NAM FUNDS TRUST
ET AL
.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE SEVENTH CIRCUIT
No. 05409. Argued April 24, 2006Decided June 15, 2006
The Securities Litigation Uniform Standards Act of 1998 (Act) specifies
that private state-law covered class actions alleging untruth or ma-
nipulation in connection with the purchase or sale of a covered se-
curity may not be maintained in any State or Federal court, 15
U. S. C. §77p(b), and authorizes removal to federal district court of
[a]ny covered class action brought in any State court involving a
covered security, as set forth in subsection (b), §77p(c). A covered
class action is a lawsuit in which damages are sought on behalf of
more than 50 people. A covered security is one traded nationally
and listed on a regulated national exchange. Merrill Lynch, Pierce,
Fenner & Smith Inc. v. Dabit, 547 U. S. ___, ___.
Petitioners, mutual fund investors, filed separate state-court ac-
tions, each seeking to assert state-law claims on behalf of a class of
investors allegedly injured by devaluation of their holdings by re-
spondent mutual funds. The funds filed notices of removal in each
case stating, among other things, that the actions were removable
under and precluded by the Act. Once removed, however, the Federal
District Court remanded each case to state court on the ground that
it lacked subject-matter jurisdiction on removal because the Act did
not preclude the investors claims. Since they were said to have been
injured as holders of mutual fund shares, not purchasers or sellers,
the court reasoned, their claims did not satisfy §77p(b)s in connec-
tion with the purchase or sale requirement, and the claims could
therefore proceed in state court. The Seventh Circuit acknowledged
that 28 U. S. C. §1447(d) bars review of district court orders remand-
ing removed cases for lack of subject-matter jurisdiction, but decided
that the District Court had the last word neither on the characteriza-
tion of its decision as jurisdictional nor on the correctness of its con- 2 KIRCHER
v. PUTNAM FUNDS TRUST
Syllabus
clusion that remand was required. The appeals court considered all
covered class actions involving covered securities, whether precluded
or not, to be removable under the Act, and therefore thought the pre-
clusion issue distinct from the jurisdictional issue whether the case
belonged in federal court at all. It held that orders remanding prop-
erly removed suits as not precluded are substantive and unaffected by
§1447(d), and therefore reviewable. Proposing that the Act reserves to
the Federal Judiciary the exclusive authority to make the preclusion
decision, the court said that treating remand orders in this context as
immunized from appeal by §1447(d) would mean that a major sub-
stantive issue would escape review, since it would not be open to
resolution in the state court subject to review by this Court. The Sev-
enth Circuit subsequently consolidated the funds appeals and de-
cided, on the merits, that the Act precludes the investors claims.
Held: Orders remanding for want of preclusion under the Act are sub-
ject to §1447(d) and its general rule of nonappealability. Pp. 514.
(a) Section 1447(d), which states that an order remanding a case to
the State court from which it was removed is not reviewable on ap-
peal, applies to all remands based on the grounds specified in
§1447(c), including lack of subject-matter jurisdiction. Thermtron
Products, Inc. v. Hermansdorfer, 423 U. S. 336, 343345. It applies
equally to cases removed under the general removal statute, §1441,
and to those removed under other provisions, see Things Remem-
bered, Inc. v. Petrarca, 516 U. S. 124, 128, and its force is not subject to
any statutory exception that might cover this case. The District Court
said that it was remanding for lack of jurisdiction, an unreviewable
ground. Where a remand order is based on one of §1447(c)s grounds,
review is unavailable no matter how plain the legal error in ordering
the remand. Briscoe v. Bell, 432 U. S. 404, 413, n. 13. The Seventh
Circuit did not overlook cases like Briscoe, but relied instead on cases
such as Kontrick v. Ryan, 540 U. S. 443, which observed that some
rulings loosely called jurisdictional are patently not jurisdictional in
the strict sense. Viewing this as such a case, the appeals court un-
derstood the District Courts preclusion decision to be substantive,
not jurisdictional, and consequently subject to review. But the Dis-
trict Court was correct in understanding its remand order to be dic-
tated by a finding that it lacked removal jurisdiction. Section 77p(c)s
authorization for removal, on which district-court jurisdiction de-
pends, is confined to cases set forth in subsection (b), i.e., those with
claims of untruth or manipulation. That phrase immediately follows
the §77p(c) language describing removable cases as covered class ac-
tions involving covered securities, and the language has no apparent
function unless it limits removal to covered class actions involving
claims like untruth or deception. Legislative history tends to show 3
Cite as: 547 U. S. ____ (2006)
Syllabus
that this was just what Congress understood. The preclusion deter-
mination is jurisdictional, as is the order implementing it. Pp. 511.
