey’s
remand motion, and dismissed all Spivey’s claims with prejudice.
Spivey timely appealed the with-prejudice dismissal. We review de
novo the district court’s denial of Spivey’s remand motion. See Allen v.
Walmart Stores, LLC, 907 F.3d 170, 182 (5th Cir. 2018). We review for abuse
of discretion the district court’s choice to dismiss claims with prejudice
rather than without prejudice. See Club Retro, LLC v. Hilton,
568 F.3d 181,
215 n.34 (5th Cir. 2009). “A district court by definition abuses its discretion
when it makes an error of law.” Koon v. United States,
518 U.S. 81, 100 (1996).
II.
As separate, dependent sovereigns, Indian tribes enjoy sovereign
immunity “subject to plenary control by Congress.” Michigan v. Bay Mills
Indian Cmty., 572 U.S. 782, 788 (2014). And “[s]overeign immunity is
jurisdictional in nature.” FDIC v. Meyer,
510 U.S. 471, 475 (1994); accord
Carver v. Atwood,
18 F.4th 494, 497 (5th Cir. 2021). These two propositions
mean that—absent a waiver or congressional authorization—federal courts
lack subject matter jurisdiction over a suit against (1) a tribe, (2) an arm or
instrumentality of the tribe, or (3) tribal employees acting in their official
capacities. Bay Mills,
572 U.S. at 789; Lewis v. Clarke,
581 U.S. 155, 162
(2017). The parties don’t dispute that tribal sovereign immunity bars
Spivey’s claims against the Tribe, the Casino, and the tribal council members
in federal court.
The question is what a district court should do when it determines that
it lacks subject matter jurisdiction over a removed case. Here, the district
court committed two independent errors. First, it held that remanding the
case would be futile because the state courts (like the federal ones) would be
barred by the Tribe’s sovereign immunity from adjudicating the suit. Second,
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the district court dismissed Spivey’s claims with prejudice. We consider each
error in turn.
A.
First, when a district court determines that it lacks subject matter
jurisdiction over a removed case, it must remand. Congress expressly said so:
“If at any time before final judgment it appears that the district court lacks
subject matter jurisdiction [over a case removed from state court], the case
shall be remanded.” 28 U.S.C. § 1447(c) (emphasis added). It uses the
mandatory “shall” rather than the permissive “may.” See Antonin
Scalia & Bryan A. Garner, Reading Law: The
Interpretation of Legal Texts 112 (2012) (“Mandatory words
impose a duty; permissive words grant discretion.”);
id. at 114 (“[W]hen the
word shall can reasonably be read as mandatory, it ought to be so read.”).
Moreover, § 1447(c)’s text includes no exceptions. If Congress’s inclusion
of one exception precludes judicial imagination of others, see TRW Inc. v.
Andrews,
534 U.S. 19, 28 (2001), then Congress’s omission of any exceptions
emphatically forbids us from writing a futility exception into the statute.
Precedent supports what the plain text says. The Supreme Court has
noted that “the literal words of § 1447(c), [ ] on their face, give . . . no
discretion to dismiss rather than remand an action. The statute declares that,
where subject matter jurisdiction is lacking, the removed case shall be
remanded.” Int’l Primate Prot. League v. Adm’rs of Tulane Educ. Fund, 500
U.S. 72, 89 (1991) (quotation omitted). We’ve said the same thing on several
occasions. See, e.g., Hexamer v. Foreness,
981 F.2d 821, 822 (5th Cir. 1993)
(agreeing “that the district court does not have jurisdiction over the case”
but holding that “instead of dismissal,
28 U.S.C. § 1447(c) requires remand
to state court” (emphasis added)); Delgado v. Shell Oil Co.,
231 F.3d 165, 175
(5th Cir. 2000) (“If we conclude that the district court lacked subject matter
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jurisdiction, we have no choice but to remand the cases to state court.”
(emphasis added)).
True, neither Hexamer nor Delgado involved allegedly futile remands.
