Cite as: 517 U. S. 706 (1996)
case does not fall into either category of remand order described in § 1447(c): It is not based on lack of subject matter jurisdiction or defects in removal procedure. The remand order here falls within that narrow class of collateral orders that are immediately appealable under § 1291. It puts the litigants in this case effectively out of court, and its effect is precisely to surrender jurisdiction of a federal suit to a state court. Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U. S. 1, 11, n. 11. The order also conclusively determines an issue that is separate from the merits, namely, the question whether the federal court should decline to exercise its jurisdiction in the interest of comity and federalism; the rights asserted on appeal from the abstention decision are sufficiently important to warrant an immediate appeal; and the remand order will not be subsumed in any other appealable order entered by the District Court. See Moses H. Cone, supra. The decision in Thermtron Products, Inc. v. Hermansdorfer, 423 U. S. 336, 352-353, that "an order remanding a removed action does not represent a final judgment reviewable by appeal," is disavowed to the extent it would require this Court to ignore the implications of the later holding in Moses H. Cone. Pp. 711-715. 2. Federal courts have the power to dismiss or remand cases based on abstention principles only where the relief sought is equitable or otherwise discretionary. Because this was a damages action, the District Court's remand order was an unwarranted application of the Bur-ford doctrine. Pp. 716-731. (a) In cases where the relief sought is equitable in nature or otherwise discretionary, federal courts not only have the power to stay the action based on abstention principles, but can also, in otherwise appropriate circumstances, decline to exercise jurisdiction altogether by either dismissing the suit or remanding it to state court. See, e. g., Great Lakes Dredge & Dock Co. v. Huffman, 319 U. S. 293, 297. By contrast, federal courts may stay actions for damages based on abstention principles, but those principles do not support the outright dismissal or remand of damages actions. See, e. g., Louisiana Power & Light Co. v. City of Thibodaux, 360 U. S. 25, 28. Pp. 716-723. (b) Burford allows a federal court to dismiss a case only if it presents "difficult questions of state law bearing on policy problems of substantial public import whose importance transcends the result in the case then at bar," or if its adjudication in a federal forum "would be disruptive of state efforts to establish a coherent policy with respect to a matter of substantial public concern." Colorado River Water Conservation Dist. v. United States, 424 U. S. 800, 814. This power to dismiss represents an extraordinary and narrow exception to a district court's duty to adjudicate a controversy properly before it. Pp. 723-728.
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