We looked back over the blog and it’s been over one year since we posted on snap removal.  Last spring and summer, we reported on new pre-service removals almost monthly.  So, we decided to poke around a bit and see if there was anything going on outside the drug and device law space.  We found Choi v. GM LLC, 2021 U.S. Dist. LEXIS 172291 (C.D. Cal. Sept. 9, 2021) and thought the court’s reasoning was worth bringing to our audience.

Plaintiffs filed suit in Los Angeles County Superior Court against GM and three local dealerships.  Three days later, before any defendant was served, GM removed the case to federal court.  It was undisputed that complete diversity existed between plaintiffs and defendants.  Id. at *4n1.  It was also undisputed that the local dealerships were forum defendants which means that the “local-defendant” limitation on removals applies – if a case is otherwise removable on the grounds of diversity, it “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).

There are two schools of thought on the forum-defendant rule.  There is the view that one should read into the statute a requirement that at least one defendant be served or that plaintiff be given a reasonable opportunity to serve at least one defendant before a case can be successfully removed.  We’ll call that the plaintiff-school.  Or simply, wrong.

The alternative view is that the statute should be afforded its plain meaning.  Only if a local defendant is “properly joined and served” may an action not be removed.  We’ll call that the defendant-school.  Or simply, correct.

The court first looked to the Ninth Circuit.  It has not addressed the issue.  Plaintiffs, therefore argued that since the majority of courts in the Central District of California have opted to follow the plaintiff-school, so too should this court.  But defendants had Central District cases on their side as well.  The court determined it need not decide “on which side of the line this District comes down with mathematical precision.”  Id. at *7.  Instead, the court looked to the reasoning of the only three federal appellate courts to have decided the issue.  And all three applied the plain meaning of the statute.

We’ve posted about all three appellate decisions – the Third Circuit’s Encompass Ins. Co. v. Stone Mansion Restaurant Inc., 902 F.3d 147 (3d Cir. 2018); the Second Circuit’s Gibbons v. Bristol-Myers Squibb Co., 919 F.3d 699 (2d Cir. 2019); and the Fifth Circuit’s Tex. Brine Co., LLC v. Am. Arbitration Ass’n. Inc., 955 F.3d 482 (5th Cir. 2020).   Plaintiff tried to argue that there are in fact four appellate decisions on snap removal citing the Eleventh Circuit’s opinion in Goodwin v. Reynolds, 757 F.3d 1216 (11th Cir. 2014).  But the issue decided by that case was whether the district court erred in allowing the plaintiff to voluntarily dismiss her suit without prejudice.  Id. at *9.  While the district court had also denied plaintiff’s motion to remand, that ruling was not appealed and was not before the court – a point the 11th Circuit repeatedly points out in the opinion.  While there is some language in the decision to suggest that the court found the pre-service removal to be a “technicality” or “gamesmanship,”

the appellate court did not effectively re-write Section 1441(b)(2) by ignoring the “properly joined and served” language (as Plaintiffs essentially as the Court to do here).

Id. at *10.

The Choi court’s view is that if Section 1441(b)(2) is going to be re-written, it needs to be by Congress.  Id. at *11.  Indeed, the plaintiffs’ bar took the issue to Congress in 2019.  And as we discussed in our post at that time, the real issue should have been litigation tourism.  If Congress is going to do anything, it should get rid of the archaic forum-defendant rule not pre-service removal.

Putting Congress aside, the court explained why not adhering to the plain language of the statue is problematic.  To the extent plaintiffs wanted the court to read into the statute a requirement that they be given a “reasonable” opportunity to serve the complaint before service, the court recognized that would cause more problems than it would solve.  What is a “reasonable” time to effectuate service?  What is to stop one court from deciding 24 hours is sufficient and another from finding a week is reasonable?  Plaintiffs encouraged the court to follow the district majority on this issue to promote predictability and consistency.  But introducing an undefined “reasonableness” standard into the rule would only lead to less, not more certainty.  Id.*13-14.  And, as for that district majority in the plaintiff-school, none of the Central District cases on which plaintiffs relied were decided after Encompass, Gibbons, or Tex. Brine.  Following the overwhelming appellate level support for pre-service removal, the Central District cases started joining the defendant-school; they just don’t outnumber the earlier cases yet.  Id. at *13n.6.

In sum, “[c]ertainty follows from application of the plain language of a statute, an approach that is in-line with the only federal courts of appeal to have directly-considered the question.”  And not through “inexact standards based upon words and/or principles that do not actually appear in the statute.” Id. at *14.