I'll nonetheless mention that even though I like how the opinion comes out (since I agree with Judge Callahan that the district court improperly remanded the case), it takes a particularly narrow view of what the district court actually did to get there. The law is that if a district judge remands a case pursuant to Section 1447(c), a party can't appeal; by contrast, if the district judge remands the case for other reasons (e.g., those not set forth in 1447(c)), a party can appeal. The Supreme Court has held that 1447(c) does not require a defendant to prove jurisdiction in its removal papers (i.e., include evidence), but that those papers nonetheless require a "plausible allegation" of jurisdiction therein to avoid dismissal.
Judge Callahan's opinion holds that Judge Klausner erred by requiring proof of jurisdiction, and since he did so, his remand wasn't based on 1447(c) and was thus subject to appeal. Doctrinally, that move may perhaps work, and permit the Ninth Circuit to hear the appeal and reverse.
But I'm not convinced it's what Judge Klausner actually did. The Ninth Circuit says: "The district court erred as a matter of law in requiring that
the notice of removal “prove” subject matter jurisdiction
instead of containing plausible allegations of the
jurisdictional elements." Yet here's how the district court's order actually reads: "The Court is
unable to find a plausible allegation that the
amount in controversy has been met." The subsequent paragraphs of the order then attempt to explain why the district court concluded that the allegations of jurisdiction (e.g., that the case was worth over $75,000) were implausible.
If the district court was simply wrong about the allegations being implausible, there's no ability to appeal, so the Ninth Circuit can't correct the error. Hence the Ninth Circuit's holding that the district court applied the wrong standard by requiring "proof" of jurisdiction "instead of containing plausible allegations of the jurisdictional elements." But given that the district court expressly held that there was no "plausible allegation" of the amount in controversy, I'm just not at all confident that the Ninth Circuit's right; he was at least ostensibly applying the right standard -- he was just wrong to hold that the allegations were implausible.
Admittedly, the problem here arises in part because of the whole "plausibility" standard in the first place. There's a fine line between being "wrong" because you think that certain allegations aren't plausible (which means there's no appeal) versus being "wrong" because you think that the party has to "prove" jurisdiction as opposed to merely plausibly allege it (which would mean we do allow an appeal). The Ninth Circuit was basically saying that the district court required too much at the pleading stage. Sure. But really what the district court was doing was "requiring too much" not because he thought there needed to be "evidence" of jurisdiction in the moving papers, but rather because he (wrongly) thought that the allegations therein weren't sufficiently "plausible" to establish jurisdiction. So he applied the right standard, just incorrectly, because he was way too strict. If you that, there's no appellate jurisdiction -- hence why the Ninth Circuit said that he applied the wrong standard, even though his order expressly articulated the right standard and said he was applying it.
To reiterate: It's hard to tell the difference between being "wrong" on the merits of a pleading versus applying the wrong pleading standard, particularly when the district court at least sets forth the right standard (but then arguably doesn't apply it correctly). That's an underlying problem with the plausibility standard itself, particularly when rigorously applied. A problem that exponentially increases when, as here, you're applying that law with respect to removal, since we sometimes remand cases sua sponte, with the additional complexity of not allowing an appeal.
But when the district court expressly says that there's no plausible allegation of jurisdiction and that that's the standard, and then goes on to explain why (in its view) there's not one here, it's hard to argue -- as the Ninth Circuit does -- that the district court wrongly thought that the removal papers required more than just a plausible allegation of jurisdiction. It's just hard to read the record that way.
Even if doing so results, as here, in getting the case "right" and correcting the district court's error.
