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Noted with Interest: "Snap Removal"

October 17, 2022
Business Litigation Reports

If you think there is no avenue to remove a case when one of the parties is a forum defendant, think again. A process known as “snap removal” has gained the approval of all of the federal appellate courts that have considered it thus far, while the lower courts seem more hesitant to adopt it as proper.

So long as diversity jurisdiction exists, 28 U.S.C.§ 1441(b) allows a defendant to remove a case to federal court except where “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(a); § 1441(b)(2) (emphasis added). Courts refer to this limitation as the “forum defendant rule.” Based on a plain reading of the statute, a party attempting a snap removal would argue that a defendant that is not “properly joined and served” in the state action is not subject to the limitation of the “forum defendant rule” by the very terms of Section 1441(b)(2).

Three federal appellate courts (the Second, Third and Fifth Circuits) that have squarely addressed whether Section 1441(b) allows for removal prior to service on a forum defendant have each concluded – based on the plain language of the statute – that snap removal is in fact permissible. Gibbons v. Bristol-Myers Squibb Co., 919 F.3d 699 (2d Cir. 2019) (permitting snap removal by a forum defendant based on the plain language of the removal statute); Encompass Ins. Co. v. Stone Mansion Restaurant Inc., 902 F.3d 147, 153-54 (3d Cir. 2018) (same); Texas Brine Co., L.L.C. v. American Arbitration Ass'n, Inc., 955 F.3d 482, 486-87 (5th Cir. 2020) (adopting the rationale of Gibbons and Encompass to hold that the plain language of Section 1441(b) permits removal by a non-forum defendant prior to service on a forum defendant). In addition, the Sixth Circuit, noted in a footnote that Section 1441(b)(2) allows snap removal. McCall v. Scott, 239 F.3d 808, 813 n.2 (6th Cir. 2001) (“Where there is complete diversity of citizenship . . . the inclusion of an unserved resident defendant in the action does not defeat removal under 28 U.S.C. § 1441(b)(2).”) (emphasis in original). Finally, the Eleventh Circuit noted in dicta that “[b]y its terms, the forum-defendant rule applies only if a forum defendant has been ‘properly joined and served.’” Goodwin v. Reynolds, 757 F.3d 1216, 1220-21 (11th Cir. 2014).

Some lower federal courts, however, have been hostile to this “tactic.” For example, analyzing the entire statutory phrase, courts have held that the term “any” should be considered inclusive – you consider the forum of parties only after they have been served and are properly joined. See Bowman v. PHH Mortg. Corp., 423 F. Supp 3d 1286. 1289 (N.D. Ala. 2019) (“‘Any’ [] means ‘one or more indiscriminately from all those of a kind.’ Inherent in the definition ‘is some number of the kind from which the one or more can be drawn.’”); Gentile v. Biogen Idc, Inc., 934 F.Supp. 2d 313, 318 (D. Mass. 2013) (“[T]he statute assumes at least one party has been served; ignoring that assumption would render a court’s analysis under the exception nonsensical and the statute’s use of ‘any’ superfluous.”)

Other courts, including the Eleventh Circuit, have expressed concern with defendants exploiting the language of the statute as part of gamesmanship. In Goodwin, for example, the Eleventh Circuit suggested, but did not hold, that if a defendant engaged in the kind of “gamesmanship” related to service that was apparent in that matter, a court may have discretion to remand a case removed pursuant to Section 1441(b). Goodwin, 757 F.3d at 1221. In that case, the plaintiff provided filed courtesy copies of a complaint to defendants after initiating an action in state court. Days later, before a forum defendant was served, a defendant removed the case to federal court. Id. The Court expressed a distaste for the defendant having taken advantage of the courtesy copy sent by the plaintiff. Similarly, in Timbercreek, the court found that the defendant engaged in gamesmanship: the plaintiff attempted to serve the defendant nine times and was unsuccessful due to the defendant’s evasion tactics; among other things, the defendant refused to open the gate to his gated community and had his secretary at work tell the process server that the defendant was not at work when he was actually present. Timbercreek Asset Mgmt., Inc. v. De Guardiola, No. 19-cv-80062, 2019 WL 947279, at *4 (S.D. Fla. Feb. 27, 2019); see also Curtis v. Bruner, No. 9:19-CV-80739, 2019 WL 7837885, at *2 (S.D. Fla. Aug. 2, 2019) (granting motion for remand where defendant removed the case after plaintiff attempted to serve defendant and the person at the service address refused to open the door to accept service); Delaughder v. Colonial Pipeline Co., 360 F. Supp. 3d 1372, 1380 (N.D. Ga. 2018) (granting motion for remand where removing defendant changed its registered agent and did not inform plaintiff of the change in order to avoid service of process).

Plaintiffs also attack snap removal under the line of cases that discuss interpretation of statutes to avoid absurd results. A result is absurd when, for example, it creates conflict between different provisions of the same act, or literal interpretation would thwart the purpose of the over-all statutory scheme. Raymond B. Yates v. Hendon, 541 U.S. 1, 17-18 (2004); United States ex rel. Barajas v. United States, 258 F.3d 1004, 1012 (9th Cir. 2001). With respect to snap removal, plaintiffs may argue that an interpretation of the removal statute that allows defendants to choose the forum, instead of plaintiffs, would lead to an absurd result. See Hawkins v. Cottrell, Inc., 785 F. Supp. 2d 1361 (N.D. Ga. 2011); DeAngelo-Shuayto v. Organon USA Inc., 2007 WL 4365311, at *4 (D.N.J. Dec. 12, 2007) (denying forum defendant’s snap removal because “such a bizarre result cannot possibly have been the intent of the legislature”). Notably, this line of objection to snap removal was rejected by the Second Circuit in Gibbons, 919 F.3d at 707, which held, “that a home-state defendant may in limited circumstances remove actions filed in state court on the basis of diversity of citizenship – is authorized by the text of Section 1441(b)(2) and is neither absurd nor fundamentally unfair.” See also North v. Precision Airmotive Corp., 600 F. Supp. 2d 1263 (M.D. Fla. February 26, 2009) (“Although Congress may not have anticipated that defendants could actively monitor state court dockets to quickly remove a case prior to being served . . . such a result is not so absurd as to warrant reliance on ‘murky’ or non-existent legislative history in the face of an otherwise perfectly clear and unambiguous statute.”).

“Reasonable minds might conclude that the procedural result [i.e., snap removal] demonstrates a need for a change in the law; however, if such change is required, it is Congress – not the Judiciary – that must act.” Encompass, 902 F.3d at 154. Notably, the statute was amended by Congress in 2011 and the relevant language was essentially left undisturbed – “even after some snap removals had already occurred.” Texas Brine Co., L.L.C., 955 F.3d at 486-87. Congress has been on notice of the issue since at least February 2020, when Representative Henry C. “Hank” Johnson, Jr., a Democrat from Georgia, introduced H.R.5801, styled as the “Removal Jurisdiction Clarification Act of 2020.” However, in over two years, the bill has not passed through the House subcommittee where it was assigned for review.

For the time being, snap removals enjoy an ambiguous position in the law that may allow savvy defendants to choose between state and federal court, even if they reside in the forum where the case is filed.