Federal Removal When Complaint Does Not Appear To Allow Removal
Although not technically a discovery issue, federal removal is a frequent defense to discovery abuse. This is particularly true for defendants in personal injury/mass tort litigation where plaintiffs file suit in jurisdictions known to be hostile to civil defendants.
Often, plaintiffs seek to avoid federal jurisdiction by either; a) suing a local entity (i.e. distributor/ physician) or; b) pleading damages below the jurisdictional threshold of $75,000. Discovery may show that Plaintiff's efforts to defeat diversity are baseless. If that information comes to light within 1 year of service of the Complaint on a defendant, then the defendant(s) may try to remove the case under Section 1446(b).
Here is an excerpt from a September 16, 2005 opinion denying a Plaintiff's Motion to Remand in MDL 1358, MTBE Litigation. The Court provides a thorough overview of removal based on information obtained after receipt of the initial Complaint:
"Section 1446(b) requires a defendant to file a notice of removal thirty days after receiving the initial pleading."
The thirty-day period is strictly construed.40 It is “triggered by formal service” of the summons and complaint.41 However, section 1446(b) also states:
"If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable."
Thus, section 1446(b) provides that where an initial pleading is not removable as originally filed, a notice of removal may be filed if a later event makes it subject to removal.42 Likewise, when a case is removable, but the grounds in the initial cornplaint are “obscured, omitted, or misstated,” a defendant “has thirty days from the revelation of grounds for removal to file a notice of removal .,,4' The purpose of the thirty-day rule is:
“to deprive the defendant of the undeserved tactical advantage that [it] would have if [it] could wait and see how [it] was faring in state court before deciding whether to remove . . .; and to prevent the delay and waste of resources involved in starting a
initial pleading”) (citing Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 354-55 (1999)).
case over in a second court after significant proceedings. . . in the
first court."44
Conversely, the second sentence of section 1446(b) preserves the defendant’s right to remove a case to federal court upon receiving notice that the case is removable.45
In order to satisfy section 1446(b), a defendant must show (1) that the original complaint was not removable on its face at the time it was filed46 and (2) that another “paper” changed the status of the case, making it clear that the complaint was removable.47 In addition, “the ‘amended pleading, motion, order or other paper’ must emanate from either the voluntary act of the plaintiff in the state court, or other acts or events not the product of the removing defendant’s activity .""
Footnotes:
38 In most instances ascertaining whether a particular state court action is removable is a simple task. See 14C Charles Alan Wright, et al., Federal Practice and Procedure § 3733 at 357 (1998) (“Fed. Prac.”) (noting that it is sensible to apply “the same liberal rules [for] testing the sufficiency of a pleading . . . to appraising the sufficiency of a defendant’s notice of removal” because “in most instances the district court can ascertain easily” whether the case is removable). Despite its procedural complexity, this case is no exception; the mythical imagery and literary flourishes of the papers submitted to the court do not obscure the basic procedural rules which must be applied here. See e.g., Pl. Mem. at 7 (“[ExxonMobil] is caught between Scylla and Charybdis”); 12/1/04 Letter from Marshall S. Perkins, Counsel for Koch plaintiffs, to Judge Marvin J. Garbis, U.S. District Judge for the District of Maryland (ExxonMobil's arguments are an “apogee of sophistry” and “Machiavellian”); Surreply to Plaintiffs’ Motion to Remand (“Suweply”), at 3 (plaintiffs “doth protest too late”).
39 The statute provides in pertinent part: “[A] notice of removal of a civil action or proceeding shall be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based.” 28 U.S.C. § 1446(b).
40 See Maybruck v. Haim, 290 F. Supp. 721,723 (S.D.N.Y. 1968)
(“the 30-day limit for the filing of the removal petition . . . is mandatory and cannot be extended by this Court”) (citations omitted).
41 Whitaker, 261 F.3d at 202 (“the commencement of the removal period [can] only be triggered by formal service of process, regardless of whether the statutory phrase ‘or otherwise’ hints at some other proper means of receipt of theinitial pleading”) (citing Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 354-55 (1999)).
