Fifth Circuit Blesses 'Snap Removal' by Out-of-State Defendants
The Fifth Circuit did not directly address the propriety of snap removal until last month, in Texas Brine v. American Arbitration Association.
May 06, 2020 at 07:16 PM
6 minute read
Defendants generally prefer to be in federal court. Among other advantages for defendants in federal court are more favorable procedural rules for defendants, limitations on voir dire, tighter control by federal judges than state court judges, and more pro-defendant jurors because federal jurors usually are drawn from larger geographic areas than their state court counterparts. Accordingly, defendants who have the option to remove a state court suit to federal court almost always avail themselves of that opportunity.
Removal of a suit from state court to federal court is proper only if the case involves federal court jurisdiction, diversity, or a statute that authorizes removal. There is one further limitation on removal. Under Section 1441(b)(2) of Title 28 of the United States Code, a suit cannot be removed if any citizen of the state where the action is filed has been "joined and served" as a defendant. This is referred to variously as the "no local defendant rule" or the "forum defendant rule." The plain language of Section 1441(b)(2) requires that the local defendant be "joined and served." And therein lies the rub. Can a defendant "snap remove" a case to federal court during the window of time that the local defendant is joined, but not yet served? Federal courts have disagreed on the answer to this question.
Some courts have reasoned that allowing snap removal would lead to "absurd" results that are inconsistent with congressional intent. Other courts have reasoned that snap removal is allowed because "the plain language" of Section 1441(b), requiring that the local defendant be "joined and served" means exactly what it appears to mean. Still other courts have allowed snap removal, but only if one additional condition is met—at least one defendant has been served before the snap removal occurs.
The U.S. Court of Appeals for the Fifth Circuit's 1998 opinion in New York Life Insurance v. Deshotel appeared to weigh against snap removal. In Deshotel, a Louisiana resident filed suit in Louisiana state court against a nonresident Louisiana insurance company and an insurance agent who was a resident of Louisiana. The nonresident insurance company removed the case to federal court before the resident insurance agent was served. The Fifth Circuit in Deshotel ordered the case remanded back to state court, reasoning that, "A non-resident defendant cannot remove an action if the citizenship of any co-defendant, joined by the plaintiff in good faith, destroys complete diversity, regardless of service or non-service upon the co-defendant."
The Fifth Circuit did not directly address the propriety of snap removal until last month, in Texas Brine v. American Arbitration Association. In Texas Brine, the Fifth Circuit explicitly blessed "snap removal," but only under limited circumstances. Nevertheless, it is difficult to reconcile the holding of Texas Brine with the holding of Deshotel.
In Texas Brine, plaintiff Texas Brine filed suit in Louisiana state court against one out-of-state defendant and two in-state defendants. The out-of-state defendant accepted service of process, and then immediately removed the case to federal court before the in-state defendants were served.
The Fifth Circuit noted that two other circuits recently interpreted Section 1441(b)(2) as allowing snap removal. The Third Circuit allowed snap removal in Encompass Insurance v. Stone Mansion in 2018, and the Second Circuit allowed it in Gibbons v. Bristol-Myers Squibb in 2019. The Fifth Circuit further noted that the Sixth Circuit interpreted Section 1441(b)(2) to allow snap removal in McCall v. Scott in 2001.
Plaintiff Texas Brine argued that interpreting Section 1441(b)(2) to allow snap removal would lead to an absurd result that would defeat Congress' intent. In response, the Fifth Circuit reasoned that, "even if we believed that there was a 'drafter's failure to appreciate the effect of certain provisions,' such a flaw by itself does not constitute an absurdity." Texas Brine also argued snap removal was "an abuse of the statute." The Fifth Circuit acknowledged that it had allowed equitable exceptions to override the plain language of statutes in some previous cases, but the court reasoned that those cases did not support "re-writing the statute here."
Texas Brine involved a removal by a non-forum defendant, and not a removal by a forum defendant—a local defendant. In fact, the Fifth Circuit pointedly noted that, "of some importance, the removing party is not a forum defendant." The Fifth Circuit framed the question facing it narrowly, as "whether the forum-defendant rule prohibits a non-forum defendant from removing a case when a not-yet-served defendant is a citizen of the forum state?"
Ultimately, the Fifth Circuit's narrow holding in Texas Brine blesses only snap removals by non-forum defendants. The Fifth Circuit held: "A non-forum defendant may remove an otherwise removable case even when a named defendant who has yet to be properly 'joined and served' is a citizen of the forum state." There is at least one other limitation on the holding of Texas Brine. The non-forum defendant that removed the suit in Texas Brine had been "joined and served" in the state court action before the removal. Texas Brine does not provide support for snap removal by non-forum defendants who have not yet been served in the state court action.
It is difficult, if not impossible, to defend snap removal as anything other than rank gamesmanship, arising out of an interpretation of a statute that leads to an absurd result. Snap removal incentivizes out-of-state defendants to preemptively troll state court dockets, in an effort to jump ahead of service of process on the local co-defendant. And it requires plaintiffs to engage in an inefficient two-step process of first suing and serving only the local defendant, and later amending the suit to add the out-of-state defendant. Although the Fifth Circuit acknowledged in Texas Brine that there may have been "a drafter's failure to appreciate the effect of certain provisions" in the statute, the Fifth Circuit inexplicably failed to use the available tools of statutory construction at its disposal to remedy the failure. It is now left to Congress to remedy this unintended perversion of the statute.
Quentin Brogdon is a partner in Crain Brogdon Rogers, in Dallas. He is a fellow of the invitation-only International Academy of Trial Lawyers, American College of Trial Lawyers and International Society of Barristers.
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