In City of Martinsville, Va. v. Express Scripts, Inc., No. 24-1912 (4th Cir. Feb. 10, 2025), a 2-1 panel holds that because the defendant filed its appeal before the district court physically mailed a remand order to state court under 28 U.S.C. § 1447, the order had no legal effect. The panel judges differ over the application of the recent Coinbase, Inc. v. Bielski, 599 U.S. 736, 741 (2023) (“Coinbase”) decision. The holding causes a circuit split.

“People often say that you shouldn’t have too many cooks in the kitchen. Wise words, particularly around Christmas. But culinary clutter can’t compare to the havoc of multiple courts taking actions in the same case, on the same issues, at the same time. That’s what happened here. Fortunately, there is a rule against it.”

The present case is one of numerous suits filed around the country against online pharmacies by local governmental units for their alleged role in facilitating the opioid crisis. Here, defendants removed from state court under the federal-officer removal statute, 28 U.S.C. § 1442. The plaintiff won a remand back to state court. But even when a plaintiff wins a remand, the state court may not proceed until the remand order is physically mailed to it. 28 U.S.C. § 1447(c) (“[a] certified copy of the order of remand shall be mailed … [t]he State court may thereupon proceed with such case”).

Defendants instantly filed a notice of appeal under 28 U.S.C. § 1447(d). They thus “beat the clerk to the punch, docketing an appeal of the remand order before the order was mailed. It then asked the district court to stay the order pending appeal, citing Coinbase.” Yet the district court denied the stay and mailed the certified order to the state court.

The Fourth Circuit, on defendants-appellants’ motion for a stay pending appeal, holds that the filing of the notice of appeal automatically stayed the district court’s authority, thus nullifying the lower court’s power to mail the order.

The panel majority launches its analysis with Griggs v. Provident Consumer Disc. Co., 459 U.S. 56 (1982), which holds as a general principle of federal judicial power that the filing of a notice of appeal “divests the district court of its control over those aspects of the case involved in the appeal.”

In Coinbase, which applied Griggs to an arbitration appeal (under Federal Arbitration Act, 9 U.S.C. § 16(a)), the panel majority finds that the Supreme Court “added three important clarifications to the Griggs principle that resolve this motion.” These are (1) that where the only question presented by an appeal is the correct forum for a case, the filing of a notice of appeal stays the lower court’s power to take further action; (2) that such stay is automatic; and (3) that Congress need not experssly legislate such a stay pending appeal. “[W]hile Congress can specify when it doesn’t want an appeal to come with a stay, the default rule is that an appeal automatically stays all aspects of the case involved in the appeal.”

The panel majority also concludes that Coinbase is not limited to appeals in arbitration cases. “In relying on Griggs, Coinbase did not discriminate between arbitration and other appeals. Indeed, it went out of its way to approvingly recognize that qualified immunity and double jeopardy were ‘analogous contexts’ where the courts of appeals have long imposed automatic stays upon appeal.”

The panel majority allows that the First, Second, and Eleventh Circuits hold that Coinbase is limited to arbitration appeals, yet observes that those orders (two unpublished and one in a footnote) were “without any analysis” and the Coinbase rationale logically applied outside of the arbitration context.

The panel majority concludes:

“Two courts at once is one court too many. Coinbase confirmed that Griggs was not a makeshift guideline with limited sweep but a general principle about the allocation of power among multiple courts with claims over the same case. The principle applies to appeals under the federal-officer-removal statute as it does elsewhere unless and until Congress tells us otherwise. So [defendants’] appeal divested the district court of authority over the issues involved in that appeal, and the district court had no power to mail its order to state court.”

Judge Wynn dissents and would follow the circuits that have understood Coinbase as being limited to arbitration cases. “With respect, I would accept the Supreme Court’s holding in Coinbase for what it is, a narrow exception for arbitrability appeals, and nothing more.”