Why Make a Federal Case Out of It?
- U.S. Const. art. III, § 2; 28 U.S.C. §§ 1331-1332, 1367.
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U.S. Constitution Article III, Section 2, and 28 U.S.C. §§ 1331, 1332, and 1367 relate to the jurisdiction of federal courts in the United States:
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U.S. Constitution Article III, Section 2 Grants the judicial power to the federal courts to hear cases arising under the Constitution, laws, and treaties of the United States. It also grants the Supreme Court original jurisdiction over cases involving ambassadors, public ministers, and consuls, and cases where a state is a party.
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28 U.S.C. § 1331 Grants federal district courts original jurisdiction over civil actions that arise under the Constitution, laws, or treaties of the United States. The well-pleaded complaint rule determines if a case “arises under” federal law.
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28 U.S.C. § 1332 Grants federal courts jurisdiction over civil actions between citizens of different states, or between a citizen of a state and a subject of a foreign state, if the amount in controversy exceeds $75,000. This is known as diversity jurisdiction.
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28 U.S.C. § 1367 Grants federal district courts supplemental jurisdiction over claims that are related to claims in an action over which the court already has jurisdiction. It also tolls the period of limitations for claims while they are pending and for 30 days after they are dismissed.
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- see U.S. Const. amend. IV, § 1; International Show Co. V. Washington, 326 U.S. 310, 316 (1945)
- Personal jurisdiction is constitutional when a defendant has minimum contacts with the state where a lawsuit is brought such that notions of fair play and substantial justice would not be offended.
- see 28 U.S.C. § 1391 Venue generally
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Applicability of Section.—Except as otherwise provided by law—(1)this section shall govern the venue of all civil actions brought in district courts of the United States; and(2)the proper venue for a civil action shall be determined without regard to whether the action is local or transitory in nature.
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Venue in General.—A civil action may be brought in—(1)a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located;(2)a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated; or(3)if there is no district in which an action may otherwise be brought as provided in this section, any judicial district in which any defendant is subject to the court’s personal jurisdiction with respect to such action.
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Residency.—For all venue purposes—(1)a natural person, including an alien lawfully admitted for permanent residence in the United States, shall be deemed to reside in the judicial district in which that person is domiciled;(2)an entity with the capacity to sue and be sued in its common name under applicable law, whether or not incorporated, shall be deemed to reside, if a defendant, in any judicial district in which such defendant is subject to the court’s personal jurisdiction with respect to the civil action in question and, if a plaintiff, only in the judicial district in which it maintains its principal place of business; and(3)a defendant not resident in the United States may be sued in any judicial district, and the joinder of such a defendant shall be disregarded in determining where the action may be brought with respect to other defendants.\
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Residency of Corporations in States With Multiple Districts.— For purposes of venue under this chapter, in a State which has more than one judicial district and in which a defendant that is a corporation is subject to personal jurisdiction at the time an action is commenced, such corporation shall be deemed to reside in any district in that State within which its contacts would be sufficient to subject it to personal jurisdiction if that district were a separate State, and, if there is no such district, the corporation shall be deemed to reside in the district within which it has the most significant contacts.\
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Actions Where Defendant Is Officer or Employee of the United States.—(1)In general.— A civil action in which a defendant is an officer or employee of the United States or any agency thereof acting in his official capacity or under color of legal authority, or an agency of the United States, or the United States, may, except as otherwise provided by law, be brought in any judicial district in which (A) a defendant in the action resides, (B) a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated, or (C) the plaintiff resides if no real property is involved in the action. Additional persons may be joined as parties to any such action in accordance with the Federal Rules of Civil Procedure and with such other venue requirements as would be applicable if the United States or one of its officers, employees, or agencies were not a party.(2)Service.— The summons and complaint in such an action shall be served as provided by the Federal Rules of Civil Procedure except that the delivery of the summons and complaint to the officer or agency as required by the rules may be made by certified mail beyond the territorial limits of the district in which the action is brought.
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Civil Actions Against a Foreign State.—A civil action against a foreign state as defined in section 1603(a) of this title may be brought—(1)in any judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated;(2)in any judicial district in which the vessel or cargo of a foreign state is situated, if the claim is asserted under section 1605(b) of this title;(3)in any judicial district in which the agency or instrumentality is licensed to do business or is doing business, if the action is brought against an agency or instrumentality of a foreign state as defined in section 1603(b) of this title; or(4)in the United States District Court for the District of Columbia if the action is brought against a foreign state or political subdivision thereof.
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Multiparty, Multiforum Litigation.— A civil action in which jurisdiction of the district court is based upon section 1369 of this title may be brought in any district in which any defendant resides or in which a substantial part of the accident giving rise to the action took place.(June 25, 1948, ch. 646, 62 Stat. 935; Pub. L. 87–748, § 2, Oct. 5, 1962, 76 Stat. 744; Pub. L. 88–234, Dec. 23, 1963, 77 Stat. 473; Pub. L. 89–714, §§ 1, 2, Nov. 2, 1966, 80 Stat. 1111; Pub. L. 94–574, § 3, Oct. 21, 1976, 90 Stat. 2721; Pub. L. 94–583, § 5, Oct. 21, 1976, 90 Stat. 2897; Pub. L. 100–702, title X, § 1013(a), Nov. 19, 1988, 102 Stat. 4669; Pub. L. 101–650, title III, § 311, Dec. 1, 1990, 104 Stat. 5114; Pub. L. 102–198, § 3, Dec. 9, 1991, 105 Stat. 1623; Pub. L. 102–572, title V, § 504, Oct. 29, 1992, 106 Stat. 4513; Pub. L. 104–34, § 1, Oct. 3, 1995, 109 Stat. 293; Pub. L. 107–273, div. C, title I, § 11020(b)(2), Nov. 2, 2002, 116 Stat. 1827; Pub. L. 112–63, title II, § 202, Dec. 7, 2011, 125 Stat. 763.)
