But removal is not always possible. Even when diversity jurisdiction would otherwise attach, forum defendants usually cannot take advantage of removal because of 28 U.S.C. § 1441(b)(2)—known as the “forum-defendant rule.” The forum-defendant rule prohibits removal based on diversity jurisdiction “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.” As an example, if a Michigan citizen sues an Ohio citizen in Ohio state court for $75,001, and the Ohio citizen is properly joined and served, the Ohio citizen cannot remove the case to federal court.
Still, the forum-defendant rule is not an absolute barrier to in-state defendants. In several courts, in-state defendants have identified and successfully invoked a loophole to the forum-defendant rule based on the rule’s plain language. That is, at least in some jurisdictions, in-state defendants have successfully avoided the forum-defendant rule by removing the case before being served with the complaint. In other jurisdictions, courts have allowed removal so long as a nonforum defendant has been first served. Other jurisdictions have applied variations of these rules.
This article discusses the federal courts’ current jurisprudence analyzing such “snap” or “preservice” removals.
Circuit Courts Permitting Preservice Removals
To date, three circuit courts have held that preservice removals are valid. The common thread among these decisions is their reading of 28 U.S.C. § 1441(b)(2)’s plain text, which they have held specifies that only a forum defendant “properly joined and served” cannot remove to federal court. Thus, if a forum defendant has not been served, removal is still on the table in these jurisdictions.
Third Circuit. The first circuit to weigh in favorably regarding preservice removal was the Third Circuit in Encompass Insurance Co. v. Stone Mansion Restaurant, Inc. There, after claims related to an automobile crash had been settled, an Illinois automobile insurer sued in Pennsylvania state court seeking contribution from the Pennsylvania restaurant that had served the intoxicated driver. Before accepting electronic service of process, the restaurant timely removed the matter to the U.S. District Court for the Western District of Pennsylvania, and the insurer moved for a remand while the restaurant moved to dismiss. The district court denied the motion to remand and granted dismissal.
On appeal, the plaintiff insurer argued that the district court had misinterpreted the forum-defendant rule, “ignoring its intent and construing it ‘in a manner that necessarily would create a nonsensical result that Congress could not have intended.’” Starting with the text of 28 U.S.C. § 1441(b)(2), the Third Circuit concluded that “the language of the forum defendant rule in section 1441(b)(2) is unambiguous. Its plain meaning precludes removal on the basis of in-state citizenship only when the defendant has been properly joined and served.”
Because the plain meaning supported the forum defendant’s preservice removal, the Third Circuit next questioned whether there had been a “most extraordinary showing of contrary intentions” and considered whether that literal interpretation led to “absurd or bizarre results.” In this analysis, the Third Circuit concluded that by including the phrase “properly joined and served,” Congress addressed a “specific problem—fraudulent joinder by a plaintiff—with a bright-line rule.” Thus, the Third Circuit reasoned, applying the plain language might create a “peculiar” result, but it does not defy rationality or render the statute nonsensical or superfluous because the reasoning (1) abides by the text’s plain meaning, (2) envisions a broader right of removal only in the narrow circumstances where a defendant is aware of an action before service of process, and (3) protects the statute’s goal without rendering any of the language unnecessary. As such, the Third Circuit affirmed the district court’s denial of remand, noting that if any change to the statute is required, “it is Congress—not the Judiciary—that must act.”
Second Circuit. The Second Circuit followed suit in Gibbons v. Bristol-Myers Squibb Co. In that case, the plaintiffs in a multidistrict litigation appealed from a judgment in the U.S. District Court for the Southern District of New York, asserting that the district court incorrectly denied the motions to remand the 44 cases before it and wrongly found the plaintiffs’ claims to be preempted.
As to the removal issue, the plaintiffs argued that because the only basis for federal court jurisdiction was diversity of citizenship, and because defendants Bristol-Myers Squibb Co. and Pfizer were sued in the state courts of their home state (Delaware), 28 U.S.C. § 1441(b)(2)’s forum-defendant rule barred removal. The Second Circuit disagreed, holding that the forum defendants were entitled to remove actions to federal court based on diversity of citizenship after the suits were filed in state court but before any defendant was served, notwithstanding the forum-defendant rule. In so ordering, the Second Circuit noted that it was resolving a “split among the district courts” as to the forum-defendant rule’s application.
