Reported / Citable
Background
Defendants removed Brittany M. Stephens’s lawsuit from Texas state court based on federal-question and supplemental jurisdiction. Her earlier pleadings alleged violations of federal law, including federal statutory and constitutional claims.
After receiving leave to amend, Stephens filed a third amended complaint asserting wrongful retention, conversion, promissory estoppel, breach of fiduciary duty relying on Texas law governing real-estate brokers, violations of the Texas Constitution, and a violation of the Texas Disciplinary Rules of Professional Conduct. Because the new pleading omitted the previously asserted federal claims, the court reconsidered subject-matter jurisdiction on its own initiative.
The Court’s Holding
Magistrate Judge Christina A. Bryan recommended remanding the case to state court for lack of subject-matter jurisdiction. An amended complaint supersedes earlier complaints unless it incorporates them, so jurisdiction depended on the allegations in Stephens’s third amended complaint rather than her prior pleadings.
The operative complaint presented no federal issue on its face. Once Stephens eliminated the federal claims that had supported removal, the court could not retain the remaining state-law claims through supplemental jurisdiction. Diversity jurisdiction was also unavailable because the parties were alleged to be Texas citizens.
Key Takeaways
- A post-removal amended complaint supersedes prior pleadings and can require a federal court to reassess its jurisdiction.
- Eliminating the federal claims that supported removal left no basis for federal-question or supplemental jurisdiction.
- The magistrate judge issued a recommendation, giving the parties fourteen days to file written objections.
Why It Matters
The recommendation applies the Supreme Court’s rule that federal jurisdiction after a post-removal amendment depends on the operative complaint. When that complaint removes every federal claim and leaves only state-law claims, the federal court’s authority to decide the dispute dissolves.
The decision also underscores that courts may examine subject-matter jurisdiction sua sponte and that supplemental jurisdiction cannot independently support a case once the federal jurisdictional anchor is gone.