Brendan Holbein, Plaintiff - Appellant v. TAW Enterprises, Inc., doing business as Baxter Chrysler Dodge Jeep Ram of Bellevue, Defendants - Appellees
No. 18-2892
United States Court of Appeals For the Eighth Circuit
December 30, 2020
Submitted: October 19, 2020
GRUENDER, Circuit Judge.
Before SMITH, Chief Judge, LOKEN, COLLOTON, GRUENDER, BENTON, SHEPHERD, KELLY, ERICKSON, GRASZ, STRAS, and KOBES, Circuit Judges, En Banc.
Brendan Holbein sued his former employer, TAW Enterprises, Inc., in Nebraska state court. TAW Enterprises removed the action to federal court and moved to dismiss for failure to state a claim. See generally
In the fall of 2015, Holbein accepted a position as general manager of TAW Enterprises’ automobile dealership in Bellevue, Nebraska. In June 2016, he learned that customers’ confidential financial information in the possession of TAW Enterprises’ finance director had been stolen. The customers were not informed of this theft. Instead, the finance director “devised a clever method of re-obtaining the financial information” from these customers without informing them that their financial information had been compromised. Holbein subsequently informed TAW Enterprises of this issue as well as other issues regarding TAW Enterprises’ or its employees’ noncompliance with certain provisions of the Gramm-Leach-Bliley Act (the “Act“),
In 2018, Holbein (then a citizen of Arizona) sued TAW Enterprises (a Nebraska corporation with its principal place of business there) in Nebraska state court. He asserted two causes of action. The first, labeled as arising under the Act, included two separate “theor[ies]” of recovery, one for “retaliation in contravention of public policy” and the other for “constructive discharge.” The second was for breach of contract. Holbein alleged more than $2.5 million in damages.
TAW Enterprises removed the case to federal court, asserting federal-question jurisdiction given Holbein‘s reference to the Act in his complaint.
Holbein appealed, challenging only the district court‘s dismissal of his first cause of action. In response to a question at oral argument before the panel, Holbein for the first time indicated he did not believe the district court had subject-matter jurisdiction. Subsequently, the panel held the district court lacked subject-matter jurisdiction, vacated the district court‘s dismissal, and ordered the case remanded to state court. Holbein, 948 F.3d 931. The panel found Holbein‘s first cause of action did not present a federal question, see id. at 936, leaving diversity jurisdiction under
TAW Enterprises petitioned for rehearing en banc, asking us to reconsider whether violation of the forum-defendant rule is a jurisdictional defect in removal. After receiving Holbein‘s response to this petition, we ordered rehearing en banc.2
Congress has granted defendants sued in state court the right to remove the suit to federal district court if the civil action is one “of which the district courts . . . have original jurisdiction.”
Holbein did not challenge removal until oral argument before the panel. That delay did not matter because, in our circuit, removal in violation of the forum-defendant rule results in “an absence of subject-matter jurisdiction.” Hurt, 963 F.2d at 1146 n.1; see also Horton, 431 F.3d at 605 (reaffirming Hurt). Nine other circuits have addressed whether the forum-defendant rule is jurisdictional in nature. All of them have held that violation of the rule is a nonjurisdictional, and thus waivable, removal defect. Morris v. Nuzzo, 718 F.3d 660, 665 (7th Cir. 2013); Lively v. Wild Oats Mkts., Inc., 456 F.3d 933, 939 (9th Cir. 2006); Handelsman v. Bedford Vill. Assocs. Ltd. P‘ship, 213 F.3d 48, 50 n.2 (2d Cir. 2000); Pacheco de Perez v. AT&T Co., 139 F.3d 1368, 1372 n.4 (11th Cir. 1998); Korea Exch. Bank, N.Y. Branch v. Trackwise Sales Corp., 66 F.3d 46, 50 (3d Cir. 1995); In re Shell Oil Co., 932 F.2d 1518, 1521-23 (5th Cir. 1991); Moores v. Greenberg, 834 F.2d 1105, 1106 n.1 (1st Cir. 1987); Plastic Moldings Corp. v. Park Sherman Co., 606 F.2d 117, 119 n.1 (6th Cir. 1979); Am. Oil Co. v. McMullin, 433 F.2d 1091, 1093-95 (10th Cir. 1970).