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Civil Resource Manual
45. Removal
When suit has been brought against the government, or an officer or agency thereof, in a state or local court, an important threshold question is whether the action should be removed to the United States district court. In suits brought against the United States under 28 U.S.C. § 2410 (see USAM 4-4.540), removal will be left to the discretion of the USA, absent a specific request from the Civil Division concerning whether or not to remove. In determining whether or not to remove such cases or to recommend the removal of other cases, the USA should consider:
- The likelihood of a fair disposition in the state or local court
- Whether federal statutes, regulation or decisional law may be challenged in the litigation
- The preference for taking appeals through the federal court system particularly When an open legal issue is involved
- The relative convenience of handling the case for the U.S. Attorney
- Whether the party suing the United States is attempting to secure a federal forum by bringing a facially jurisdictionally invalid suit against the United States
As noted in USAM 4-2.100, the United States may not be sued in state court at all, absent express statutory consent. Formerly, removal to the federal court of such an unconsented suit did not cure the jurisdictional defect, even in a situation in which the federal court would have had jurisdiction if the action had originally been instituted there. See Minnesota v. United States, 305 U.S. 382, 388-389 (1939); Gleason v. United States, 458 F.2d 171, 174 (3d Cir. 1972). This doctrine of “derivative jurisdiction” was abolished by section 3 of the Judicial Improvements Act of 1985, codified at 28 U.S.C. § 1441(e). See Lewis v. Windsor Door Co., 926 F.2d 729, 730 n.2 (8th Cir. 1991).
In other civil suits against government officers, employees, service personnel, and agencies, and particularly in cases in which personal injury, death, a significant federal interest, or property damage is involved, care should be taken to remove to the United States district court. Most of these actions will have to be removed within the thirty days specified in 28 U.S.C. § 1446(b). However, removal of tort suits under the provisions of the Federal Employees Liability Reform and Tort Compensation Act of 1988, 28 U.S.C. § 2679(d)(2), may be effected any time prior to trial, as may most suits against a member of the armed forces on account of an act done under color of office or status. See 28 U.S.C. § 1442a. Garnishment actions against the government seeking child support or alimony payments pursuant to 42 U.S.C. § 659 ordinarily should be removed unless the client agency will honor the garnishment writ or order.
The statute generally authorizing removal of state court suits against federal officers for acts under color of office, see 28 U.S.C. § 1442(a)(1), does not permit removal by federal agencies. Int’l Primate Protection League v. Adm’rs of Tulane Educational Fund, 500 U.S. 72, 76 (1991) [Editor’s Note: 28 U.S.C. § 1442 was amended in 1996 to allow agencies to remove cases to federal court].
[updated September 2000] [cited in USAM 4-2.400] source
28 U.S. Code § 1446 – Procedure for removal of civil actions
- Generally.—A defendant or defendants desiring to remove any civil action from a State court shall file in the district court of the United States for the district and division within which such action is pending a notice of removal signed pursuant to Rule 11 of the Federal Rules of Civil Procedure and containing a short and plain statement of the grounds for removal, together with a copy of all process, pleadings, and orders served upon such defendant or defendants in such action.
- Requirements; Generally.—
- The notice of removal of a civil action or proceeding shall be filed within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within 30 days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter.
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- When a civil action is removed solely under section 1441(a), all defendants who have been properly joined and served must join in or consent to the removal of the action.
- Each defendant shall have 30 days after receipt by or service on that defendant of the initial pleading or summons described in paragraph (1) to file the notice of removal.
- If defendants are served at different times, and a later-served defendant files a notice of removal, any earlier-served defendant may consent to the removal even though that earlier-served defendant did not previously initiate or consent to removal.
- Except as provided in subsection (c), if the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.
- Requirements; Removal Based on Diversity of Citizenship.—
- A case may not be removed under subsection (b)(3) on the basis of jurisdiction conferred by section 1332 more than 1 year after commencement of the action, unless the district court finds that the plaintiff has acted in bad faith in order to prevent a defendant from removing the action.
- If removal of a civil action is sought on the basis of the jurisdiction conferred by section 1332(a), the sum demanded in good faith in the initial pleading shall be deemed to be the amount in controversy, except that—
- the notice of removal may assert the amount in controversy if the initial pleading seeks—
- nonmonetary relief; or
- a money judgment, but the State practice either does not permit demand for a specific sum or permits recovery of damages in excess of the amount demanded; and
- removal of the action is proper on the basis of an amount in controversy asserted under subparagraph (A) if the district court finds, by the preponderance of the evidence, that the amount in controversy exceeds the amount specified in section 1332(a).
