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Federal Court Jurisdiction: Diversity Federal Court Jurisdiction: Diversity and Removal Complexities

Navigating the Intricate Jurisdiction Standards and Removal Process

T d ’ f l f

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific THURS DAY, DECEMBER 2, 2010

Today’s faculty features: Justin M. S her, Partner, Sher, New Y

• rk

Jared M. Katz, Partner, Mullen & Henzell, S anta Barbara, Calif.

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Federal Court Jurisdiction: Diversity and J y Removal Complexities

S Justin M. Sher Sher LLP Justin sher@sherllp com Justin.sher@sherllp.com 212.202.6000

4

Biography of Justin M Sher Biography of Justin M. Sher

• Justin M. Sher is the Founder and Managing Partner of Sher LLP, a litigation

boutique based in New York City Mr Sher and his firm represent executives boutique based in New York City. Mr. Sher and his firm represent executives, entrepreneurs, public officials and businesses of all sizes in complex commercial disputes, white collar criminal matters and regulatory investigations. Mr. Sher has handled matters involving insider trading, market manipulation, accounting fraud, antitrust violations, complex contract disputes, claims of breach of fiduciary duty and , p p , y y allegations of securities fraud.

• Mr. Sher graduated from Harvard College with honors. Following his graduation, Mr.

Sher worked for the Frauds Bureau of the New York County District Attorney’s Office, where he analyzed complex facts for high profile white collar grand jury investigations where he analyzed complex facts for high-profile white collar grand jury investigations and criminal prosecutions. Mr. Sher received his law degree, also with honors, from New York University, where he served as Staff Editor for NYU’s Journal of Legislation and Public Policy and as a member of the Federal Defender Clinic. Prior to founding Sher LLP, Mr. Sher clerked for Hon. George B. Daniels in the Southern District of New York and was associated with the law firm of Davis Polk & Wardwell LLP in New York City.

5

Advantages of Federal Jurisdiction Advantages of Federal Jurisdiction

• General:

– Faster – Quality of judges

• For Plaintiff:

– Interstate discovery Interstate domestication / enforcement – Interstate domestication / enforcement

• For Defendant:

– Higher pleading standards / more cases dismissed Higher pleading standards / more cases dismissed before trial – Rules limit discovery

6

Diversity Jurisdiction Basics Diversity Jurisdiction Basics

• 28 U.S.C. 1332

28 U.S.C. 1332

• Conceived to protect out-of-state parties

from local prejudice from local prejudice

• Requires:

– Threshold amount: Amount in controversy Threshold amount: Amount in controversy greater than $75,000 – Diversity: Citizens of different states, citizens y

• f state and citizens of foreign state, action

brought by foreign state

7

Amount in Controversy Amount in Controversy

• $75,000 threshold

$75,000 threshold

– Based on good-faith allegations in complaint (Horton

• v. Liberty Mut. Ins. Co., 367 U.S. 348, 354 (1961))

– Jurisdiction not retroactively revoked if amount of damages is lower, but court may impose costs on plaintiff plaintiff – Cannot consider counterclaims – Declaratory or injunctive actions -- amount in y j controversy measured by the value of the object of the litigation (Hunt v. Washington State Apple Advertising Com'n 432 U S 333 347 (1977)) Advertising Com n, 432 U.S. 333, 347 (1977))

8

Diversity Diversity

• Complete diversity

Complete diversity

– If a single plaintiff has the same citizenship as a single defendant diversity will be defeated a single defendant, diversity will be defeated

• Class actions over $5 million

Complete diversity not required – Complete diversity not required – Any member of class of plaintiffs from a state different from any defendant different from any defendant

9

Citizenship of Individuals Citizenship of Individuals

• Individuals

Individuals

– Citizenship based on place of domicile Domicile = place of residence along with – Domicile = place of residence along with intent to reside for indefinite period – Determined according to facts at time lawsuit – Determined according to facts at time lawsuit is commenced

10

Corporations Corporations

• Corporations are citizens of:

Corporations are citizens of:

– State of incorporation “Principal place of business” – Principal place of business – Citizens of both

11

Principal Place of Business Principal Place of Business

• Hertz Corp. v. Friend, 130 S.Ct 1181 (2010)

Hertz Corp. v. Friend, 130 S.Ct 1181 (2010)

– Class action brought by California citizens in California state court; Hertz sought removal – Hertz: citizen of New Jersey, where it maintained its headquarters and where core executive and administrative functions took place administrative functions took place – District court applied the “business activity test” and held that Hertz was CA citizen because amount of business activity in CA was significantly larger than the next closest state – Ninth Circuit affirmed – Ninth Circuit affirmed

12

Nerve Center Test Nerve Center Test

• Supreme Court adopts the “nerve center” test and

p p reverses:

• the “‘principal place of business’ is best read as referring

to the place where a corporation's officers direct, control, to the place where a corporation s officers direct, control, and coordinate the corporation's activities.”