We now eliminate this lopsided circuit split and conclude that violation of the forum-defendant rule is a nonjurisdictional defect in removal that is waived if not raised in “[a] motion to remand . . . made within 30 days after the filing of the notice of removal.”
A.
Whether the forum-defendant rule is jurisdictional ultimately turns on “whether Congress mandated” it be treated as such. See Henderson ex rel. Henderson v. Shinseki, 562 U.S. 428, 435 (2011). The question before us, then, is principally one of statutory interpretation. Accordingly, as in any statutory-interpretation case, “we start . . . with the statutory text.” Liscomb v. Boyce, 954 F.3d 1151, 1154 (8th Cir. 2020); accord Henderson, 562 U.S. at 438.
In § 1441(a), Congress gave defendants the right to remove from state to federal court “any civil action brought in a State court of which the district courts of the United States have original jurisdiction,” “[e]xcept as otherwise expressly provided by Act of Congress.” Congress provided otherwise in the forum-defendant rule by prohibiting removal of a “civil action otherwise removable solely on the basis of the jurisdiction under [§] 1332(a) . . . if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.”
Unlike other statutory provisions that unequivocally govern district-court jurisdiction, e.g.,
Thus, § 1441(a) on its face is not a jurisdiction-granting provision, and § 1441(b)(2) on its face is not a jurisdiction-stripping provision. Instead, § 1441(a) gives certain state-court defendants access to a federal forum that already possesses subject-matter jurisdiction over the type of action being removed. The forum-defendant rule, in turn, narrows the class of defendants who are entitled to exercise this right. Simply put, the rule strips forum defendants of the statutory right to remove; it does not strip district courts of jurisdiction they otherwise have to adjudicate the sorts of actions forum defendants might attempt to remove.
It is true that courts sometimes have referred to § 1441(a) as “grant[ing] removal jurisdiction.” Watson v. Cartee, 817 F.3d 299, 303 (6th Cir. 2016); see also Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation Tr. for S. Cal., 463 U.S. 1, 7 (1983) (mentioning “the removal jurisdiction conferred by
“Removal jurisdiction,” however, is something of a misnomer.3 “[R]emoval is not a kind of jurisdiction,” Wright, supra, § 3721, and “[t]he removal statute does not in itself create jurisdiction,” Danca v. Private Health Care Sys., Inc., 185 F.3d 1, 4 (1st Cir. 1999). Removal is a “statutory right,” Lewis v. Rego Co., 757 F.2d 66, 68 (3d Cir. 1985); see also Little York Gold Washing & Water Co. v. Keyes, 96 U.S. 199, 201 (1877), or “privilege,” Cont‘l Cablevision of St. Paul, Inc. v. U.S. Postal Serv., 945 F.2d 1434, 1435 (8th Cir. 1991); see also Chi., Rock Island & Pac. R.R. Co. v.
Stude, 346 U.S. 574, 580 (1954). It gives certain defendants a choice of forum between two courts, each of which already has subject-matter jurisdiction over the type of action. It would conflate categories to treat a district court‘s separately granted subject-matter jurisdiction as dependent on a defendant‘s right to remove. See Grupo Dataflux v. Atlas Glob. Grp., L.P., 541 U.S. 567, 574 (2004) (recognizing that unauthorized removal under § 1441(a) results in a “statutory defect” rather than a “jurisdictional defect“).
Similarly, the forum-defendant rule is a “privilege,” albeit one “granted to the plaintiff.” See Strother v. Union Pac. R.R. Co., 220 F. 731, 733 (W.D. Mo. 1915) (referring to the prohibition on removal now codified at
The location of § 1441 within the Judicial Code,
B.
The statutory history of what is now § 1447(c) provides further support for the nonjurisdictional view. See United States v. Wong Kim Ark, 169 U.S. 649, 653-54 (1898) (“In construing any act of legislation . . . regard is to be had . . . to the history of the law as previously existing, and in the light of which the new act must be read and interpreted.“); BNSF Ry. Co. v. Loos, 586 U.S. ---, 139 S. Ct. 893, 906 (2019) (Gorsuch, J., dissenting) (recognizing that “statutory history,” unlike “unenacted legislative history,” is “the sort of
The relevant predecessor to § 1447(c) first appeared in the 1948 recodification of the Judicial Code.