- the notice of removal may assert the amount in controversy if the initial pleading seeks—
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- If the case stated by the initial pleading is not removable solely because the amount in controversy does not exceed the amount specified in section 1332(a), information relating to the amount in controversy in the record of the State proceeding, or in responses to discovery, shall be treated as an “other paper” under subsection (b)(3).
- If the notice of removal is filed more than 1 year after commencement of the action and the district court finds that the plaintiff deliberately failed to disclose the actual amount in controversy to prevent removal, that finding shall be deemed bad faith under paragraph 1).
- Notice to Adverse Parties and State Court.—Promptly after the filing of such notice of removal of a civil action the defendant or defendants shall give written notice thereof to all adverse parties and shall file a copy of the notice with the clerk of such State court, which shall effect the removal and the State court shall proceed no further unless and until the case is remanded.
- Counterclaim in 337 Proceeding.—With respect to any counterclaim removed to a district court pursuant to section 337(c) of the Tariff Act of 1930, the district court shall resolve such counterclaim in the same manner as an original complaint under the Federal Rules of Civil Procedure, except that the payment of a filing fee shall not be required in such cases and the counterclaim shall relate back to the date of the original complaint in the proceeding before the International Trade Commission under section 337 of that Act
- [1] Where the civil action or criminal prosecution that is removable under section 1442(a) is a proceeding in which a judicial order for testimony or documents is sought or issued or sought to be enforced, the 30-day requirement of subsection (b) of this section and paragraph (1) of section 1455(b) is satisfied if the person or entity desiring to remove the proceeding files the notice of removal not later than 30 days after receiving, through service, notice of any such proceeding.
The What, When, How, and Why of Removing to Federal Court Before a Defendant Is “Properly Joined and Served”
- Defendants often seek to move their cases to federal court after being sued in state court for reasons such as procedural consistency, efficient docket management, and reduced liability.
- “Snap removal” is a procedural play where both forum and out-of-state defendants can remove a case to federal court before any in-state, forum defendant is formally served, allowing them to assert federal question or diversity jurisdiction.
- While snap removals have been controversial, four federal circuit courts of appeals have upheld the practice, emphasizing the plain meaning of the removal statute and its effectiveness in discouraging fraudulent attempts to make lawsuits removal-proof.
Defendants, including individuals and corporate entities, often want to remove their cases to federal court after being sued in state court. There are frequently manifold reasons for doing so. Federal courts can provide consistency in procedure, more efficient docket management, increased opportunities for final resolution of asserted claims through motion practice, and reduced liability in the case of adverse judgments. But the strict metes and bounds of a federal court’s subject matter jurisdiction and the statutory requirements of removal under 28 U.S.C. §§ 1441 and 1446 limit a defendant’s ability to proceed in federal court once an action has been filed in state court. Courts normally defer to a plaintiff’s choice of forum and endeavor to prevent forum shopping between state and federal systems. Moreover, federal courts are courts of limited jurisdiction—unlike state courts, which have general jurisdiction—and they have an affirmative and ongoing obligation to ensure that the cases before them are based on federal question or diversity jurisdiction. See 28 U.S.C. §§ 1331, 1332; Fed. R. Civ. P. 12(h)(3). How then can defendants desiring to have a federal court assess their defenses and potential counterclaims navigate these barriers to entry? An answer lies in the oft-debated but readily available procedural play of “snap removal.”
Federal Courts’ Limited Jurisdiction
Congress has broadly authorized federal courts to exercise subject matter jurisdiction over all civil actions “arising under the Constitution, laws, or treaties of the United States,” 28 U.S.C. § 1331, or “where the matter in controversy exceeds the sum or value of $75,000” and the dispute is between citizens of different states, U.S. citizens and foreign citizens, or U.S. citizens and foreign states. 28 U.S.C. § 1332(a). The existence of federal question jurisdiction is often conflated with a plaintiff’s need to prove a defendant’s obligations under federal law or a defendant’s reliance on federal law as a defense, as in the case of preemption. See, e.g., Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 8 (2003). Diversity jurisdiction is often more clear-cut, but a plaintiff may attempt to preemptively defeat such jurisdiction by naming a defendant that is a citizen of the same state—i.e., a forum defendant. See, e.g., Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97 (1921); accord Johnson v. Am. Towers, LLC, 781 F.3d 693, 704 (4th Cir. 2015).
Removal Generally
Under the federal removal statute, a case that implicates federal question or diversity jurisdiction is removable within 30 days after formal service of process of the initial pleading. 28 U.S.C. § 1446(b)(1). Whether an initial pleading has been properly served varies by state, but the U.S. Supreme Court has clarified that the 30-day period does not begin until the plaintiff has effectuated formal service of process. Murphy Bros. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 354 (1999). This is crucial, as the filing of a summons or complaint alone does not trigger the removal clock. Id. at 347–48. There must also be proper service. See id. Where a state court complaint names multiple defendants, all “properly joined and served” defendants must consent to removal unless they are fraudulently joined. 28 U.S.C. § 1446(b)(2)(A); see also Home Depot U.S.A., Inc. v. Jackson, 139 S. Ct. 1743, 1746 (2019).