• should normally be the place where the corporation

maintains its headquarters maintains its headquarters

• Should not be a “mail drop box, a bare office with a

computer, or the location of an annual executive retreat”

• Court motivated by simplicity and predictability
• Burden of persuasion rests on party seeking diversity

jurisdiction jurisdiction

13

Partnerships Partnerships

• A partnership is a citizen of each

A partnership is a citizen of each jurisdiction of which a partner is a citizen (Great Southern Fire Proof Hotel

• citizen. (Great Southern Fire Proof Hotel
• Co. v. Jones, 177 U.S. 449, 456 (1900))
• Must look to citizenship of each and every
• Must look to citizenship of each and every

partner

14

Limited Liability Companies Limited Liability Companies

• “[L]ike a partnership an LLC is a citizen of

[L]ike a partnership, an LLC is a citizen of every state of which its owners/members are citizens (Johnson v Columbia are citizens. (Johnson v. Columbia Properties Anchorage, LP 437 F.3d 894, 899 (9th Cir 2006)) 899 (9th Cir. 2006)) M t l k t h d b

• Must look to each and every member or

partner

15

Omitting Defendants Strategically Omitting Defendants Strategically

• Question: As plaintiff seeking federal

Question: As plaintiff seeking federal jurisdiction, can you strategically omit defendant in order to obtain complete p diversity?

• Answer: Yes, but . . .
• Court will not have jurisdiction over claims

by plaintiff against third-party defendant, y p g p y intervenor or other parties subsequently

• joined. 28 USC 1367(b).

16

Including Defendants Strategically Including Defendants Strategically

• Question: Can a plaintiff name a

Question: Can a plaintiff name a defendant from the same state in order to avoid removal from state court? avoid removal from state court?

• Answer: Not if it is fraudulent or improper.

17

Fraudulent Joinder and Misjoinder Fraudulent Joinder and Misjoinder

• Fraudulent Joinder

– A defendant's “right of removal cannot be defeated by a fraudulent joinder of a resident defendant having no real connection with the controversy.” (Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97 (1921)) , , ( )) – Must demonstrate, by clear and convincing evidence, either that (1) there has been outright fraud committed in the plaintiff's pleadings, or (2) there is no possibility, based on the pleadings, that a plaintiff can state a cause of action against the non-diverse that a plaintiff can state a cause of action against the non diverse defendant in state court.” (Whitaker v. American Telecasting, Inc., 261 F.3d 196, 207 (2d Cir. 2001))

• Fraudulent Misjoinder

– Joining defendants with no real connection to the controversy, even if colorable claim exists, may be so egregious as to constitute fraudulent joinder. (Tapscott v. MS Dealer Service Corp., 77 F.3d 1353, 1360 (11th Cir.1996)) p , , ( ))

18

Mullen & Henzell L.L.P.

Federal Court Jurisdiction: Federal Court Jurisdiction:

mh

Diversity and Removal Diversity and Removal Complexities Complexities

Navigating the Intricate Jurisdiction Standards Navigating the Intricate Jurisdiction Standards and Removal Process and Removal Process

Part II: Removal Based on Diversity Part II: Removal Based on Diversity-

• Strategic Issues

Strategic Issues g

Jared M. Katz Jared M. Katz Mullen & Mullen & Henzell Henzell L.L.P. L.L.P.

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Mullen & Henzell L.L.P.

Jared M. Katz Jared M. Katz

mh

Mullen & Henzell L.L.P. Santa Barbara, California Jared Katz is the Litigation Chair at Mullen & Henzell L.L.P. He is experienced in handling complex litigation in California He is experienced in handling complex litigation in California.

