A defendant can utilize 28 U.S.C. § 1441 to remove a state court case to federal court where complete diversity of citizenship exists. But the statute includes restrictions that limit a defendant’s ability to remove a case to federal court, including what is known as the “forum defendant rule” set out in 28 U.S.C. § 1441(b)(2). Section 1441(b)(2) provides that an action “may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.” The language “properly joined and served” has been hotly contested. Parties have debated over whether a defendant should be able to remove a case to federal court before a named forum defendant has been served. Based on the plain meaning of “properly joined and served,” many courts have allowed for this practice, called “snap removal.”
Last year, the U.S. Court of Appeals for the Third Circuit (covering federal courts in Delaware, New Jersey, and Pennsylvania) became the first circuit court of appeals to recognize the viability of snap removal, also known as pre-service removal. In particular, the practice whereby a defendant (in-state or otherwise) removes a state court claim to federal court based on diversity of citizenship before any forum defendants are served. See Encompass Insurance Co. v. Stone Mansion Restaurant, Inc., 902 F.3d 147 (3d Cir. 2018). Prior to the Encompass decision, district courts in other jurisdictions had applied certain factors in considering whether snap removal leads to absurd outcomes. The Third Circuit effectively deemed these considerations irrelevant. Moreover, the Encompass case involved what some may consider a particularly “extreme” application of snap removal—an in-state defendant who evaded service and effectuated federal court removal.
Since the Encompass decision, the Second Circuit has also unanimously affirmed snap removal practice. See Gibbons v. Bristol-Myers Squibb Co., 919 F.3d 699 (2d Cir. 2019). Additionally, many district courts in other circuits have adopted the Encompass decision and recognized snap removal, including district courts from the Fourth, Fifth, and Ninth Circuit. See Blankenship v. Napolitano, Civ. A. 2:19-cv-00236, 2019 WL 3226909 (S.D.W.Va. July 17, 2019); Loewen v. McDonnell, Case No. 19-cv-00467-YGR, 2019 WL 2364413 (N.D. Cal. June 5, 2019); Zirkin v. Shandy Media, Inc., Case No. 2:18-cv-09207-ODW (SSx), 2019 WL 626138 (C.D. Cal. Feb. 14, 2019); Texas Brine Company, LLC v. American Arbitration Association, Inc., Civ. A. No. 18-6610, 2018 WL 4927640 (E.D. La. Oct. 11, 2018).
By potentially making removal more available, these recent decisions should prove to be useful arrows in the quiver of any defendant fighting “forum shopping” by plaintiffs. That is, the practice whereby plaintiffs strategically pick the jurisdiction where they believe they will get the best outcome. Because of forum shopping, certain jurisdictions are overburdened by case filings, many of which have little factual relation to the state in which they are filed.
Recently, however, certain legislators in the United States House of Representatives have taken an interest in changing the statutory language to restrict a defendant’s ability to remove a case. On November 14, 2019, the House Judiciary Committee, Subcommittee on Courts, Intellectual Property, and the Internet held a hearing on “Examining the Use of ‘Snap’ Removals to Circumvent the Forum Defendant Rule.” During that hearing Chairman Jerrold Nadler (D-NY) delivered an opening statement calling snap removals an attempt to “exploit modern technology and a supposed statutory loophole.” Chairman Nadler urged the Subcommittee to consider changing the law to restrict removal.
Whether Congress will actually move forward and effectuate a change in policy remains to be seen. Stay tuned.
