As we’ve gleefully chronicled, recently the tide has been running distinctly in our favor on defendants being permitted to remove cases to federal court before plaintiffs – every one of them a non-resident litigation tourist – can serve a so-called “forum defendant” – that is, a completely diverse defendant that is also a resident of the jurisdiction where the action is originally filed.  A resident (that is, not a litigation tourist) plaintiff suing a forum defendant would not be diverse, and thus the case would not be removable at all.

This “forum defendant rule” limits removal of diverse cases to federal court when any (also diverse) defendant residing in the state is sued, no matter how many out-of-state defendants there are, and no matter how relatively unimportant the forum defendant is to the overall lawsuit.  Think of it this way:  the rule would trap six diverse, non-resident multinational corporations in state court whenever a diverse litigation tourist plaintiff also sues a single in-state mon-and-pop drugstore.

Removal before service lets those six target defendants remove the action to federal court – away from the friendly jurisdiction the litigation tourist selected − as long as they do so before the litigation tourist serves mom-and-pop with initial process (usually, but not necessarily, the complaint).  Removal before service has no effect on any plaintiff from suing anybody in the courts of that plaintiff’s home state.  Only litigation tourists would benefit from elimination of removal before service.

Two courts of appeals, the second and third, with jurisdiction over mass tort fleshpots in New York, Pennsylvania and New Jersey (as well the increasingly important personal jurisdictional haven, Delaware), have upheld the language of the statute, 28 U.S.C. §1441(b)(2), against plaintiffs’ claims that Congress couldn’t have meant what it rather clearly said.  See Gibbons v. Bristol-Myers Squibb Co., 919 F.3d 699, 705-07 (2d Cir. 2019); Encompass Insurance Co. v. Stone Mansion Restaurant, Inc., 902 F.3d 147, 152 (3d Cir. 2018).  As discussed in our most recent general post about this subject, these appellate rulings also appear to be moving district courts nationwide, particularly in California, in our direction.

So what have the plaintiffs done?  What they always do – forum shop.  Having first lost in the courts, and then having a rules proposal bounced by the Advisory Committee on the Civil Rules just before Halloween, they have now turned to Congress.  The Courts (and other things) Subcommittee of the House Judiciary Committee recently took time out from more important business to hold a brief hearing on removal before service (also called “snap” or “wrinkle” removal).  Two practicing attorneys – Ellen Relkin of Weitz & Luxenberg, and Kaspar Stoffelmayr of Bartlit Beck – testified, for plaintiffs and defendants, respectively.

Fair enough, but then two law professors also testified, both of whom offered schemes for precluding removal before service.  Thus, the final witness tally was an unbalanced one for our side of the “v.” and three for the other.  Law professors almost always favor more litigation, since that increases demand for lawyers, and thus the demand for professors to teach would-be lawyers.

Here’s a link to a video of the entire hearing.  Note, that for some unknown reason the video plays for over half an hour (30:22, to be precise) before anything at all happens.  Skip to that point to save yourself time.

We learn from the subcommittee chairman’s opening statement (30:39-34:58) that the aforementioned “forum defendant rule” has been around since 1789.  Also that removal before service is a “problem” because it “circumvents” that rule.  Shockingly, modern technology allows “well resourced” defendants to remove cases as little as “ten minutes” after filing.  Removal before service is “machination,” “bizarre,” “gamesmanship.” “manipulation,” “ironic absurdity,” “inherently unfair,” and so on and so forth.  Suffice it to say that the chairman does not like this removal tactic that our blog helped popularize, starting with this post back in 2007 (see also, here, here, here, and here).  Removal before service “eviscerates” the forum defendant rule.

The ranking member (who is retiring) expressed concerns in her opening statement (35:08-37:43) over “negative impact on fairness in litigation by giving one party a clear advantage over the other.”  She recognized that what is going on here is forum shopping, and that forum defendants are being joined “only included to keep a case in a state court that may be seen favorable to the plaintiffs.”  Removal before service “has served to return some balance” in determining where litigation is venued.  Suffice it to say that the ranking member is more favorable to removal before service than the subcommittee chair.

The chairman of the full Judiciary Committee also stopped by to speak (37:50-40:54).  He declared that removal before service is “the latest effort to game the system to favor the wealthy and the powerful” – and so on.  You get the drift.  We agree with him on a number of issues (Bexis recently met him at a White Plains memorial service for a friend), but not this one.  He did made the point that Congress created the forum defendant rule because the “bias” that led the framers to create diversity jurisdiction, “no longer exists” when a forum defendant is sued in that defendant’s home court.

Each witness had five minutes to testify and then answered questions.

Witness Relkin (45:26-50:40) had the usual complaints that defendants were using modern technology to prevent plaintiffs from keeping cases in whatever court they originally chose.  Removal before service was the most “dramatic” procedural “alteration of the landscape of civil litigation” that she has seen in 35 years of practice.  So our side must be doing something right, and she can’t stand it.  It’s a “perfect storm” combining increasing electronic dockets in state court and appellate courts following the plain language of the removal statute.  She dates the “problem” with removal before service to after 2011, when Congress last amended the statute.  (However, by 2010, the Blog already had ten posts on removal before service, which we detailed here, and we knew of 31 favorable cases from 14 states).  She seemed more upset about “hide and seek” with physical acceptance of service, than with removal before service itself.  She also blamed defendants for removing non-diverse cases – a limited point on which we agree (nondiverse cases can’t be removed), but one not germane to removal before service.  Her last point, that suing in the defendant’s home state was the “only state court option for out-of-state plaintiffs,” only underscores (albeit without her saying so) that removal before service only benefits litigation tourists.

Witness Stoffelmayr (50:49-55:57) (whose firm name, we noticed, was misspelled) addressed the forum defendant rule “in practice.”  Litigation tourists are seeking “some special benefit” from their choice of forum.  Removal before service is only effective where “there is proper federal diversity jurisdiction.”  Plaintiffs usually ignore the forum defendant, whose usefulness ends with successful assertion of state-court jurisdiction.  Thus, non-resident defendants are trapped in hostile state courts, notwithstanding full diversity.  The service requirement is “an important limit” on the forum defendant rule.  Amending the statute to eliminate removal before service could have “unintended consequences” that create “gamesmanship of a different kind.”  Empirical data shows that removal before service is “infrequent” (50 times a year) and thus not worth unknown possible consequences.  In any event “a plaintiff who wants to sue in their local home court” is never disadvantaged by removal before service; we are only here because of litigation tourism.  Such plaintiffs really don’t have anything to complain about.

The first of the two law professors, Arthur Hellman (56:04-1:01:16) testified that Congress intended a defendant sued in its “home state” should not be able to remove.  He was mostly interested in a technical fix to “restore symmetry.”  His recommended change would create a fixed “snap back” period during which a forum defendant could be served, even following removal, that would restore state-court jurisdiction under a modified forum defendant rule and require remand  This minimal change would, he testified, reduce the likelihood of unintended consequences and not open any new “loopholes.”

The second law professor, James Pfander (1:01:24-1:05:50) advanced four points.  First, one lesson from removal before service is that forum-shopping matters, so the best we can do is establish rules within which both sides can jockey for position.  Second, removal techniques are good candidates for legislation, since they do not involve any substantive policy.  Courts allow removal before service because of the text of the current statute.  “If Congress chooses to preserve the forum defendant rule,” removal before service should be eliminated.  Third, such removal should be prohibited rather than subject to an after-the-fact snap back.  “Ounce of prevention….”  Fourth, a solution to removal before service might be part of a larger legislative overhaul of removal procedures generally – possibly by delegating everything to a judicial rules committee.  We don’t know if Prof. Pfander was aware that the plaintiffs’ side had already unsuccessfully peddled a rules-based proposal to the existing Civil Rules Committee.

