Recently, in downsizing our elderly father to a smaller residence and cleaning out his house, we came upon a cassette recording of our too-many-decades-ago Bat Mitzvah. We dug an old boom box out of the basement, listened to our sweet 13-year-old voice, and allowed the waves of nostalgia to wash over us. We remembered the dress we wore (pink and white) and the upturned faces of our proud relatives (including all four grandparents, the first of whom would depart the very next year). We recalled the home-cooked food at the “open house” at our home that evening (this was a different era – and tax bracket – than those occupied by cousins who have recently thrown six-figure extravaganzas for their children’s events) and the elusive (for us) sense of religious affiliation. For the thirty minutes of that cassette tape, we were transported.
Our love of nostalgia is neither new nor news. Readers of this blog know how much we love revivals of old Broadway musicals (recent: South Pacific, Pippin, Finian’s Rainbow, Hello, Dolly; upcoming: Carousel, My Fair Lady), and we will wax nostalgic in Connecticut this weekend at our 30th law school reunion (Guido’s torts class anecdotes, anyone?). And we had a wistful flash when we read today’s case. A decade ago, we were enmeshed in the earliest stages of a mass tort MDL. Plaintiffs routinely filed in state court and, seeking to evade federal jurisdiction, sued a distributor domiciled in the state of filing (a “forum defendant”) along with our client, the manufacturer. Trajectory permitting, we would sweep in and remove those cases before the forum defendant was served. We called these “wrinkle removals,” because a “wrinkle” in the removal statute opened this window for us.
As one of our co-bloggers recently explained, this blog has been posting about “removal before service” since Bexis brought it to the attention of the legal community in 2007. It’s a procedural tactic that enables defendants to remove cases to federal court despite the “forum defendant rule,” which ordinarily prohibits a defendant from removing to a case that, while it meets the requirements of diversity jurisdiction under 21 U.S.C. § 1332(a), is also pending in the home state of the defendant. Here’s the rule as codified in 21 U.S.C. § 1441(b) (2): “A civil action otherwise removable solely on the basis of the jurisdiction under section 1332(a) of this title 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.” (Emphasis added).
A review of our long chain of posts on this subject reveals dramatic splits among, and even within, district courts (notably, the Eastern District of Pennsylvania) on this issue. Some courts acknowledge the plain language of the statute and deny remand, while others remand in the supposed “spirit” of diversity jurisdiction. Last week’s Southern District of New York decision in Cheung v. Bristol-Myers Squibb Co., et al., 2017 WL 4570792 (S.D.N.Y. Oct. 12. 2017), one of the best opinions we have read on this issue, falls resoundingly in the former category. In Cheung, the court explained that, in response to the Eliquis MDL court’s dismissal, on preemption grounds, of the first case subject to a 12(b)(6) motion, plaintiffs’ counsel voluntarily dismissed thirty-three cases and re-filed them in Delaware state court. The defendants removed them to the United States District Court for the District of Delaware, and the judge there denied motions to remand all thirty-three cases, holding that removal was proper despite the presence of a defendant domiciled in Delaware. The same plaintiffs’ firm filed four more actions in Delaware state court, and the defendants removed those, too, and tagged them for transfer to the MDL in the Southern District of New York. The plaintiffs waited to move for remand until the cases were transferred to the MDL, then moved to remand all four.
Denying the motions to remand, the court emphasized that “the [removal] statute prohibits removal when there are in-state defendants only when those defendants have been ‘properly joined and served.’ The specific purpose of the ‘joined and served’ requirement has been read to prevent a plaintiff from blocking removal by joining as a defendant against whom it does not intend to proceed and who it does not even serve,” Cheung, 2017 WL 4570792 at * 3 (internal punctuation and citations omitted), precisely the description of the distributor defendant in our long-ago MDL. Noting that it was “undisputed that the defendants removed the cases before they were properly served,” id., the Court held that “a plain reading of the forum defendant rule” permitted removal. Id.
The plaintiffs “urge[d] the Court to ignore the plain reading of the statute to discourage what they term[ed] ‘gamesmanship’ by the defendants,” id., suggesting that the statute “should only be enforced when a removal occurs after a plaintiff has had a ‘meaningful chance’ to serve the [forum] defendant.” Id. They argued that upholding the removals, “which they contend[ed were] strategically done in order to evade the forum defendant rule, would be to frustrate the purpose of both diversity jurisdiction and the forum defendant rule.” Id.
But the court refused to bite. As the court emphasized, “It is well and long established that courts apply the plain meaning of unambiguous statutory language. . . . The plain language of Section 1441(b) makes clear that its ‘prohibition’ on removal applies only where a defendant who has been ‘properly joined and served’ is a resident of the forum state.” Id. at *4 (citations omitted, emphasis in original). The court continued, “Ignoring the plain terms of the statute to determine in an individual case when a plaintiff has had meaningful opportunity to serve each defendant and to investigate the parties’ motives . . . would add expense, delay, and uncertainty to the litigation. In cases like the ones at issue here, the investigation is complicated and points in several directions. While the defendants no doubt removed the actions swiftly [before the forum defendant rule would prohibit removal], a ruling in favor of the plaintiffs on the issue of removal would reward a different type of gamesmanship altogether. Instead of promptly moving before [the District of Delaware] for remand of [these] four cases, . . . [the plaintiffs] waited until the JPML had ordered the transfer to move for their remand, . . . hop[ing] for a different result.” Id. The court concluded, “If the plaintiffs, then, urge an interpretation of the removal statute that takes the litigants’ strategies into account, theirs may not be ignored.” Id. Remand denied, and all four cases dismissed under the same preemption arguments that had previously prevailed.
We just love this stuff. It combines all the elements that, on a good day, make this a fun job – hornbook statutory construction, chutzpah, a confident judge, and questionable opponents. We will continue to follow the trail of this doctrine and will hope that more judges veer down this fork in the jurisprudential road.