On April 30, 2014, the US Court of Appeals for the Fourth Circuit held in Barlow v. Colgate Palmolive Company that the federal removal statute (28 U.S.C.A. § 1447) does not have an attorney-misconduct exception to the prohibition on review of remand orders (No. 13-1839, (4th Cir. Apr. 30, 2014)).

The plaintiffs brought separate suits against Colgate and other companies in Maryland state court, alleging that the defendants' products exposed them to asbestos. Colgate removed both cases to federal court based on diversity jurisdiction. Colgate alleged fraudulent joinder in state court and asserted that the plaintiffs did not intend on pursuing claims against the nondiverse defendants.

The plaintiffs subsequently moved to remand the cases, arguing that they had viable claims against the nondiverse defendants. The district court agreed with the plaintiffs and found that it was still possible for the plaintiffs to identify a basis to recover against the nondiverse defendants. On remand, however, the plaintiffs requested that the two cases be consolidated as the plaintiffs were only pursuing asbestos claims against Colgate.

As a result, Colgate moved to vacate the remand orders as a sanction against the plaintiffs. The district court denied this motion, finding that reconsideration of a remand order is prohibited by the removal statute (except in two scenarios not applicable here). Colgate appealed and argued that the district court erred in deciding that it did not have authority to consider whether the plaintiffs' misconduct warranted relief from the remand orders. Rather, Colgate argued, the court had authority under FRCP 11 and 60, as well as inherent power, to take remedial action and strike the remand order as a sanction. Under this sanction framework, the request for vacatur is therefore not considered a "review" of the remand orders.

The Fourth Circuit disagreed with Colgate and affirmed the district court decision. The court found Colgate's argument failed because:

In rejecting Colgate's attempt to frame the issue as a sanction, the Fourth Circuit also emphasized that the law favors finality so that the parties can proceed to the merits of the case. The district court therefore correctly ruled that it lacked jurisdiction to revisit the remand orders.

One dissenting judge agreed with Colgate that a vacatur under Rule 60(b)(3) is not a forbidden "review" of an order remanding a case to state court. The dissent would have remanded the case to the district court for consideration of Colgate's Rule 60 motion. While the dissent agreed that the district court could not vacate the remand order under FRCP 11, it asserted that the district court had jurisdiction after remand to consider other Rule 11 sanctions. According to the dissent, the majority opinion's contrary holding creates a circuit split.

Attorneys should be aware that remand orders are generally not reviewable, even under an alternative framework like attorney misconduct or sanctions. Attorneys should also remain alert to the possible development of a circuit split about whether parties may move for sanctions after a remand to state court.