While a plaintiff is the master of her complaint (and decides the forum in which she will file a lawsuit), the defendant is not without any say in the matter. The procedure for removal allows a defendant to remove certain cases filed in state court to federal court. In some circumstances, your client’s litigation position may be significantly enhanced by the opportunity to litigate in federal court. For instance, removing a case from state court to federal court may alleviate concerns about possible prejudice or bias against an out-of-state-defendant. It may allow a defendant to take advantage of federal procedural rules, including, for example, rules governing expert testimony. Or it may provide a defendant with an avenue to consolidate mass litigation through the multidistrict litigation procedures. Whatever reason your client may have for wanting to litigate in federal court, it is critical that you be able to analyze efficiently the potential bases for removal in a complaint and that you also be well versed in the requirements for doing so. District courts will strictly analyze removals. A failure to comply with substantive and procedural requirements is likely to result in the remand of your client’s case.
Deadline for Removal
One of the first things to do after receiving a complaint is to determine the deadline for removal. By the time you are retained to represent a client, there may be little time to remove the case, underscoring the importance of your ability to quickly discern the potential avenues for removal. A notice of removal must be filed within 30 days after the defendant’s receipt of the initial pleading “through service or otherwise” or within 30 days after service of the summons on the defendant, if the initial pleading is not required to be served on the defendant, whichever period is shorter. 28 U.S.C. § 1446(b)(1).
However, just because a case is not initially removable does not mean it may never become so. It is, therefore, important to stay alert to developments in litigation that may make a case removable. If a case is not initially removable, a notice of removal may be filed within 30 days after the defendant’s receipt, through service or otherwise, of a copy of an amended pleading, motion, order, or other paper from which it first may be ascertained that the case is one that is or has become removable. 28 U.S.C. § 1446(b)(3). While the meanings of “pleading,” “motion” and “order” seem clear, the definition of “other paper” has been the subject of litigation, and the courts are not always consistent in interpreting that term’s meaning. This second chance at removal will not always exist in diversity cases, however. A case that is removable solely on the basis of diversity jurisdiction may be removed based on an amended pleading, motion, order, or other paper only within one year of the commencement of the lawsuit, unless the district court finds that the plaintiff has acted in bad faith to prevent the defendant from removing an action. 28 U.S.C. § 1446(c)(1).
A failure to timely file a notice of removal will result in remand back to state court, so careful attention should be paid to these strict jurisdictional deadlines.
Where to Remove
In order to determine whether removal will benefit your client, you must know to which district court the case will be removed. If a case is removable, it may be removed to the district court for the district and division in which the state court action is pending. 28 U.S.C. § 1446(a). Once you have determined the district to which you will remove, you should review the local rules governing removal in your jurisdiction and become familiar with the judges presiding in that district.
Common Bases for Removal
Next, you must determine whether your case is removable. While there are many avenues for removal, see, e.g., 28 U.S.C. §§ 1442, 1443, 1444, and 1446, the most common bases for removal are pursuant to the federal court’s jurisdiction provided through either 28 U.S.C. section 1331 or 1332. This article focuses on jurisdiction provided by sections 1331 and 1332.
When analyzing the possibility of removal, first review the complaint to determine whether federal question jurisdiction exists. In other words, determine whether the action arises under the Constitution, laws, or treaties of the United States. See 28 U.S.C. § 1331. The determination of whether a claim “arises under” federal law must be made by reference to the “well-pleaded complaint.” Merrell Dow Pharm. Inc. v. Thompson, 478 U.S. 804, 808 (1986). The vast majority of cases brought under federal question jurisdiction are those cases in which federal law creates the cause of action. See id. A defense that raises a federal question, however, will not confer federal jurisdiction. See id.
If federal question jurisdiction does not exist, you must next determine whether the court has diversity jurisdiction. Diversity jurisdiction exists where the plaintiff(s) on the one hand and the defendant(s) on the other hand are citizens of different states, and where the amount in controversy exceeds $75,000, exclusive of interest and costs. 28 U.S.C. § 1332. Section 1332 also deals with circumstances involving citizens of foreign states, as well as the unique rules governing diversity jurisdiction as it pertains to class actions. This article focuses on diversity jurisdiction involving citizens of different states.