There is a readily apparent logic to these limitations. Plaintiffs are afforded deference in their choice of forum as masters of their complaint. Foreign or out-of-state defendants are not forced to litigate a case in a state court with which they are unfamiliar without some avenue of reprieve. And in multi-defendant cases, one defendant cannot unilaterally change the forum without appropriate notice to codefendants.
Snap Removals
The question then is this: Where a defendant would prefer to pursue claims and defenses in federal court—for reasons real or perceived, anecdotal or empirical—how can that be effectuated once a complaint is filed in state court? If the alleged claims arise under federal law or are completely preempted, defendants can remove as usual and assert federal question jurisdiction. In addition, if complete diversity among the parties on both sides of the v does not exist, diversity removal is not possible. In the intermediate case, however, where there is not federal question jurisdiction, complete diversity does exist, and a forum defendant is the only bar to removal under section 1441(b)(2), the way to navigate a case from state to federal court has been more difficult. But the path forward is now more favorable. A close read of the removal statute provides the solution: A forum defendant does not actually exist until that defendant has been “properly joined and served.”
Recognizing this window of opportunity, fast-acting and savvy defendants have charted a path in the past two decades, which has been validated by four federal circuit courts of appeals: snap removal. With this procedural mechanism, both forum and out-of-state defendants can remove a case to federal court with arguable or no federal question jurisdiction and complete diversity among the named defendants as long as they do so before any in-state, forum defendant is formally served.
Once removed, the defendant or defendants can assert federal question jurisdiction if it exists, and can rely on diversity jurisdiction if it does not, to stay in federal court. Further, and importantly, the federal court’s decision on the propriety of removal will generally be final as a practical matter, because the denial of a motion to remand is an interlocutory order that is not usually subject to immediate appeal. See, e.g., 28 U.S.C. § 1447(d); 15A Charles Wright, Arthur Miller & Edward Cooper, Federal Practice and Procedure § 3914.11 (3d ed. 1992) (“One aspect of appealing orders as to removal and remand remains blessedly simple. An order denying remand is not final. . . .”); see also Estate of Bishop By & Through Bishop v. Bechtel Power Corp., 905 F.2d 1272, 1274–75 (9th Cir. 1990); Neal v. Brown, 980 F.2d 747, 748 (D.C. Cir. 1992) (collecting cases from the First, Second, Third, Fourth, Fifth, Seventh, and Ninth Circuits).
Although a path has been laid, the issue of how to leverage the window of time between the filing of a summons and complaint and service poses another barrier to entering a federal courthouse’s doors. Thankfully, the ability to monitor court dockets electronically has made it easier to traverse this final hurdle. However, it does require a keen and vigilant eye on the potential litigation landscape and an ability to file removal papers quickly in what amounts to a service race to the courthouse with plaintiffs.
Snap Decisions
Unsurprisingly, snap removals have been controversial among courts and commentators alike. Opponents criticize the practice as contrary to the spirit of diversity jurisdiction—especially when the in-state defendant is the party removing the case—and an unfair exploitation of a procedural technicality. See, e.g., Goodwin v. Reynolds, 757 F.3d 1216, 1221 (11th Cir. 2014) (affirming Rule 41(a)(2) dismissal where plaintiff filed a state court action and provided courtesy copies to defendants—one of whom was a forum defendant—and defendants removed the action before formal service after interpreting the purpose of “properly joined and served” as an effort to prevent “gamesmanship” by plaintiffs and defendants). Critics also argue that snap removal may lead to improper conduct such as a defendant misleading a plaintiff into not formally serving a complaint or evading formal service to buy time to remove.
Proponents of the practice point to the statutory text, which explicitly conditions the forum defendant rule on “served” defendants, as well as traditional tools of statutory construction. They argue that the plain meaning of the removal statute permits snap removal. Further, there is a practical and policy argument supporting the practice: Snap removals disincentivize plaintiffs from attempting to make lawsuits removal-proof by fraudulently joining in-state defendants that they have no intention of actually serving.
To date, there is a split of authority among district courts addressing whether the practice is permissible, but four circuit courts of appeals addressing the issue have upheld the practice. The Sixth Circuit led the way in 2001, noting in a footnote that “the inclusion of an unserved resident defendant in [an] action does not defeat removal” based on diversity jurisdiction. McCall v. Scott, 239 F.3d 808, 813 n.2 (6th Cir.), amended on denial of reh’g, 250 F.3d 997 (6th Cir. 2001). Several years later, in 2018, the Third Circuit upheld snap removal after a substantive analysis in Encompass Insurance Co. v. Stone Mansion Restaurant Inc., 902 F.3d 147 (3d. Cir. 2018). To be sure, the court described the procedure as “pre-service machinations to remove a case that [] otherwise could not [be removed.]” Id. at 154. But after addressing the issue as one of statutory interpretation, the Third Circuit held that snap removal is proper based on “the plain meaning of the statute” and the absence of “an extraordinary showing of contrary legislative intent.” Id. The Second Circuit soon after followed suit and affirmed the propriety of this procedure without hesitation, finding it “is neither absurd nor fundamentally unfair.” Gibbons v. Bristol-Myers Squibb Co., 919 F.3d 699, 707 (2d Cir. 2019) (“Put simply, the result here—that a home-state defendant may in limited circumstances remove actions filed in state court on the basis of diversity of citizenship—is authorized by the text of Section 1441(b)(2)[.]”). And, most recently, the Fifth Circuit has given its blessing, explaining it does not have “any doubt about the propriety of removal because . . . the text [section 1441(b)(2)] is unambiguous.” Texas Brine Co., L.L.C. v. Am. Arbitration Ass’n, Inc., 955 F.3d 482, 487 (5th Cir. 2020).