We found the following responses to questions (1:06:04-1:24:02, 1:24:45-1:30:03) interesting, or occasionally, incredible:

Hellman − The forum defendant rule rests on the assumption that as long as there is one resident defendant, no defendant needs protection from local bias.

Stoffelmayr – The forum defendant rule, when not “too quick, does have plenty of justification,” but becomes questionable when non-resident defendants are also involved.  Large non-resident defendants derive “cold comfort” from a small resident co-defendant.

Relkin – removal before service has become “an epidemic” recently.

Relkin – BMS is making fraudulent joinders “go away.”

Stoffelmayr – There are always five or ten “state court hotspots” that litigation tourists like.  Plaintiffs have “asymmetric” ability to file in federal court, whenever they want, but can prevent defendants from having that same forum.

Relkin – Defendants can rely on fraudulent joinder to solve forum shopping.  Even resident defendants use removal before service.  Defendants like unanimous juries.  [Note:  defendants like preemption, Daubert, and TwIqbal even more.]

Stoffelmayr – Fraudulent joinder is of little use because the standard is “incredibly high.”

Stoffelmayr – Both removal and service of process have been speeded up by technology.

Hellman – Once in effect, snap back, would have a preventative, or at least deterrent, effect on rapid removal.

Relkin – unless removal before service is banned, “state court jurisdiction will go away.”  Only federal courts will be able to decide what should be state-law issues, unless they certify questions.

Relkin – “Plaintiffs are not going to have the opportunity to have their cases heard where the very defendant who committed the alleged tort . . . performed it.”  [Note: this is the incredible one, since litigation tourists almost always are fleeing the state where they were the were allegedly injured.]

Relkin – is OK with snap back as a fix.

Relkin – An example of fraudulent joinder was Missouri allowing joinder of 99 plaintiffs, with only one resident plaintiff, which has been changed by that state’s supreme court.

Stoffelmayr – Missouri situation wasn’t an issue of federal fraudulent joinder at all, but a different state-law question involving personal jurisdiction, not removal.  Real problem is state mass torts with 5,000 plaintiffs, 4500 of which are non-residents, with local distributors not serious defendants but surviving a fraudulent joinder analysis.

Relkin – That example was fixed by BMS.  No problem anymore except for removal before service.

What do we think?  We think that everybody pretty much missed the point – except for fleeting references to “preserving” the forum defendant rule, and witness Stoffelmayr’s point that only litigation tourists currently benefit from that rule.

The problem as we see it is not removal before service.  That’s only a symptom.  The real problem is the explosion of litigation tourism – particularly in the mass torts that witness Relkin specializes in (she is W&L’s drug/device practice co-chair).  Litigation tourism is enabled by the forum defendant rule, which as the chairman noted has been more or less unchanged since 1789.  Think about that.  Had they lived back then, it is doubtful that either the subcommittee chair, or the ranking member, could even have voted in their home states.  More to the point, 1789 was long before widespread litigation tourism ever existed.  In 1789, litigation tourism would have meant weeks on horseback, travelling over unpaved roads, just to get to the courthouse.  Moreover, modern-style litigation tourism wouldn’t have worked once the plaintiff got there, because of the territorial limitations on personal jurisdiction exemplified by Pennoyer v. Neff, 95 U.S. 714 (1877) – but existing long before Pennoyer itself:

The authority of every tribunal is necessarily restricted by the territorial limits of the State in which it is established.  Any attempt to exercise authority beyond those limits would be deemed in every other forum, as has been said by this court, in illegitimate assumption of power, and be resisted as mere abuse.

Id. at 720, citing D’Arcy v. Ketchum, 52 U.S. 165, 172 (1850) (New York judgment could not be enforced against non-resident under a 1790 statute).  A plaintiff in 1789 could not trap a non-resident in state court by also joining a forum defendant because s/he could not obtain personal jurisdiction over the non-resident (unless lucky enough to make actual personal service by ambush).  Back when the forum defendant rule was created, a corporation was amenable to suit only in its State of incorporation.  Bank of Augusta v. Earle, 38 U.S. (13 Pet.) 519, 589 (1839).  That’s why states eventually enacted statutes requiring foreign corporations to register to do business.

The forum defendant rule itself, therefore, now operates in ways totally unintended when it was originally enacted.  It serves only to require that state courts adjudicate cases involving non-resident litigation tourist plaintiffs, injured elsewhere, as to which the states being imposed upon have no significant legal interest.

We believe that modern litigation tourism has rendered the entire concept of the forum defendant rule obsolete and archaic.  The mere presence of one “forum defendant” – in whom the plaintiff often (if not invariably) has only a nominal interest – does not prevent other, non-resident, defendants from suffering from the “home cooking” of a state court specifically selected for that purpose by the plaintiff.  That is particularly true when hundreds, or thousands, of other plaintiffs likewise lie in wait in the same place.  Removal before service is simply a tool that modern technology has handed defendants to combat the phenomenon of litigation tourism, something that the Congressional contemporaries of the Founding Fathers never contemplated, and would not have countenanced if they had.

So Congress should address the disease, not the symptom.  Removal before service is an imperfect way of combating injustices that flourish under the forum defendant rule as currently applied.  That rule should not be “preserved” or “maintained” in anything resembling its current scope.  We would happily trade a ban on removal before service for the abolition of the forum defendant rule – or the rule’s limitation to actions brought by a plaintiff who, for some reason (usually jurisdictional), is not able to sue a defendant in the plaintiff’s home state.  The forum defendant rule operates contrary to its reason for being, and thus has no place, whenever other, non-resident defendants are joined.  Until Congress is willing to put litigation tourism itself on the table, though, we believe that removal before service serves a valuable ameliorative function and should be maintained.

Last year was a banner year for removal before service, with both the Second and Third Circuits weighing in to support application of the removal statute according its terms, thereby giving their blessing to the so-called “snap” or “wrinkle” removal practice that this Blog has advocated for a decade.  See Gibbons v. Bristol-Myers Squibb Co., 919 F.3d 699, 705-07 (2d Cir. March 26, 2019); Encompass Insurance Co. v. Stone Mansion Restaurant, Inc., 902 F.3d 147, 151-54 (3d Cir. 2018).  Particularly given coincidental personal jurisdiction developments that tend to restrict mass tort plaintiffs seeking aggregation to suing defendants in their “home” courts, removal before service is now another accepted means for combating the other side’s incessant forum-shopping.  E.g., Anderson v. Merck & Co., 2019 WL 161512, at *1-2 (D.N.J. Jan. 10, 2019) (denying remand in 104 Zostavax cases).

Plaintiffs keep trying, however – frankly, we would expect no less.  Thus, the Pennsylvania lawyers among us are particularly pleased with the recent decision in McLaughlin v. Bayer Essure, Inc., 2019 WL 2248690 (E.D. Pa. May 24, 2019), which shot down an attempt to interpose a Pennsylvania procedural peculiarity against defendants’ ability to remove before service.  In Pennsylvania, unlike practically any other state, a plaintiff may serve a bare summons without an accompanying complaint.  Pa. R. Civ. P. 1007.  It’s a rather common practice because, for very little work, a plaintiff so doing can toll the Pennsylvania statute of limitations.  E.g., Sheets v. Liberty Homes, Inc., 823 A.2d 1016, 1018 (Pa. Super. 2003).

Does the service of a bare summons also preclude removal before service?  In McLaughlin the court held it did not.  As we’ve discussed many times before, removal before service works because, according to the express terms of the federal removal statute, the so-called “forum defendant rule” (barring removal when an otherwise diverse defendant is sued in the state court of its domicile), only applies to defendants “properly joined and served.”  28 U.S.C. §1441(b)(2).  Personal-jurisdiction-driven suits against a defendant in its “home” forum bring the forum defendant rule into play, and thus place a premium on removal before service.

