August 23, 2018
In a previous article, we examined the prerequisites for a Court to exercise in personam jurisdiction over a Defendant. Equally important for defense counsel is to determine whether the case can be removed to federal court.
Removal jurisdiction derives from provisions of Title 28 of the U.S. Code. Timing of removal is a paramount consideration.If removal would be timely, there are three bases for removal that we will briefly review: federal subject matter jurisdiction (§1331); diversity jurisdiction (§1332); and federal officer/property removal (§ 1442). We not here address the removal provisions of the Class Action Fairness Act.
Why Should Defendants Remove? We should not pass over the basic question as to “why” this is important.Many of us feel that the federal judiciary is overall “better” than state judges. Comparatively, the standards for appointment to the federal courts, while still including political connections, are ‘higher’ in that the judges have to obtain Presidential nomination and U.S. Senate confirmation. It is also believed that federal judges, on the whole, will grant case-dispositive motions more readily than their state counterparts.The jury pool in many areas is broader than state courts; the latter being tied often to specific counties or localities that we can identify as “plaintiff-friendly”.For example, the jury pool found in Bronx County and New York County (and the bench) is traditionally thought to be very pro-Plaintiff.However, the U.S. District Court for the Southern District of New York includes not only those Counties, but Republican-dominated, and comparatively wealthier suburban areas, of Westchester, Rockland, Putnam, Orange, Dutchess, and Sullivan Counties. The latter provides ‘balance’ to the other Counties included within that District.
Defendants should also consider that most federal districts utilize Magistrate Judges to manage pretrial discovery.In general, the Magistrate Judges have stronger qualifications and more decisive judicial personalities than their state-court counterparts acting in mass tort settings. They have regularized procedures for case management and informal adjudication of discovery disputes that may make it easier for Plaintiffs to control some of Defendants’ routine temporizing and objectioneering that are ‘standard’ in many Defendants’ typical discovery responses.
Only “Defendants” May Remove. The statutory right of removal is accorded to a “Defendant” or “Defendants.§ 1441.Case law prohibits Third-Party Defendants, therefore, from initiating removal.
How to Remove. Defendant should file a Notice of Removal that reads essentially like a Complaint that sets forth the timeliness of removal, as well as the factual and legal bases for federal jurisdiction.The Notice is signed by counsel under the precepts of Fed. R. Civ. Pro. 11.
Timing. A Defendant has 30 days to remove a case from receipt of notice by “service or otherwise” of a “paper” that shows the case is removable.§ 1446. Most often, this time starts with formal service of the Complaint, but there are situations where other “papers,” such as Motions, discovery responses, or other documents, are “received” and which contain sufficient information to demonstrate a removable case.Those circumstances are too numerous to outline here; suffice to say that Defendants should be vigilant as to the information they may receive that impact upon cases filed and pending against them, as well as those that have yet to include them as Defendants.They should also be aware of the governing law within the Circuit where the removal will be affected.
The starting of the removal ‘clock’ in a multi-defendant case is interpreted in at least three different ways among the Courts:
- The clock starts when the first defendant is served with a ‘removable paper’ and if that Defendant, or any other Defendant served within that first 30 day period, does not remove, no further removal is possible;
- The clock runs only upon service of the last Defendant; or
- The 30 days runs anew upon the service of each Defendant.
With regard to removal based on diversity of citizenship, the statutes place a one-year time limit for removal from the date of the commencement of the action.§ 1446 (b) (3).Whatever the case, as soon as any Complaint, or paper in an existing case that has any bearing on the status of parties, it should be examined to determine whether it would suggest that the case is removable.
Unanimity/Consent. The Courts have created a rule in multi-defendant cases that the use of the word “Defendants” in the statute implies a requirement of unanimity among Defendants who had been served at the time of removal. Some Courts will credit the representation of the removing Defendant in the Notice of Removal that it has consent, while others require written proof from the co-Defendants’ counsel.
Federal Question Jurisdiction. In general, if the Complaint explicitly sets forth a cause of action that arises under the Constitution or laws of the United States, then it is removable regardless of the citizenship of the parties. Certain groups of federal causes of action have specific jurisdictional statutes, such as civil rights (§ 1343) and bankruptcy. § 1334. Tort cases, particularly in products liability, slip and fall, automobile negligence, and medical malpractice cases, typically do not state causes of action that raise a federal question. There are exceptions, particularly where state actors are involved and a Plaintiff may have asserted a cause of action under 42 U.S.C. § 1983, which is removable without regard to diversity of citizenship.
Diversity of Citizenship. This topic has generated reams of decisions and publications discussing this, so we will summarize them briefly. Cases that are “between citizens of different states” are removable and there must be “complete diversity” between each Plaintiff and each Defendant in a case where the amount in controversy is at least $75,000.Citizenship for individuals is tied to their domicile. There is a separate set of rules for non-natural persons. Corporations are citizens either of the state where their principal place of business is located or where they are incorporated. Partnerships, limited liability companies and limited partnerships are also citizens of every state where the partners/members reside. § 1331(c). In the case of broadly held real estate investment trusts, the Supreme Court found that the citizenship of every investor had to be included.
§ 1441 (b) (2) imposes the “forum defendant rule”.This applies solely to diversity cases where a Defendant seeking removal is citizen of the state in which the Plaintiff filed the case. In that event, Congress has determined that the “forum defendant” will suffer no inherent prejudice from being in the courts of its home state and it therefore cannot remove even if there is complete diversity.
Federal Enclave/Federal Officer Removal. This, too, is an area that has generated substantial controversy.Basically, it permits a Defendant who believes that its liability arises because of conduct on a “federal enclave” or taken at the direction of a “federal officer” entitles it to remove the case without regarding to the citizenship of the parties or whether the Plaintiff alleges a federal question.A “federal enclave” is generally a property that is owned and/or controlled exclusively by the federal government.
Federal officer removal has generated substantial controversy in the asbestos litigation, particularly in light of the extensive use of asbestos-containing materials in components of naval ship construction. The Defendant has to demonstrate that it has a “colorable federal defense” as a government contractor who used asbestos and which use caused Plaintiff’s injuries.In turn, it has to show that the government “approved reasonably precise specifications; the equipment conformed to those specifications; and the supplier warned the United States about any dangers in the use of the equipment that were not known to the United States.”Plaintiffs often argue that the latter requirement means that a government contractor cannot remove a “failure to warn” case.Defendants considering removal under this avenue should perform appropriate factual and legal research in order to properly support their Notices of Removal.