28 U.S.C. § 1447(d) bars appellate review of remand orders. 9 U.S.C. § 205 permits removal of actions relating to international arbitration agreements, and 9 U.S.C. § 16 permits appellate review of orders denying motions to compel arbitration. So what happens when a case is removed under section 205 and the district court in a single order denies a motion to compel arbitration and remands the case to state court? The Eleventh Circuit confronted that question in Wu v. Liu, 2025 WL 854669 (11th Cir. March 19, 2025) and dismissed the appeal for lack of jurisdiction.
The action arose from a purported investment opportunity offered to Chinese nationals hoping to participate in the EB-5 visa program. Under that program, foreign nationals may receive US visas in exchange for $500,000 or $1,000,000 investments in certain job-creating enterprises. Fu Jing Wu and Wai Lam pitched such an opportunity to Chinese nationals, with the investors executing purchase agreements that included arbitration provisions. But it turned out that Wu and Lam diverted to themselves most of the “invested” funds. One of the investors, Chun Liu, filed a putative class action against Wu in Florida state court.
In state court, Wu responded to discovery, served discovery, and moved for entry of a protective order. Then he filed a motion to compel arbitration pursuant to the arbitration clause in the purchase agreement. Liu argued that Wu had waived any right to compel arbitration by his litigation activity. While the motion to compel arbitration was pending, Wu removed the case to federal court under section 205 of the Federal Arbitration Act (“FAA”). That section permits removal of an action whose subject matter “relates to an arbitration agreement or award falling under the Convention”—that is, the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Wu’s notice of removal also asked the federal court to compel arbitration and to stay the proceedings. The district court, in a single order, denied Wu’s motion to compel arbitration and remanded the case to state court. The district court determined that Wu failed to meet the “jurisdictional prerequisites for the arbitration agreement to fall under the [New York] Convention” because Wu was not a signatory to the purchase agreement. And Wu had cited no basis for jurisdiction other than section 205. Wu appealed, presenting the appeal as one from the denial of his motion to compel arbitration.
Chief Judge Bill Pryor, writing for the court, began (and ended) by reviewing the court of appeals’ jurisdiction. Section 1447(d) precludes appellate review of remand orders. Even so, a court of appeals “may review remand orders ‘that determine[]the substantive issues of the case in a way that is conclusive because it is unreviewable by the state court.’” That principle does not apply, however, where “‘the substantive issue is intrinsic to the district court’s decision to remand for lack of subject matter jurisdiction.’”
The asserted basis for federal jurisdiction in the case before the court was the FAA’s section 205, which conveys federal jurisdiction over actions relating to international arbitration proceedings. (For litigation relating to domestic arbitration proceedings, by contrast, the FAA does not convey subject matter jurisdiction; those cases require an independent jurisdictional basis.) Section 205 provides that “[t]he procedure for removal of causes otherwise provided by law shall apply” to actions removed under that section. The question was whether the FAA’s provision for appeal of orders denying motions to compel arbitration constitutes a statutory exemption from the “procedure . . . otherwise provided by law”—and more precisely, the procedure provided by 28 U.S.C. § 1447(d)—under which remand orders are not reviewable on appeal. The answer is no. “When Congress intends to make section 1447(d) inapplicable to new grounds for removal,” the court observed, “it says so expressly.” And nothing in the FAA exempts section 205 removals from the usual rule that remand orders are not appealable.
The court considered two exceptions to the general rule that remand orders are not appealable and determined that neither applied. The exception for remand orders that also decide matters of substantive law—an exception which, the court noted, was “judge-made” and of unclear constitutional provenance—did not apply, because the district court’s ruling that Wu had failed to meet the “jurisdictional prerequisites” for application of section 205 was a jurisdictional finding with no preclusive effect in state court. Nor did the exception described in Waco v. United States Fidelity & Guaranty Co., 293 U.S. 140 (1934), for orders that “lead to, but are separate from orders of remand and have a conclusive effect upon the ensuing state court action,” apply. “Even if we were to cast the denial of Wu’s motion to compel arbitration as a separate order” from the remand order, “it would not be a conclusive one”—again, because the district court’s determination was a jurisdictional one and not subject to appeal, precluding the application of collateral estoppel. The court observed that its conclusion was confirmed by the Supreme Court’s decision in Kircher v. Putnam Funds Tr., 547 U.S. 633 (2006), in which the Court held that section 1447(d) barred review of a remand order the basis for which was a determination that the action was not a “covered” class action under the Securities Litigation Uniform Standards Act of 1998. There, the jurisdictional question “coincided entirely” with the merits of the asserted federal question, but the district court’s resolution of the question to find it had no jurisdiction had no preclusive effect in state court and was not reviewable on appeal.
The issue resolved in Wu arose from the fact that the removal in question was effected under section 205 of the FAA, application of which depends on the existence of an international arbitration agreement. Resolution of a motion to compel arbitration, of course, also depends on the existence of an arbitration agreement, and the district court’s determination that it lacked jurisdiction over Liu’s dispute with Wu entailed a finding that Wu was not a party to the arbitration agreement. But that jurisdictional conclusion is not binding on the state court. Accordingly, the remand order—like remand orders generally—was not subject to appellate review.