The DDL blog is no friend of the forum defendant rule – the exception to removability of diverse cases. You wouldn’t find us lamenting if it suddenly disappeared because it would take with it busloads of litigation tourists who would no longer have any incentive to sue a forum defendant – often a nominal defendant – just to force out-of-state defendants to endure litigation in a state court handpicked by plaintiff. However, as we noted in our most recent post on the issue of snap or wrinkle removal, if the forum defendant rule is sticking around, so too must removal before service. Fortunately, the Fifth Circuit becomes the third appellate court to adopt the defense “plain language” approach which is quickly becoming the overwhelming majority view.
The “forum defendant rule” provides that
[a] civil action otherwise removable solely on the basis of [diversity] 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). So, by way of example assume a Kansas plaintiff files suit in Pennsylvania against an Indiana drug manufacturer and a distributor who has a principal place of business in Pennsylvania. There is complete diversity but the case stays in state court thanks to the forum defendant despite its almost assuredly minimal ties to events that give rise to the suit. That is unless the Indiana defendant can remove the case before the Pennsylvania defendant is served. That’s what the statute says and that’s how the Second, Third and now the Fifth Circuit read and apply it.
Texas Brine Company, L.L.C. v. American Arbitration Association, Inc., — F.3d –, 2020 WL 1682777 (5th Cir. Apr. 7, 2020) is not a drug/device case, but it did involve a Texas plaintiff, a New York defendant, and two Louisiana defendants sued in state court in Louisiana. Before the Louisiana defendants were served, the New York defendant removed the case to federal court. When plaintiff challenged the removal, the court was asked to decide whether the “plain language” of the statute was unambiguous and whether it would lead to an “absurd result.” Id. at *3.
The language of the forum defendant rule is pretty plain and unambiguous, so plaintiff argued that snap removal was an absurd result. Id. Plaintiff contended that Congress’s intent in adding the “properly served” language was to prevent plaintiffs from naming forum defendants simply to defeat diversity. Plaintiff’s solution was that the language should be ignored when a plaintiff really and truly intends to pursue its case against the forum defendants. Gee, do you really promise, pinky swear, cross your heart? We’re sure that’s a standard courts want to enforce.
As the Fifth Circuit explained, however, “absurdity is not mere oddity. The absurdity bar is high, as it should be. The result must be preposterous, one that ‘no reasonable person could intend.’” Id. (quoting Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 237 (2012)). We’re sure McConnell would have some wonderfully humorous examples of absurdities versus oddities if this was his post, but given that we are living in a worldwide pandemic that is shutting down nations which in part has led to Tiger King becoming an international phenomenon the bar for absurdity has risen significantly this year.
Under any circumstance though, snap removal doesn’t rise to that level. The Fifth Circuit found that removal before service “is at least rational.” Even if Congress failed to appreciate the effect the “proper service” provision would have, that does not make it absurd. Id. Like both the Second and Third Circuits, the Fifth Circuit concluded that “a reasonable person could intend the results of the plain language.” Id. Such reasons include limiting gamesmanship, providing a bright-line rule (service v. plaintiff’s intent), and “to protect out-of-state defendant from in-state prejudices.” Id. This takes us back to our prior point – if you are going to have the forum defendant rule which in modern practice has led to litigation tourism, out-of-state defendants need a bright-line rule to counter plaintiffs’ forum-shopping games.
The unambiguous language of the statute, and giving meaning to each word, means that the forum defendant rule “is inapplicable until a home-state defendant has been served” and “until then, a state court lawsuit is removable” where complete diversity exists. Id. And, the court found no “exceptional circumstances” that warranted creating an exception to the exception that would require reading into the statute a “reasonable” time to effect service on the forum defendant. Id.
With the growing body of authority on the defense side which may even sway districts with prior not so favorable interpretations – by all means, snap remove.