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June 27, 2018 Top Story

New Trigger for Determining Removal Deadline

Fifth Circuit extends deadline in cases where basis for removal arises during deposition

By Geoff A. Gannaway

Discovery of a basis for removal during deposition does not necessarily start the 30-day clock to file removal papers.

When does the 30-day clock begin?

When does the 30-day clock begin?

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Although some circuits have held the federal removal statute is triggered as soon as a witness gives relevant testimony, the U.S. Court of Appeals for the Fifth Circuit recently muddied the waters by allowing a defendant 30 days from the date it received a transcript of the testimony in question. ABA Section of Litigation leaders warn of questions left unanswered by the opinion and opportunities for gamesmanship.

Defendant Removes after Learning of Federal Issue During Deposition

The original pleading in Morgan v. Huntington Ingalls, which a former shipyard employee filed in state court seeking damages related to asbestos-related mesothelioma, did not reveal any basis for federal jurisdiction. However, in the middle of an eight-day deposition that stretched over a period of more than a month, the plaintiff indicated he may have worked on the USS Huntsville. Eight days later, the defendant, Avondale Shipyards, received a link to the deposition transcript. It then waited a month before removing the case to the U.S. District Court for the Middle District of Louisiana based on the testimony regarding the USS Huntsville and the federal officer removal statute, 28 U.S.C. § 1442(a)(1). On the plaintiff's motion, the district court concluded that removal was untimely and remanded the case to state court. The outcome turned on the court's holding that the removal clock began running on the date of the relevant oral testimony, which occurred more than 30 days prior to removal.

"Other Paper" Requirement Not Necessarily Satisfied by Oral Testimony

On appeal, the parties disputed the application of the rule that a case must be removed within 30 days "after receipt . . . of an amended pleading, motion, order, or other paper from which it may first be ascertained that the case is one which is or has become removable," as set forth in 28 U.S.C. § 1446(b)(3). The defendant argued that the deposition transcript was the "other paper" within the meaning of the statute and asked the appellate court to vacate the remand order because removal had occurred within 30 days of the transcript's arrival. In response, the plaintiff urged the court to follow the U.S. Court of Appeals for the Tenth Circuit and adopt the rule that oral testimony satisfies the "other paper" requirement, even without a written transcript.

The Fifth Circuit sided with the defendant, concluding that the plain meaning of, purpose of, and policy behind the removal procedure all weighed against treating oral deposition testimony as "other paper." To say that a defendant "receives" a "paper" when it hears oral testimony would defy logic and dictionary definitions, the court held.

The court also weighed the twin, competing aims of the procedure: encouraging prompt, proper removals and preventing hasty, improper removals. While the court acknowledged that defendants could intentionally delay their removal deadline by declining to order a transcript, it was more concerned that triggering the deadline based on oral testimony might lead litigants to file premature "protective removals" before completing a multi-day deposition and obtaining all information relevant to the removal question. Therefore, the court announced, a "bright-line rule" that the removal clock does not start ticking until receipt of the deposition transcript was appropriate.

Unanswered Questions and Opportunities for Gamesmanship Remain

The outcome in Morgan may have been driven in part by the unusual, month-long length of the plaintiff's deposition, according to Tracy A. DiFillippo, Las Vegas, NV, cochair of the Section of Litigation's Pretrial Practice & Discovery Committee. "The court crafted this rule to address extremely lengthy depositions like the one in this case, but it is extraordinary for a deposition to last more than a day or two. For a deposition of normal length, the justification for the rule is not as persuasive," she explains. "The removal deadline is now less concrete [in the Fifth Circuit] than in other circuits. For example, a lawyer might not order the transcript in order to buy more time."

Section leaders question whether the line drawn by the Fifth Circuit is entirely bright. "The deadline seems to be triggered by receipt of the official transcript, leaving open the question whether daily transcripts, rough drafts, and real-time feeds count as 'other paper,'" notes Robert J. Will, St. Louis, MO, cochair of the Section's Pretrial Practice & Discovery Committee. Because of these unanswered questions, lawyers should still treat the removal clock as if it started ticking when the deponent testified, Will advises.

"Err on the side of caution," he suggests. "You do not want the other side to have room to question whether you missed a deadline." So treat the 30-day clock for removing to federal court as starting the day you receive information indicating you may have the right to remove.


Geoff A. Gannaway is a contributing editor for Litigation News.

Hashtags: #Removal, #Remand, #FederalJurisdiction


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