• Mr. Katz is admitted before the Federal District Courts for

California, including the Central District (Santa Barbara and Los Angeles), Eastern District (Fresno), Southern District (San Di ) d N h Di i (S F i ) ll h Diego) and Northern District (San Francisco), as well as the Ninth and Eighth Circuits. Mr. Katz's practice encompasses contract disputes, tort claims, business and partnership disputes, insurance coverage, real estate litigation, fiduciary

112 E. Victoria Street

disputes, insurance coverage, real estate litigation, fiduciary duty claims, international law, bailment and motor cargo claims, employment law, and other areas. A graduate of Princeton University and Loyola Law School, Mr. Katz is experienced in ti ll t f li t l i l di F t 500

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representing all types of clientele, including Fortune 500 companies, institutions, local businesses, and individuals.

2

Overview: Removal Based on Diversity Overview: Removal Based on Diversity

Mullen & Henzell L.L.P.

Overview: Removal Based on Diversity Overview: Removal Based on Diversity

• Generally, there are three ways the district court can obtain

Generally, there are three ways the district court can obtain subject matter jurisdiction over a claim that has been removed: subject matter jurisdiction over a claim that has been removed:

mh

subject matter jurisdiction over a claim that has been removed: subject matter jurisdiction over a claim that has been removed: (1) based on a federal question; (2) (1) based on a federal question; (2) based on diversity based on diversity jurisdiction; jurisdiction; or (3) supplemental jurisdiction.

• r (3) supplemental jurisdiction.
• This presentation addresses commonly litigated issues in

This presentation addresses commonly litigated issues in ti ith l b d di it j i di ti ti ith l b d di it j i di ti connection with removal based on diversity jurisdiction. connection with removal based on diversity jurisdiction.

• “Any civil action” commenced in state court is removable if it

“Any civil action” commenced in state court is removable if it might have been brought originally in federal court. 28 U.S.C. might have been brought originally in federal court. 28 U.S.C. § § 1441(a); 1441(a); see Exxon Mobile Corp v see Exxon Mobile Corp v Allapattah Allapattah Services Inc Services Inc 545 545 1441(a); 1441(a); see Exxon Mobile Corp. v. see Exxon Mobile Corp. v. Allapattah Allapattah Services, Inc. Services, Inc. 545 545 U.S. 546, 563 (2005) (“district court has original jurisdiction of a U.S. 546, 563 (2005) (“district court has original jurisdiction of a civil action for purposes of civil action for purposes of § § 1441(a) as long as it has original 1441(a) as long as it has original jurisdiction over a subset of the claims constituting the action”). jurisdiction over a subset of the claims constituting the action”). Th fi t t i t d t i h th th ti ld h b Th fi t t i t d t i h th th ti ld h b

• The first step is to determine whether the action could have been

The first step is to determine whether the action could have been filed in federal court. filed in federal court. Caterpillar Inc. v. Williams Caterpillar Inc. v. Williams, 482 U.S. 386, , 482 U.S. 386, 392 (1987). 392 (1987).

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Overview: Removal Based on Diversity Overview: Removal Based on Diversity ( t’d) ( t’d)

Mullen & Henzell L.L.P.

(cont’d) (cont’d)

• Court examines if removal jurisdiction exists before ruling on the

Court examines if removal jurisdiction exists before ruling on the merits merits See University of South Alabama v American Tobacco See University of South Alabama v American Tobacco

mh

merits.

• merits. See University of South Alabama v. American Tobacco

See University of South Alabama v. American Tobacco Co. Co., 168 F.3d 405, 410 , 168 F.3d 405, 410-

• 411.

411.

• The federal court’s removal jurisdiction is statutory, deriving from

The federal court’s removal jurisdiction is statutory, deriving from 28 U.S.C. 28 U.S.C. § § 1441, 1441, et seq. et seq. Since federal courts have limited Since federal courts have limited bj t tt j i di ti l i t i tl t d bj t tt j i di ti l i t i tl t d subject matter jurisdiction, removal is strictly construed. subject matter jurisdiction, removal is strictly construed. Shamrock Oil & Gas Corp. v. Sheets Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108 , 313 U.S. 100, 108-

• 109

109 (1941); (1941); Gaus v. Miles, Inc. Gaus v. Miles, Inc. 980 F.2d 564, 566 (9th Cir. 1992) 980 F.2d 564, 566 (9th Cir. 1992) (“strong presumption” against removal). (“strong presumption” against removal).