The first ground, for “improvident” removals, applied to removals in which “one of the statutory, non-jurisdictional requirements for removal” was not satisfied. In re Merrimack Mut. Fire Ins., 587 F.2d 642, 647 n.8 (5th Cir. 1978). One such statutory, nonjurisdictional requirement was the forum-defendant rule. E.g., In re Estate of Sellers, 657 F. Supp. 168, 171 (W.D. Wash. 1987); Schwarz v. Hosp. Corp. of Am., 636 F. Supp. 276, 278-79 (S.D. Fla. 1986); Unanue v. Caribbean Canneries, Inc., 323 F. Supp. 63, 65-66 (D. Del. 1971).
Congress amended § 1447(c) in 1988.
Considering the effect of this amendment, courts concluded that “the ‘removed improvidently’ language of pre-1988 section 1447(c) was replaced, without intent to change the meaning, with the ‘defect in removal procedure‘” language. See In re Medscope Marine Ltd., 972 F.2d 107, 109-10 (5th Cir. 1992). Thus, consistently with the pre-1988 view that violating the forum-defendant rule rendered removal improvident, courts post-1988 generally viewed such violations as a nonjurisdictional “defect in removal procedure.” E.g., Korea Exch. Bank, N.Y. Branch, 66 F.3d at 50; see also Baris v. Sulpicio Lines, Inc., 932 F.2d 1540, 1544 (5th Cir. 1991) (“As used in [§ 1447(c)], a ‘procedural’ defect is any defect that does not go to the question of whether the case originally could have been brought in federal district court . . . .“).
The “removal procedure” language, however, proved troublesome. Snapper, 171 F.3d at 1257-58. Some removals, after all, violated “substantive” removal provisions like the forum-defendant rule rather than “clearly . . . procedural” removal provisions like those found in § 1446. See In re Shell Oil Co., 932 F.2d at 1522. This linguistic discordance, along with § 1447(c)‘s dichotomy between “procedural” and “jurisdictional” defects, led us in 1992 to place the “substantive” forum-defendant rule on the jurisdictional side of the divide. See Hurt, 963 F.2d at 1146 n.1 (distinguishing a prior-panel precedent on the basis that
In 1996, Congress again amended § 1447(c).
In sum, the statutory history of § 1447(c) further demonstrates that Congress did not rank the forum-defendant rule as jurisdictional.
C.
Longstanding judicial understanding of the nature of the forum-defendant rule also is a relevant consideration in determining whether Congress intended for it to carry jurisdictional consequences. See Henderson, 562 U.S. at 436 (“When a long line of this Court‘s decisions left undisturbed by Congress has treated a . . . requirement as jurisdictional, we will presume that Congress intended to follow that course.” (internal quotation marks and citations omitted)). If we were confronted with, say, “a century‘s worth of precedent and practice in American courts” treating the rule as jurisdictional, that jurisprudential tradition could be dispositive. See Bowles v. Russell, 551 U.S. 205, 209 n.2 (2007) (maintaining the view that the statutory timeframe in which a notice of appeal must be filed is jurisdictional given longstanding precedent and practice to that effect). However, while initially the rule was viewed as jurisdictional, since 1900 the nonjurisdictional view of the forum-defendant rule (and similar provisions governing removal) has predominated in American courts. Thus, the jurisprudential tradition relevant here bolsters the foregoing textual and contextual considerations.
Congress first enacted the forum-defendant rule in 1887.
Less than a decade later, the Court abandoned this jurisdictional view of the substantive prerequisites to removal. See Baggs v. Martin, 179 U.S. 206 (1900). In Baggs, the plaintiffs brought a state-law claim in Colorado state court against a federal-court-appointed receiver, in his capacity as receiver, for a Colorado railroad. Id. at 207. The receiver removed to federal court, asserting the right to remove due to the presence of a federal question (namely, his status as a federal-court-appointed receiver) and claiming the state action was “ancillary” to the federal action in which he had been appointed receiver. Id. The case proceeded to trial, and the plaintiffs prevailed. Id. at 207-08. The receiver appealed, and we certified two questions to the Supreme Court: (1) whether the receiver had the right to remove the case; and (2) whether, even if not, the federal court “acquire[d] lawful jurisdiction” by virtue of the uncontested removal. Id. at 208. The Court expressed doubt that removal was permitted, but it declined to answer that question.4 Id. at 209. Instead, it answered only the second question, finding that the federal court “plainly had jurisdiction” given the nature of the action (it was ancillary to the federal action) and holding that the (presumably) unauthorized removal did not vitiate or preclude the exercise of that subject-matter jurisdiction. Id.