Like the Third Circuit, the Second Circuit reasoned that the language of the forum-defendant rule is unambiguous and that, “[b]y its text,” § 1441(b)(2) is “inapplicable until a home-state defendant has been served in accordance with state law; until then, a state court lawsuit is removable under Section 1441(a) so long as a federal district court can assume jurisdiction over the action.”
The Second Circuit also rejected the plaintiffs’ argument that following the plain text would produce absurd results, finding that “a statute is not ‘absurd’ merely because it produces results that a court or litigant finds anomalous or perhaps unwise.” The Second Circuit noted that Congress’s intent in adopting the “properly joined and served” requirement may have been to both limit gamesmanship and provide a bright-line rule that might be more easily administered.
Finally, the Second Circuit rejected the plaintiffs’ argument about avoiding “non-uniform application” because of variations in state law service requirements, explaining that “state-by-state variation is not uncommon in federal litigation, including in the removal context.”
In sum, the Second Circuit concluded that “the result here—that a home-state defendant may in limited circumstances remove actions filed in state court on the basis of diversity of citizenship—is authorized by Section 1441(b)(2) and is neither absurd nor fundamentally unfair.”
Fifth Circuit. Finally, in Texas Brine Co., L.L.C. v. American Arbitration Association, Inc., the Fifth Circuit agreed with the Second and Third Circuits and concluded that “[b]y its text, then, Section 1441(b)(2) is inapplicable until a home-state defendant has been served in accordance with state law; until then, a state court lawsuit is removable under Section 1441(a) so long as a federal district court can assume jurisdiction over the action.”
In that case, after an American Arbitration Association (AAA) arbitration, a party to that arbitration sued in state court alleging that the AAA and arbitrators engaged in intentional and wrongful fraudulent conduct during the proceedings. Before the plaintiff served the two Louisiana-based defendants, the AAA removed the case to the U.S. District Court for the Eastern District of Louisiana. The plaintiff moved to remand, and the district court denied the motion and ultimately granted the defendants’ motions to dismiss.
On appeal, the Fifth Circuit began by recognizing that “the forum-defendant rule is a procedural rule and not a jurisdictional one.” There, the district court had subject matter jurisdiction because each defendant was diverse from the plaintiff: the plaintiff was a Texas citizen, while the defendants were a New York corporation (the AAA) and two individual citizens of Louisiana.
Turning to the text, the Fifth Circuit held that § 1441(b)(2)’s plain meaning was that the forum-defendant rule could not apply until a home-state defendant had been served. Thus, in that case, although the AAA had been served, it was not a citizen of Louisiana, the forum state. All that mattered under the statute’s plain language was that AAA removed before the Louisiana defendants had been served.
Next, the Fifth Circuit, like the Second and Third Circuits, rejected the plaintiff’s argument that applying the language would lead to an absurd result: “In our view of reasonableness, snap removal is at least rational.” The Fifth Circuit explained that unintended consequences did not require the court’s intervention: “We are not the final editors of statutes, modifying language when we perceive some oversight.”
Circuit Courts Not Allowing Preservice Removals
No circuit court has yet firmly rejected preservice removal. Instead, in dicta, the Eleventh Circuit in Goodwin v. Reynolds rejected the forum defendants’ attempts to use preservice removal. There, a man had died after a tractor-trailer struck him, and his widow sued three defendants in state court. But only one defendant was a citizen of the forum state. The plaintiff paid for the service of process on all three defendants the same day that she filed suit. One of the nonforum defendants received a courtesy copy of the complaint. It and the other nonforum defendant then removed, before any defendant had been served. The plaintiff moved to remand and, in the alternative, moved to dismiss the case without prejudice under Federal Rule of Civil Procedure 41(a)(2) so that she could refile in state court. The district court granted the plaintiff’s motion to dismiss the case without prejudice so the plaintiff could refile the case in state court in “such a manner as to irrefutably trigger the forum-defendant rule and, thereby, preclude a second removal.”