Since these decisions, district courts in several circuits have allowed allow snap removals. E.g., Kornfeind v. Kia Am., Inc., No. 23-cv-01796, 2023 WL 8456111, at *2 (C.D. Cal. Dec. 6, 2023); DMO Methuen, LLC v. FCA U.S., LLC, No. 23-cv-10724, 2023 WL 7548084, at *3 (D. Mass. Sept. 29, 2023); WFG Nat’l Title Ins. Co. v. Bay, No. 22-cv-01010, 2023 WL 6595846, at *3 n.3 (D. Or. Aug. 30, 2023), adopted, 2023 WL 6930918 (D. Or. Oct. 19, 2023).
The U.S. Supreme Court and other circuits courts of appeals have yet to weigh in on the practice.
Snapbacks?
Of note, the removal statute was amended by Congress in 2011, after snap removals had become more common, but the relevant language allowing snap removals was not altered. Congress has since contemplated taking action to change the removal statute. House Resolution 5801, styled as the Removal Jurisdiction Clarification Act of 2020, would have essentially eliminated snap removals by requiring district courts to remand (i.e., “snap back”) snap removal cases upon a plaintiff’s motion. But as its title suggests, the bill has languished for several years in the House Committee on the Judiciary (specifically the Subcommittee on Courts, Intellectual Property, and the Internet). There is no immediate indication that this legislation will ever become law.
Key Takeaways
Given all this, there are a few key takeaways. First, for defendants and their counsel who have reason to anticipate litigation and prefer to litigate in federal court, it is important to monitor state court docket activity. Second, defendants and counsel should be fluent in the service of process rules in the states where litigation is expected. Third, it is a good practice, when litigation is anticipated, to prepare snap removal templates that can be tailored and filed shortly after notice of a filed state court complaint is received. Finally, the grass is not always greener in federal court for every litigation. The pace is often faster, and state court may offer greater flexibility with procedural and evidentiary rules. In addition, the potential judge assignment in either state or federal court is a key consideration that can have a material effect on the course of a litigation. Although time is of the essence with snap removal, be sure to consider these factors as well before filing. source
Requirements for Removing a Case From State Court to Federal Court
State and federal courts have overlapping jurisdiction over many legal claims. Plaintiffs are responsible for choosing where to file their lawsuits, but defendants can have their say in some situations. “Removal” is the process of transferring a lawsuit filed in state court to the United States District Court with jurisdiction over the same area.
A defendant can remove a case from state to federal court by filing a notice of removal in federal court and then notifying the state court and the other parties. They might need the agreement or joinder of any other defendants, or they might be able to remove a case on their own. After removal, the state court no longer has jurisdiction over the lawsuit. A plaintiff can move the federal court to remand the case to state court, but the state court otherwise has no further involvement. Before removing a case, a defendant should consider the potential advantages of federal court and review the jurisdictional requirements and local rules for removal.
Why Remove a Case to Federal Court?
Federal courts may present certain advantages for defendants. For example:
- Since federal judges have lifetime appointments, their courts often offer more consistency in terms of matters like docketing.
- Federal courts tend to have more experience with certain types of lawsuits, so removal could mean that the case makes it through the court more efficiently.
- Rules of procedure and caselaw are often more consistent in federal court. The Federal Rules of Civil Procedure are the same throughout the nation, and all district courts in a circuit are bound by the same precedents.
- Jury pools in federal courts usually come from a wider geographic area.
If a defendant decides that federal court would offer enough advantages, they should begin looking at the procedure for removal.
Deadline to Remove a Case
A defendant has 30 days from the date when they receive the plaintiff’s petition or complaint to remove the case to federal court. A case that is not removable when it is first filed can become removable later if the plaintiff adds new claims, joins more defendants, or increases the amount in controversy. A defendant can remove a case within 30 days of receiving an amended petition or complaint. In many situations, however, the defendant cannot remove the case if more than one year has elapsed since the lawsuit was first filed.
Federal Subject Matter Jurisdiction
A case is removable to federal court only if the federal court would have had subject matter jurisdiction in the first place. The two most well-known bases for federal court subject-matter jurisdiction are:
- Federal question jurisdiction: The case arises under the US Constitution or a federal statute; and
- Diversity jurisdiction: The plaintiff(s) and defendant(s) are from different states, and the amount in controversy is at least $75,000.
Federal courts can exercise supplemental jurisdiction over state-law claims that are closely related to the other claims in the lawsuit.
If a plaintiff who is a citizen of California files suit in a California state court against a defendant who is a citizen of Minnesota, for example, they could file in federal court if the amount of their claims is $75,000 or more. If a plaintiff is asserting causes of action under both federal and state laws, a federal court could have jurisdiction over all the claims under federal question and supplemental jurisdiction.
A lawsuit that is removable based solely on diversity jurisdiction is subject to an additional restriction. It cannot be removed if any defendant is a citizen of the state in which it is filed.