And when it comes to allegedly futile remands, there appears to be some
confusion over the Fifth Circuit rule. For example, we have invoked the
futility exception in unpublished cases. See, e.g., Underhill v. Porter, 1994 WL
499742, at *1 (5th Cir. 1994) (per curiam) (dismissing because a remand
would be futile); Boaz Legacy, LP v. Roberts,
628 F. App’x 318, 320 (5th Cir.
2016) (per curiam) (similar). And we have published cases that some—
including, most troublingly, the leading treatise on federal courts—cite as our
official recognition of the futility exception. See, e.g., Asarco, Inc. v. Glenara,
Ltd.,
912 F.2d 784, 787 (5th Cir. 1990); Nolan v. Boeing Co.,
919 F.2d 1058,
1070 (5th Cir. 1990); see also Randolph v. ING Life Ins. & Annuity Co.,
486 F.
Supp. 2d 1, 11 (D.D.C. 2007) (citing Asarco to say we’ve embraced the futility
exception to § 1447(c)); 14C Charles Alan Wright & Arthur R.
Miller, Federal Practice & Procedure § 3739.1 n.43 (4th ed.
2009) [Wright & Miller] (citing Nolan for the same proposition); In re
Halo Wireless, Inc.,
872 F. Supp. 2d 558, 563 (W.D. Tex. 2012) (also citing
Nolan). But our published cases do not even cite § 1447(c), much less discuss
it, much less hold that it contains an unwritten futility exception. See Asarco,
912 F.2d at 787; Nolan,
919 F.2d at 1070.
Given that our published decisions have never squarely confronted
today’s question, our rule of orderliness imposes no obstacle to following the
plain text of § 1447(c). We therefore hold, in accordance with the statute’s
plain text and the great weight of authority from across the country, * that
_____________________
*
See Hudson Sav. Bank v. Austin, 479 F.3d 102, 108–09 (1st Cir. 2007); Bromwell
v. Mich. Mut. Ins. Co.,
115 F.3d 208, 213 (3d Cir. 1997); Roach v. W. Va. Reg’l Jail & Corr.
Facility Auth.,
74 F.3d 46, 48–49 (4th Cir. 1996); Coyne v. Am. Tobacco Co.,
183 F.3d 488,
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§ 1447(c) means what it says, admits of no exceptions, and requires remand
even when the district court thinks it futile.
B.
The district court’s second error is that it dismissed Spivey’s
complaint with prejudice.
The judicial power vested in us by Article III is “the power to render
final judgments.” Plaut v. Spendthrift Farm, Inc., 514 U.S. 211, 231 (1995);
see, e.g., United States v. O’Grady,
89 U.S. (22 Wall.) 641, 647–48 (1874)
(“Judicial jurisdiction implies the power to hear and determine a cause” and
render “judgment in a court of competent jurisdiction.”). When a court has
jurisdiction, its judgment power includes the power to reach the merits of a
party’s claim, to adjudicate those merits, and to render a judgment that
carries res judicata effect—including, as relevant here, a dismissal with
prejudice. See also, e.g., 9 Wright & Miller, supra, § 2373 (noting a
court can issue with-prejudice dismissal only when it has jurisdiction and
with-prejudice dismissal carries res judicata effect).
Contrariwise, when a district court lacks jurisdiction, it is
emphatically powerless to reach the merits. “Without jurisdiction the court
cannot proceed at all in any cause.” Ex parte McCardle, 74 U.S. (7 Wall.) 506,
_____________________
496 (6th Cir. 1999); Smith v. Wis. Dep’t of Agric., Trade & Consumer Prot., 23 F.3d 1134,
1139–40 (7th Cir. 1994); Fent v. Okla. Water Res. Bd.,
235 F.3d 553, 557 (10th Cir. 2000);
Univ. of S. Ala. v. Am. Tobacco Co.,
168 F.3d 405, 410 (11th Cir. 1999); see also Randolph,
486 F. Supp. 2d at 10–11 (rejecting the futility exception and collecting cases); 14C
Wright & Miller, supra, § 3739.1 (collecting cases). Only the Ninth Circuit has gone
the other way, and even then, it has been inconsistent. Compare, e.g., Glob. Rescue Jets, LLC
v. Kaiser Found. Health Plan, Inc.,
30 F.4th 905, 920 n.6 (9th Cir. 2022) (applying futility
exception), with Bruns v. Nat’l Credit Union Admin.,
122 F.3d 1251, 1257–58 (9th Cir. 1997)
(rejecting it).