The defendants argued that the district court abused its discretion, but the Eleventh Circuit held that “under the circumstances of this case, it was not” an abuse of discretion. District courts enjoy broad discretion whether to allow a voluntary dismissal under Rule 41(a)(2), and the appellate court held that since the “purported removability” was based on a “technicality,” the dismissal deprived the defendants of no “substantial right,” even if the case was removable.
The Eleventh Circuit noted that the district court found that the case was removable because the forum defendant had not yet been served; the court specifically stated: “That aspect of the district court’s order is not before us, and we assume arguendo that it is correct.” Nonetheless, the court concluded that “Defendants’ right of removal, if any, was not at the core of what the removal statute protects.” In dicta, then, the court briefly discussed preservice removal and said that allowing such removal would promote gamesmanship by defendants. Further, because the “properly joined and served” language was to address fraudulent joinder and therefore to prevent tactical maneuvers by plaintiffs, the court also noted in dicta that the district court similarly has discretion to “undo Defendants’ gamesmanship in the circumstances at bar” by granting the plaintiff’s motion to dismiss under Rule 41(a)(2).
Ninth Circuit’s Decision on “Super” Snap Removals
Notably, the Ninth Circuit has left open the “final chapter on snap removals,” even as it addressed a slightly different question: the validity of what it deemed “super” snap removals. Specifically, in Casola v. Dexcom, Inc., the Ninth Circuit held that “super” snap removals—removals effectuated before a complaint was even technically “filed” in state court—were impermissible.
The Ninth Circuit’s opinion addressed three cases that were consolidated on appeal. In each, defendant Dexcom had removed not only before it was served but also beforethe underlying complaints were even filed in state court. In reviewing a decision to remand the underlying actions to state court under the forum-defendant rule, the Ninth Circuit held that Dexcom’s “super” snap removals were premature because they constituted attempts to remove cases that did not yet exist as civil actions pending in state court. Because the removals were ineffectual, the district court had the “power to grant the plaintiffs’ eventual motions to remand” based on the forum-defendant rule even though the plaintiffs waited more than 30 days after Dexcom’s so-called removal before moving to remand and thus blew the motion to remand deadline that would apply to a legitimate removal. The Ninth Circuit ultimately dismissed the consolidated appeals for lack of jurisdiction.Thus, the Ninth Circuit’s message to forum defendants is that when it comes to removals, be quick, but not too quick, as only an existing civil action can be removed.
Interestingly, the Dexcom decision appears to disregard the plain language of the 30-day deadline for motions for remand set forth in 28 U.S.C§ 1447(c), which provides that “[a] motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction must be made within 30 days after the filing of the notice of removal under section 1446(a).” Notably, the Ninth Circuit never held that the federal judiciary lacked subject matter jurisdiction. Arguably, the plaintiffs were challenging what could have been thought of as a simple “defect.” But instead of finding that the plaintiffs’ remand was untimely under § 1447(c), the Ninth Circuit found that the super snap removals were “legal nullities that did not start the 30-day remand clock under § 1447(c).” In so finding, the Ninth Circuit opened the door for future plaintiffs to challenge removals after § 1447(c)’s 30-day deadline.
Indeed, in finding that the state court complaint was not deemed filed until processed or endorsed by the state court clerk, the Ninth Circuit expressed little sympathy for Dexcom’s position, which posited that “filing” meant simply delivering the complaint to the clerk. The Ninth Circuit explained:
It is defendant Dexcom . . . who asks the court to deem these cases into existence before their docketing in state court. And for what purpose but to attempt to deprive Plaintiffs of their choice of forum? Whatever the benefits might be to litigating in federal court, there is no manifest injustice to a California-based company having to defend itself in a California court. . . . Often-overburdened state trial courts deserve the chance to at least register the pleadings that come to them before having cases removed by nimble parties.
