September 04, 2014 Top Story

Third Time Is Not a Charm for Party Seeking Removal

Eighth Circuit lacked jurisdiction to review untimely removal attempt

Sara E. Costello

Untimeliness prevented the U.S. Court of Appeals for the Eighth Circuit from reviewing a defendant’s third failed attempt to remove a case in Arnolds Crossroads, L.L.C. v. Gander Mountain Company. In finding it lacked jurisdiction, the Eighth Circuit sidestepped the question of whether it is possible to remove something “less than the entire case” to federal court.

Three Failed Removal Attempts

In a suit involving the breach of a commercial lease, the defendant repeatedly attempted to remove the case to the U.S. District Court for the Eastern District of Missouri. First, because the defendant was a citizen of Minnesota, it sought to remove the action from the Missouri state court based on diversity jurisdiction, as set out in 28 U.S.C. § 1332(a). The Arnolds Crossroads district court, however, concluded that the amount in controversy failed to satisfy the $75,000 requirement included in § 1332(a). Thus, the district court remanded the matter to Missouri state court.

Next, the defendant filed its own suit against the plaintiff in federal court seeking a declaratory judgment. But the district court abstained from hearing the matter to avoid interference with the state court case.

After the plaintiff increased its claim for damages to several million dollars in the state court action, the defendant again tried to remove the case. Because the plaintiff filed its initial complaint in state court 18 months earlier, the court found the removal attempt to be untimely. Section 1446(c) provides that a case cannot be removed more than one year after it was commenced.

Nearly a year later, the City of Arnold, which had a redevelopment agreement with the plaintiff, intervened in the state case. The city alleged that it was harmed by the defendant’s misrepresentations. Ten days before trial, the defendant made its third removal attempt. The defendant argued that the city’s complaint “initiated a separate and independent civil action removable” under 28 U.S.C. § 1441(a). Thus, the defendant aimed to remove only the city’s suit. Both the city and the plaintiff filed motions for remand.

The district court remanded the case, based on its previous remand orders. The court also held that “28 U.S.C. § 1441(a) allows only entire cases to be removed to federal court.” The defendant appealed the district court’s order to the Eighth Circuit.

The Eighth Circuit Lacks Jurisdiction over Third Remand Order 

The Eighth Circuit first pointed out “Congress has decided in the ordinary case the federal district court should have the final word on removal.” The court noted that 28 U.S.C. § 1447(d) bars the review of remand orders involving procedural defects or the lack of subject matter jurisdiction. Accordingly, it was necessary for the Eighth Circuit to ascertain the basis for the district court’s remand order.

Although the district court’s ruling was brief, the Eighth Circuit attached importance to the court’s reference to the reasoning in its earlier orders, one of which addressed untimely removal. Thus, the Eighth Circuit concluded that the district court also viewed the defendant’s third removal attempt as untimely. Because the “basic ground for the district court’s remand order was that Gander’s removal attempt was defective,” the Eighth Circuit held that it did not have jurisdiction to review the district court’s ruling.

In a lengthy dissent, Judge Lavenski R. Smith argued that the majority erred in concluding that the district court’s order was focused on timeliness. Instead, the dissent suggested that the Eighth Circuit should review and resolve whether it was possible for the defendant to remove “less than the entire case.” The dissent noted, “few cases touch on whether an intervenor’s separate claim against a defendant can be removed despite the lack of removability of the underlying claim.”

Evaluating the Eighth Circuit’s Ruling

“Although the dissent raised some good points,” the majority’s decision is sound “overall policy,” believes Donika P. Pentcheva, Minneapolis, MN, cochair of the ABA Section of Litigation’s Business Development & Litigation Skills Subcommittee of the Young Advocates Committee. Parties should not be able to remove “something less than an entire case,” she says.

In comparison to the “dissent’s well-written and well-reasoned” opinion, “the majority is stretching,” thinks Jeffrey G. Close, Chicago, IL, cochair of the Section of Litigation’s Discovery and Motion Practice Subcommittee of the Pretrial Practice & Discovery Committee. The decision is “very results-oriented,” he suggests. The result, however, is not surprising because “federal courts jealously guard their jurisdiction.”

Filing Successful Removal Requests

It is important to remember that “removal is a statutory privilege, not a right,” Pentcheva says. Thus, attorneys filing for removal must “strictly comply with the statute’s requirements,” she recommends.

If the court requests such information, attorneys must be ready “to file evidence of their due diligence regarding the monetary amount or diversity” of the parties, Close suggests. It is also helpful to “know local practice” and have information about how local judges have handled other removal requests, he notes.


Sara E. Costello is an associate editor for Litigation News.

Keywords: removal, diversity jurisdiction, Eighth Circuit

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