POLITZ, Circuit Judge:
Dean Witter Reynolds, Inc. appeals the trial court's remand order issued under the discretionary provision of 28 U.S.C. § 1367(c). Plaintiffs counter that the court lacks jurisdiction to hear the appeal and, joined by the third-party defendants, contend that the trial court acted within its discretion in ordering the remand. For the reasons assigned, we deny plaintiffs' motion to dismiss the appeal, affirm in part, and vacate and remand in part.
This case arose from the illegal conduct of a Dean Witter stockbroker, Jody M. Felterman. Felterman conducted a Ponzi
Plaintiffs were grouped according to the names of their attorneys: the Baldwin and Haspel plaintiffs; the Stansbury plaintiffs; the Wright plaintiffs; the Versaggi plaintiffs; and the Rice plaintiffs. Dean Witter successfully removed all cases to federal court on the basis of federal question jurisdiction. Plaintiffs' complaints, other than those filed by the Stansbury plaintiffs, alleged RICO
At the threshold we pause to consider the challenge to our appellate jurisdiction. Our pause need only be brief. Plaintiffs suggest that the trial court should have remanded under the authority of 28 U.S.C. § 1447(c), an order for which appellate review is precluded by 28 U.S.C. § 1447(d). They further contend that a decision to remand under 28 U.S.C. § 1367(c) is reviewable only by a petition for writ of mandamus. Both propositions are foreclosed by our jurisprudence.
Alternatively, plaintiffs and third-party defendants submit that the remand order fell within the court's discretionary powers. Section 1367 provides in pertinent part as follows:
The Supreme Court in United Mine Workers v. Gibbs
The Gibbs test is a flexible one, under which courts should conduct a fact-specific
The trial court noted the general rule favoring dismissal of state claims when the federal claims to which they are pendent are dismissed.
Dean Witter vigorously argues that the trial court exceeded its discretionary authority in remanding the cases. It insists that the intensive, protracted pretrial preparation in federal court brings this case within the rubric of Newport Ltd. v. Sears, Roebuck and Co.,
In evaluating Dean Witter's arguments — which are not wholly lacking in persuasive force — we are mindful of the wide discretion vested in the trial court to order a remand of state claims on the heels of a dismissal of federal claims.
Dean Witter suggests that those seeking a remand are engaged in forum manipulation. We are not persuaded. The trial court considered and rejected this contention, noting:
Similarly, to the extent that the status of the state cases — which impeded settlement, according to the trial court — factored into the decision to remand, we are persuaded that Dean Witter suffered no prejudice. The trial court cited various reasons for the remand, and this "extra-record" observation was only one of many. We have no hesitation whatever in accepting the inference that the pendency of a large number of related cases would have a chilling effect on the consummation of a settlement which did not include those cases.
Finally, our review of the total record, in light of the briefs and oral arguments of counsel, convinces us that the trial court did not abuse its discretion in entering the remand order. The order, however, is too embracive. The remand order is based on the court's belief that only state law claims remained in any of the remanded actions. That understanding is incorrect. The actions involving the Versaggi plaintiffs have outstanding federal claims against Dean Witter. We must therefore vacate and remand the order of the trial court as it relates to the actions by the Versaggi plaintiffs. On remand the district court will be free to consider anew a remand request should the federal claims issue be resolved so as to permit such. In all other respects the remand order appealed is affirmed.
AFFIRMED IN PART; VACATED AND REMANDED IN PART.