Further, the Ninth Circuit stated that adopting Dexcom’s “delivery-as-filing rule would effectively give in-forum defendants with subscriptions to e-filing monitoring services a safe harbor in which to accomplish snap removals unhindered by speedy service of process.”
The Ninth Circuit’s decision in Dexcom thus does not foreclose preservice removals in the Ninth Circuit. Instead, it establishes the boundaries for forum defendants who seek to remove to federal court: removal must be made before service and after the complaint is “filed” under the state court’s rules.
District Courts in the First, Fourth, Sixth, Seventh, Eighth, and Tenth Circuits
The remaining circuits have yet to weigh in directly on preservice removals, leaving the district courts in those circuits split on the question.
First Circuit. The First Circuit has not weighed in on preservice removals. Instead, in Novak v. Bank of New York Mellon Trust Co., NA., the court held that a nonforum defendant may remove a state court action to federal court any time after the lawsuit is filed but before the statutorily defined period for removal ends. In a footnote, the First Circuit noted that because the plaintiff had “not named a defendant who is a citizen of the forum state in this case,” the court did not need to consider or decide whether the defendant’s notice of removal “would have been proper under the forum-defendant rule.”
In the absence of circuit court authority, district courts within the First Circuit have taken a nuanced approach to snap removal, finding that preservice removal is not appropriate unless at least one party (a nonforum defendant) has been served at the time of removal. The “seminal” case on this issue, Gentile v. Biogen Idec, Inc., specifically holds:
Precluding removal until at least one defendant has been served protects against docket trolls with a quick finger on the trigger of removal. Under the reading I have given to section 1441(b) here, plaintiffs legitimately seeking to join a forum defendant face the modest burden of serving that defendant before any others. If a plaintiff serves a non-forum defendant before serving a forum defendant, he has effectively chosen to waive an objection to the removal by a nimble non-forum defendant who thereafter removes the case before service upon a forum defendant named in the complaint. And, even when a forum defendant is served first, my reading anticipates a situation in which an unserved non-forum defendant may remove following service on a forum defendant, in hopes of arguing that joinder of the forum defendant was fraudulent.
In so deciding, the Gentile court explained that the plain meaning of the word “any” in § 1441(b) “assumes at least one party has been served”; otherwise, “ignoring that assumption would render a court’s analysis under the exception nonsensical and the statute’s use of ‘any’ superfluous.” Under this interpretation, if no party has been served, the statute is inapplicable.
The Gentile court also supported its decision by the history and purpose of removal, finding that although the removal power gives a “non-forum defendant the ability to seek the protection of the federal court against any perceived local bias in the state court,” the “protection-from-bias rationale behind the removal power evaporates when the defendant seeking removal is a citizen of the forum state.” Further, the Gentile court found that Congress intended the “properly joined and served” language to prevent plaintiffs from defeating removal through improper joinder of a forum defendant; thus, “incomplete service appears to have been included as a means of identifying and policing such abuse by proxy.”
Fourth Circuit. Courts in the Fourth Circuit are “divided” on the issue of whether § 1441(b)(2) permits “removal involving an unserved forum defendant.” Some courts have rejected snap removal, holding, for example, that “the plain meaning of Section 1441(b)(2) permits pre-service removal by a resident defendant, but a literal application of this plain meaning is contrary to congressional intent and creates absurd results.” Other courts apply the plain meaning of the statute, holding that removal is unavailable only once a forum defendant is “properly joined and served.” Thus, so long as the forum defendant has not been served, these courts will uphold removal.
Sixth Circuit. The Sixth Circuit has previously hinted that it approves of preservice removals. Specifically, a footnote in McCall v. Scott notes, “Where there is complete diversity of citizenship, as [the plaintiff] concedes there was, the inclusion of an unserved resident defendant in the action does not defeat removal under 28 U.S.C. § 1441(b).”However, this footnote in McCall has been consistently dismissed as dicta.