Twenty-four snap-removed plaintiffs contended in McLaughlin that service of a Pennsylvania summons without a complaint satisfied the key statutory language.  The court had no trouble batting away this “Hail Mary pass” of an argument.  First, in analogous removal situations, the service of a bare summons doesn’t count.  Only service of a complaint starts the clock ticking on the 30-day removal period.  Murphy Brothers, Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 347-48 (1999); Sikirica v. Nationwide Insurance Co., 416 F.3d 214, 221-23 (3d Cir. 2005); Maneri v. Starbucks Corp., 2017 WL 5885732, at *2 (E.D. Pa. Nov. 29, 2017); Car Sense, Inc. v. Signet Financial Group, Inc., 2012 WL 13014938, at *2 (E.D. Pa. July 9, 2012); Polanco v. Coneqtec Universal, 474 F. Supp.2d 735, 737 (E.D. Pa. 2007); Gladkikh v. Lyle Industries, Inc., 2006 WL 266100, at *2 (Mag. M.D. Pa. Feb. 1, 2006).

Since only service of a complaint effects removal, plaintiffs’ contention that mere filing of a summons meant that all defendants were “properly joined and served” did not hold water.  McLaughlin, 2019 WL 2248690, at *3.

[W]e cannot allow service of the writ of summons to play such a central role in application of the Forum Defendant Rule when the United States Supreme Court and the Third Circuit have made it clear that the Complaint is the operative pleading for purposes of starting the removal process and the writ is largely inconsequential.

Id. (citing Murphy Brothers and Sikirica).  Congress’ “uniformity” purpose in the removal statute would also be frustrated:

because some forum defendants would be considered “properly joined and served” (and thus prohibited from removing) prior to even knowing the nature of the suit against them while others would not be considered joined and served (and thus prohibited from removing) until they received a Complaint setting forth the precise claims against them.

Id. (citations omitted).

Not only that, but to interpret “properly filed and served” to include a bare summons, would require this language to be construed differently from another place in the removal statute where identical language appears.  The same phrase is in 28 U.S.C. §1446(b)(2)(A), requiring the consent to removal of all “properly joined and served” defendants in federal question cases.  But that language has never been construed to require consent of defendants, served only with a bare summons.  Id.; see Car Sense, 2012 WL 13014938, at *2; DiLoreto v. Costigan, 2008 WL 4072813, at *3-4 & n.4 (E.D. Pa. Aug. 29, 2008), aff’d, 351 F. Appx. 747 (3d Cir. 2009).  A uniform construction of “properly joined and served” precluded a bare summons from qualifying:

[W]e can only conclude that forum defendants who have been served with the writ of summons and have not yet received the Complaint should not be considered “properly joined and served” for purposes of the Forum Defendant Rule.  Thus, consistency demands that the presence in litigation of a forum defendant who has been served with a writ of summons but not the Complaint does not defeat removal that is grounded on diversity jurisdiction.

McLaughlin, 2019 WL 2248690, at *4 (citation omitted).

Having lost everything else, plaintiffs in McLaughlin fell back on a variant of the same “absurd result” argument that the Third Circuit had rejected, as to removal before service in any context, in Encompass Insurance.  2019 WL 2248690, at *4.  This didn’t work either.

[I]n assessing whether the result we reach is “absurd or bizarre,” we are guided by the Third Circuit, which has . . . permit[ted] a forum defendant to strategically evade service in order to avoid application of the Forum Defendant Rule and has concluded that the practical outcome of that interpretation of the Rule is not “so outlandish as to constitute an absurd or bizarre result.”  Encompass, 902 F.3d at 153-54.  In light of this precedent, we conclude that an interpretation of the Forum Defendant Rule that permits removal before the forum defendant is properly served with the Complaint is not “so outlandish as to constitute an absurd or bizarre result.”

Id.  Plaintiffs’ threadbare “gamesmanship” argument fell on deaf ears because, essentially, plaintiffs’ own gamesmanship created the situation.  “Plaintiffs could have avoided the result they now face by merely mailing the Complaint to all of the named Defendants simultaneously with their filing of the Complaint.”  Id.

Thus, McLaughlin effectively hoisted plaintiffs on their own procedural petard.  The other side of the “v.” resorts to summons-only service as a quick and easy way to stop the statute of limitations from running.  But for removal purposes, that same neat trick now also means that nobody has been “properly joined and served.”  Service of a bare summons, where as in McLaughlin the forum defendant rule is in play, becomes the procedural equivalent of an engraved invite to defendants to remove the case to federal court.

Our recent post on “wrinkle removal” – that is, removal before service – case got us thinking.  The opinion discussed in that post, Dechow v. Gilead Sciences, Inc., ___ F. Supp.3d ___, 2019 WL 5176243 (C.D. Cal. Feb. 8, 2019), was out of California, in the Ninth Circuit.  That didn’t keep Dechow from citing the Third Circuit case we blogged about last August, Encompass Insurance Co. v. Stone Mansion Restaurant, Inc., 902 F.3d 147 (3d Cir. 2018).  As we discussed last year, Encompass Insurance was the first appellate decision to address removal before service, and it was a resounding victory for the defense position that such removal is expressly allowed by statute and is a perfectly rational (and hardly absurd) response to the repeated gamesmanship that forum-shopping plaintiffs have resorted to, literally for decades.

So, how has removal before service fared since Encompass Insurance has been in the books?  Previously, we thought the defense “plain language” approach was the majority position, but the split was anything but overwhelming.  We’re pleased to report that the Third Circuit’s reasoning appears to have tipped the balance towards “overwhelming.”  First of all, we can run through new decisions by district courts (in Pennsylvania, New Jersey, Delaware, and the Virgin Islands) that are precedentially bound to follow Encompass Insurance.  These are: Anderson v. Merck & Co., 2019 WL 161512, at *1-2 (D.N.J. Jan. 10, 2019) (denying remand in 104 cases) (mentioned in this post), and Mendoza v. Ferro, 2019 WL 316727, at *2 (E.D. Pa. Jan. 24, 2019) (second removal, within 30 days of Encompass Insurance decision).  We can also, of course, subtract any adverse decisions (there were more than a handful) previously issued from district courts in the Third Circuit.

Outside the Third Circuit, courts have mostly found Encompass Insurance persuasive.  A second case from the Central District of California held:

[W]hen a natural reading of the statute leads to a rational, common-sense result, an alteration of meaning is not only unnecessary, but also extrajudicial.  As the Third Circuit explained, a plain meaning interpretation of the language “properly joined and served” in the Forum Defendant Rule “envisions a broader right of removal only in the narrow circumstances where a defendant is aware of an action prior to service of process with sufficient time to initiate removal.”  Stone Mansion, 902 F.3d at 153. . . .  While it is clear that courts in this district have found that permitting pre-service removal absurd, others have not, concluding that the plain language of Section 1441(b)(2) states that it only applies when the local defendants have been “properly joined and served.” Finally, and arguably most importantly − a Plaintiff in this very district, in a similar removal action unsuccessfully invoked [the absurd results argument] to support remand. [Citing Dechow]

Zirkin v. Shandy Media, Inc., 2019 WL 626138, at *3 (C.D. Cal. Feb. 14, 2019) (other citations and quotation marks omitted).  We are particularly gratified to see these two cases out of the Central District of California.  Our last research post on removal before service tallied up all the favorable decisions between 2011 and mid-2018 (it was written about a week before Encompass Insurance was decided).  It found twelve cases out of California, but only two from the Central District.  Encompass Insurance seems to have convinced the judges in that previously rather refractory district to be less refractory.

Another California decision, Monfort v. Adomani, Inc., 2019 WL 131842 (N.D. Cal. Jan. 8, 2019), expressly “agree[d] with the Third Circuit” and permitted removal before service.  Id. at *4.