• When removing, you must comply with requirements governing

When removing, you must comply with requirements governing removal papers and for initiating a new case in federal court. removal papers and for initiating a new case in federal court. Those requirements may vary depending on the jurisdiction. Those requirements may vary depending on the jurisdiction. D f d t’ b d t d t t th d f l d D f d t’ b d t d t t th d f l d

• Defendant’s burden to demonstrate the grounds for removal and

Defendant’s burden to demonstrate the grounds for removal and compliance with applicable procedural requirements. compliance with applicable procedural requirements. California California ex rel. Lockyer v. Dynegy, Inc. ex rel. Lockyer v. Dynegy, Inc., 375 F.3d 831, 838; , 375 F.3d 831, 838; Miller v. Miller v. Diamond Shamrock Co. Diamond Shamrock Co., 275 F.3d 414, 417 (5th Cir. 2001). , 275 F.3d 414, 417 (5th Cir. 2001). (See attachment) See attachment)

112 E. Victoria Street 22 22

( )

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Only a Non Only a Non-

• Local Defendant Can

Local Defendant Can R

Mullen & Henzell L.L.P.

Remove Remove

• Only a defendant

Only a defendant – not a plaintiff not a plaintiff – – can remove. 28 U.S.C. can remove. 28 U.S.C. § § 1441(a) In a multi 1441(a) In a multi-defendant case any defendant can remove defendant case any defendant can remove

mh

1441(a). In a multi 1441(a). In a multi defendant case, any defendant can remove, defendant case, any defendant can remove, subject to meeting rules governing multiple defendings, joinder subject to meeting rules governing multiple defendings, joinder and timing. and timing. See Cartwright v. Thomas Jefferson Univ. Hosp. See Cartwright v. Thomas Jefferson Univ. Hosp., 99 , 99 F.Supp.2d 550, 553 (E.D. Pa. 2000). F.Supp.2d 550, 553 (E.D. Pa. 2000). A l i tiff h h b t A l i tiff h h b t d i t id d d i t id d

• A plaintiff who has been counter

A plaintiff who has been counter-sued is not considered a sued is not considered a defendant.

• defendant. See Shamrock Oil & Gas Corp. v. Sheets

See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. , 313 U.S. 100 (1941); 100 (1941); Ballard’s Service Center, Inc. v. Transue Ballard’s Service Center, Inc. v. Transue, 865 F.2d , 865 F.2d 447, 449 (1st Cir. 1989) (Rule 11 sanctions awarded against 447, 449 (1st Cir. 1989) (Rule 11 sanctions awarded against removing plaintiff’s counsel); removing plaintiff’s counsel); Progressive West Ins. Co. v. Progressive West Ins. Co. v. P di d P di d 479 F 3d 1014 1017 (9th Ci 2007) ( t t t 479 F 3d 1014 1017 (9th Ci 2007) ( t t t Prediado, Prediado, 479 F.3d 1014, 1017 (9th Cir. 2007) (state court 479 F.3d 1014, 1017 (9th Cir. 2007) (state court plaintiff, who is also a cross plaintiff, who is also a cross-

• defendant, not permitted to remove).

defendant, not permitted to remove).

• In bringing a petition based on an arbitration procedure, the

In bringing a petition based on an arbitration procedure, the moving or petitioning party is considered the plaintiff, and the moving or petitioning party is considered the plaintiff, and the moving or petitioning party is considered the plaintiff, and the moving or petitioning party is considered the plaintiff, and the respondent or opposing party is considered the defendant. respondent or opposing party is considered the defendant. See See Oppenheimer & Co., Inc. v. Neidhardt Oppenheimer & Co., Inc. v. Neidhardt, 56 F.3d 352, 356 (2nd , 56 F.3d 352, 356 (2nd

• Cir. 1995).
• Cir. 1995).

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Only a Non Only a Non-

• Local Defendant Can

Local Defendant Can R ( t’d) R ( t’d)

Mullen & Henzell L.L.P.