The upshot of Baggs was that even “wholly unauthorized” removal did not pose a jurisdictional problem so long as the action could have been filed initially in federal court. See B.C. Moon, The Removal of Causes from the Courts of the Several States to the Circuit Courts of the United States 637 (1901). That is, if the federal court to which the case was removed had subject-matter jurisdiction over “a case of that character,” it “could retain jurisdiction” even if there was “no fundamental right to remove.” Phila. & Bos. Face Brick Co. v. Warford, 123 F. 843, 843-44 (C.C.D. Mass. 1902); see also Toledo, St. Louis & W. R.R. Co. v. Perenchio, 205 F. 472, 475 (7th Cir. 1913) (reading Baggs to mean that unauthorized removal did not amount to a jurisdictional defect “inasmuch as the subject-matter was within the lawful authority of the federal court to hear and decide“).
The Sixth Circuit then applied this logic to violations of the forum-defendant rule. See Handley-Mack Co. v. Godchaux Sugar Co., 2 F.2d 435 (6th Cir. 1924). In Handley-Mack, the court recognized that Martin “implied” that the rule was jurisdictional, but it found “no holding of the Supreme Court” to this effect. Id. at 437 (observing that Martin may have been an instance in which “the term ‘jurisdiction’ was used less strictly than it latterly has been“); see also Bush v. United States, 939 F.3d 839, 843 (7th Cir. 2019) (“The Justices have acknowledged that in earlier years they used the word ‘jurisdiction’ loosely . . . .“). It then looked to Baggs to reason that jurisdiction could “be retained where, as here, although the case was not technically removable under the statute, the court yet had jurisdiction over the subject-matter of the controversy, and the parties had fully consented to the federal jurisdiction and acted thereunder.” Handley-Mack, 2 F.2d at 437. A few years later, the Second Circuit
The Supreme Court lent credence to this view when it cited Baggs alongside Bailey, Handley-Mack, and Perenchio as support for the proposition that the absence of a “right to removal” does not pose a jurisdictional problem so long as the district court “would have had original jurisdiction” over the removed action. Am. Fire & Cas. Co. v. Finn, 341 U.S. 6, 16 & n.14 (1951); see also Woodward v. D.H. Overmyer Co., 428 F.2d 880, 883 (2d Cir. 1970) (noting that the Finn Court cited Bailey and Handley-Mack “with what could be regarded as approval and certainly was not disapproval“). By this point, the conventional wisdom was that Baggs had “displace[d]” Martin, meaning unauthorized removal was to be treated as a “[m]ere irregularity” that did not have jurisdictional consequences provided the action could have been brought originally in federal district court. See Finn, 341 U.S. at 19 & n.1 (Douglas, J., dissenting). The Court later made clear it agreed with this view when, in Grubbs v. General Electric Credit Corp., it relied on Baggs (among other authorities) to conclude that, when an action is removed without statutory authorization to remove but removal goes unchallenged before the district court, the issue on appeal “is not whether the case was properly removed, but whether the federal district court would have had original jurisdiction of the case had it been filed in that court.” 405 U.S. 699, 702 (1972).
As noted above, nine of our sister circuits have followed this logic and concluded that the forum-defendant rule is nonjurisdictional. Accord Noethe v. Mann, 27 F.2d 451, 452 (D. Minn. 1928). Additionally, outside of Hurt and Horton, we have done the same for comparable prohibitions on removal. For example, in 1910, Congress prohibited removal of Federal Employers’ Liability Act suits brought in state court.
In short, over “a century‘s worth of precedent and practice in American courts,” see Bowles, 551 U.S. at 209 n.2, including our own (Hurt and Horton aside), supports the nonjurisdictional view of the forum-defendant rule. This means that text, context, and precedent all militate in favor of that view. Accordingly, we hold that violating the forum-defendant rule results in a nonjurisdictional defect in removal, and we overrule Hurt and Horton to the extent they held to the contrary.