[T]he more precise question is whether pre-service removal frustrates the purpose behind §1441(b)(2)’s “joined and served” language.  As the Third Circuit explained, the “joined and served” language reflects Congress’s intent to prevent a plaintiff from fraudulently joining a resident party in order to avoid removal to federal court.  Encompass, 902 F.3d at 153.  Interpreting “joined and served” to permit pre-service removal by an in-state defendant does not impair the provision’s anti-fraudulent joinder purpose, which focuses on what a plaintiff may or may not do to defeat diversity jurisdiction.  Id. (noting that a plain language interpretation of joined and served “protects the statute’s goal without rendering any of the language unnecessary”).  Moreover, . . . Congress amended the removal statute after decisions permitting pre-service removal, but did not alter the “joined and served” language.

Id. (non-Encompass Insurance citations omitted).  Encompass Insurance also proved persuasive in Texas Brine Co., LLC v. American Arbitration Ass’n, 2018 WL 4927640 (E.D. La. Oct. 11, 2018), which cited it for the propositions that “defendants may remove despite unserved resident defendants,” and that “[n]o exception for gamesmanship exists.”  Id. at *2.

Still, while there’s been a shift since Encompass Insurance, there remain courts that find gamesmanship by plaintiffs somehow less bothersome than gamesmanship by defendants, and still refuse to recognize removal before service as permitted by the express terms of the removal statute.  Such a case is Delaughder v. Colonial Pipeline Co., ___ F. Supp.3d ___, 2018 WL 6716047 (N.D. Ga. Dec. 21, 2018), which refused to follow Encompass Insurance on a record that revealed both sides engaging in procedural machinations – with plaintiffs determined to keep a personal injury suit in a plaintiff-friendly court, and a diverse defendant just as determined to be in federal court instead.

Here’s what happened in Delaughder.  Two out-of-state litigation tourists sued the target defendant (a Delaware corporation) in Atlanta over an Alabama accident, also joining a Georgia “forum defendant” that would have prevented removal.  Id. at *1-2 & nn 1-2.  The Delaware defendant successfully snap removed.  In response, plaintiffs moved for voluntary dismissed, fully intending to win the race to the courthouse on their second try.  Id.  The defendant was just ready.  On the same day the voluntary dismissal was effective, the defendant changed its Georgia registered agent.  Id.  Plaintiff refiled the next day and – loaded for bear – served the defendant’s former agent less than half an hour after refiling.  Id.  But service was ineffective because of the change in agents, and the defendant snap removed again.  Id.

Although non-residents suing in Georgia over an accident in Alabama seems, to us, a most blatant example of forum-shopping gamesmanship, the court in Delaughder focused solely on the defendant’s actions.  Although recognizing that “the Third Circuit has definitively come down on one side of the issue,” 2018 WL 6716047, at *3, that court nonetheless went with the “absurd result” argument and remanded.  “While [defendant] found a possible avenue to take away Plaintiffs’ power to decide the forum for this litigation, the Court cannot overlook the clear gamesmanship present in this case.”  Id. at *6.

In the words of another Georgia court, “[o]ne person’s ‘gamesmanship’ is strategy to another.”  Francis v. Great West Casualty Co., 2018 WL 999679, at *2 (M.D. Ga. Feb. 21, 2018).  As for Delaughder itself, there are other words Bexis picked up while living in the Peach State:

Forget, hell.

Here’s something we know about Georgia precedent:

Georgia’s registration statute, Ga. Code §14-2-1501, provides no indication that registration affects jurisdiction one way or another; nor are there relevant state cases. However, in Orafol Americas, Inc. v. DBi Services, LLC, 2017 WL 3473217 (N.D. Ga. July 20, 2017), the court held:

Plaintiff notes that [defendant] is registered to do business in Georgia, and has a registered agent in the State.  Additionally, [defendant] has actually engaged in business in Georgia. . . .  But these contacts are woefully insufficient to render [defendant] “at home” in Georgia.  Every company that does any business in Georgia must register with the State and maintain a registered agent.  Just because a company does some small amount of business in Georgia does not mean that due process will allow that company to be sued in Georgia for acts that occurred outside the State.

Id. at *3.

Out of the frying pan, into the fire.  Nothing in the Delaughder opinion gives us any reason to believe that there is any basis for personal jurisdiction in Georgia over the non-forum defendant.  And not only that, once those plaintiffs lose on jurisdiction, they’ll get no tolling of the statute of limitations in Alabama for their frolic and detour in the Georgia courts, since Alabama is one of “[s]ix states [with] no mechanism for preserving claims following a dismissal without prejudice.”

Game on.

This post comes from the Cozen O’Connor side of the blog.

We’ve been blogging about “removal before service” since we announced it to the world 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 federal court 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).

We emphasized the phrase “properly joined and served” because that’s the basis for “removal before service.” Defendants have had success, in certain courts before certain judges, arguing that this phrase should be interpreted according to its plain terms and that, therefore, a defendant who has not yet been served can remove a case on diversity jurisdiction grounds even if the case is in its home state court.

The court in Young v. Bristol-Myers Squibb Co., 2017 U.S. Dist. LEXIS 98736 (D. Del. June 27, 2017), is one of the courts that accepts this argument. Young was one of 33 cases in the Eliquis drug litigation that plaintiffs’ lawyers had filed in the Superior Court of Delaware. Each plaintiff and the two defendants, Bristol-Myers Squibb and Pfizer, were citizens of different states, suggesting that the cases were ripe for removal to federal court on the basis of diversity jurisdiction. But BMS and Pfizer are citizens of Delaware (as are so many corporations), implicating the forum defendant rule’s bar to removal of diversity cases.

But, as the Young court put it, all of this occurred “before Plaintiffs served (or, due to Superior Court procedures, could have served) their complaints on Defendants.” Id. at *2. The defendants had an opportunity. And they took it. They immediately removed the cases to the United States District Court for the District of Delaware where they had the good fortune of drawing a judge who had previously blessed “removal before service”—and did so again:

The undersigned judge has had several occasions to consider this issue. Having done so again, the Court sees no reason here to depart from its previously-adopted reasoning. See Munchel, 2012 U.S. Dist. LEXIS 128971, 2012 WL 4050072; Hutchins, 2009 U.S. Dist. LEXIS 4719, 2009 WL 192468. As in Munchel and Hutchins, the Court views the plain and unambiguous language of § 1441(b) as controlling. Section 1441(b)(2) provides that a case in which there is diversity jurisdiction “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.” Here, there is diversity jurisdiction, but because there was no service on any defendant before removal, none “of the parties in interest properly joined and served as defendants is a citizen” of “the State in which [this] action” was brought, i.e., Delaware. 28 U.S.C. § 1441(b)(2) (emphasis added).

Id. at *5 (emphasis in original). And so we have yet another decision approving “removal of service” under the plain terms of the statute.

In this instance, the Court suggested that it had an additional reason to rule the way it did. The plaintiffs had already engaged in forum-selection tactics of their own. The cases were originally filed in California state court, not Delaware. The defendants, who were not California citizens, promptly removed the cases to a federal court in California and started the process to transfer the cases to the Eliquis MDL, a place that plaintiffs most certainly did not want to be. So—and here it comes—the plaintiffs voluntarily dismissed all 33 cases. They then re-filed the cases, the very same day, in Delaware state court, a court from which they hoped the forum defendant rule would hamstring defendants from once again removing the cases to federal court. Id. at *1-2.

This history of forum shopping clearly influenced the Court’s decision on plaintiffs’ motion to remand:

Additionally, given the history of these cases — including that Plaintiffs voluntarily dismissed cases originally filed in California state court, seemingly (at least in part) to avoid transfer to the MDL — removal is not a nonsensical result. To the contrary, the totality of circumstances strongly supports exercising discretion to deny Plaintiffs’ motions to remand.

