Third Circuit Becomes First Appellate Court to Greenlight 'Snap Removals'
By filing a notice of removal in federal court after the state-court suit is filed but before the state-court suit has been effectively served, a tactic enabled by modern technology and the ability to electronically monitor more and more state-court dockets on a real-time basis.
October 16, 2018 at 03:02 PM
13 minute read
Last year in this column (“Getting Your Company's Case Removed to Federal Court When Sued in Your 'Home' State” (Dec. 19, 2017)), we told you about a vigorous debate in federal district courts across the country over a controversial federal-court removal tactic called “snap removal,” see Arthur Hellman,”Neutralizing the Stratagem of 'Snap Removal': A Proposed Amendment to the Judicial Code,” 9 Fed. Cts. L. Rev. 103 (2016). That tactic involves avoiding the so-called “forum defendant rule,” a statutory bar against removing state-court suits where one of the defendants is a citizen of the state in which the action is filed, but where the suit has not yet been served. How? By filing a notice of removal in federal court after the state-court suit is filed but before the state-court suit has been effectively served, a tactic enabled by modern technology and the ability to electronically monitor more and more state-court dockets on a real-time basis.
Cases too numerous to count have taken a diversity of positions on the legality of these snap removals, evoking questions at the heart of statutory interpretation—How strictly must courts follow the literal text of a statute? When is a reading of the statute's literal text too absurd or bizarre to pass muster? Can legislative history or a statute's perceived purpose overcome its literal text and, if so, when?
Until very recently, no federal court of appeals had definitively resolved the lawfulness of snap removals or wrestled with the statutory-interpretation questions it implicates. Some had nibbled around the edges—one suggesting courts had discretion to reject snap removals, as in Goodwin v. Reynolds, 757 F.3d 1216 (11th Cir. 2014) (indicating that “because the likely purpose of the phrase 'properly joined and served' is to prevent gamesmanship by plaintiffs, … we cannot believe that it constrains the district court's discretion under Rule 41(a)(2) to undo the defendants' gamesmanship in the circumstances at bar”)—but none had squarely decided the question. There is good reason for this appellate court reticence—the law generally precludes immediate appeals from orders granting or denying motions to remand to state court. See 28 U.S.C. Section 1447(d) (barring most appeals from orders remanding to state court); Caterpillar v. Lewis, 519 U.S. 61, 74 (1996) (“An order denying a motion to remand, 'standing alone,' is 'obviously … not final and immediately appealable' as of right.”). Additionally, as for orders denying remand motions based on the forum defendant rule, the weight of authority considers the forum defendant rule a procedural rule, not a jurisdictional one, see, e.g., Korea Exchange Bank, New York Branch v. Trackwise Sales, 66 F.3d 46, 50 (3d Cir. 1995), and the Supreme Court made clear in Caterpillar that a procedural defect in removal cannot furnish the basis to later reverse a final judgment entered when the district court had jurisdiction, see Caterpillar, 519 U.S. at 64 (holding that “a district court's error in failing to remand a case improperly removed is not fatal to the ensuing adjudication if federal jurisdictional requirements are met at the time judgment is entered”). In the rare instances when a challenge to snap removal is raised in an appeal from a final judgment, therefore, it is unlikely to prevail since the district court ordinarily would have had diversity jurisdiction at the time of judgment, thus triggering the broad rule of Caterpillar.
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