The Current State of Snap Removals
Federal district courts currently disagree about whether an in-state defendant can ever remove a case to federal court solely on the basis of diversity jurisdiction. The debate centers on the meaning of 28 U.S.C. § 1441(b)(2), the forum defendant rule, and whether that provision allows for snap removals—the term given to the removal of a case involving an in-state defendant before service of process. Before delving into the nuances of the issue and how U.S. circuit courts of appeals have addressed the question, it is helpful to have some background on diversity jurisdiction and the removal statute.
Diversity jurisdiction extends original jurisdiction to the federal district courts in all civil actions between citizens of diﬀerent states where the amount in controversy exceeds $75,000. 28 U.S.C. § 1332(a)(1). For certain nationwide class actions, the citizenship requirements for diversity jurisdiction are relaxed when more than $5 million is in controversy. 28 U.S.C. § 1332(d).
When diversity jurisdiction is satisﬁed, a defendant may remove the case from state court to federal court. Under the removal statute, except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.
28 U.S.C. § 1441(a). Each defendant has 30 days after service on that defendant of the initial pleading of summons to ﬁle a notice of removal. 28 U.S.C. § 1446(b)(1).
However, even where diversity jurisdiction is met, a case may not be removed if any defendant is a citizen of the forum state. Under the forum defendant rule, a defendant may remove a case to federal court except where “any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.” 28 U.S.C. § 1441(b)(2) (emphasis added). The justiﬁcation for the forum defendant rule stems from the view that forum defendants will not be harmed in state court by any biases or discrimination that might aﬀect out-of-state defendants.
Still, the forum defendant rule presents an interesting challenge for codefendants. A common criticism of the rule is that codefendants who are not citizens of the state where an action is brought, but who are nonetheless subject to the forum defendant rule, may still face the kind of discrimination that the removal statute aimed to eliminate.
However, snap removals allow defendants to remove a case to federal court even if a defendant is a citizen of the forum state. Again, snap removal refers to instances where a forum or nonforum defendant has removed a case to federal court after the case was ﬁled but before any forum defendant was served. Snap removal is commonly justiﬁed by a plain reading of the statute because before service, the forum defendant has not been “properly joined and served” under 28 U.S.C. § 1441(b)(2) and is therefore not subject to the forum defendant rule.
District courts have split on the permissibility of snap removals, and several circuit courts have weighed in on the issue. Circuits upholding snap removal have focused on the literal interpretation of the statute and rejected the notion that the peculiar result of allowing an in-state defendant to remove a case on the basis of diversity jurisdiction justiﬁes dismissing the statute’s plain text.
Encompass. In 2018, the U.S. Court of Appeals for the Third Circuit upheld snap removal for a lone forum defendant in Encompass Insurance Co. v. Stone Mansion Rest. Inc. 902 F.3d 147 (3d Cir. 2018).
In Encompass, the plaintiﬀ, a citizen of Illinois, brought an action in Pennsylvania state court against the defendant, a citizen of Pennsylvania. Id. at 149. The forum defendant agreed to accept electronic service in lieu of formal service; and upon receiving a copy of the complaint and a service acceptance form by the plaintiﬀ, the defendant removed the action to federal court before formally accepting. Id. at 150. Noting that the requirements for diversity jurisdiction were satisﬁed, the defendant relied on a Pennsylvania district court opinion interpreting the forum defendant rule’s language of being “properly joined and served” to mean that a forum defendant can remove the case before being served. Id. at 150. The district court agreed.
On appeal, the Third Circuit aﬃrmed the district court’s holding. The court found the statutory language to be unambiguous. Id. at 152. The plain language of the statute indicated that a defendant’s in-state citizenship precludes removal only when the defendant has been properly joined and served. Id. Because the defendant had not been properly joined and served, the court reasoned that its interpretation simply followed the plain meaning of the statute. Id. at 153.
The court also rejected the plaintiﬀ’s argument that the district court’s ruling ignored the intent of the forum defendant rule. In assessing the purpose of the properly joined and served language absent legislative history guidance, the Third Circuit found that Congress’s intent in the rule was to “to prevent a plaintiﬀ from blocking removal by joining as a defendant a resident party against whom it does not intend to proceed, and whom it does not even serve.” Id. The court rejected the plaintiﬀ’s argument that Congress did not intend the properly joined and served language to permit in-state defendants to remove an action to federal court by delaying formal service of process. Id. Rather, the court simply noted that the properly joined and served language addresses fraudulent joinder by a plaintiﬀ with “a bright-line rule,” and the removal of the case did not conﬂict with the statute’s purpose. Id.
