If You Want to Remove, Make it Snappy!
By: Amber Barlow Garcia, Deutsch Kerrigan
When a lawsuit is filed in state court but federal court is a proper forum, defendants often prefer to remove the case. According to 28 U.S.C. § 1441, “any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.” Defendants commonly remove based on diversity of citizenship or federal question jurisdiction. Generally, removal must be sought within a strict time limit of thirty days after service (in most cases).
Diversity jurisdiction provides one means by which an out-of-state defendant may avoid litigating in state court. Federal courts have “original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000” that are between “citizens of different states.” 28 U.S.C. § 1332(a)(1). According to § 1441(b)(2), a “civil action otherwise removable solely on the basis of [diversity] jurisdiction . . . may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.” This provision—§ 1441(b)(2)—is known as the forum-defendant rule: meaning ordinarily that if a forum defendant is named in the lawsuit, the case will not be able to be removed based on diversity grounds. Even if complete diversity exists between all plaintiffs and all defendants, removal is ordinarily not permitted if any defendant is a forum defendant. For example, a New York plaintiff files suit against two New Jersey defendants, a Delaware defendant, a Pennsylvania defendant, and a Louisiana defendant in New Jersey state court. Complete diversity exists; however, the two New Jersey defendants are at-home defendants in New Jersey. The “forum-defendant rule” would typically prevent removal.
The forum for filing a lawsuit is generally at the discretion of the plaintiff. Plaintiffs often have several options in where they pursue their claims. Where a defendant is sued is not ordinarily within the defendant’s control. Removal statutes provide a vehicle that give defendants some control over where a lawsuit is litigated.
“Snap removal” is an option in specific circumstances and one that more defendants are utilizing recently. A “snap” removal is when a defendant removes the case to federal court on the grounds of diversity jurisdiction, even when there are one or more resident defendants. The key is that snap removal must be done before any forum defendant has been served. Once any forum defendant has been served, then removal is no longer possible under the language of § 1441(b)(2).
Snap removals have been coined “a race to the courthouse.” Understandably, when trying to remove a case before the forum defendant (or defendants) has been served, this means the removing defendant must “beat” service. This requires the removing defendant to know the lawsuit is filed before any formal service has been effectuated on a forum defendant. For a snap removal to be successful, an attorney must be on the lookout for state court filings before lawsuits are served.
Is Snap Removal New?
Removal and the forum-defendant rule have been the law and in practice for over 200 years. But the language in § 1441(b)(2), “[a] civil action otherwise removable solely on the basis of [diversity] jurisdiction . . . may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action in brought,” was codified in 1948.
Practically speaking, snap removals have been viable since 1948 when the legislature enacted the language that required that a forum defendant had to be properly joined and served to defeat removal on diversity grounds.
Of course, the key to a snap removal is timing. A defendant essentially must beat the clock and remove the case from state court to federal court before any of the forum defendants are served. Seemingly, technology and resources play a large hand in making snap removal a success in modern times.
Circuit Court Precedent on Snap Removal
The first reported mention of the concept of snap removal by an appellate court was in 2001. See McCall v. Scott, 239 F.3d 808, 813 n.2 (6th Cir. 2001). The Sixth Circuit noted that snap removal was permissible. However, this observation was in dicta and lacked any real analysis. In the remainder of that decade, federal district courts saw higher volumes of snap removals and issued various opinions that ranged from permitting snap removals based on the plain language of “properly joined and served” to finding that the presence of a forum defendant prevented removal because it ostensibly destroyed complete diversity.
In 2018, the Third Circuit in Encompass Insurance Co. v. Stone Mansion Restaurant, Inc., 902 F.3d 147 (3d Cir. 2018) became the first appellate court to rule squarely on snap removal. In Encompass, the plaintiff was an Illinois citizen that filed a lawsuit in a Pennsylvania state court against a Pennsylvania corporation. While plaintiff and defendant were completely diverse, the forum-defendant rule would ordinarily thwart removal. However, the Pennsylvania defendant learned of the plaintiff’s lawsuit and timely removed to federal court prior to being served. Plaintiff filed a motion to remand, and the trial court denied the remand. The Third Circuit affirmed. The Third Circuit applied a plain reading of § 1441(b)(2) since the defendant had not been served prior to the removal. Thus, not only did the Third Circuit bless snap removal generally, but it also took no issue with the fact that the forum state defendant was the one to effectuate the removal there.
In 2019, the Second Circuit in Gibbons v. Bristol-Myers Squibb Co., 919 F.3d 699 (2d Cir. 2019) followed suit and unanimously affirmed snap removal as a procedural vehicle to remove to federal court. Multiple plaintiffs filed suit against two Delaware companies in Delaware state court. The defendants successfully removed the suit to federal court prior to service. The district court reasoned that from the text of § 1441(b)(2), removal was proper. The Second Circuit agreed and noted that the statute created no barrier to removal because the forum defendants were not yet served. The Second Circuit—quoting the Third Circuit from Encompass—went so far as to note that “the language of the forum defendant rule in section 1441(b)(2) is unambiguous.” Id. at 705 (quoting Encompass, 902 F.3d at 152).