In the absence of clear circuit guidance, courts within the Sixth Circuit have varied in their interpretation of § 1441(b)(2) and the propriety of snap removal. For example, the U.S. District Court for the Southern District of Ohio has repeatedly held that “snap removals are inappropriate.” A “substantial number of the District Courts within the Sixth Circuit” have held that preservice removal contradicts the purpose of § 1441(b)(2)—to limit gamesmanship.
Other district courts in the Sixth Circuit have read § 1441(b)(2)’s plain language to “condition[] removal on service of at least one [nonforum] defendant” such that “[r]emoval is . . . improper before any defendant has been served.” This approach thus mirrors the approach in the First Circuit, described above.
Seventh Circuit. District courts within the Seventh Circuit have also been split in their decisions. Some courts have found that the statute’s plain meaning permits a forum defendant to remove an action to federal court before being served. For example, in D.C. ex rel. Cheatham v. Abbott Laboratories, Inc., the U.S. District Court for the Northern District of Illinois upheld a preservice removal, finding that “the statutory text must control.” In so deciding, the court nonetheless acknowledged that no Seventh Circuit precedent interpreted the forum-defendant rule, and that district courts within the circuit have disagreed on the correct interpretation.The court noted, however, that “it is sufficiently common to imagine that Congress will rewrite the statute if it feels that removal where an in-forum defendant has not yet been served constitutes an abuse of the judicial system.”
Other district courts have held that interpreting § 1441(b)(2) literally would produce absurd results plainly at odds with the forum-defendant rule’s purpose. For example, in Hoffman Bikes, Inc. v. Pacific Cycle, Inc., the court disagreed with allowing its jurisdiction over the case to be “determined by [the defendant’s] race to the federal courthouse.” The court held that such a result is “so plainly at odds with the purpose of the forum-defendant rule that the court would look beyond the plain language to avoid the absurd result,” and as a result, the court remanded the case where the forum defendant had removed before service.
Eighth Circuit. Within the Eighth Circuit, the Missouri district courts appear to have most thoroughly addressed the propriety of snap removal. Like many of the district courts in the other circuits, these courts are also split. Some Missouri district courts have found that § 1441(b)(2)’s plain language permits snap removals. Others have rejected the propriety of snap removals, finding that the maneuver violates the forum-defendant rule’s purpose. Still others have found that given the use of the word “any” in § 1441(b)(2), “the plain language contemplates removal only where at least one [nonforum] defendant had been served.”
Tenth Circuit. Although district courts in the Tenth Circuit vary in their interpretation of § 1441(b)(2), “district courts within the Circuit have held that removal without service could be improper.”
Some district courts in the Tenth Circuit have allowed preservice removals under § 1441(b)(2)’s plain language unless doing so would produce an absurd result. Specifically, district courts following this approach have explained that § 1441(b)(2)’s plain language would control and allow for removal “when there is scant evidence that the plaintiff made any timely attempt to serve [the] defendant” or when a plaintiff attempts to “prevent removal by naming a forum defendant without any genuine intention to proceed against that defendant.” “But where the facts show that the forum defendant is not a sham party, and that the removing defendant is attempting snap removal before the plaintiff has a reasonable opportunity to serve the forum defendant, courts do not countenance the absurd results flowing therefrom.” In that scenario, remand would be appropriate.
Other courts in the Tenth Circuit agree more directly with district courts in the First Circuit that § 1441(b)(2)’s plain language does not apply unless at least one nonforum defendant has been served.
An Effective Tool
Preservice removals can be an effective tool for forum defendants who want to avoid litigating in state court. Litigants should be aware of this tool and the varying approaches among the circuit courts so that they can adjust their approach accordingly.
As discussed, some courts will simply allow snap removals when a forum defendant removes before service, even in instances where the forum defendant is the only defendant, or where there is a nonforum defendant that also has not been served. Other courts will require that at least one nonforum defendant has been served before a defendant attempts to effectuate removal. Still, others will reject preservice removals altogether. Thus, although time is normally of the essence with snap removal, defendants should be aware of these other factors that will determine whether or not their removal will stick within a certain jurisdiction.
