April 17, 2014
You can think of remand as the reverse of removal. Remand follows an improper removal. Here is an example:
Let's say we have a defendant sued in New York state court. The plaintiff is a citizen of New York. The defendant notifies the court that he is a citizen of California and that the amount in controversy exceeds $75,000.
Removal was easy. The defendant just took the case out of state court and brought it to federal court based on diversity jurisdiction (NY plaintiff, CA defendant, amount in controversy > $75,000).
So now the case is in federal court. However, the defendant is actually not a citizen of California. He is a citizen of New York. There is no diversity because the plaintiff and defendant are citizens of the same state.
What should the plaintiff do? The plaintiff should ask the federal court (move the federal court) to remand the case back to state court. If the court agrees with the plaintiff the judge will find that there is no diversity jurisdiction. If there is no diversity subject matter jurisdiction the federal court must remand the case back to state court. The case will the proceed in state court.