In 2020, the Fifth Circuit in Texas Brine Co. v. American Arbitration Ass’n, Inc., 955 F.3d 482 (5th Cir. 2020) joined the Second and Third Circuits in approving snap removal based on a plain language reading of § 1441(b)(2). In this case, a Texas plaintiff filed suit against a New York defendant and two Louisiana defendants in Louisiana state court. The New York defendant promptly removed before the Louisiana defendants were served. The Fifth Circuit unanimously found that the plain language of § 1441(b)(2) was unambiguous and does not lead to an absurd result. The forum-defendant rule was no barrier to removal because neither of the two Louisiana defendants were served. The panel also noted that “[i]n statutory interpretation, an absurdity is not mere oddity. The absurdity bar is high, as it should be. The result must be preposterous, one that ‘no reasonable person could intend.’ ANTONIN SCALIA & BRYAN A. GARNER, READING LAW: THE INTERPRETATION OF LEGAL TEXTS 237 (2012). In our view of reasonableness, snap removal is at least rational.” Id. at 486 (citation omitted).
Although the plaintiff’s bar may sometimes view snap removals as defense “trickery” or engaging in “gamesmanship,” appellate courts so far do not agree. Snap removals are permitted by federal statute and can be used to the defendants’ advantage when the case is ripe for such a removal.
In 2021, the Tenth Circuit in Woods v. Ross Dress for Less, Inc., 833 F. App’x 754 (10th Cir. 2021) touched on snap removal in a different context. Here, an Oklahoma plaintiff filed suit against an Oklahoma defendant and a California defendant in Oklahoma state court. The California defendant attempted to remove from state court to the United States District Court for the Northern District of Oklahoma on the basis of diversity jurisdiction because at the time of the removal, the Oklahoma defendant had not yet been served. The district court denied plaintiff’s motion to remand. It concluded that “because no ‘properly joined and served’ defendant was an Oklahoma citizen at the time of removal,” removal was appropriate. Id. at 756. However, the Tenth Circuit reversed and noted that the threshold requirement of diversity jurisdiction had not been met: “The [district] court erred because [the removing California defendant] needed to show federal diversity jurisdiction under § 1441(a) before § 1441(b)(2)’s limitation on diversity-based removal could even come into play. Because there was not ‘complete diversity between all named plaintiffs and all named defendants,’ and no other basis for federal jurisdiction existed, the court lacked removal jurisdiction under § 1441(a).” Id. at 759 (quoting Lincoln Prop. Co. v. Roche, 546 U.S. 81, 84 (2005)).
While there have been over one hundred district court cases around the country addressing snap removals, the other circuits have not yet weighed in on the viability of snap removals.
The circuits that have addressed snap removals overwhelmingly bless them and see no absurdity to a defendant removing a case on the basis of diversity jurisdiction if the forum defendant has not yet been served. The plain reading of the statue allows for it.
Tips for a Successful Snap Removal
Removal must ordinarily take place within thirty days of having received “through service or otherwise, … a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based.” 28 U.S.C. § 1446(b)(1). This statutory provision has been interpreted by the Supreme Court to mean that the removal period begins when a defendant is formally served, rather than in receipt of the initial pleading through informal means. Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 354-356 (1999). However, formal service is not a prerequisite for removal. And there is no specific timeline for enacting a snap removal. The very essence of a snap removal is that a defendant removes to federal court before the forum defendant(s) is served.
To determine if forum defendants have been served, the attorney planning to remove can do several things, such as (1) call and ask counsel for the forum defendant about the status of service; (2) check the court docket to determine if service has been noted; (3) in a state like Louisiana, call the sheriff’s office to determine if a sheriff return has been executed. The difficulty, of course, is that these methods for determining service are not always completely up to date. For example, a defendant may attempt to remove based on snap removal only to later find out that the forum defendant was actually served minutes before the notice of removal was filed. If this occurs, since the forum defendant was technically served prior to the case being removed, the attempted snap removal would not be successful.
Snap removals require consent from all “properly joined and served” defendants. Practically, this means contacting each defendant to determine if they have been served and, if so, if they consent to removal.
For removal to be successful, the removing defendant must complete three things before a forum defendant gets served: (1) file the notice of removal in federal court; (2) file a copy of the notice of removal in state court; and (3) notify all adverse parties that the notice of removal has been filed pursuant to 28 U.S.C. § 1446.
Certain district courts have ruled that each of these three steps must be completed before the forum defendant is served. For example, in Hardman v. Bristol-Myers Squibb Co., No. 18-11223, 2019 WL 1714600 (S.D.N.Y. Apr. 17, 2019), a defendant filed a notice of removal in the United States District Court for the Southern District of New York at 2:24 p.m., prior to service on any forum defendant. The forum defendants were served later that same day at 3:51 p.m. At 7:06 p.m., the removing defendant filed a copy of the notice of removal with the state court. The federal district court held that the forum defendants “were served prior to the [removing d]efendants completion of all three statutory requirements under Section 1446(d). The analysis ends there.” Id. at *3 (citations omitted). Similarly, in Brown v. Teva Pharmaceuticals, Inc., 414 F. Supp. 3d 738 (E.D. Penn. 2019), the plaintiff filed suit in state court at 10:06 a.m. At 1:55 p.m., defendants filed a notice of removal in Pennsylvania federal court. On the same day at 2:15 p.m., plaintiff served the forum defendants. The removing defendants filed the notice of removal in state court approximately two hours later (4:11 p.m.). The district court granted plaintiff’s motion to remand and noted that “[t]iming was everything, and plaintiff has won the race.” Id. at 741.
Thus, unless and until the removal statute is amended or the Supreme Court takes up the issue, attorneys should “make it snappy” and “race to the courthouse” to remove state court actions to federal court where forum defendants have not yet been served.