42 See Cottman Transmission Systems LLC v. Bence, No. 03-5467,2004 WL 98594 (E.D. Pa. Jan. 15,2004) (finding that the case became removable on entry of a consolidation order permitting plaintiffs’ claims to be aggregated thereby causing the amount in controversy to reach $75,000).
43 Moore’s ¶ 107.30[3][a][ii]. Accord Lovern v. General Motors Corp., 121 F.3d 160, 162 (4th Cir. 1997) (“the statute does not preclude defendants from removing a case where their discovery of the grounds of federal jurisdiction is belated because facts disclosing those grounds were inadequately or mistakenly stated in the complaint”).
44 Yankee Bank for Fin. & Sav., FSB v. Hanover Square Associates-One Ltd. P’ship, 693 F. Supp. 1400, 141 1 (N.D.N.Y. 1988) (quoting Wilson v. Intercollegiate (Big Ten) Conference Athletic Assoc., 668 F.2d 962, 965 (7th Cir. 1982)).
45See Whitaker, 261 F.3d at 204.
4G See In re Willis, 228 F.3d 896, 897 (5th Cir. 2000) (“thirty-day period begins running on receipt of complaint only when complaint explicitly discloses [basis for federal jurisdiction]").
47 The phrase “other paper" generally refers to “documents generated within the state court litigation.” Zbranek v. Hofheinz, 727 F. Supp. 324, 326 (E.D. Tex. 1989). This includes documents produced in consolidated cases. See Growth Realty Companies v. Burnac Mortgage Investors, Ltd. 474 F. Supp. 99 1 , 996 (D. P.R. 1979) (under 28 U.S.C. § 1446(b), “the phrase ‘other paper’ cannot refer to pleadings filed in a separate, distinct case, in which the parties are not the same and which has not been consolidated as allowed by the local laws of Civil Procedure with the case at the bar"). In addition, the types of document can be anything from a deposition, to an amended pleading, to a letter between the parties. See Fed. Prac. § 3732 at 309-10 (1998) (noting that “depositions, answersto interrogatories, and requests for admissions, amendments to ad damnum clauses of the pleadings, and correspondence between the parties and their attorneys or between the attorneys are usually accepted as ‘other paper’ sources that initiate a new thirty day period of removability” and collecting cases).
Often, plaintiffs seek to avoid federal jurisdiction by either; a) suing a local entity (i.e. distributor/ physician) or; b) pleading damages below the jurisdictional threshold of $75,000. Discovery may show that Plaintiff's efforts to defeat diversity are baseless. If that information comes to light within 1 year of service of the Complaint on a defendant, then the defendant(s) may try to remove the case under Section 1446(b).
Here is an excerpt from a September 16, 2005 opinion denying a Plaintiff's Motion to Remand in MDL 1358, MTBE Litigation. The Court provides a thorough overview of removal based on information obtained after receipt of the initial Complaint:
"Section 1446(b) requires a defendant to file a notice of removal thirty days after receiving the initial pleading."
The thirty-day period is strictly construed.40 It is “triggered by formal service” of the summons and complaint.41 However, section 1446(b) also states:
"If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable."
Thus, section 1446(b) provides that where an initial pleading is not removable as originally filed, a notice of removal may be filed if a later event makes it subject to removal.42 Likewise, when a case is removable, but the grounds in the initial cornplaint are “obscured, omitted, or misstated,” a defendant “has thirty days from the revelation of grounds for removal to file a notice of removal .,,4' The purpose of the thirty-day rule is:
“to deprive the defendant of the undeserved tactical advantage that [it] would have if [it] could wait and see how [it] was faring in state court before deciding whether to remove . . .; and to prevent the delay and waste of resources involved in starting a
initial pleading”) (citing Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 354-55 (1999)).
case over in a second court after significant proceedings. . . in the
first court."44
Conversely, the second sentence of section 1446(b) preserves the defendant’s right to remove a case to federal court upon receiving notice that the case is removable.45
In order to satisfy section 1446(b), a defendant must show (1) that the original complaint was not removable on its face at the time it was filed46 and (2) that another “paper” changed the status of the case, making it clear that the complaint was removable.47 In addition, “the ‘amended pleading, motion, order or other paper’ must emanate from either the voluntary act of the plaintiff in the state court, or other acts or events not the product of the removing defendant’s activity .""