Remove (cont’d) Remove (cont’d)

The “No The “No-

• Local

Local-

• Defendant Rule”

Defendant Rule”

E i f l t di it E i f l t di it l l d f d t l l d f d t t

mh

• Even in cases of complete diversity,

Even in cases of complete diversity, local defendants local defendants are not are not permitted to remove to federal court. 28 U.S.C. permitted to remove to federal court. 28 U.S.C. § §1441(b) (“none 1441(b) (“none

• f the parties in interest properly joined and served as defendants
• f the parties in interest properly joined and served as defendants

is a citizen of the State in which such action is brought”); is a citizen of the State in which such action is brought”); Spencer Spencer

• v. United States District Court for the Northern District of
• v. United States District Court for the Northern District of

C lif i (Alt I d t i I ) C lif i (Alt I d t i I ) 393 F 3d 867 870 (9th Ci 393 F 3d 867 870 (9th Ci California (Altec Industries, Inc.) California (Altec Industries, Inc.), 393 F.3d 867, 870 (9th Cir. , 393 F.3d 867, 870 (9th Cir. 2004); 2004); Getty Oil Corp., Div. of Texaco, Inc. v. Insurance Co. of Getty Oil Corp., Div. of Texaco, Inc. v. Insurance Co. of N.A. N.A., 841 F.2d 1254, 1258 (5th Cir. 1988). , 841 F.2d 1254, 1258 (5th Cir. 1988).

• Citizenship is determined at the time the action is filed and at the

Citizenship is determined at the time the action is filed and at the

• Citizenship is determined at the time the action is filed and at the

Citizenship is determined at the time the action is filed and at the time of removal. time of removal.

• Once any local defendant is served or has appeared, the action is

Once any local defendant is served or has appeared, the action is not removable based on diversity, though this may be a waivable not removable based on diversity, though this may be a waivable d f t d f t S Wi d C Cl k S Wi d C Cl k 530 F S 812 813 (D 530 F S 812 813 (D defect.

• defect. See Windac Corp. v. Clarke,

See Windac Corp. v. Clarke, 530 F.Supp. 812, 813 (D. 530 F.Supp. 812, 813 (D.

• Neb. 1982).
• Neb. 1982).
• Corporations and partnerships can have multiple states of

Corporations and partnerships can have multiple states of citizenship; in an action against partnership, removal is barred if citizenship; in an action against partnership, removal is barred if

112 E. Victoria Street 24 24

citizenship; in an action against partnership, removal is barred if citizenship; in an action against partnership, removal is barred if any partner is a citizen of the state. any partner is a citizen of the state. See Underwriters at Lloyd’s, See Underwriters at Lloyd’s, London v. Osting London v. Osting-

• Schwinn

Schwinn, 613 F.3d 1079 (11th Cir. 2010). , 613 F.3d 1079 (11th Cir. 2010).

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Timing Timing

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Timing Timing

A defendant seeking to remove must timely file a notice of A defendant seeking to remove must timely file a notice of l Th l Th th ti li it ti th ti li it ti id d f id d f

mh

• removal. There are
• removal. There are three time limitations

three time limitations provided for provided for removal under 28 U.S.C. removal under 28 U.S.C. § § 1446(b): 1446(b):

• 1. The notice can be filed
• 1. The notice can be filed within 30 days after the

within 30 days after the

• 1. The notice can be filed
• 1. The notice can be filed within 30 days after the

within 30 days after the defendant receives service of the initial pleading defendant receives service of the initial pleading stating the claim for relief; or stating the claim for relief; or 2 If the case stated in the initial pleading is not remo able 2 If the case stated in the initial pleading is not remo able

• 2. If the case stated in the initial pleading is not removable,
• 2. If the case stated in the initial pleading is not removable,

the defendant can file its notice of removal the defendant can file its notice of removal within 30 within 30 days days after the defendant receives “ after the defendant receives “a copy of an a copy of an amended pleading, motion, order or other paper amended pleading, motion, order or other paper from from hi h it fi t b t i d th t th i hi h it fi t b t i d th t th i which it may first be ascertained that the case is one which it may first be ascertained that the case is one which is or has become removable.” which is or has become removable.”

• 3. The latest a case can be removed on the basis of
• 3. The latest a case can be removed on the basis of

112 E. Victoria Street 25 25

3 e atest a case ca be e

• ed o

t e bas s o 3 e atest a case ca be e

• ed o

t e bas s o diversity is diversity is 1 year after the action was filed 1 year after the action was filed.

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What triggers the 30 day clock? What triggers the 30 day clock?

