                           In the
 United States Court of Appeals
              For the Seventh Circuit
                        ____________

No. 04-1495
CARL KIRCHER and ROBERT BROCKWAY,
individually and on behalf of a class,
                                       Plaintiffs-Appellees,
                            v.

PUTNAM FUNDS TRUST and PUTNAM
INVESTMENT MANAGEMENT, LLC,
                                     Defendants-Appellants.

                        ____________
           Appeal from the United States District Court
                for the Southern District of Illinois.
        No. 03-CV-0691-DRH—David R. Herndon, Judge.
                        ____________
     SUBMITTED MAY 26, 2004—DECIDED JUNE 29, 2004
                    ____________



 Before EASTERBROOK, EVANS, and WILLIAMS, Circuit
Judges.
  EASTERBROOK, Circuit Judge. Plaintiffs own shares in
Putnam Funds Trust, a mutual fund regulated by the
Securities and Exchange Commission under statutes such
as the Securities Act of 1933, the Securities Exchange Act
of 1934, and the Investment Company Act of 1940. Con-
tending that the fund and its investment adviser (Putnam
Investment Management) had engaged in misconduct that
reduced the value of their shares, plaintiffs filed suit in
2                                               No. 04-1495

state court, invoking state law alone. They propose to rep-
resent a class of the Fund’s investors. By forswearing re-
liance on federal law plaintiffs hope to avoid the strictures
of federal statutes such as the Private Securities Litigation
Reform Act of 1995. Similar maneuvers by other investors
in the wake of the 1995 statute led Congress to enact the
Securities Litigation Uniform Standards Act of 1998. This
statute, usually known by its ungainly acronym SLUSA,
blocks many class actions based on state law when the
issuers are covered by the federal securities laws. Preemp-
tion normally is an affirmative defense, to be evaluated by
the court in which the plaintiff elects to sue. See, e.g.,
Franchise Tax Board of California v. Construction Laborers
Vacation Trust, 463 U.S. 1 (1983). SLUSA departs from the
norm by permitting defendants to remove so that a federal
court may evaluate the defense in advance of any step in
the state litigation. See 15 U.S.C. §§ 77p(c), 78bb(f)(2). If
the federal court determines that the claim is preempted, it
dismisses the suit; otherwise it remands for proceedings
under state law. 15 U.S.C. §§ 77p(b), (d)(4), 78bb(f)(1),
(3)(D).
  Defendants removed this suit under §77p(c). (From here
on, we mention only §77p; provisions in §78bb are function-
ally identical.) They asked the district judge to find the
action foreclosed by §77p(b), which provides:
    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 omission of a
        material fact in connection with the pur-
        chase or sale of a covered security; or
        (2) that the defendant used or employed
        any manipulative or deceptive device or
        contrivance in connection with the purchase
        or sale of a covered security.
No. 04-1495                                                  3

The district court concluded that the proceeding is a
“covered class action” because plaintiffs seek damages on
behalf of more than 50 investors. (Section 77p(f)(2)(A) pro-
vides the full definition of “covered class action.”) But the
judge concluded that the suit is not affected by §77p(b) be-
cause plaintiffs do not allege loss “in connection with the
purchase or sale” of securities; they have held throughout
the class period and claim to be injured by events that
diminished the value realized by all investors. The court’s
conclusion that §77p(b) does not thwart plaintiffs’ claims
required a remand under the terms of §77p(d)(4):
    In an action that has been removed from a State
    court pursuant to subsection (c), if the Federal court
    determines that the action may be maintained in
    State court pursuant to this subsection, the Federal
    court shall remand such action to such State court.
In the opinion’s final paragraph, the district judge added:
“Because the Court lacks subject matter jurisdiction, the
Court REMANDS this action to the Madison County,
Illinois Circuit Court.” (Capitalization and boldface in orig-
inal.) This sentence had led to the dispute that requires our
resolution.
  Because it ends the litigation in federal court, a remand
is a “final decision” that may be appealed under 28 U.S.C.
§1291. See Quackenbush v. Allstate Insurance Co., 517 U.S.
706, 711-15 (1996). Defendants filed a timely notice of
appeal from the district court’s remand. But we must
reckon with 28 U.S.C. §1447(d), which says that “[a]n order
remanding a case to the State court from which it was
removed is not reviewable on appeal or otherwise.” In
Thermtron Products, Inc. v. Hermansdorfer, 423 U.S. 336
(1976), the Court held that §1447(d) is not as sweeping as
its language suggests; instead, the Justices concluded, it
blocks review only when the district court acts under the
authority granted by §1447(c) or an equivalent statute. See
4                                                No. 04-1495