Footnotes:
38 In most instances ascertaining whether a particular state court action is removable is a simple task. See 14C Charles Alan Wright, et al., Federal Practice and Procedure § 3733 at 357 (1998) (“Fed. Prac.”) (noting that it is sensible to apply “the same liberal rules [for] testing the sufficiency of a pleading . . . to appraising the sufficiency of a defendant’s notice of removal” because “in most instances the district court can ascertain easily” whether the case is removable). Despite its procedural complexity, this case is no exception; the mythical imagery and literary flourishes of the papers submitted to the court do not obscure the basic procedural rules which must be applied here. See e.g., Pl. Mem. at 7 (“[ExxonMobil] is caught between Scylla and Charybdis”); 12/1/04 Letter from Marshall S. Perkins, Counsel for Koch plaintiffs, to Judge Marvin J. Garbis, U.S. District Judge for the District of Maryland (ExxonMobil's arguments are an “apogee of sophistry” and “Machiavellian”); Surreply to Plaintiffs’ Motion to Remand (“Suweply”), at 3 (plaintiffs “doth protest too late”).
39 The statute provides in pertinent part: “[A] notice of removal of a civil action or proceeding shall be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based.” 28 U.S.C. § 1446(b).
40 See Maybruck v. Haim, 290 F. Supp. 721,723 (S.D.N.Y. 1968)
(“the 30-day limit for the filing of the removal petition . . . is mandatory and cannot be extended by this Court”) (citations omitted).
41 Whitaker, 261 F.3d at 202 (“the commencement of the removal period [can] only be triggered by formal service of process, regardless of whether the statutory phrase ‘or otherwise’ hints at some other proper means of receipt of theinitial pleading”) (citing Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 354-55 (1999)).
42 See Cottman Transmission Systems LLC v. Bence, No. 03-5467,2004 WL 98594 (E.D. Pa. Jan. 15,2004) (finding that the case became removable on entry of a consolidation order permitting plaintiffs’ claims to be aggregated thereby causing the amount in controversy to reach $75,000).
43 Moore’s ¶ 107.30[3][a][ii]. Accord Lovern v. General Motors Corp., 121 F.3d 160, 162 (4th Cir. 1997) (“the statute does not preclude defendants from removing a case where their discovery of the grounds of federal jurisdiction is belated because facts disclosing those grounds were inadequately or mistakenly stated in the complaint”).
44 Yankee Bank for Fin. & Sav., FSB v. Hanover Square Associates-One Ltd. P’ship, 693 F. Supp. 1400, 141 1 (N.D.N.Y. 1988) (quoting Wilson v. Intercollegiate (Big Ten) Conference Athletic Assoc., 668 F.2d 962, 965 (7th Cir. 1982)).
45See Whitaker, 261 F.3d at 204.
4G See In re Willis, 228 F.3d 896, 897 (5th Cir. 2000) (“thirty-day period begins running on receipt of complaint only when complaint explicitly discloses [basis for federal jurisdiction]").
47 The phrase “other paper" generally refers to “documents generated within the state court litigation.” Zbranek v. Hofheinz, 727 F. Supp. 324, 326 (E.D. Tex. 1989). This includes documents produced in consolidated cases. See Growth Realty Companies v. Burnac Mortgage Investors, Ltd. 474 F. Supp. 99 1 , 996 (D. P.R. 1979) (under 28 U.S.C. § 1446(b), “the phrase ‘other paper’ cannot refer to pleadings filed in a separate, distinct case, in which the parties are not the same and which has not been consolidated as allowed by the local laws of Civil Procedure with the case at the bar"). In addition, the types of document can be anything from a deposition, to an amended pleading, to a letter between the parties. See Fed. Prac. § 3732 at 309-10 (1998) (noting that “depositions, answersto interrogatories, and requests for admissions, amendments to ad damnum clauses of the pleadings, and correspondence between the parties and their attorneys or between the attorneys are usually accepted as ‘other paper’ sources that initiate a new thirty day period of removability” and collecting cases).
posted by Bob Redmond at 1:17 PM
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