Still, the Third Circuit acknowledged that allowing snap removals may raise questions or suggest a need to change the law, but it concluded that any such change must come from the legislature, not the courts. Id. at 154.
Gibbons. Similarly, in Gibbons v. Bristol-Myers Squibb Co., the U.S. Court of Appeals for the Second Circuit upheld snap removal where the forum defendant removed the case before any defendant was served. 919 F.3d 699 (2d Cir. 2019). The Second Circuit echoed the Third Circuit’s reasoning in Encompass that the statutory language is unambiguous and simply precludes removal once a forum defendant has been properly joined and served. Id. at 705. The court rejected the argument that snap removal by the forum defendant should be barred because it produces an “absurd result” given the purpose of the removal statute. Id. According to the Second Circuit, Congress may have included the service requirement to both limit gamesmanship and establish an easily administered, bright-line rule regarding removal for courts. Id. Therefore, the result of interpreting the statute to permit snap removals was not so absurd that ignoring the statute’s plain text could be justiﬁed. Id.
McCall. In McCall v. Scott, the U.S. Court of Appeals for the Sixth Circuit also hinted that the diversity jurisdiction statute may allow snap removal. 239 F.3d 808, 813 n.2 (6th Cir. 2001) (“Where there is complete diversity of citizenship, as [the plaintiﬀ] concedes there was, the inclusion of an unserved resident defendant in the action does not defeat removal under 28 U.S.C. § 1441(b).”).
Snap removal has also been upheld for nonforum defendants. In Texas Brine Co., L.L.C. v. American Arbitration Ass’n, the U.S. Court of Appeals for the Fifth Circuit upheld snap removal for a nonforum defendant who removed the case to federal court before a forum defendant was properly joined and served. 955 F.3d 482, 487 (5th Cir. 2020). In upholding snap removal, the court emphasized that the statute’s text is unambiguous and that a court should not attempt to revise the statute. Id.
However, other courts have found diﬀerently. In Woods v. Ross Dress for Less, Inc., the U.S. Court of Appeals for the Tenth Circuit held that snap removal was not permissible for a nonforum defendant. 833 Fed. App’x 754, 755 (10th Cir. 2021). In Ross, the plaintiﬀ, a citizen of Oklahoma, sued a corporation and a store manager after tripping outside one of the corporation’s stores in Oklahoma. The store manager was a forum defendant, while the corporation was not. The defendant corporation removed the case to federal court under diversity jurisdiction, and the district court subsequently granted the defendant’s summary judgment motion. On appeal, the Tenth Circuit reversed the lower court’s summary judgment motion in favor of the defendant.
However, the Tenth Circuit’s holding was based on the fact that no diversity jurisdiction originally existed. Therefore, neither the issue of removal jurisdiction nor snap removal could come into play. Id. at 759.
In Goodwin v. Reynolds, the U.S. Court of Appeals for the Eleventh Circuit did not rule directly on the issue of snap removal but observed in dicta that a district court’s decision to grant a plaintiﬀ’s motion to dismiss a case, thereby precluding snap removal, was proper. 757 F.3d 1216 (11th Cir. 2014).
In Goodwin, a plaintiﬀ ﬁled suit in state court against one forum defendant and two nonforum defendants. The plaintiﬀ paid for service of process on all defendants and sent courtesy copies of the complaint as well. Upon receiving the courtesy copies, the two nonforum defendants removed the case before any defendants, including the forum defendant, were served. Id. at 1218. Although the case was removed to federal district court, the district court granted the plaintiﬀ’s motion to dismiss to allow the plaintiﬀ to reﬁle the case in state court. Id. This action therefore precluded a subsequent removal. On appeal, the Eleventh Circuit aﬃrmed the district court’s holding, eﬀectively precluding snap removal.
The divergent results in the Third Circuit’s decision in Encompass and the Eleventh Circuit’s decision in Goodwin might be attributed to the diﬀerent analysis of the relevant issue on appeal. In Encompass, the issue on appeal was whether the defendants could utilize snap removal to remove the action to federal court. In Goodwin, the issue was whether the district court erred in granting the plaintiﬀ’s motion to dismiss. The Eleventh Circuit rejected the defendant’s argument that the district court had abused its discretion. Id. at 1219. The barring of snap removal was, therefore, a secondary eﬀect of the court’s holding.
The speciﬁc issue of whether the defendants could remove the case to federal court, however, was never raised in Goodwin, and the Eleventh Circuit did not directly rule on this issue. The court assumed that the defendant’s removal was proper and later held that the district court’s dismissal of the case was proper as well. Id. at 1221. The Eleventh Circuit’s analysis focused on whether the defendant would suﬀer a clear legal prejudice outside of a subsequent lawsuit if the plaintiﬀ’s dismissal were granted. In holding that the district court did not abuse its discretion in granting the plaintiﬀ’s motion to dismiss the case, the Eleventh Circuit noted that obtaining a “tactical advantage in future litigation” does not bar a voluntary dismissal. Id. at 1219.