Things Remembered, Inc. v. Petrarca, 516 U.S. 124 (1995),
which recapitulates the Court’s views on §1447(d).
  Lack of subject-matter jurisdiction is a ground on which
remand is authorized (indeed, required) by §1447(c), and
accordingly a district judge’s conclusion that jurisdiction is
lacking is not subject to appellate review. See, e.g., Gravitt
v. Southwestern Bell Telephone Co., 430 U.S. 723 (1977);
Rubel v. Pfizer Inc., 361 F.3d 1016 (7th Cir. 2004); Adkins
v. Illinois Central R.R., 326 F.3d 828 (7th Cir. 2003);
Phoenix Container, L.P. v. Sokoloff, 235 F.3d 352 (7th Cir.
2000). Section 77p(d)(4), by contrast, is not within §1447(c)
or equivalent to it, for a remand under §77p(d)(4) comes at
the end rather than the outset of federal adjudication. The
Supreme Court has itself reviewed remand decisions that
fall outside the scope of §1447(c). Quackenbush and
Thermtron are two; Carnegie-Mellon University v. Cohill,
484 U.S. 343 (1988), is another. We must decide how this
situation fits.
  One possibility is that the district judge’s use of the word
“jurisdiction” is conclusive. We held in Rubel and Phoenix
Container that a court may not look behind a jurisdictional
remand to examine the reasons why the district judge
thought jurisdiction lacking; plaintiffs say that the same
principle applies here. Yet defendants do not want us to
pierce an ultimate conclusion in order to get at the interme-
diate steps in the syllogism. Their point, rather, is that
“jurisdiction” is a word of many shadings, and that judges
sometimes use the word “jurisdiction” or the phrase “sub-
ject-matter jurisdiction” when they mean something else.
Twice in the past few months the Supreme Court has ob-
served that a court lacks “subject-matter jurisdiction” only
when Congress has not authorized the federal judiciary to
resolve the sort of issue presented by the case (or the
Constitution forbids adjudication). See Kontrick v. Ryan,
124 S. Ct. 906, 914-16 (2004); Scarborough v. Principi, 124
S. Ct. 1856, 1864-65 (2004). There may be many other
No. 04-1495                                                  5

reasons why a court should not resolve a dispute, but these
differ from the lack of subject-matter jurisdiction.
  In Gravitt, Rubel, Adkins, and Phoenix Container the dis-
trict judges held that removal was improper; the litigation
never should have come to federal court. That is not,
however, what the district judge found here. Because
plaintiffs represent more than 50 investors, this is a “co-
vered class action” and a federal judge is not only autho-
rized but also required to decide whether any court may
entertain the litigation. A conclusion that a suit is not a
“covered class action” (say, because just 40 investors stand
to recover damages) would imply that removal had been
improper, and such a decision would come within §1447(d).
  Removal of this suit was proper, the district judge held;
that is why the court proceeded to the question how §77p(b)
affects the litigation. Only after making the substantive
decision that Congress authorized it to make did the district
court remand. After making the decision required by
§77p(b), the district court had nothing else to do: dismissal
and remand are the only options. Perhaps one could say
that jurisdiction evaporated at that juncture, but that
would be tautological. Once a court does all that the statute
authorizes, there is no adjudicatory competence to do more.
That is not the “lack of subject-matter jurisdiction” that
authorizes a remand. Otherwise every federal suit, having
been decided on the merits, would be dismissed “for lack of
jurisdiction” because the court’s job was finished. Cf. Bell v.
Hood, 327 U.S. 678 (1946).
  We must distinguish between a decision that “this court
lacks adjudicatory competence” and a decision that “the
court has been authorized to do X and having done so
should bow out.” The former implies lack of subject-matter
jurisdiction, as Kontrick and Scarborough explain; the lat-
ter implies the presence of jurisdiction. A good example of
the second category is a suit under federal law with a
6                                               No. 04-1495

