963 F.3d 1030
11th Cir.2020Background:
- Philip and Jennie Bowling bought a house in 1986, later defaulted on the mortgage; the mortgage note was assigned to U.S. Bank and serviced over time by Litton and then Ocwen.
- Following foreclosure, WGB, LLC purchased the property at a 2012 foreclosure sale and sued the Bowlings in Alabama state court for ejectment; the Bowlings refused to vacate.
- In their state-court answer/counterclaim, the Bowlings added U.S. Bank, Litton, and Ocwen as third-party counterclaim defendants and asserted federal claims (TILA, RESPA, FCRA, FDCPA) against them—no federal claims were asserted against WGB.
- The third-party counterclaim defendants removed the entire action to federal court under 28 U.S.C. § 1441(c); the Bowlings moved to remand.
- The district court denied remand (severed and remanded WGB’s ejectment claim), later denied the Bowlings’ motion to strike a witness declaration, and granted summary judgment for the third-party counterclaim defendants on the federal claims.
- On appeal the Eleventh Circuit reversed: holding that after the Supreme Court’s decision in Home Depot U.S.A., Inc. v. Jackson, third-party counterclaim defendants cannot remove under § 1441(c); it vacated the district court’s subsequent rulings and instructed remand to state court.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether third-party counterclaim defendants may remove the civil action under 28 U.S.C. § 1441(c) | Bowlings: removal improper because only defendants to the original complaint may remove; the third-party claims should not convert the state action into removable federal jurisdiction | Third-Party Defs: removal proper under Carl Heck precedent — third-party claims that would be removable if sued alone permit removal of the whole case under § 1441(c) | Held: Home Depot abrogates Carl Heck; § 1441(c) must be read with § 1441(a), so only defendants to the original action may remove; third-party counterclaim defendants cannot remove under § 1441(c). |
| Whether Carl Heck controls removal by third-party counterclaim defendants under the current § 1441(c) | Bowlings: Carl Heck is inconsistent with Home Depot and the current statutory text; it should not control | Third-Party Defs: Carl Heck allows removal of third-party claims that are separate and independent; district court relied on Carl Heck | Held: Carl Heck is abrogated by Home Depot and the current text of § 1441(c); identical statutory language across (a) and (c) requires the same meaning of "defendant." |
| Whether the district court’s denial of remand and subsequent summary-judgment orders should stand | Bowlings: denial of remand deprived federal court of proper subject-matter jurisdiction; thus later rulings must be vacated | Third-Party Defs: removal was proper so district court had jurisdiction to resolve summary judgment | Held: Because removal was improper, the denial of remand was reversible; the summary-judgment and related evidentiary rulings were vacated and the case remanded to state court. |
Key Cases Cited
- Home Depot U.S.A., Inc. v. Jackson, 139 S. Ct. 1743 (2019) (third-party counterclaim defendants are not "defendants" who may remove under § 1441(a), controlling interpretation applied to § 1441(c))
- Carl Heck Engineers, Inc. v. Lafourche Parish Police Jury, 622 F.2d 133 (5th Cir. 1980) (prior Fifth Circuit rule permitting removal by third-party defendants under the earlier § 1441(c), abrogated here)
- Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (1941) (counterclaim defendant who was original plaintiff cannot remove; precedent relied on in Home Depot)
- Conn. State Dental Ass'n v. Anthem Health Plans, Inc., 591 F.3d 1337 (11th Cir. 2009) (removing party bears burden to establish federal subject-matter jurisdiction)
- Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir. 1981) (en banc) (Eleventh Circuit adopted pre‑October 1, 1981 Fifth Circuit precedent as binding)