D.
Holbein raises a few points as to why we should stand by Hurt‘s and Horton‘s jurisdictional characterization of the forum-defendant rule. Alternatively, he argues that even if we overrule Hurt and Horton on
Holbein devotes the bulk of his response to TAW Enterprises’ petition for rehearing en banc defending Hurt and Horton as correctly reasoned and decided. For the foregoing reasons, however, we disagree.
Holbein then suggests we are bound by Martin to treat the forum-defendant rule as jurisdictional because ”Baggs is distinguishable.” This is incorrect. As Judge Hand recognized nearly a century ago, insofar as Martin stands for the proposition that the absence of a right to remove leaves the district court without subject-matter jurisdiction over the removed action, Baggs overruled it by treating the absence of a right to remove as a nonjurisdictional defect. See Bailey, 47 F.2d at 155.
And again, the Supreme Court has reinforced Baggs in the 120 years since it was decided. E.g., Grubbs, 405 U.S. at 702 (holding that unauthorized removal does not pose a jurisdictional problem so long as the district court would have had original jurisdiction over the action had it been filed there initially); see also Caterpillar Inc. v. Lewis, 519 U.S. 61, 70-78 (1996) (concluding that unauthorized removal does not require vacatur and remand to state court, presuming the district court had subject-matter jurisdiction to enter final judgment, even when the objection to removal is timely raised and properly preserved). Whatever lingering doubt remains about the status of Martin despite these decisions is dispelled by the fact the Court itself apparently has concluded Martin has no precedential force. See Lincoln Prop. Co. v. Roche, 546 U.S. 81, 90 n.6 (2005) (noting that the Court has not addressed whether the forum-defendant rule is jurisdictional while suggesting it agrees with the nonjurisdictional view); cf. Arbaugh v. Y & H Corp., 546 U.S. 500, 511 (2006) (instructing that “drive-by jurisdictional rulings,” such as where a court dismisses a matter “for lack of jurisdiction” without explaining that disposition, “should be accorded no precedential effect on the question whether the federal court had authority to adjudicate the claim in suit” (internal quotation marks omitted)).
Holbein also asserts that this case is “ill-suited for the exercise of federal jurisdiction because it revolves entirely on the interpretation of Nebraska case law.” Regardless, with rare exception, federal courts “have ‘no more right to decline the exercise of jurisdiction which is given, than to usurp that which is not given.‘” Sprint Commc‘ns, Inc. v. Jacobs, 571 U.S. 69, 77 (2013) (quoting Cohens v. Virginia, 19 U.S. (6 Wheat.) 264, 404 (1821)). Congress gave federal courts jurisdiction over this sort of action even though it involves only a state-law issue.
Alternatively, Holbein argues that, even if violation of the forum-defendant rule is a waivable, nonjurisdictional defect, waiver occurs only after “the parties litigated through a trial.” For this point, he relies on the Grubbs Court‘s observation that objections to removal based on nonjurisdictional defects are waived when, after removal, the case is “tried on the merits
Holbein reads too much into the Grubbs Court‘s use of the word “tried.” See, e.g., Kruse v. Hawai‘i, 68 F.3d 331, 334 (9th Cir. 1995) (permitting waiver after summary judgment); Johnson v. Odeco Oil & Gas Co., 864 F.2d 40, 42 (5th Cir. 1989) (finding waiver where the plaintiff “participates in the conduct” of the action post-removal, such as by amending the complaint and participating in discovery); Farm Constr. Servs., Inc. v. Fudge, 831 F.2d 18, 19, 22 (1st Cir. 1987) (per curiam) (finding waiver after dismissal). At any rate, since 1996, § 1447(c) has required that a plaintiff raise “any defect other than lack of subject matter jurisdiction” within “30 days after the filing of the notice of removal.” Otherwise, the opportunity for remand on such grounds is waived. See Bloom, 440 F.3d at 1031 n.2. Having the action “tried” is no longer a prerequisite (if it ever was) to finding waiver of an objection to removal based on the forum-defendant rule.