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514 (1868) (emphasis added). That’s why the Supreme Court has
admonished the federal courts:
The statutory and (especially) constitutional elements of
jurisdiction are an essential ingredient of separation and
equilibration of powers, restraining the courts from acting at
certain times, and even restraining them from acting
permanently regarding certain subjects. For a court to [reach
the merits] when it has no jurisdiction to do so is, by very
definition, for a court to act ultra vires.
Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 101–02 (1998) (quotation
omitted).
And it’s precisely because the jurisdiction-less court cannot reach the
merits that it also cannot issue with-prejudice dismissals that would carry res
judicata effect. So we’ve repeatedly insisted that “a jurisdictional dismissal
must be without prejudice to refiling in a forum of competent jurisdiction.”
Carver, 18 F.4th at 498 (emphasis added). “This rule applies with equal force
to sovereign-immunity dismissals.” Ibid.; see also, e.g., Block v. Tex. Bd. of L.
Exam’rs,
952 F.3d 613, 620 (5th Cir. 2020) (“Claims barred by sovereign
immunity are dismissed without prejudice, not with prejudice.” (emphasis
added and quotation omitted)); United States v. $4,480,466.16 in Funds
Seized from Bank of Am. Acct. Ending in 2653,
942 F.3d 655, 666 (5th Cir.
2019) (same); In re Great Lakes Dredge & Dock Co. LLC,
624 F.3d 201, 209
(5th Cir. 2010) (“[I]f the district court had held that it lacked subject matter
jurisdiction, it should have entered dismissal without prejudice . . . .”);
Mitchell v. Bailey,
982 F.3d 937, 944 (5th Cir. 2020) (“[A] lack of subject
matter jurisdiction is not a determination of the merits and does not prevent
the plaintiff from pursuing a claim in a court that does have proper
jurisdiction. Accordingly, such a dismissal should be made without
prejudice.” (quotation omitted)); Cox, Cox, Filo, Camel & Wilson, LLC v.
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Sasol N. Am., Inc., 544 F. App’x 455, 456 (5th Cir. 2013) (per curiam) (“A
dismissal with prejudice is a final judgment on the merits. Accordingly, to
dismiss with prejudice under Rule 12(b)(1) is to disclaim jurisdiction and then
exercise it.” (quotation omitted)).
The Tribe nonetheless contends that the “best-case exception”
allows jurisdictional dismissals with prejudice. The best-case exception
allows a district court sua sponte to dismiss a complaint on the merits and with
prejudice where the plaintiff (1) “repeatedly declared the adequacy of that
complaint in . . . response to [the] defendant’s motion to dismiss” and
(2) “refused to file a supplemental complaint even in the face of a motion to
dismiss.” Brown v. Taylor, 829 F.3d 365, 370 (5th Cir. 2016); see also Carroll
v. Fort James Corp.,
470 F.3d 1171, 1177 (5th Cir. 2006). But it’s precisely
because a best-case dismissal is with prejudice that a district court can never
render one without first establishing its jurisdiction. The limitations on
district courts in dismissing cases on the merits after establishing jurisdiction
(as in Brown and Carroll) say nothing about the limitations on district courts
that do not have jurisdiction to reach the merits (as here).
For these reasons, the district court’s with-prejudice dismissal is
REVERSED, and the case is REMANDED with instructions to remand it
to state court.
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