Id. at *4-5.

So the “removal before service” option lives on, at least in some courts. And Young offers precedent for an argument that “removal before service” may be even more appropriate when the history of the case suggests that the plaintiff had already engaged in some sort of procedural maneuvering before the case was even removed.

We’ve learned of another win for removal before service in our local federal court, the Eastern District of Pennsylvania. In Boyer v. Wyeth Pharmaceuticals, Inc., C.A. No. 12-739, slip op. (E.D. Pa. April 25, 2011), the case was removed “before any defendant had been served.”  Id. at 1. The plaintiff sued Pfizer, a non-Pennsylvania defendant, and Wyeth, a Pennsylvania “forum defendant.”  The non-forum defendant (Pfizer) was the removing party.  Id.

As usual, the argument in Boyer came down to a choice between the “plain meaning” of the removal statute (21 U.S.C. §1441(b)), and the plaintiff’s claim that removal before service was some sort of gimmick that courts simply should not allow, no matter what Congress provided.  The court (Judge Ludwig) came down on the side of plain meaning.  Slip op. at 2-6 (collecting cases – including some we haven’t cited before in the blog).

A couple of notes about Boyer:

First, the court drew a distinction between removal before service by the forum as opposed to the non-forum defendant, and suggested that remand is more appropriate “where the unserved removing party was the forum defendant.”  Boyer, slip op. at 4 n.2.  We don’t think that should matter, but to the extent that it does – a word to the wise is sufficient.  If the defendant has a choice (and in Boyer we think there was), then always have the non-forum defendant do the removing.  No use handing the other side an issue that can be avoided.

Second, the plaintiff in Boyer did something a little unusual – serving the forum defendant anyway after the case was removed, and claiming that made a difference.  One reason that argument’s unusual is probably that it’s quite meritless.  As the court observed, “[t]he propriety of removal is determined as of the date of removal.”  Slip op. at 4 (citing Wright & Miller).

So if you’re keeping track, Boyer is one more win for the good guys.  We’ll close the way the court did:

[T]he propriety of pre-service removal has been recognized. . . .  [T]he removal statutes expressly permit defendants to remove state court actions to federal court prior to service.  The pre-service removal of this action by a non-forum defendant where the forum defendant had not been served prior to removal was proper under the unambiguous language of §1441(b).

Boyer, slip op. at 4-5 (citations omitted).

God only knows how many times we’ve posted on the topic of removal before service, because we can’t count that high.  We did take a look through our “removal” topic tag and figured out that our last post about this subject was back in May.  Well, a reader recently sent us a new decision, so we’ve found an occasion to bring up this old saw again.

Briefly, for you newbies, what’s the big deal with removal before service?  First, “removal” in this context refers to the process for getting cases out of state court (generally thought of – by both sides – as more plaintiff-friendly), and getting them into federal court (conversely considered more defense friendly).

Plaintiffs do all sorts of things to get cases into their preferred state-court forums (fora? fori? foræ?).  One of them is to take advantage of the so-called “forum defendant” exception to federal diversity (that is, the plaintiff and defendant are citizens of different states) jurisdiction.  That exception allows a diverse plaintiff (say, from North Carolina) to sue a defendant (say, a large drug company) in the defendant’s home state.  This trick is employed when the defendant has the misfortune of being located in a state (say, Pennsylvania, New Jersey, or California) that also contains a judicial hellhole favored by the plaintiff’s bar.

Well, the “forum defendant” exception is purely statutory, and the statute, 28 U.S.C. §1441(b), provides that only defendants “properly joined and served” at the time of removal count as forum defendants.  Defendants recently figured out (all right, we admit, we helped a little bit) that if the case could be removed ASAP, before the plaintiff had time to serve the forum defendant – the forum defendant no longer defeated the removal of an otherwise diverse case under the best reading of the statute, because it hadn’t been “served” as the statute requires.

In removal before service cases, the opposing arguments are:  On the defense side – even if Congress probably didn’t intend (or even think about) this twist, the plain language of the statute provides that removal before service trumps the forum defendant rule.  On the plaintiff’s side – even though we took advantage of the forum defendant loophole to have a plaintiff from Upper Dogpatch bring suit in the defendant’s home hellhole, it’s too much “gamesmanship” to allow defendants to take advantage of their removal before service loophole to our loophole.

Anyway, we’ve painted the scene.  So here’s what’s just happened.  In Christison v. Biogen Idec, Inc., No. C 11-4382 RS, slip op. (N.D. Cal. Nov. 14, 2011), a plaintiff from Utah (not usually thought of as a judicial hellhole) chose to sue several non-Utah defendants, including Elan, a California corporation in California state court (a full-fledged judicial hellhole).  The defendants (or at least Biogen) got wise to the suit and got it out of Dodge within a week of its being filed – before plaintiff could serve process on Elan.  Id. at 2.

Plaintiff argued gamesmanship.  Defendants argued plain meaning.  The court came down solidly on the side of Congress meaning what it says – and that Congress can change it if they didn’t:

There is no dispute, however, that Elan had not been served with summons and complaint at the time that defendant Biogen Idec, Inc. filed the operative notice of removal.  The plain language of the removal statute permits removal where no defendant who has been “properly joined and served” is a resident of the forum. 28 U.S.C. §1441(b) (emphasis added). . . .  [T]he mere absence of . . . delay here does not warrant adopting a judge-made rule departing from statutory text.  Not only does it remain true that Congress can amend the statute if there in fact is a significant problem with “gamesmanship” . . . plaintiff could have avoided the issue, of which his counsel undoubtedly was aware, by ensuring that he served Elan prior to giving Biogen notice of the filing.

Christison, slip op. at 1-2 (following Carreon v. Alza Corp., 2010 WL 539392 (N.D. Cal. Feb. 9, 2010), which we cited in our last removal before service post) (emphasis original).

Thanks to reader Joe Blute of Mintz Levin for sending along this case.  By the way, as part of this post, we also searched for other good removal before service decisions since our last post in May and found nothing useful.  If you’re out there sitting on something good, please – like Joe Blute – send it along to us.

It was one of our biggest issues in the blog’s first couple of years – whether a defendant’s removal of a case before service on: ( 1) the forum defendant where an out-of-state defendant is sued in its own state’s court, or (2) anybody (including the removing defendant), would result in the unserved forum defendant not counting for removal/remand purposes.  Application of plain statutory language meant that, in products cases where defendants had the bad fortune of residing in a jurisdiction considered pro-plaintiff, out-of-state plaintiffs could not keep sharp-eyed defendants from defeating the forum defendant rule by removing as soon as they learned of an action.

We played a role in popularizing the tactic, blogging about it here, here, here, here, here, here, here, here, here, here, and here. Trying to organize our multiple posts, we put up a comprehensive post that tried to round up every removal-before-service decision we could find (at least the ones taking the position we liked) back in October, 2009.

But since then – over a year and a half – we’ve said nothing about removal before service.  It’s not like we haven’t covered other removal issues….  Heck we discussed two removal issues just this past week, but we hadn’t gone back to the well of pre-service removal.

Well, a reader recently emailed us and asked why.

We didn’t have a good reason, except maybe indolence (or Herrmann retiring).  So we thought we’d take a stroll down Memory Lane and see what, if anything, has happened on that front since our last big post back in late 2009.

What we’ve found is that the dispute still simmers.  Our side says, follow the “plain language” of 28 U.S.C. §1441(b), which states that only defendants “properly joined and served” at the time of removal count as forum defendants.  The other side urges that the statutory language should be ignored in favor or either some version of “intent” or the assertion that removal before service is some sort of high-tech game that the courts don’t have to put up with because it produces an “absurd” result.