(b) The Seventh Circuits reading was in part motivated by the
courts erroneous assumption that the Act gives federal courts exclu-
sive jurisdiction to decide the preclusion issue. A covered action is
removable if it is precluded, and a defendant can enlist the Federal
Judiciary to decide preclusion, but he can elect to leave the case
where the plaintiff filed it and trust the state court to make the pre-
clusion determination. What a state court could do in the first place
it may also do on remand; here, the funds can ask for dismissal on
preclusion grounds when they return to state court. Collateral es-
toppel should be no bar to such a revisitation, given that §1447(d)
prevents the funds from appealing the District Courts decision.
While the state court cannot review the decision to remand in an ap-
pellate way, it is free to reject the remanding courts reasoning. Id.,
at 583. There is no reason to doubt that the state court in this litiga-
tion will duly apply Dabits holding that holder claims are embraced
by §77p(b), but this Court can review any claim of error on that point.
Pp. 1114.
403 F. 3d 478, vacated and remanded.
S
OUTER
, J., delivered the opinion of the Court, in which R
OBERTS
,
C. J., and S
TEVENS
, K
ENNEDY
, T
HOMAS
, G
INSBURG
, B
REYER
, and A
LITO
,
JJ., joined, and in which S
CALIA
, J., joined as to Parts I, III, and IV.
S
CALIA
, J., filed an opinion concurring in part and concurring in the
judgment. _________________
_________________
1
Cite as: 547 U. S. ____ (2006)
Opinion of the Court
NOTICE: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports. Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Wash-
ington, D. C. 20543, of any typographical or other formal errors, in order
that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
No. 05409
CARL KIRCHER,
ET AL
., PETITIONERS v. PUTNAM FUNDS TRUST
ET AL
. ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT [June 15, 2006] J
USTICE
S
OUTER
delivered the opinion of the Court.
Title 28 U. S. C. §1447(d) limits appellate review of a
district court order remanding a case from federal to state
court. The question here is whether an order remanding a
case removed under the Securities Litigation Uniform
Standards Act of 1998 is appealable, notwithstanding
§1447(d). We hold it is not.
I
The Private Securities Litigation Reform Act of 1995
(Reform Act), 109 Stat. 737, targeted perceived abuses of
the class-action vehicle in litigation involving nationally
traded securities, Merrill Lynch, Pierce, Fenner & Smith
Inc. v. Dabit, 547 U. S. ___, ___ (2006) (slip op., at 8), and
put limits on federal securities class actions. But Congress
soon discovered that [r]ather than face the obstacles set in
their path by the Reform Act, plaintiffs and their represen-
tatives [were] bringing class actions under state law, often
in state court, id., at ___ (slip op., at 9). To block this
bypass of the Reform Act, Congress enacted the Securities
Litigation Uniform Standards Act of 1998 (Act), 112 Stat.
3227; see Dabit, supra, at ___ (slip op., at 810). 2 KIRCHER
v. PUTNAM FUNDS TRUST
Opinion of the Court
The Act has a preclusion provision
1
and a removal pro-
vision
2
: it provides that private state-law covered class
actions alleging untruth or manipulation in connection
with the purchase or sale of a covered security may not
be maintained in any State or Federal court, 112 Stat.
3228 (codified at 15 U. S. C. §77p(b)),
3
and it authorizes
removal to federal district court of [a]ny covered class
action brought in any State court involving a covered
security, as set forth in subsection (b), 112 Stat. 3228
(codified at §77p(c)). A covered class action is a lawsuit
in which damages are sought on behalf of more than 50
people. A covered security is one traded nationally and
listed on a regulated national exchange. Dabit, supra, at

1
No covered class action based upon the statutory or common law of
any State or subdivision thereof may be maintained in any State or
Federal court by any private party alleging
(1) an untrue statement or