Mullen & Henzell L.L.P.

gg y gg y

Removal of Initial Complaint (first 30 day time period): Removal of Initial Complaint (first 30 day time period):

mh

• An initial pleading is removable if the allegations demonstrate

An initial pleading is removable if the allegations demonstrate diversity of citizenship. Notice to the defendant of removability is diversity of citizenship. Notice to the defendant of removability is determined by the “four corners of the applicable pleadings, not determined by the “four corners of the applicable pleadings, not through subjective knowledge or a duty to make further inquiry.” through subjective knowledge or a duty to make further inquiry.” H i B k Lif & C C H i B k Lif & C C 425 F 3d 689 694 (9th Ci 425 F 3d 689 694 (9th Ci Harris v. Bankers Life & Cas. Co. Harris v. Bankers Life & Cas. Co., 425 F.3d 689, 694 (9th Cir. , 425 F.3d 689, 694 (9th Cir. 2005); 2005); Lovern v. General Motors Corp. Lovern v. General Motors Corp., 121 F.3d 160, 162 (4th , 121 F.3d 160, 162 (4th

• Cir. 1997);
• Cir. 1997); Whitaker v. American Telecasting, Inc.

Whitaker v. American Telecasting, Inc., 261 F.3d 196, , 261 F.3d 196, 206 (2nd Cir. 2001). 206 (2nd Cir. 2001).

• The grounds must be “unequivocally clear and certain” to start

The grounds must be “unequivocally clear and certain” to start the 30 day clock; this avoids “protective” removals by defendants the 30 day clock; this avoids “protective” removals by defendants faced with an equivocal pleading. faced with an equivocal pleading. Bosky v. Kroger Texas, LP Bosky v. Kroger Texas, LP, , 288 F.3d 208, 211. 288 F.3d 208, 211.

• If the case stated in the initial pleading is removable, the 30 day

If the case stated in the initial pleading is removable, the 30 day clock is triggered by clock is triggered by service of process service of process. . Murphy Bros., Inc. v. Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc. Michetti Pipe Stringing, Inc., 526 U.S. 344, 347 , 526 U.S. 344, 347-

• 348 (1999)

348 (1999) (holding that the 30 day period for removal does not begin until (holding that the 30 day period for removal does not begin until f l i f ) f l i f )

112 E. Victoria Street 26 26

formal service of summons). formal service of summons).

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What triggers the 30 day clock? What triggers the 30 day clock? ( t’d) ( t’d)

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(cont’d) (cont’d)

• There must be receipt of the pleading after it was

There must be receipt of the pleading after it was filed with the court not a courtesy copy that was sent filed with the court not a courtesy copy that was sent

mh

filed with the court, not a courtesy copy that was sent filed with the court, not a courtesy copy that was sent in advance (technically not yet a pleading). in advance (technically not yet a pleading). See See Schneeghagen v. Spangle Schneeghagen v. Spangle, 975 F.Supp. 973, 974 , 975 F.Supp. 973, 974 (S.D. Tex. 1997). (S.D. Tex. 1997). Amendment not Extend Time: Amendment not Extend Time:

• The time to remove runs from the date of service of

The time to remove runs from the date of service of the “initial pleading” 28 U S C the “initial pleading” 28 U S C § 1446(b) The filing 1446(b) The filing the initial pleading . 28 U.S.C. the initial pleading . 28 U.S.C. § 1446(b). The filing 1446(b). The filing

• f an amendment to a complaint does not revive the
• f an amendment to a complaint does not revive the

time to file a notice of removal. time to file a notice of removal. See, e.g., See, e.g., Samura v. Samura v. Kaiser Foundation Health Plan, Inc., et al., Kaiser Foundation Health Plan, Inc., et al., 715 715 F Supp 970 (N D CA 1989) F Supp 970 (N D CA 1989) F.Supp. 970 (N.D. CA 1989). F.Supp. 970 (N.D. CA 1989).

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What triggers the 30 day clock? What triggers the 30 day clock? ( t’d) ( t’d)

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(cont’d) (cont’d)

What if the initial Complaint does not show diversity? What if the initial Complaint does not show diversity? (2nd 30 Day Time Period) (2nd 30 Day Time Period)

mh

(2nd 30 Day Time Period) (2nd 30 Day Time Period)

• If diversity jurisdiction not ascertained from face of initial

If diversity jurisdiction not ascertained from face of initial pleading, the second 30 day clock is triggered when defendant pleading, the second 30 day clock is triggered when defendant can “intelligently ascertain” grounds for removal, based on can “intelligently ascertain” grounds for removal, based on g y g , g y g , receipt of “paper” showing existence of subject matter receipt of “paper” showing existence of subject matter jurisdiction.