Relatedly, Holbein claims that finding waiver here “would be particularly unfair given the state of the law when this case began.” The only way to avoid finding waiver under § 1447(c) in this case is to apply today‘s holding strictly prospectively. But “the normal rule in civil cases” is “full retroactivity.” Bottineau Farmers Elevator v. Woodward-Clyde Consultants, 963 F.2d 1064, 1075 (8th Cir. 1992). Even assuming we have discretion to depart from this rule in cases where retroactivity risks “grave disruption or inequity,” Ryder v. United States, 515 U.S. 177, 184-85 (1995); accord Nat‘l Fuel Gas Supply Corp. v. FERC, 59 F.3d 1281, 1288 (D.C. Cir. 1995), we find no grave inequity here warranting such a departure.
When Holbein for the first time doubted the existence of jurisdiction at oral argument before the panel, his counsel was quick to note that Holbein did not contest jurisdiction because he just wanted “to have [his] case heard.” We do not think it particularly unfair to grant Holbein‘s request by following the normal rule of retroactivity, finding he waived his objection to removal per § 1447(c), and proceeding to the merits.
III.
Accordingly, we proceed to the merits of the district court‘s dismissal of Holbein‘s first cause of action for retaliatory demotion and discharge in contravention of public policy. We review de novo both the district court‘s dismissal for failure to state a claim, Birchansky v. Clabaugh, 955 F.3d 751, 755 (8th Cir. 2020), and its interpretation of state law, Boudoin v. Harsson, 962 F.3d 1034, 1044 (8th Cir. 2020). “Because this is a diversity action, we apply the substantive law of the forum state, here Nebraska.” Ackerman v. U-Park, Inc., 951 F.3d 929, 933 (8th Cir. 2020). “[W]e are bound by the decisions of the Nebraska Supreme Court, and, where it has not spoken, we must predict how it would rule.” E3 Biofuels, LLC v. Biothane, LLC, 781 F.3d 972, 976 (8th Cir. 2015). “In making our prediction, we may consider relevant state precedent, analogous decisions, considered dicta, scholarly works and any other reliable data.” Ventura v. Titan Sports, Inc., 65 F.3d 725, 729 (8th Cir. 1995). We “may pay particular attention to sources cited approvingly by the state‘s highest court.” Butler v. Balolia, 736 F.3d 609, 613 (1st Cir. 2013).
The district court concluded that Holbein‘s first cause of action “fail[ed] as a matter of law.” Holbein, 2018 WL 9538221, at *3. We agree.
We accept the factual allegations in Holbein‘s complaint as true and construe them in the light most favorable to him. See Vandevender v. Sass, 970 F.3d 972, 975 (8th Cir. 2020). Holbein alleges TAW Enterprises demoted and constructively discharged him because he: informed TAW Enterprises about his colleague‘s allegedly criminal misconduct in attempting to cover up the loss of customer financial information,
To be clear, Holbein does not allege that these provisions of federal law imposed on him a mandatory reporting duty that he was fired for fulfilling or protected him from discharge for this sort of internal whistleblowing. And he has not called our attention to any portion of the applicable provisions of the Act or those provisions’ implementing regulations that impose such a duty or contain such a protection.
It seems the Nebraska Supreme Court has not yet decided whether to extend the public-policy exception to these circumstances. See O‘Brien, 856 N.W.2d at 741 (recognizing that the plaintiff in that case raised this question in similar circumstances but opting to affirm on alternative grounds without deciding whether to extend the exception). In arguing the Nebraska Supreme Court effectively has extended the public-policy exception to these circumstances, Holbein relies heavily on Schriner v. Meginnis Ford Co., in which that court held that the exception would apply to protect an employee fired for reporting in good faith his employer‘s suspected criminal behavior externally to the
Therefore, we must predict how the Nebraska Supreme Court would decide this case. To this end, we find the analysis in Wendeln v. The Beatrice Manor, Inc., 712 N.W.2d 226 (Neb. 2006), instructive. In Wendeln, a certified nursing assistant claimed her discharge contravened public policy because she was fired for filing a statutorily mandated report with the state department of health and human services. Id. at 232-33, 236. “[A]gree[ing] with the reasoning” in a Wisconsin Supreme Court decision, the Wendeln court held that the public-policy exception applied in such circumstances. Id. at 239-40 (referencing Hausman v. St. Croix Care Ctr., 571 N.W.2d 393 (Wis. 1997)). In endorsing the Hausman court‘s reasoning, however, the Wendeln court suggested it approved of the line the Wisconsin Supreme Court drew between “‘praiseworthy conduct consistent with public policy‘” that does not fall under the public-policy exception and conduct going “well beyond ‘merely praiseworthy conduct‘” that does. Id. at 239 (quoting Hausman, 571 N.W.2d at 397-98); see also Ludlow v. BNSF Ry. Co., No. 4:12CV3113, 2013 WL 3872930, at *23 (D. Neb. July 24, 2013) (“[I]n Wendeln the Nebraska Supreme Court expressed approval of Wisconsin‘s more narrow rule that employees are not protected from discharge for ‘merely engaging in praiseworthy conduct consistent with public policy.‘” (quoting Wendeln, 712 N.W.2d at 239)).