Venue for Removal
Once a defendant has determined that a federal court can exercise subject matter jurisdiction over the lawsuit, they must identify the court where they can file a notice of removal. Federal law states that removal must be to the district court in “the district and division within which such action is pending.” If a plaintiff files a lawsuit in a New York state court in Manhattan, for example, the court to which the case should be removed would be in the Southern District of New York.
Filing the Notice of Removal
The procedure and timing for filing a notice of removal partly depend on the basis for federal subject matter jurisdiction. The notice of removal must include “a short and plain statement of the grounds for removal.” The defendant must attach copies of all the documents served in the state case.
When a defendant seeks to remove a case based on general federal jurisdiction, all of the defendants who have been served in the state case must either consent or join the removal. If a defendant wants to remove the case more than 30 days after a different defendant was served, that defendant can still consent to removal.
If a lawsuit is not initially removable, a plaintiff can render it removable later, such as by adding a claim that falls under federal question jurisdiction. A defendant can remove the case within 30 days of receiving the amended complaint or petition, as long as the original pleading was filed no more than one year earlier. A court can waive the one-year limit if it finds that the plaintiff “acted in bad faith in order to prevent a defendant from removing the action.” For example, a plaintiff who misrepresented the amount in controversy to avoid diversity jurisdiction may be considered to have acted in bad faith.
Notice to State Court and Other Parties
The defendant must notify the other parties and the state court “promptly” after filing the notice of removal in federal court. It must provide written notice to the other parties and file a copy of the notice with the clerk of the state court.
Severing State-Law Claims
The federal court will review its jurisdiction over the causes of action in the lawsuit. It can exercise supplemental jurisdiction over state-law claims. If it finds that it does not have supplemental jurisdiction, the court may sever those claims from the lawsuit and remand them to state court.
Cases That Are Not Removable
Federal law states that certain claims may not be removed to federal court. These include claims against railroads and motor carriers for $10,000 or less, workers’ compensation claims, and civil lawsuits brought under the Violence Against Women Act. source
Removal to Federal Court
The plaintiff is the master of his/her complaint, including where and in what court it is filed. However, the defendant can sometimes wrest the complaint out of state court and have it heard in federal court instead.
Procedurally, it is simple. The defendant files a motion to remove in federal court, a notice to the same effect in state court, and gives notice to all the parties. The case is then docketed in federal court and proceeds there. For examples of removal petitions (sometimes called notices), filter this Docket Search by jurisdiction. See also Form – Petition for Removal, and Form – Notice to State Court of Removal.
After defendants remove the case to federal court, the plaintiffs may move to remand it back to state court. The federal court can also remand the case back to state court on its own (sua sponte) if the court determines it lacks jurisdiction to consider the action. For additional information about remand, see Overview – Remand.
Removal, governed by 28 U.S.C. § 1441, ends the case in state court and transfers the action to federal court instead. Generally:
• only a case that could have originally been brought in federal court is subject to removal;
• only the defendant can remove the case; and
• all defendants must agree to remove the action (with limited exceptions – see below).
Only cases that would have had original jurisdiction in a federal district court may be removed from state court. 28 U.S.C. § 1441. See Overview – Subject Matter Jurisdiction. Therefore, the defendant has to assert and demonstrate federal question, diversity, or statutory jurisdiction.
Federal question jurisdiction, 28 U.S.C. § 1331
Whether the complaint presents a federal question is judged by the well-pleaded complaint rule. See Point of Law (POL). That is, for federal question jurisdiction to attach, an issue of federal law must appear on the face of the complaint. If the complaint includes only state-law claims, a federal defense is not enough to support removal, even if the complaint anticipates that the defendants will assert it. POL.
But the plaintiff can’t avoid stating a federal claim simply by “artfully pleading” around a necessary issue of federal law embedded in the claims. POL. If a substantive issue of federal law or important federal policy must be decided to provide relief in the complaint, that can support removal. For example:
• Courts permit removal where federal law completely preempts state law. This is a narrow exception, but issues of securities law, labor law, ERISA, and other comprehensive regulatory schemes provide examples of state law claims or issues that must be decided under federal law.
• Courts may hold that a claim is necessarily federal, where the right to relief, if any, depends on resolution of a substantial, disputed federal question. POL.
Diversity jurisdiction: more stringent than under 28 U.S.C. § 1332
Diversity must be complete AND no defendant can be a citizen of the state in which the suit is brought. 28 U.S.C. § 1441(b)(2). This is a more stringent rule than the rule for cases originally filed in federal court. However, most circuits hold that the “no resident citizen” requirement isn’t jurisdictional and can be waived if no remand motion is filed within the required period. POL.
For purposes of the rule, a corporation is a citizen of both its state of incorporation and that of its principal place of business. 28 U.S.C. § 1332(c)(1). There are specific rules for each type of entity, so the statutes must be carefully reviewed. 28 U.S.C. § 1332(d).
The defendant must show by a preponderance of the evidence that the amount in controversy requirement for diversity jurisdiction is met. POL.
If the complaint doesn’t assert an amount in controversy, the defendants must make a good faith estimate of the amount based on the pleadings. POL. Jurisdictions have different rules about proving the amount in controversy, so jurisdictional-specific research is required.
The statute says “defendant or defendants” can file the notice of removal. Counterclaim defendants and third-party defendants don’t count as “defendants” for purposes of being able to initiate removal.