The Eleventh Circuit nonetheless brieﬂy discussed snap removal in dicta and noted that permitting snap removal allows gamesmanship by defendants. Id. at 1221. Absent clear guidance for interpretation of the properly joined and served language that was added to the statute in 1948, the court noted that the defendant’s right of removal is not “at the core of what the removal statute protects.” Id. It reasoned that the likely purpose of the addition was “to prevent a plaintiﬀ from blocking removal by joining as a defendant a resident party against whom [the plaintiﬀ] does not intend to proceed, and whom [the plaintiﬀ] does not even serve.” Id. (citing Sullivan v. Novartis Pharms. Corp., 575 F. Supp. 2d 640, 644 (D.N.J. 2008)). The statute therefore aimed to prevent tactical maneuvers for fraudulent joinder by plaintiﬀs. Id. Under that framework, the Eleventh Circuit observed in dicta that the district court similarly had discretion to “undo” any tactical maneuvers by the defendant’s snap removal through granting the plaintiﬀ’s motion to dismiss the case. Id.
Notably, the Third Circuit later agreed with the Eleventh Circuit’s interpretation of the statute’s legislative history four years later in Encompass, where it upheld snap removal while acknowledging that doing so did not contravene the purpose of the removal statute.
District courts have split on the permissibility of snap removals, with some district courts denying snap removals. Generally, those courts have rejected the practice because either (1) they conclude that the literal interpretation of § 1441(b)(2) produces an absurd result, or (2) they interpret the statute to require service on at least one defendant before a case can be removed. Murphy v. Inman, No. 17-13292, 2018 WL 8809349, *11-12 (E.D. Mich. Feb. 21, 2018).
Courts that ﬁnd the “absurd result” reasoning persuasive have emphasized that Congress added the phrase properly joined and served to § 1441(b)(2) to prevent plaintiﬀs from joining forum defendants to an action merely to avoid removal. See, e.g., Phillips Constr., LLC v. Daniels L. Firm, PLLC, 93 F. Supp. 3d 544, 553 (S.D. W. Va. 2015); Deustche Bank Nat’l Tr. Co. v. Old Republic Title Ins. Grp. Inc., 532 F. Supp. 3d 1004, 1013 (D. Nev. 2021). Consequently, for those courts, interpreting the statute to allow snap removals works against congressional intent because, as one judge observed, “[r]ather than only providing a shield for defendants against gamesmanship by plaintiﬀs, the literal interpretation of Section 1441(b)(2) would provide an incentive for defendants to employ gamesmanship, themselves, by racing to remove newly ﬁled actions.” Phillips Constr., 93 F. Supp. 3d at 554.
Similarly, courts that read § 1441(b)(2) to require service on at least one defendant before removal view that interpretation as more consistent than the literal interpretation with congressional intent to prohibit forum defendants from removing cases. See, e.g., Bowman v. PHH Mortg. Corp., 423 F. Supp. 2d 1286, 1293 (N.D. Ala. 2019) (“In contrast, the alternative interpretation of the statute—requiring at least one defendant to have been properly joined and served before removal when an in-state defendant is involved—ﬁts neatly with the history and purpose of the rule.”).
Currently, there is no indication that Congress rejects snap removal. The properly joined and served language was added in 1948; and when Congress revised the forum defendant rule in 2011, the properly joined and served language survived. However, the Removal Jurisdiction Clariﬁcation Act of 2020 (H.R. 5801), which would eﬀectively eliminate snap removals, sits before the House Committee on the Judiciary. In the meantime, though, absent any clear guidance from Congress otherwise, snap removal remains a valid litigation practice.
Attorneys considering snap removal should consider their jurisdiction’s position on the issue and other factors, such as the number of defendants in the litigation, that might aﬀect the district court’s decision if a plaintiﬀ challenges removal. See D’Ovidio v. Royal Caribbean Cruises, Ltd., No. 22-21629-CIV-MORENO, 2022 WL 16798446 (S.D. Fla. Nov. 8, 2022) (interpreting the properly joined language of the forum defendant rule to require more than one defendant for snap removal).
Attorneys should also consider the goals of the forum defendant rule and any bad faith by a party or fraudulent joinder when developing arguments regarding snap removal.
This article originally appeared in the ABA Section on Litigation Pretrial Practice & Discovery’s Winter Newsletter and is posted with permission from the ABA.