Although it does not appear that the Nebraska Supreme Court has fleshed out further what it considers “merely praiseworthy conduct,” the Wisconsin Supreme Court has. Because the Nebraska Supreme Court has endorsed this principle recognized by that court, we consider what the Wisconsin Supreme Court has held to be “merely praiseworthy conduct” not protected under the exception. See Butler, 736 F.3d at 613 (“In fashioning [an Erie] prediction, the federal court should consult the types of sources that the state‘s highest court would be apt to consult . . . .“).
For our purposes, we find Bushko v. Miller Brewing Co., 396 N.W.2d 167 (Wis. 1986), particularly insightful. There, an employee voluntarily reported internally his concerns about his employer‘s allegedly unlawful safety practices, his employer‘s hazardous-waste-disposal procedures, and “dishonest conduct” by some of his colleagues involving “falsification of personnel and expense records.” Id. at 168-69. After being fired, he sued his employer, asserting wrongful discharge in contravention of public policy by alleging that his firing was motivated by his internal reporting of these issues. Id. The state court of appeals held that these facts fell under the public-policy exception, but the Wisconsin Supreme Court reversed, reasoning that “if the employee of his own volition” reports these sorts of concerns “consistently with public policy,” he engages in “merely ‘praiseworthy’ conduct” and is not protected from discharge by the exception. Id. at 169-70, 172.
The facts in Bushko are similar to the facts in this case. Holbein, “of his own volition” and “consistently with public policy,” reported internally a colleague‘s alleged criminal misconduct as well as other issues of noncompliance with federal law in the workplace. See Bushko, 396 N.W.2d at 170. Certainly, as alleged, his conduct was “praiseworthy.” See id. at 171. But Nebraska‘s public-policy exception does not protect Holbein from demotion and discharge “for ‘merely engaging in praiseworthy conduct consistent with public policy.‘” See Wendeln, 712 N.W.2d at 239 (quoting Hausman, 571 N.W.2d at 397); see also Gomez v. Cargill, Inc., No. 4:06CV3191, 2006 WL 3257184, at *1-2, *1 n.1 (D. Neb. Nov. 9, 2006) (concluding that the Nebraska Supreme Court would not extend the exception to protect an employee of a beef slaughter facility from being fired for “making health and safety complaints to his supervisors” concerning “dangerous conditions” in the workplace that violated state criminal law). Mindful of the Nebraska Supreme Court‘s admonition that the public-policy exception is to be “limited to manageable and clear standards” and should be applied only in the face of “a very clear mandate of public policy” so dictating, see Ambroz, 416 N.W.2d at 515, we conclude the Nebraska Supreme Court would not extend the exception to the facts alleged in this case. Therefore, the district court correctly held that Holbein failed to state a claim as a matter of law under Nebraska‘s public-policy exception. See Holbein, 2018 WL 9538221, at *3-4.
IV.
For the foregoing reasons, we overrule our decisions in Hurt and Horton to the extent they held that the forum-defendant rule is a jurisdictional defect in removal. We also conclude that Holbein failed to state a claim as a matter of law for retaliatory demotion and discharge in contravention of public policy under Nebraska law. Thus, we affirm the judgment of the district court dismissing Holbein‘s complaint with prejudice.