The first step in this analysis is to determine whether complete diversity exists between the plaintiff(s) and the defendant(s). This may be as simple as determining the citizenship of each of the parties and finding complete diversity exists. In other cases, there may be a defendant who destroys diversity. Before deciding that removal is not possible, you should consider whether the nondiverse defendant has been fraudulently joined. A defendant is considered fraudulently joined when the plaintiff has not stated or cannot state a claim for relief against the nondiverse defendant under the applicable substantive law or does not intend to secure a judgment against that particular defendant. See 14B Charles A. Wright et al., Federal Practice and Procedure § 3723 (4th ed. 2009). As a practical matter, you can think about this analysis much as you would if you were filing a motion to dismiss on behalf of the nondiverse defendant. A removing defendant may also establish fraudulent joinder by establishing that there has been outright fraud in the plaintiff’s pleading of the jurisdictional facts. See id. Establishing fraudulent joinder can be difficult, though, as “there need only be a possibility that a right to relief exists under the governing law to avoid a court’s finding of fraudulent joinder.” Id. (emphasis added). You should counsel your client accordingly.
After you determine the citizenship of each of the parties, you must consider whether any of the defendants is a citizen of the state in which the action was brought. An action is not removable on the basis of diversity jurisdiction if any defendant who has been properly joined and served is a citizen of the state in which the plaintiff brought the action. 28 U.S.C. § 1441(b)(2).
Next, you must consider whether the amount in controversy exceeds $75,000, exclusive of interest and costs. When the plaintiff seeks more than $75,000 in the complaint, the complaint generally is determinative on this issue. Like the citizenship analysis, however, the amount in controversy may not always be determinable from the face of the complaint. For instance, a complaint may contain an unspecified damages demand. In that case, the defendant will bear the burden of proving by a preponderance of the evidence that the amount in controversy exceeds $75,000. You might support such an assertion by offering evidence of the monetary value of the damages sought—e.g., the amount of a plaintiff’s earnings in a claim for lost wages or the amount of a plaintiff’s medical bills in a claim asserting personal injury. You might also rely on jury verdicts in factually similar cases exceeding $75,000. Because punitive damages are included in calculating the jurisdictional amount, you should highlight that punitive damages are being sought where the plaintiff has made a demand for such damages. In other instances, the plaintiff may be seeking equitable relief. In an action seeking declaratory or injunctive relief, you should establish that the value of the object of the litigation exceeds $75,000. One practical advantage of making an amount in controversy argument is that it may cause the plaintiff to disclaim damages in excess of $75,000, if the plaintiff wishes to avoid removal to federal court.
These are not the only bases for removal, and care should be taken to analyze other potential bases for removal.
Procedural Requirements for Removal
Once you have determined that your case is removable, it is critical to understand the procedural requirements for removal. The failure to comply with them may result in remand.
To effectuate a removal, the defendant must file a short and plain statement of the grounds for removal, which shall be signed pursuant to Federal Rule of Civil Procedure 11. 28 U.S.C. § 1446(a).
The defendant shall also file with the notice of removal “a copy of all process, pleadings, and orders served upon” the defendant(s). 28 U.S.C. § 1446(a). Practically speaking, attaching the entire state court file to the notice of removal will satisfy this requirement. The state court clerk’s office can be a helpful resource in ensuring you have all necessary processes, pleadings, and orders, even in jurisdictions maintaining an online docket. Depending on the complexity of the case and when in the course of litigation the case is removed, it can be time consuming to collect such documents from the state court. It is therefore important to start the removal process with ample time to complete these procedural tasks.
For actions removed solely under 28 U.S.C. section 1441, all defendants who have been properly joined and served must join in or consent to the removal. 28 U.S.C. § 1446(b)(2). It can be difficult to coordinate obtaining such consent among your codefendants, providing another reason to start the removal process early.
Finally, the removing defendant must provide written notice of the removal to all adverse parties and must file a copy of the notice with the clerk of the state court in which the action was brought. 28 U.S.C. § 1446(d). It is prudent to attach a copy of the notice of filing to your notice of removal. Reference should be made to the local rules to determine whether a file-stamped copy must be attached to the notice of removal.
Most importantly, while this article attempts to set out some of the standard jurisdictional bases for removal, as well as some of the requirements for removal, it is imperative to review and understand the procedural and substantive law governing the district to which you will remove your case, as well as the governing local rules.
Republished with permission. This article first appeared in the ABA’s The Woman Advocate on March 2, 2017.