Most young lawyers learned in first-year procedure that a case can’t be removed to federal court on the basis of diversity of citizenship when there is an in-state defendant. That rule is commonly referred to as the “forum-defendant rule,” which is codified in 28 U.S.C. § 1441(b)(2). This description of the “forum-defendant rule” has become increasingly less accurate over the last few months.

The text of § 1441(b)(2)—which hasn’t changed since it was first drafted in 1948—reads as follows:

A civil action otherwise removable solely on the basis of the jurisdiction under section 1332(a) of this title 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.

Unless you’ve been involved in a “snap removal,” you may have missed the critical conjunction of “joined and served.” While impossible to have predicted in 1948, this conjunction has increasingly profound implications.

Technology (namely electronic docketing) allows enterprising defendants to game the conjunctive requirement of “joined and served” to “snap remove” a case before a plaintiff can serve a forum defendant. The removing defendant argues that because the forum defendant has not been both joined and served the case can still be removed. For the last decade, the practice has been controversial—with multiple federal courts noting that the practice “bears the telltale signs of gamesmanship and forum manipulation.” Smethers v. Bell Helicopter Textron Inc., 6:16-CV-58, 2017 WL 1277512, at *3 (S.D. Tex. Apr. 3, 2017) (quoting Breitweiser v. Chesapeake Energy Corp., 3:15-CV-2043-B, 2015 WL 6322625, at *7 (N.D. Tex. Oct. 20, 2015)).

In recognition of the gamesmanship, Texas courts had been fairly uniform in their approach to “snap removals,” and permitted only a non-forum defendant to remove a case before the forum defendant is served. Smethers, 2017 WL 1277512, at *3 (Hanks, J.); Bretweiser, 2015 WL 6322625, at *6 (Boyle, J.). These judges reasoned that allowing a forum defendant to remove a case before it is served would lead to an absurd result that Congress did not intend when it created the forum-defendant rule. Many other federal courts across the country have reached the same conclusion. E.g., Gentile v. Biogen Idec, Inc., 934 F. Supp. 2d 313, 317 (D. Mass. 2013).

Over the last few months, though, Texas stopped being uniform. Now, the outcome of a snap removal could depend on the judge your snap-removed case lands in front of. In the Northern District of Texas, two judges recently held that a forum defendant can snap remove a case to federal court—even when the forum defendant was the only defendant. Baker v. Bell Textron, Inc., 3:20-CV-292-X, 2020 WL 5513431, at *6 (N.D. Tex. Sept. 14, 2020) (Starr, J.); Mirman Group, LLC v. Michaels Stores Procurement Co., Inc., 3:20-CV-1804-D, 2020 WL 5645217, at *3 (N.D. Tex. Sept. 22, 2020) (Fitzwater, J.). The same split now exists in the Southern District of Texas. Latex Constr. Co. v. Nexus Gas Transmission, LLC, CV 4:20-1788, 2020 WL 3962247, at *6 (S.D. Tex. July 13, 2020). As of early October, the Western and Eastern Districts hadn’t developed a split.

The Fifth Circuit only recently addressed the propriety of snap removals. It held that “[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.” Tex. Brine Co., L.L.C. v. Am. Arbitration Ass’n, Inc., 955 F.3d 482, 487 (5th Cir. 2020). The Texas federal district judges that have allowed a forum defendant to snap remove a case have all done so since Texas Brine. Those judges have held that even though the Fifth Circuit only blessed a non-forum defendant snap removing a case, the Fifth Circuit was not asked to decide whether a forum defendant could snap remove a case while noting that the Fifth Circuit cited two sister-circuit cases that permitted a forum defendant to snap remove a case.

Until this summer, out-of-state plaintiffs in Texas could hold a state-court forum by breaking up their filings and suing the forum defendant before suing the non-forum defendant. That path is still potentially viable depending on the judge drawn. But even that cumbersome process cannot guarantee a case remains in state court given the intra-district splits in the Northern and Southern Districts.

Ultimately, it may be up to Congress to tell us whether decades-old language written before anyone could conceive of electronic filing is being accurately applied or whether § 1441(b)(2) needs to be amended to uphold Congress’s intent. Until then, the best practice for plaintiffs may be filing after hours so that their case doesn’t end up in the daily case reports and having a process server on standby to rush a citation to a registered agent the next day once the filing is accepted and citation is issued. If the stakes are sufficiently high, plaintiffs may also need to scale back pre-suit notice to defendants. For defendants, the best practice will continue to be monitoring electronic dockets and having snap-removal forms ready.

_____________________________

Stephen Higdon focuses his practice at Lyons & Simmons, LLP on handling personal injury litigation and complex business disputes. He has extensive courtroom experience handling a wide range of civil litigation at both the trial and appellate levels.

 

_____________________________

Articles on the DAYL website are provided for informational use only and are in no way intended to constitute legal advice or the opinions or views of the DAYL.