                    United States Court of Appeals
                          FOR THE EIGHTH CIRCUIT
                                     ___________

                                     No. 98-3740
                                     ___________

Lee Xiong; Housa Xiong; Sue Xiong,         *
by Their Next Friends Dan Xiong and        *
Ong Xiong; Misael Romero; Erwin            *
Romero, by Their Next Friend Celia         *
Hinajosa; Robin Louise Thomas, by Her      *
Next Friend, Pauline Thomas; David         *
Mann, by His Next Friends Doug and         *
Linda Mann; Neng Her; Mor Her; Sue         *
Her; Math Her; Pheng Her, by Their         *
Next Friend, Chia Chue Her; Edwardo        *
Reyes, by His Next Friend, Martha          *
Reyes; Chao Lor, by His Next Friends       *
Vang Lor and Mee Thao; Xue Yang;           *
Bao Yang; Khue Yang, by Their Next         *
Friends Thai Yang and Ying Lor;            *
Rosaura Flores; Claudia Flores, by Their   *
Next Friend Maria Flores; Chao Xiong;      *   Appeal from the United States
Pheng Xiong; Xee Xiong, by Their Next      *   District Court for the District
Friend Coua Vang; Wa Vang; Tou Xay         *   of Minnesota
Vang; Kia Vang; Tou Tue Vang; Kou          *
Vang; Kao Vang; Chu Nou Xiong, by          *
Their Next Friend Ja Yer Xiong; Jenna      *
Rubio; Yesnea Rubio, by Their Next         *
Friend Adela Chacon; Ken Morris,           *
                                           *
            Plaintiffs-Appellees,          *
                                           *
      v.                                   *
                                           *
State of Minnesota; Jesse Ventura,         *
Governor, State of Minnesota;              *
Minnesota State Board of Education;   *
Jeanne Kling, Acting President and Vice
                                      *
President; Nedra Wicks; Susan         *
Holderness; Carmen Robles; Wendell    *
Maddox; George Jernberg; Tom          *
Peacock; Jim Bartholomew, Members of  *
the Minnesota State Board of Education;
                                      *
Minnesota Department of Children,     *
Families, and Learning; Christine Jax,*
Commissioner of Minnesota Department  *
of Children, Families, and Learning;  *
Minnesota Senate; Allan H. Spear,     *
President of the Minnesota Senate; The*
Seventy-Seventh Minnesota State House *
of Representatives; Phil Carruthers,  *
Speaker of the Minnesota House of     *
Representatives;                      *
                                      *
            Defendants,               *
                                      *
Metropolitan Council, A Public Body   *
Corporate and Politic,                *
                                      *
            Defendant-Appellant. ___________
                                      *

                              Submitted: October 21, 1999

                                   Filed: November 8, 1999
                                    ___________

Before BEAM, FAGG, and HANSEN, Circuit Judges.
                           ___________

FAGG, Circuit Judge.

     Representatives of a class of Minneapolis school children brought this action in
Minnesota state court against the state, state officials, and the Metropolitan Council,

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an administrative agency that coordinates planning and development in the
Minneapolis-St. Paul area. The lawsuit alleges the Minneapolis public schools are
segregated on the basis of race and socioeconomic status. The claims against the
Metropolitan Council assert the alleged segregation is the product, in part, of the
Council's housing and transportation policies and practices. The Metropolitan Council
removed the case to federal district court under the All Writs Act, 28 U.S.C. § 1651(a),
which gives federal courts power "to effectuate and prevent the frustration of orders it
has previously issued in its exercise of jurisdiction otherwise obtained." United States
v. New York Tel. Co., 434 U.S. 159, 172 (1977). The Metropolitan Council asserted
the plaintiffs' claims against it were identical to claims brought, settled, and released
by "plaintiffs and/or their privies" in an earlier action called Hollman v. Cisneros. The
consent decree in Hollman bars all parties from relitigating any matters alleged in that
action, and the federal district court in Hollman retained jurisdiction to supervise
compliance with the decree's provisions until the year 2002. The Metropolitan Council
asserted that removal to federal court is necessary to prevent frustration of the Hollman
consent decree and thus is permissible under § 1651(a).