All Defendants Must Join/Consent
This is required unless removal is based on CAFA (see below). POL. The consent for removal must be explicit and all defendants must sign the removal filing in federal court.
PRACTICE TIP: Gauge and get consent from all co-defendants well before the deadline. It will be required in writing to file the notice.
Notice of removal must be filed in state court within 30 days “after receipt … through service or otherwise, of a copy of the initial pleading setting forth the claim for relief.” 28 U.S.C. § 1446.
If the case becomes removable after that time expires, a notice of removal must be filed within 30 days of defendant’s notice of the change (e.g., the filing of a revised complaint stating a federal claim).
One year is the absolute cut off if a federal court’s jurisdiction is based on diversity jurisdiction. CAFA is a possible exception (see below). 28 U.S.C. § 1446(c)(1).
WATCH YOUR DEADLINES. Did the defendant already respond to the complaint in state court? If not, following removal, a response is due 21 days from the date the defendant received summons and the complaint, or five days from the date of removal, whichever is longer, to file a response to the complaint. See FRCP 81(c).
PRACTICE TIP: Consider contacting plaintiff to stipulate a date for response.
In general, a defendant must file a petition for removal in federal court, a notice of removal in the state court, and give notice of the removal to all parties in the action. See Overview – Removal Process (28 U.S.C. § 1446).
PRACTICE TIP: Local rules may dictate the format of certain aspects of the petition or notice, and might impact what must be included in the petition. To find local rules, click on the relevant state on the map under State Resources on the Litigation Intelligence Center.
Generally:
• Attach the petition for removal to the state court notice.
• Attach the state court notice to the federal petition for removal.
• Attach a copy of everything in the state court docket to the petition for removal.
Removal Jurisdiction Is Narrow
The burden of establishing federal jurisdiction is on the party seeking removal. The statute is strictly construed against removal jurisdiction. POL.
28 U.S.C. § 1447(c) includes a fee shifting provision. If the court finds there was no “objectively reasonable basis” for removal, it can award fees and costs of remand to the plaintiff. POL.
The Class Actions Fairness Act 28 U.S.C. § 1453 (CAFA) was written to expand federal court access for class actions. CAFA generally permits removal where:
• The case is a class action under FRCP 23 or similar state rule or statute;
• The aggregate number of class members in all proposed classes is 100 or greater; and
• The amount in controversy is $5 million or more (aggregated among claims and plaintiffs, exclusive of interest and costs).
The remand rules under CAFA are more relaxed from those that generally apply. Key differences include:
• CAFA requires only minimal geographic diversity, instead of complete diversity with no defendant resident in the state where suit was brought. Minimal diversity here means, essentially, that at least one plaintiff is a citizen of a state where no defendant resides. Because entities have dual citizenship, at minimum, this inquiry can be complex.
• CAFA doesn’t require all of the defendants to agree to remove the action. Any one defendant can do it on its own.
• The one-year outer limit for removing diversity cases provided in 28 U.S.C. § 1446(c)(1) does not apply to covered class actions removed under CAFA.
Mass actions can also be removed under CAFA, but specific separate rules apply. See 28 U.S.C. 1332(d)(11)(B)(i). See the statute for differences between mass actions and class actions, including limitations on transfer.
See Overview – Removing Under CAFA.
All are strictly construed against removal:
28 U.S.C. § 1369 – Under 28 U.S.C. § 1441(e), if the suit is about an accident in which at least 75 people died, removal is an option.
28 U.S.C. § 1442 – Under this statute a federal officer can remove an action if he/she acted under color of law.
28 U.S.C. § 1442(1)(a) – Under this statute a member of the armed forces can remove any case.
28 U.S.C. § 1443 – This is a “civil rights” removal. Under this statute a defendant can remove if he or she will be denied a federal civil right in state court.
28 U.S.C. § 1452 – This statute relates to bankruptcy removal. When a case filed in state court is related to a bankruptcy proceeding, it can be removed to federal court if that court has jurisdiction over the bankruptcy proceeding.
Under 28 U.S.C. § 1445, some actions are not removable.
Some actions can’t be removed at all, such as:
-Actions against a railroad;
-Workers’ compensation proceedings;
-Actions for less than $10,000 against carriers for losses to specific shipments
There is no appeal from an order of remand based on lack of subject matter jurisdiction or a timely raised procedural defect in the removal. 28 U.S.C. § 1447(d). Statutory exceptions apply for some defendants. (28 U.S.C. 1442, 28 U.S.C. 1443), but generally there is just one shot at removal. If the case is remanded, the defendant can’t seek reconsideration or appeal.
If the defendant removed under CAFA, appeal is allowed under 28 U.S.C. § 1453(c)(1), but very tight time limits apply. You must apply within 10 days of the order for remand. SeeSmart Code®.
Why Make a Federal Case Out of It?
Imagine this scenario: you live in and own a house in Florida, and it is badly damaged by a storm. You file an insurance claim with your insurance company, which is headquartered outside of Florida, and your insurance company denies your claim. You disagree with the insurance company’s assessment of the claim, and you hire a lawyer to represent you in a lawsuit against your insurer. Your lawyer starts a lawsuit against your insurance company in state court, in the county where your house is located. Everything appears to be going smoothly, and then suddenly your attorney informs you that your insurance company has removed your case from state court into a federal court. How did your state court case suddenly become a federal case? How can an insurance company remove your case to a completely different court—with completely different procedures—all by itself? This article examines these questions.
