Since the Judiciary Act of 1789, defendants have been able to remove to federal court state court suits over which the district court would have diversity of citizenship jurisdiction if it had been filed there. Removal is accomplished simply by the defendant timely e-filing in the district court of a notice of removal, signed under Rule 11, that states the basis for federal jurisdiction and attaches a copy of the state court pleadings.

Since the revision of Title 28 in 1948, however, 28 U.S.C. § 1441(b)(2) has limited diversity removal to suits against an out of state defendant by providing that an action otherwise removable solely on the basis of diversity "may not be removed if any of the parties in interest properly joined and served is a citizen of the state where the action is brought." The rationale of the restriction is that diversity jurisdiction is only necessary to protect out-of-state defendants from potential local prejudice in the state courts, and that a defendant sued in its home state therefore does not need to burden the federal courts.

Back in the day of paper filing, most defendants didn't learn they had been sued until they were served with process. The "properly joined and served" language of § 1441(b) operated only to prevent a plaintiff from defeating diversity removal by joining an in-state defendant that it did not intend to proceed against and therefore did not serve. But electronic filing in the state courts has now changed all that. It is possible for a sophisticated business to continually monitor the state court docket for its own name and learn that it has been sued before it is served. In-state defendants who would prefer what they consider to be the shelter of the federal courts have developed the practice of what is called "snap removal," in which they monitor the docket and then avoid service of process long enough to remove cases brought by out of state plaintiffs. The removal is then challenged by the plaintiff's motion to remand. Snap removal is a particularly important tactical device for businesses that can expect a significant number of product liability suits against them in the courts of the state where they have their headquarters or principal place of business.

The district courts have been sharply divided about the legality of snap removal. Some, including in the District of New Jersey, held that it led to a "bizarre result" that defeated Congress's intent to keep in-state defendants from removing based on diversity. Others relied on the literal language of the statute to uphold snap removal before the in-state defendant was served. Two recent Court of Appeals decisions, by the Third Circuit in 2018 and the Second Circuit this year, have come down squarely on the side of plain meaning, denying motions to remand and holding that the statute allows an in-state defendant to remove as long as it can file in federal court before it has been "properly served." Insofar as the result is bad public policy, they state, the remedy lies with Congress.

The Third Circuit believed that this interpretation was acceptable because snap removal is possible "only in the narrow circumstances where a defendant is aware of an action prior to service of process with sufficient time to initiate removal." That circumstance isn't so narrow. As this paper reported recently, the result has been a practice of sophisticated defendants vigilantly monitoring the state court electronic docket and then ducking service until they can remove. We don't believe that this result is consistent with Congress's overriding intent to keep in-state defendants from invoking diversity jurisdiction.

Congress may fix the problem or it may not. There are hearings pending on proposed legislation, and this might be the kind of technical issue on which our deeply polarized representatives can find sensible common ground.

In the meantime, though, we think that the validation of this kind of gamesmanship by the two Courts of Appeals perfectly illustrates the 1947 caution of Judge Learned Hand in Central Hanover Bank & Trust Co. v. Commissioner against the plain meaning doctrine of statutory construction:

"There is no more likely way to misapprehend the meaning of language … than to read the words literally, forgetting the object which the document as a whole is meant to secure. Nor is a court ever less likely to do its duty than when, with an obsequious show of submission, it disregards the overriding purpose because the the particular occasion which has arisen was not foreseen."

The unforeseen development of electronic filing has allowed a class of defendants to get into federal court whom the drafters of § 1441(b) in 1948 would never have wanted there, but the current judicial style of statutory construction is far more passive-aggressive towards the legislature and far more limited in its concept of judicial duty to make things work sensibly than it was in Judge Hand's day.