There’s law going both ways – the dispute itself certainly hasn’t gone away.  In fact, the most recent case we’ve seen, Hawkins v. Cottrell, Inc., ___ F. Supp.2d ___, 2011 WL 1898867 (N.D. Ga. May 19, 2011), observed that “the federal district courts have been inundated with a flood of cases addressing this issue.”  Id. at *3.  We’d like to think we contributed to that in some small way.

Hawkins, however, came up with a weird (or at least novel) reading of §1441(b) – that somebody had to be properly served before removal, or else the “none of the defendants properly joined and served” language” (the court thought) made sense.  Id. at *6.  It didn’t seem to matter that scores, if not hundreds, of other cases had found before service to be proper (or if improper, not on this ground). Rather, the court held that its “reading of the statute necessarily restricts removal to cases where at least one defendant has been served.”  Id. at *5.

The Hawkins court reached its admittedly novel result by splitting hairs.  It relied on a state law (in Georgia) that an action can be “commenced” but not yet “pending” for purposes of removal.  Id. at *7.  How that would apply to states like Pennsylvania (where plaintiffs can start litigation with a bare summons without filing a complaint), or New York (where there’s a 10-day grace period after service before an action is considered filed) is unclear.  Actually, though, Hawkins was just the absurd results rationale masquerading as straight statutory interpretation, since it relies upon the same old “Congress couldn’t have foreseen the technology” argument to reach its result, just moved to another part in the argument:

[T]he Court implicitly assumed that service of process would always occur prior to removal. The only reason removal is even possible prior to service is due to the advent of electronic case filing and waiver of service rules that could not have been foreseen when the current removal statute was enacted.

Id. at *6 (discussing and attempting to analogize to Murphy Brothers, Inc., v. Michetti Pipe Stringing, Inc., 526 U.S. 344 (1999)).  Basically the Hawkins court was dead set against reading §1441(b) as written and determined to remand no matter what.

But yes, Hawkins definitely demonstrates that the controversy remains.  Our Westlaw search – “1441(b)” within the same paragraph as “properly joined” limited to cases after our last comprehensive post – found a bunch of other cases.

We don’t do plaintiffs’ research for them, so they’ll have to find the relatively few “purpose”/”absurdity” cases for themselves, but we’re happy to provide a list of the recent cases (since our last compilation) holding that removal before the forum defendant is served is proper and creates diversity jurisdiction.  Here they are:

CaliforniaAllen v. Eli Lilly & Co., 2010 WL 3489366, at *2 (S.D. Cal. Sept. 2, 2010) (“clear language” of statute allows removal before service of forum defendants); Carreon v. Alza Corp., 2010 WL 539392, at *2 (N.D. Cal. Feb. 9, 2010) (following plain meaning, finding nothing absurd about the result); Timmons v. Linvatec Corp., 2010 WL 2402918, at *1 (C.D. Cal. Jan. 24, 2010) (removal before service allowed forum defendant to be ignored), reconsideration denied, 2010 WL 2402924, at *1 (C.D. Cal. March 9, 2010) (“the plain language of the statute states that it only applies when the local defendants have been ‘properly joined and served’”); Haseko Homes, Inc. v. Underwriters Insurance Co., 2010 WL 358531, at *2 (S.D. Cal. Jan. 22, 2010) (removal proper where forum defendant not served; defendant may remove before being served).

GeorgiaGibson v. Wal-Mart Stores East, LP, 2010 WL 419393, at *2-4 (M.D. Jan. 28, 2010) (removal before service allowed forum defendant to be ignored; distinguishing cases where diversity is lacking).

Hawai’iWatanabe v. Lankford, 684 F. Supp.2d 1210, 1218-19 (D. Haw. 2010) (following plain meaning, finding nothing absurd about the result).

Illinois: In re Yasmin & Yaz (Drospirenone) Marketing, Sales Practices & Relevant Products Liability Litigation, 2010 WL 3937414, at *11 (S.D. Ill. Oct. 4, 2010) (“[T]his action was removed before the forum defendant was served. This fact, standing alone, is a sufficient ground for denying Plaintiff’s motion to remand.”).

LouisianaBilliot v. Canal Indemnity Co., 2010 WL 4975622, at *2 (W.D. La. Nov. 8, 2010) (removal before service allowed forum defendant to be ignored); Stewart v. Auguillard Construction Co., 2009 WL 5175217, at *3-4 (E.D. La. Dec. 18, 2009) (following plain meaning, finding nothing absurd about the result; forum defendant rule not resurrected by post-removal service).

Maryland:  Robertson v. Iuliano, 2011 WL 476520, at *3 (D. Md. Feb. 4, 2011) (following plain meaning, finding nothing absurd about the result).

MissouriTerry v. J.D. Streett & Co., 2010 WL 3829201, at *2 (E.D. Mo. Sept. 23, 2010) (following plain meaning, finding nothing absurd about the result); Wallace v. Tindall, 2009 WL 4432030, at *3-4 (W.D. Mo. Nov. 30, 2009) (improper service allowed forum defendant to be ignored).

NevadaLamy v. United Parcel Service, Inc., 2010 WL 1257931, at *2 (D. Nev. March 27, 2010) (removal before service allowed forum defendant to be ignored).

New Jersey:  Bivins v. Novartis Pharmaceuticals Corp., 2010 WL 1463035, at *1 (D.N.J. April 12, 2010) (forum defendant rule not resurrected by post-removal service).

North CarolinaChace v. Bryant, 2010 WL 4496800, at *2 (E.D.N.C. Nov. 1, 2010) (removal before service allowed forum defendant to be ignored).

TexasEvans v. Rare Coin Wholesalers, Inc., 2010 WL 595653, at *2 (E.D. Tex. Jan. 28, 2010) (removal before service allowed forum defendant to be ignored).

West VirginiaLeonard v. Mylan, Inc., 718 F. Supp.2d 741, 743 n.2 (S.D. W.Va. 2010) (recognizing removal before service as proper; plaintiffs did not seek remand)

A few observations.  First, in some of these cases the removing defendant was actually served first, and took advantage of the plaintiff’s delay in serving the would-be forum defendant.  In others the removing defendants learned about the litigation, in one way or another, before anyone had been served.  We don’t think the distinction matters because the statute doesn’t distinguish between the two situations.  Obviously, the Hawkins court (but not much else) does.

Second, we note with some satisfaction that more than half of the cases we’re seeing on removal before service don’t involve drugs and devices.  We’re glad to see other defendants jumping on the bandwagon.  When everybody relies upon removal before service, it gets harder for the other side to characterize it as some sort of procedural gimmick that shouldn’t be allowed.

Third, we also came across a useful law review article on the subject, M. Curry, “Plaintiff’s Motion To Remand Denied: Arguing For Pre-Service Removal Under The Plain Language Of The Forum-Defendant Rule,” 58 Clev. St. L. Rev. 907 (2010), which marshals the arguments in favor of pre-service removal, and critiques the arguments against.

We also found a decision that demonstrates how removal before service can have collateral benefits, although a screw-up by the other side is necessary.  In In re Trasylol Products Liability Litigation, 2011 WL 830287 (S.D. Fla. March 8, 2011), the defendant successfully removed some cases before service, and (we assume) won the removal before service argument as remand was denied.  After that, the plaintiffs apparently fell asleep at the switch.  After losing the remand motion, they never bothered to complete service against anybody.  After time passed (enough for the statute of limitations to run), the defendant pounced on this error, and moved to dismiss – again successfully.  Removal before service didn’t in any way prevent these plaintiffs from doing what any competent plaintiff should do, and complete service after removal:

[I]t is undisputed that Plaintiffs have never perfected service. . . .  The issue thus boils down to whether [defendant] has waived the defense of lack of personal jurisdiction by its conduct of this litigation.  I find that [it] has not.  While [the] strategy of removing this case to federal court before service could be perfected certainly rises to the level of “legal gamesmanship,” it does not constitute “overt wrongdoing,” an attempt to “avoid service,” or a general appearance in the case sufficient to forfeit the defense.