To understand how a case filed in state court can be removed to a federal court, you must first understand a little bit about how jurisdiction works. Simply put, “jurisdiction” describes a court’s legal authority to administer justice. In practical terms, “jurisdiction” describes a court’s ability to hear and resolve cases. A court must always have jurisdiction over a case in order to even begin the case. Without jurisdiction, a court has no authority over a case whatsoever. In the United States, jurisdiction is generally comprised of two components: (1) jurisdiction over the subject matter of a case (the law and the facts of the case), and (2) jurisdiction over the parties in the case (also known as “personal jurisdiction”). In order to have jurisdiction over a case, a court must have both personal jurisdiction and subject matter jurisdiction over the case.
Regarding personal jurisdiction, a court must have jurisdiction over the parties to a lawsuit. For example, a court in Florida would not have personal jurisdiction over individuals in Oregon for a dispute that only took place in Oregon. Personal jurisdiction can become far more complicated, especially when dealing with corporations (which are legal entities that can be all over the world), but the general idea is that the parties to a lawsuit must have some connection to the state in which the lawsuit is brought. An Ohio man suing another Ohio man for an event that occurred in Ohio cannot bring a suit in Florida to resolve the dispute; he would most likely have to bring it in Ohio. Likewise, in the opening scenario, a Florida state court would have personal jurisdiction over the case, because both you and your house are located in Florida, and your insurance company has transacted business in Florida by issuing you an insurance policy under the laws of the state of Florida.
Regarding subject matter jurisdiction, certain courts have only limited subject matter jurisdiction. That is to say that certain courts can only resolve disputes in very narrow areas of the law. For example, federal bankruptcy courts alone have the legal authority to hear and decide bankruptcy cases. No other court in the country has that power. By contrast, most state level trial courts are courts of “general jurisdiction”, meaning that their subject matter jurisdiction is not limited to certain types of disputes. They have the general power to resolve most disputes that arise within their geographical area of the state (such as a county), apart from certain pre-empted subject matters (such as bankruptcy). In the first example, you can properly bring your lawsuit against your insurance company in your local circuit court, because your dispute (most likely a breach of contract action) falls within the general jurisdiction of your state court. Most likely, your attorney would bring suit in the county where you and your house reside.
Now, how does a state court claim suddenly wind up in federal court? Federal courts in the U.S. are courts of limited jurisdiction. Federal courts only have the power to resolve disputes in a number of limited subject matters. Among these subject matters, are (1) disputes involving federal question(s) and (2) disputes involving “diversity of citizenship”. Federal question jurisdiction is exactly what it sounds like. In order for a federal court to have jurisdiction arising under federal question jurisdiction, the case must involve some kind of federal law (i.e. a “federal question”). Unsurprisingly federal courts have the power to interpret federal laws, and create federal case law. Interestingly, state courts also have the power to interpret federal laws, and they are not bound by federal courts’ decisions (apart from the U.S. Supreme Court).
Federal diversity jurisdiction arises when two conditions are met: (1) there must be complete diversity of citizenship between the parties and (2) the “amount in controversy” is greater than $75,000.00. Diversity of citizenship is also exactly what it sounds like. The parties must be citizens of different states. In the first example, diversity of citizenship exists in your case, because you reside in Florida, and your insurance company is headquartered outside of Florida. As to the second element, your claim against your insurance company must be greater than $75,000.00, in order to have diversity jurisdiction.
Once federal diversity jurisdiction exists, any claim—even if it is also proper in state court—may be brought in federal court. When you started your lawsuit, you could have brought your claim in either state court or federal court. Even though you brought your claim in state court, the other party has the right to remove your case to federal court within 30 days after receiving the lawsuit. This is according to federal law, which expressly grants “original jurisdiction” to the federal court in all diversity cases (28 U.S.C. § 1332). Procedurally, this is done by the party seeking to move the case to federal court by filing a “Notice of Removal” in the federal court. If your attorney believes that their removal to federal court is improper, then you can file a “Motion for Remand” within 30 days after the filing of the Notice of Removal. Once a case is removed to federal court (and not remanded back to state court), then the case will be decided by a federal judge. All of the procedural rules of the federal court will apply to your case, even though the federal judge will still apply state law.
Why do some insurers prefer to remove cases to federal court? There are potentially strategic reasons to do so. For instance, if an insurer sees that the case has been assigned to a judge in a state court that they think will rule unfavorably to them, they may want to remove the case to another judge, which can be easily done by removal to federal court. Likewise, many attorneys are not admitted to federal court, or they are not familiar with federal court procedures, so removal may be a way for the insurance company to catch your attorney off-guard. Also, federal courts tend to be generally uniform across the country, and abide by strict procedural guidelines. Some insurers may prefer the increased formality of the federal court system, which again can catch an unfamiliar attorney off-guard.
If you are concerned that your insurance claim could potentially end up in federal court, or if you have a question about your claim in general, please give us a call. Many of our attorneys have experience practicing in both state and federal courts, and we have attorneys who have experience dealing with federal removal issues. source