August 22, 2018 Article

Safe at Home? Preservice Removal and the Forum Defendant Rule

By Lindsay C. Omolecki

Defendants are always looking to improve venue by removing a case to federal court whenever the opportunity arises. Plaintiffs, on the other hand, tend to prefer state court and often strategically name a local defendant to prevent removal based on the “forum defendant rule” found in 28 U.S.C. § 1441(b)(2). The forum defendant rule bars removal to federal court based on diversity jurisdiction if the case is filed in a state court in which one of the defendants is a citizen. This is a tactic commonly employed by plaintiffs in product liability cases. Everyone knows that the manufacturer is the target defendant, yet plaintiffs will often name a distributor, pharmacy, doctor, or other party that resides in the forum state in an attempt to keep their case in state court.

Section 1441(b)(2): Snap Removal
Depending on the federal court, a defendant can circumvent the forum defendant rule by removing the case to federal court before the plaintiff serves the forum defendant. Sometimes referred to as snap removal, this loophole is based on the language in section 1441(b)(2), which states that “[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.” 28 U.S.C. § 1441(b)(2) (emphasis added). The properly joined and served language provides a “safety valve” for the forum defendant rule by preventing a plaintiff from naming, but not serving, a forum defendant against whom he does not intend to proceed simply to block removal. Laster v. Monsanto Co., No. 4:18-CV-397 CAS, 2018 U.S. Dist. LEXIS 54260, at *5 (E.D. Mo. Mar. 30, 2018).

Snap removal has become an increasingly popular litigation tactic in recent years. In the age of electronic court dockets, defendants have begun to monitor online dockets and immediately remove a case to federal court before the plaintiff has the opportunity to serve any forum defendant.

Court Split on Preservice Removal
Although grounded in the express language of section 1441(b)(2), this controversial practice has not been universally endorsed by courts.

Some courts interpret the statute literally. Those courts that permit snap removal interpret section 1441(b)(2) literally and reason that until the forum defendant is served, the defendant cannot be considered for removal purposes because the defendant has not been “properly joined and served.” E.g., Howard v. Crossland Constr. Co., No. 17-CV-00480-TCK-FHM, 2018 U.S. Dist. LEXIS 94667, at *5 (N.D. Okla. June 1, 2018). To hold otherwise would fail to acknowledge that the words and served are part of the statute. Courts find further support for snap removal from Congress’s retention of the properly joined and served language when it amended section 1441(b)(2) as part of the Federal Courts Jurisdiction and Venue Clarification Act of 2011. The legislative history of this act suggests that Congress did not have snap removal in mind when it amended section 1441. However, applying rules of statutory construction, when Congress amends one part of a statute but not another, Congress’s inaction is interpreted as satisfaction with, or at least tolerance of, the inadequacies of the unamended portion. Therefore, courts have concluded that Congress endorsed snap removal by preserving the properly joined and served language. Regal Stone Ltd. v. Longs Drug Stores Cal., L.L.C., 881 F. Supp. 2d 1123, 1129 (N.D. Cal. 2012) (citing H.R. Rep. No. 112-10, at 11–16).

Some courts perceive Congress’s intentions as different from its words. Courts that prohibit snap removal also recognize that the plain language of section 1441(b)(2) permits removal before the forum defendant is served, but they essentially choose to ignore the and served language because it would lead to “absurd and bizarre” results that could not have been intended by Congress. E.g., Sullivan v. Novartis Pharm. Corp., 575 F. Supp. 2d 640, 646 (D.N.J. 2008). Courts adhering to this view generally believe that Congress added the properly joined and served language to address the issue of improper or fraudulent joinder and that Congress could not possibly have intended to create an arbitrary method for defendants to evade the forum defendant rule by removing a case before the plaintiff has the chance to serve the forum defendant. Courts have commented that rewarding defendants for the gamesmanship of electronic docket monitoring and “winning a race” does not serve any conceivable public policy goal or further congressional intent. Id. at 646.

Courts differ on whether forum defendants can use snap removal. Snap removal is most often used by a nonforum defendant, but some courts have even allowed preservice removal by the forum defendant itself. E.g., Munchel v. Wyeth LLC, No. 12-906-LPS, 2012 U.S. Dist. LEXIS 128971 (D. Del. Sept. 11, 2012). Nothing in the plain language of section 1441(b)(2) limits removal to nonforum defendants.

Other courts refuse to allow snap removal by the forum defendant because to do so would frustrate the policy underlying the forum defendant rule. The reasoning behind the forum defendant rule is that where one of the defendants is a citizen of the forum state, the likelihood of local bias is diminished. Where the party seeking removal is from the forum state, local bias cannot be used to justify removal. E.g., Fields v. Organon USA, Inc., No. 07-2922 (SRC), 2007 U.S. Dist. LEXIS 92555, at *10 (D.N.J. Dec. 12, 2007).

Practical Implications
There are practical implications for both defendants and plaintiffs.

Monitoring of electronic court dockets might help defendants employ snap removal. Whether snap removal is gamesmanship or a loophole, until Congress or the Supreme Court speaks on the subject, defendants can continue to utilize it to obtain a federal forum. Defendants may even choose to implement procedures to monitor electronic court dockets in order to increase their ability to remove a case before any forum defendant is served.

Defendants will almost certainly face a motion to remand if they employ snap removal, but there is ample legal support for this technique. Defendants should check the case law in their jurisdiction to see how courts have ruled on the issue and obtain the most recent cases to gauge the likelihood of defeating a motion to remand. There is little guidance from federal appellate courts, and district court opinions are not binding precedent; thus, snap removal remains an option even in jurisdictions where the practice has not been well received.

Plaintiffs should serve forum defendants as quickly as possible to avoid snap removal. In order to avoid snap removal, plaintiffs should do whatever they can to serve the forum defendant as quickly as possible. In multidefendant cases, if there are not stringent service deadlines, plaintiffs should consider serving the forum defendant before attempting service on any nonforum defendants in an effort to obtain service on the forum defendant before any other defendants receive notice of the lawsuit.

Of course, if the defendants are monitoring the court docket, they may remove the case before the plaintiff even has the opportunity to serve the forum defendant. Some states have procedural rules that make it impossible to immediately serve a defendant after filing a complaint. For example, if state laws require service by a sheriff, there will inevitably be a delay between the commencement of the action and service. In this situation, it may be infeasible for the plaintiff to serve the forum defendant before the defendants learn of the action through electronic docket monitoring.

 

Lindsay C. Omolecki is a partner Wiedner & McAuliffe, Ltd., in Chicago, Illinois.


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