2011 WL 830287, at *6.  Dismissal for failure to perfect service is not something one wishes to discuss with ones client.

Thus, in courts that follow the plain meaning of §1441(b) in removal before service cases, smart defendants should be making sure that the plaintiffs in fact do complete service.  Plaintiffs have 120 days to do this under Rule 4(m).  After that, it’s open season for dismissal.  However, even smarter defendants, as in Trasylol, make sure to wait until after the statute of limitations has run.

But we have to say that plaintiffs aren’t the only ones who do dumb things.  Removal before service can only be used to obtain jurisdiction in a truly diverse case – one that could have been brought in federal court in the first instance.  Hair-trigger removal only provides a way around the forum defendant rule (that even diverse cases aren’t removable where the defendant is sued in its home court), but not around a fundamental lack of diversity.  Removal before service of a non-diverse case (where the plaintiff and at least one of the defendants are citizens of the same state) can’t create federal jurisdiction.  E.g., Jennings-Frye v. NYK Logistics Americas Inc., 2011 WL 642653, at *3-4 (C.D. Cal. Feb. 11, 2011) (“case law is clear that a defendant who is a citizen of plaintiff’s state destroys complete diversity, regardless of whether that defendant was properly served prior to removal”); Smith v. Federal Express Corp., 2010 WL 3634347, at *3 (E.D. Mich. Sept. 14, 2010) (“including the unserved defendant, destroys diversity and eliminates this Court’s jurisdiction”); O’Brien v. Cessna Aircraft Co., 2010 WL 4721189, at *15 (D. Neb. July 21, 2010) (“Diversity of citizenship among the parties is determined . . . regardless of whether each party has been served at the time of removal”).

This is pretty basic 1-L civil procedure, so we don’t recommend removing a non-diverse case just because the plaintiff hasn’t gotten around to serving the non-diverse defendant.  For one thing, it could lead to fee-shifting sanctions, and telling a client it has to pay the other side’s lawyers is also something unpleasant.  But more fundamentally, even if the plaintiff is asleep at the switch, it’s not a good idea to remove a non-diverse case.  There’s no subject matter jurisdiction, and subject matter jurisdiction can be challenged at any time.  That means that a defendant removing a non-diverse case for lack of service on a non-diverse defendant could end up spending a lot of time and effort litigating a case to a favorable result, and have everything taken away when the plaintiff finally wakes up (or a court sua sponte raises subject matter jurisdiction).

Overall, we’d have to say based on our review, that removal before service is alive and well, and that the good guys – the “plain meaning” argument – seem to have the upper hand at the moment.  The dispute is likely to continue for some time, because remand orders are not appealable, and removal by definition takes place at the outset of the case.  Even if somebody were inclined to challenge a successful removal on appeal long after the fact, that’s still in the future.

By now, everyone but the newest of our readers knows this drill.  The client gets sued in state court.  The action would be removable, because there’s diversity of citizenship between plaintiff and defendants (that is, they live in different states) except there’s an “in-state” defendant that prevents removal because the plaintiff sued that defendant in that defendant’s own state’s courts.  The in-state defendant (which may or may not be the client) hasn’t been served yet.

Remove to federal court before the in-state defendant is served, and what happens?

You may or may not get remanded, depending primarily on who the assigned federal judge is.  We’ve posted about this a lot, most comprehensively here.

The latest entry is Wallace v. Tindall, 2009 WL 4432030 (W.D. Mo. Nov. 30, 2009), which denied remand.  So what are the quirks in Wallace?  For one thing, it was an amended complaint – and the in-state defendant was actually served, but only the first time around.

What happened is this.  There was an auto accident; out of state plaintiff sues in-state defendant, the other driver in that driver’s home (Missouri) court.  And served him right – literally.  Proper service on the in-state defendant under Missouri law.  Wallace, 2009 WL 4432030, at *1.

But, oops….  What if the other driver doesn’t have deep enough pockets?

Thus, a couple of weeks after completing service, the plaintiff files an amended complaint naming two additional out-of-state defendants:  the other driver’s employer and an insurance company.  There’s still diversity between the plaintiff (not sure where he’s from, but not Missouri). Id.

But while plaintiff serves the new defendants with the amended complaint, he doesn’t serve the original, in-state defendant.  Id.

Double oops.

The additional defendants remove the case to federal court.  Not only that, but the original defendant (the one not served with the amended complaint) didn’t consent to the removal.

Thus the question presented:  Is removal before service proper under the “properly joined and served” language of 28 U.S.C. §1441(b) where the in-state defendant was properly served with the original complaint that didn’t name the removing defendants, but not with the amended complaint that did name those defendants.  (There’s also a secondary question about consent to removal, but that turns on the same issue.)

Answer, according to Wallace:  Yes!

Here’s why.  Missouri state practice requires that, “Each affected party shall be served with. . .[e]very pleading subsequent to the original petition.”  Missouri Rule 43.01(1)(1).  But that rule doesn’t apply to defendants “in default.”  Id. 43.01(a)(3) (inapplicable exception omitted).

Plaintiff might have gotten away with the amendment, but didn’t wait long enough.  For a defendant to be “in default” under Missouri law, 30 days had to pass without the defendant answering (or otherwise pleading to) the complaint.  Because the amended complaint came only a couple of weeks after service of the first complaint, the defendant wasn’t in default when the second one was served.  Thus, under Missouri rules, plaintiff was obligated to serve him.  Wallace, 2009 WL 4432030, at *3.

A couple of things might be going on here.  It could just be a sloppy plaintiff’s counsel.  That would follow Occam’s Razor, which in this context means “don’t ascribe to malevolence, what can be explained by incompetence.”  Or it could be that the original defendant was just a sham to keep the case in state court (and the first service was to prevent resort to §1441(b)).  Or it could be that the plaintiff, regardless of intent, couldn’t wait any longer – maybe plaintiff simply couldn’t wait any longer to sue the additional defendants.  The opinion doesn’t give the accident date, so there could be a statute of limitations looming out there.

In any event, the original, in-state defendant wasn’t properly served with the amended complaint when the new defendants removed it.  That also did away with the plaintiff’s “consent to removal” argument, since the need to obtain consent likewise applied only to “properly served” defendants.  Wallace, 2009 WL 4432030, at *4.

So on the main question, whether removal before service of an in-state defendant is proper, the court came down squarely on the side of those courts interpreting §1441(b) as meaning what it says:

The issue of service however is the pivotal issue in this case. Courts have held that even though a Missouri defendant is named in a Complaint, if that defendant is not served at the time of removal, the forum defendant rule does not apply. . . .  As held by the ‘majority’ of federal courts, this Court must apply the statute as written and determine that Defendants properly removed this action.

Wallace, 2009 WL 4432030, at *3.  The court followed two previous Missouri district court cases, Brake and Taylor – both of which we’re glad to see were included in our prior attempt at comprehensively addressing (our side of) this issue.

So chalk up another one for the side of truth, justice, and an infinite number of peculiar fact patterns.

Thanks to reader Roshan D. Shah at Baker, Sterchi for the tip….

On the one hand, there’s the plain language of the statute.

On the other hand, some courts think that a literal reading of the statute would yield “a bizarre result” that “cannot possibly have been the intent of the legislature.”

So some courts follow the language, and others ignore it. The law becomes a muddle.

That happened when Congress accidentally wrote in the Class Action Fairness Act that “a court of appeals may accept an appeal from an order of a district court granting or denying a motion to remand . . . if application is made to the court of appeals not less than 7 days after entry of the order.” 28 U.S.C. §1453(c)(1) (emphasis added). Does CAFA really impose a seven-day waiting period for appeals of remand decisions or, more likely, did Congress mean to impose a seven-day deadline, requiring that appeals be taken not more than 7 days after entry of the remand order?