state-law claim supported by the supplemental jurisdiction.
28 U.S.C. §1367. District courts should relinquish supple-
mental jurisdiction under certain circumstances, remanding
to state court if the suit originated there. 28 U.S.C.
§§ 1367(c), 1441(c). We know from Carnegie-Mellon that
§1447(d) does not foreclose review of such a remand. In both
Carnegie-Mellon and Quackenbush the district judge found
the removal proper but concluded that the state court
should handle some issues. In Carnegie-Mellon the remand
reflected limits to the supplemental jurisdiction, and in
Quackenbush the district judge concluded that abstention
was appropriate so that the state judiciary could resolve
points of state law. In both cases the Supreme Court
reviewed the decision on the merits, treating a remand as
unaffected by §1447(d) when the propriety of the removal
was not in doubt.
  This suit was properly removed. The district judge made a
substantive decision under authority granted by a federal
statute. It follows that the remand is unaffected by
§1447(d). This makes practical sense too. The goal of that
statute is that a contest about what forum should resolve
the dispute be wrapped up quickly, so that the litigation can
get under way. Appellate consideration of what amounts to
a venue dispute slows things down to little good end, for the
state court is competent to address the merits. SLUSA
means, however, that one specific substantive decision in
securities litigation must be made by the federal rather
than the state judiciary. Appellate review of decisions under
§77p(b) will promote accurate and consistent implementa-
tion of that statute, at little cost in delay beyond what the
authorized removal itself creates. Yet if the remand is
deemed non-appealable, then a major substantive issue in
the case will escape review—for SLUSA ensures that only the
federal judiciary makes the §77p(b) decision. Normal
remands, for which §1447(d) is designed, leave all substan-
tive issues open to plenary resolution in the state court
No. 04-1495                                                7

(and, if necessary, the Supreme Court of the United States).
That’s not how SLUSA works; it is now or never for appellate
review of the question whether an action under state law is
preempted. In the unusual securities class action where
expedition is vital, we can accelerate the appeal’s disposi-
tion. See Abney v. United States, 431 U.S. 651, 662 & n.8
(1977).
  We recognize that two courts of appeals have held that
disputes about the application of §77p and §78bb cannot be
resolved by federal appellate judges. See Spielman v.
Merrill Lynch, Pierce, Fenner & Smith, Inc., 332 F.3d 116
(2d Cir. 2003); United Investors Life Insurance Co. v.
Waddell & Reed, Inc., 360 F.3d 960 (9th Cir. 2004); Abada
v. Charles Schwab & Co., 300 F.3d 1112 (9th Cir. 2002). All
of these decisions precede Scarborough, and although
United Investors came a month after Kontrick the court did
not discuss it. Both the second and the ninth circuits were
mesmerized by the word “jurisdiction” and did not see the
difference between a case that never should have been re-
moved and a case properly removed and remanded only
when the federal job is done.
  Suits that the district court itself finds to have been
properly removed are unaffected by §1447(d). That’s the
upshot of Carnegie-Mellon and Quackenbush. “[W]e under-
stand Carnegie-Mellon to permit review when the district
court believes that removal was proper and that later
developments authorize remand.” In re Amoco Petroleum
Additives Co., 964 F.2d 706, 708-09 (7th Cir. 1992). Adkins
qualifies this statement with the observation that if the
“later development” is one that demonstrates the impropri-
ety of removal in the first place, then §1447(d) applies. 326
F.3d at 832-34. Here, however, later developments did not
undercut the propriety of the removal; the only perti-
nent development is that the district court completed its
appointed task. Thus the principle of Amoco Petroleum
8                                                No. 04-1495

Additives covers our situation. Adkins observes that this
principle enjoys the support of the fourth, fifth, and elev-
enth circuits too.
  Technically this opinion creates a conflict among the cir-
cuits about appellate review of decisions under SLUSA, so we
have circulated it before release to all active judges under
Circuit Rule 40(e). But our disposition reflects nothing more
than application of settled circuit law to a different substan-
tive statute. We could not follow the second and ninth
circuits without overruling Amoco Petroleum Additives and
later decisions in this circuit. Because Amoco Petroleum
Additives has the support of at least three other cir-
cuits—not to mention Things Remembered and
Quackenbush—overruling would be inappropriate. On the
Rule 40(e) poll, none of the active judges favored a hearing
en banc.
  The appeal is within our appellate jurisdiction and will
proceed to briefing and decision on the merits.

A true Copy:
       Teste:

                         ________________________________
                         Clerk of the United States Court of
                           Appeals for the Seventh Circuit




                    USCA-02-C-0072—6-29-04
