Academy of Country Music v. Continental Casualty Co., No. 20-55589 (9th Cir. 2021)
Annotate this Case
In 2020, the Academy filed suit in state court alleging that Continental breached an insurance policy by denying coverage for a claim asserted against it by a former executive. After removal to the district court, the district court issued a sua sponte order remanding the case to state court.
The Ninth Circuit concluded that the district court's transmittal of its sua sponte order remanding this civil action to a state court based solely on the notice of removal does not deprive federal courts of jurisdiction. The panel also concluded that despite the district court's characterization of its order, 28 U.S.C. 1447(d) does not bar the panel's review because jurisdiction could not be determined when the district court issued its sua sponte order. The panel explained that section 1447(d) bars review only of a remand order that is based on a colorable section 1447(c) ground. In this case, the district court's requirement that a notice of removal prove subject matter jurisdiction is contrary to Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 89 (2014), and accordingly, is not a "colorable" ground under section 1447(c). Accordingly, the panel vacated the district court's remand order.
Court Description: Jurisdiction / Remand. The panel vacated the district court’s order sua sponte remanding this civil action to state court, based on the panel’s determination that the transmittal of the remand order did not deprive federal courts of jurisdiction and that review was not barred by 28 U.S.C. § 1447(d). The panel held that 28 U.S.C. § 1447(d) barred review only of a remand order that was based on a colorable § 1447(c) ground. The panel held further that it could look behind the district court’s characterization of its order to determine whether its assertion of § 1447(c) was colorable. The panel held that the district court’s remand order was not based on a colorable § 1447(c) ground. Specifically, the panel held that the district court erred as a matter of law in requiring that the notice of removal “prove” subject matter jurisdiction. By acting sua sponte, and thereby refusing to allow the appellant to offer proof to substantiate its allegations in the notice of removal that the amount in controversy exceeded $75,000, the district court denied the appellant a fair opportunity to submit proof. The panel further held that because the district court erred as a matter of law in requiring that the notice of removal “prove” the amount in controversy and then failed to follow Supreme Court and Ninth Circuit precedent by refusing to allow the appellant to supplement its notice of removal, the district ACAD. OF COUNTRY MUSIC V. CONTINENTAL CAS. CO. 3 court’s order was not “colorable” or “arguable,” and could be reviewed. The panel concluded that the transmittal of the remand order to the state court did not deprive this court of jurisdiction. The panel further held that the district court’s assertion that a notice of removal must prove subject matter jurisdiction was contrary to Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 89 (2014), and Arias v. Residence Inn by Marriott, 936 F.3d 920 (9th Cir. 2019), and thus was not a “colorable” basis for remand. The panel directed the district court to enter an order recalling the remand, and to notify the state court that the district court had resumed jurisdiction over the action.
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.