In the CAFA setting, many courts simply ignored the statutory language, reading “less” to mean “more” — which is an awfully dangerous approach to statutory construction. Our guest blogger, Sean Costello of Jones Day, opined that Judge Easterbrook of the Seventh Circuit solved this riddle in Spivey v. Vertrue, Inc., 528 F.3d 982 (7th Cir. June 11, 2008), holding that “less” means “less” and finding another route to avoid the absurdity seemingly imposed by that reading.

That’s one out of the way.

Shift gears.

The conventional thinking is that a defendant sued in its home state court cannot remove the action to federal court. The removal statute, 28 U.S.C. Sec. 1441(b), contains the “resident defendant” exception to removal based on diversity jurisdiction. An action can be removed on the basis of diversity only if “none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.”

Suppose, however, that the plaintiff names a resident defendant in the complaint, but the defendant removes the case before the plaintiff has served it? The plain language of the statute seems to permit removal of such a case, but plaintiffs argue that such a literal construction leads to absurd results, because defendants could evade the resident defendant exception simply by removing actions before service.

We’ve followed this issue with interest — here, here, here, and here. And Judge Baylson’s approach, which allows courts to split the baby, here. (We just can’t get enough of this puppy. Are we weird, or what?)

A recent pair of cases brings this issue back into our sights, because they so squarely show the clash between the “literal language” line of reasoning and the opposing “ignore the language to prevent absurdity” rationale.

Thus, in Brown v. Organon International, Inc., No. 07-3092(HAA), 2008 WL 2833294 (D.N.J. July 21, 2008), plaintiffs sued Organon (a New Jersey citizen) in New Jersey state court. Organon removed the action on the basis of diversity before the plaintiff effected service. Judge Ackerman, following the recommendation of Magistrate Judge Salas, would have none of it: “Reading the statute literally would give rise to the absurd, ‘untenable result that forum defendants can remove actions from state court as long as they do so before they are served.’ . . . ‘Such a bizarre result cannot possibly have been the intent of the legislature.'” Id. at *4 (citations omitted). Motion to remand granted.

And then there’s the other side of the coin. Just one week later, in In re Fosamax Prods. Liab. Litig., No. 1:07-cv-2442 (JFK), 2008 U.S. Dist. Lexis 57473 (S.D.N.Y. July 28, 2008) a court reached precisely the opposite result. There, plaintiff sued Merck (a New Jersey citizen) in New Jersey state court. (The MDL Panel transferred all of the Fosamax cases to New York, so Judge Keenan of the S.D.N.Y. ultimately ruled on plaintiff’s motion to remand.) Merck removed before plaintiff had served it. Judge Keenan read the same Section 1441(b) that Judge Ackerman had read, but Judge Keenan didn’t see any issue at all: “Plaintiff does not claim that she served Merck or any other in-state defendant before removal. . . . [T]he plain language of section 1441(b) allows removal unless an in-state defendant has been ‘properly joined and served.’ . . . Therefore, the case was removable and Flores’ motion to remand is DENIED.'” Id. at *47.

You couldn’t ask for a more stark contrast of results — or of judicial philosophies.

Although our crystal ball is cloudy, we predict that the view reading statutory language literally will ultimately prevail. Just as Judge Easterbrook finally cracked the riddle in the context of CAFA, some judge will find a way to read the removal statute literally and yet avoid any absurd result, or else state courts or Congress will revamp the existing legal framework to avoid any supposed gamemanship.

Any other solution can’t last in the long run. If courts have the power to ignore unambiguous statutory language, then laws will have lost their meaning, and the judiciary will no longer be The Least Dangerous Branch.

Here is another post from our junior blogger-in-training, Dean Balaes.  He tackles one of the blog’s favorite subjects, removal before service to bring our readers the skinny on the first case where a plaintiff attempted to interpose a COVID-19 objection to snap removal, unsuccessfully.  Since other plaintiffs might try the same thing, that makes for an interesting post.


The precedent of unprecedented COVID-19 times reveals the other side’s willingness to ignore the law and rely on unprecedented imaginations.  In Ellis v. Miss. Farm Bureau Cas. Ins. Co., 2020 WL 2466247 (E. D. La. May 13, 2020), the plaintiff creatively tried (and failed) to take advantage of the COVID-19 world crisis to harpoon Due Process and Defendant’s valid snap removal.  This Blog has explained many times over many years that removal before service under 28 U.S.C. Section 1441(a) is a necessary and strategic move to avoid “state-court fora that attract litigation tourists from all over the country.”

Quick recap.  Assuming that federal subject matter jurisdiction exists, removal provides the defendant an opportunity to override the plaintiff’s choice of forum.  When evaluating the merits of removal, courts will look only to defendants named in the complaint and properly served with process.  Therefore, §1446(b)(2)(A) requires that removal be joined by all defendants “who have been properly joined and served.”  Section 1446(b)(1) requires that the notice of removal be filed in federal court within 30 days after “receipt by the defendant, through service or otherwise.”

But what happens when a defendant is not formally served with process?  In Ellis, the defendant was not formally served and filed a notice of removal “following receipt of the petition for Damages.”  Ellis, 2020 WL 2466247, at *6.  As snap removals go, this one was not particularly snappy.  Eight days passed between the filing of suit and the defendant’s removal.  Id. at *1.  On motion to remand the proceeding to state court, the issue became whether “a defendant may properly file a notice of removal prior to being formally served.”  Id. at *2.  The answer is emphatically, yes.  Ellis cited to Delgado v. Shell Oil Co., 231 F.3d 165, 177 (5th Cir. 2000):  “[G]enerally, service of process is not an absolute prerequisite to removal.”  Id. at *3.  Fifth Circuit jurisprudence interprets 28 U.S.C. §1446(b), “through service or otherwise,” to “require that an action be commenced against a defendant before removal, but not that the defendant have been served.”  Id.

Not liking how things were playing out, the plaintiff contended that it was “unfair” that one defendant filed a notice of removal before another defendant could be served.  They alleged that the defendant removed the case “knowing that Governor Edwards’s stay-at-home-order would significantly delay” the plaintiff’s ability to serve another defendant.  Id. at *4.  This COVID-19 order occurred during the eight days between the plaintiff’s initial filing and removal to federal court.  Id. at *1.  Therefore, the plaintiff claimed that defendant’s (valid) removal was contrary to the intent of the forum defendant rule.  Id. at *4.

This argument was a Hail Mary pass that ignored Fifth Circuit jurisprudence.  “[T]he Fifth circuit recently considered and squarely rejected [the plaintiff’s] argument” in Texas Brine Co., LLC v. Am. Arbitration Ass’n, Inc., 955 F.3d 482, 485 (5th Cir. 2020), which we blogged about here.  Texas Brine had found valid removal where the defendant acted four days after a plaintiff filed a complaint and before either of the two other defendants could be served.  955 F.3d at 485.

While COVID-19 has caused a lot of changes, one thing the virus did not change was the plain language of the federal removal statute.  Texas Brine controlled, so Ellis held that defendant’s removal avoided the forum defendant rule.  “[T]he only defendant properly joined and served at the time of removal was not a citizen of Louisiana, the forum state.”  Ellis, 2020 WL 2466247, at *10.  Ellis is significant because, as a practical matter, the plaintiff was probably right – COVID-19 has made most methods of service, particularly in-person service, more difficult.  But that practical difficulty is of no more consequence than the plaintiff’s prior “gamesmanship” complaints, given the plain language of the statute.  In Ellis, the plaintiff did not follow the letter of the law, but the defense did.  COVID-19 or no, the matter was validly removed.