       The plaintiffs moved to remand to state court, asserting their claims against the
Metropolitan Council differ from the claims asserted in Hollman in a variety of ways.
The district court concluded that the plaintiffs' "claims in this case are identical to those
settled and released in Hollman," but concluded § 1651 removal was improper anyway.
The district court acknowledged our contrary conclusions about the propriety of
removal in NAACP v. Metropolitan Council, 125 F.3d 1171, 1173-75 (8th Cir. 1997)
(NAACP I), vacated and remanded for reconsideration, 118 S. Ct. 1162 (1998),
reinstated after remand, 144 F.3d 1168 (8th Cir. 1998) (NAACP II). In those cases,
as in this one, the plaintiffs sought state injunctive relief against the Metropolitan
Council "concerning the very matters the Hollman decree governs." NAACP I, 125
F.3d at 1173. We held that under § 1651, the district court had jurisdiction to prevent
frustration of the consent decree in Hollman, over which the district court had
independent jurisdiction. See NAACP I, 125 F.3d at 1173; NAACP II, 144 F.3d at

                                            -3-
1171. The district court in this case rejected our holdings in NAACP I and NAACP
II, noting a petition for writ of certiorari was pending. Disregarding our controlling
precedent and coming to the opposite conclusion that § 1651 did not permit the
exercise of jurisdiction over the case, the district court granted the plaintiffs' motion to
remand all claims against all defendants. Three weeks later, contrary to the district
court's apparent expectation, the Supreme Court denied the plaintiff's petition for writ
of certiorari in NAACP II. See 119 S. Ct. 73 (1998).

      The Metropolitan Council appeals the remand order. See In re Otter Tail Power
Co., 116 F.3d 1207, 1212 n.4 (8th Cir. 1997) (remand reviewed on direct appeal rather
than by mandamus). The plaintiffs move to dismiss the appeal for lack of jurisdiction.
We conclude we have jurisdiction to review the district court's order and reverse.

       To support their assertion that we lack jurisdiction to review the remand order,
the plaintiffs rely on 28 U.S.C. § 1447(d). This section forecloses our review of an
order remanding a case to state court based on a lack of subject matter jurisdiction at
the time of removal. See Things Remembered, Inc. v. Petrarca, 516 U.S. 124, 127-28
(1995); In re Otter Tail Power Co., 116 F.3d at 1212 n.5; Trans Penn Wax Corp. v.
McCandless, 50 F.3d 217, 223 (3d Cir. 1995). When a district court remands a
properly removed case on grounds the court lacks authority to consider, however, §
1447(d) does not bar review. See Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S.
336, 351 (1976). In deciding whether a remand order is reviewable, we look beyond
the district court's stated reasons for the remand and independently examine the record
to determine the actual grounds or basis. See Transit Cas. Co. v. Certain Underwriters
at Lloyd's of London, 119 F.3d 619, 624 (8th Cir. 1997), cert. denied, 118 S. Ct. 852
(1998); In re Otter Tail Power Co., 116 F.3d at 1212-14.

        In its remand decision, the district court recognized the issue was "whether a
federal court can exercise jurisdiction over a state action pursuant to the All Writs Act
if the state action frustrates a previous order by the federal court." Although we had

                                            -4-
already answered the question affirmatively in NAACP I and NAACP II, the district
court ignored this controlling precedent and made its own directly conflicting
determination that removal was improper under the All Writs Act and that the court
thus "lack[ed] jurisdiction to hear [the] case." The district court had no power to
replace governing circuit law with its own view. See BPS Guard Servs. v. NLRB, 942
F.2d 519, 524 (8th Cir. 1991) (Eighth Circuit holdings on issues bind all district courts
in the circuit and district courts must follow those holdings until reversed by the Eighth
Circuit en banc or the United States Supreme Court); see also Thermtron, 423 U.S. at
351 (district courts cannot remand contrary to federal law governing removal then
avoid review of remand order). Given our decisions in NAACP I and NAACP II, there
was simply no jurisdictional question to be resolved once the district court decided the
plaintiffs' claims were identical to those settled and released in Hollman. See Aliota
v. Graham, 984 F.2d 1350, 1357 (3d Cir. 1993). At that point, our case law dictated
that jurisdiction was proper at the time of removal. Because the district court remanded
a properly removed cause on grounds the court lacked authority to consider, the remand
order is reviewable on appeal. See Thermtron, 423 U.S. at 351. We thus deny the
motion to dismiss the appeal for lack of jurisdiction.

       Turning to the merits, we conclude the district court committed error in
remanding the claims against the Metropolitan Council because federal court control
of the current case is necessary to effectuate and prevent the frustration of the earlier
federal consent decree in Hollman. See New York Tel. Co., 434 U.S. at 172. We held
in NAACP I and NAACP II that removal of the same claims was appropriate under the
All Writs Act to protect the integrity of the Hollman consent decree. The plaintiffs
assert their claims are different from those raised in Hollman because, among other
things, the claims allege violations over a later time period. We agree with the district
court that the alleged differences are immaterial and the plaintiffs' claims against the
Metropolitan Council in this case "are identical to those settled and released in
Hollman." Because the Hollman court issued a decree redressing those claims and
retaining jurisdiction to supervise compliance until the year 2002, federal courts have

                                           -5-
authority over the claims, even if based on later occurrences, until the consent decree
expires.

      We thus reverse the district court's order remanding the plaintiffs' claims against
the Metropolitan Council and remand with directions to dismiss those claims with
prejudice.

      A true copy.

             Attest:

                     CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.




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