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United Investors Life Insurance Company v. Waddell & Reed Inc. Waddell & Reed Financial Inc. Waddell & Reed Financial Services Inc. W & R Insurance Agency Inc. Thomas A.N. Miller Cheryl Aldava David Atkinson Timothy Glenn Eric Hoopingarner, Michael Ingaglio Duane Johnson Carolyn Joyce Gloria Kimmel William Knoke Mark Larsen Carolyn Leone Albert Martinez John Morreale Joyce O'DOnnell Elizabeth Ruch Kenneth Sheets Bobby Yount

Citations: 360 F.3d 960; 2004 U.S. App. LEXIS 3227Docket: 02-56278

Court: Court of Appeals for the Ninth Circuit; February 22, 2004; Federal Appellate Court

Narrative Opinion Summary

The case involves a dispute between a federally registered investment advisor, Waddell, Reed, Inc., and United Investors Life Insurance Company over state-law securities claims. United Investors alleged that Waddell, Reed engaged in deceptive practices to replace variable annuity policies, violating California's Business and Professions Code § 17200. Waddell, Reed removed the case to federal court, asserting that the Securities Litigation Uniform Standards Act (SLUSA) preempted the state claims, and filed a motion to dismiss. The district court denied the motion and remanded the case to state court, implying a lack of subject matter jurisdiction. Waddell, Reed appealed, arguing the remand order should be reviewable as it was not based on jurisdictional grounds. However, the appellate court determined that the remand was jurisdictional under 28 U.S.C. § 1447, which bars appellate review. Consequently, the appeal was dismissed due to lack of jurisdiction, leaving the state court to handle the claims. The court emphasized that the district court acted within its duty to determine the absence of federal jurisdiction regardless of the parties' positions on the matter.

Legal Issues Addressed

Appellate Review of Remand Orders

Application: The appellate court dismissed the appeal for lack of jurisdiction, as remand orders based on lack of subject matter jurisdiction cannot be reviewed.

Reasoning: Consequently, the remand order is not subject to appellate review under subsection 1447(d), resulting in a lack of jurisdiction to consider Waddell, Reed's motion to dismiss on its merits.

Jurisdiction and Remand Orders under 28 U.S.C. § 1447

Application: The district court's remand order was deemed based on a lack of subject matter jurisdiction, precluding appellate review.

Reasoning: The court's conclusion that the district court's remand was based on a perceived lack of subject matter jurisdiction is supported by the record.

Requirement for District Court to Establish Subject Matter Jurisdiction

Application: The district court independently evaluated jurisdiction and determined SLUSA did not preempt, which confirmed the lack of federal jurisdiction.

Reasoning: The district court was obligated to independently establish subject matter jurisdiction over the removed action, regardless of whether the parties raised the issue.

SLUSA Preemption of State-Law Securities Actions

Application: The court evaluated whether the Securities Litigation Uniform Standards Act preempts United Investors' state-law securities action but found it does not.

Reasoning: Waddell, Reed's motion to dismiss hinges on whether SLUSA preempts United Investors's state-law securities action.