• jurisdiction. See Huffman v. Saul Holdings Ltd. Partnership,

See Huffman v. Saul Holdings Ltd. Partnership, 194 194 F.3d 1072, 1077 (10th Cir. 1999) (plaintiff deposition testimony F.3d 1072, 1077 (10th Cir. 1999) (plaintiff deposition testimony triggered 30 day time to remove). triggered 30 day time to remove). Citizenship: Citizenship:

• The initial pleading may not reveal the plaintiff’s citizenship.

The initial pleading may not reveal the plaintiff’s citizenship.

• Court presumes the removing defendant knows its own

Court presumes the removing defendant knows its own citizenship. citizenship. p

• Residence is not the same as citizenship: a state court

Residence is not the same as citizenship: a state court complaint alleging residence but not citizenship is not removable, complaint alleging residence but not citizenship is not removable, regardless of possible clues of citizenship. regardless of possible clues of citizenship. Harris, supra, Harris, supra, 425 425 F.3d at 695 F.3d at 695-

• 96.

96.

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What triggers the 30 day clock? What triggers the 30 day clock? ( t’d) ( t’d)

Mullen & Henzell L.L.P.

(cont’d) (cont’d)

Damages Damages --

• - Jurisdictional Minimum:

Jurisdictional Minimum:

mh

• Likewise, the complaint may not state the amount in controversy. (Some

Likewise, the complaint may not state the amount in controversy. (Some states have procedural rules prohibiting the dollar amounts from being states have procedural rules prohibiting the dollar amounts from being pleaded in the complaint.) The inquiry focuses on the time when the pleaded in the complaint.) The inquiry focuses on the time when the defendant was provided with fair notice the amount in controversy defendant was provided with fair notice the amount in controversy exceeded the jurisdictional minimum. exceeded the jurisdictional minimum.

• Special and general damages.

Special and general damages. See See Simmons v. PCR Technology Simmons v. PCR Technology, 209 F. , 209 F.

• Supp. 2d 1029, 1031 (N.D. Cal. 2002);
• Supp. 2d 1029, 1031 (N.D. Cal. 2002); Gallo v. Homelite Consumer

Gallo v. Homelite Consumer Products Products, 371 F.Supp.2d 943, 948 (N.D. Ill. 2005) (allegations plaintiff , 371 F.Supp.2d 943, 948 (N.D. Ill. 2005) (allegations plaintiff suffered burns over 60% of body causing pain, disfigurement, sufficient to suffered burns over 60% of body causing pain, disfigurement, sufficient to trigger removal clock) trigger removal clock) trigger removal clock). trigger removal clock).

• Punitive damages.

Punitive damages. St. Paul Reinsurance Co. v. Greenburg

• St. Paul Reinsurance Co. v. Greenburg, 134

, 134 F.3d 1250, 1253 F.3d 1250, 1253-

• 1254 (5th Cir. 1998);

1254 (5th Cir. 1998); Anthony v. Security Pacific Anthony v. Security Pacific Fin’l Services, Inc. Fin’l Services, Inc., 75 F.3d 311, 315 (7th Cir. 1996); , 75 F.3d 311, 315 (7th Cir. 1996); Watson v. Watson v. Blankenship Blankenship 20 F 3d 383 386 20 F 3d 383 386 387 (10th Cir 1994) 387 (10th Cir 1994) Blankenship Blankenship, 20 F.3d 383, 386 , 20 F.3d 383, 386-

• 387 (10th Cir. 1994).

387 (10th Cir. 1994).

• Attorney’s fees.

Attorney’s fees. Galt G/S v. JSS Scandinavia Galt G/S v. JSS Scandinavia, 142 F.3d 1150, 1155 , 142 F.3d 1150, 1155-

• 1156 (9th Cir. 1998).

1156 (9th Cir. 1998).

112 E. Victoria Street 29 29 Santa Barbara, CA 93101

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Multiple Defendants: Timing Multiple Defendants: Timing

Mullen & Henzell L.L.P.

p g p g

• The statute does not expressly address the issue of

The statute does not expressly address the issue of lti l d f d t S 28 U S C lti l d f d t S 28 U S C § 1446(b) Wh 1446(b) Wh

mh

multiple defendants. See 28 U.S.C. multiple defendants. See 28 U.S.C. § 1446(b). When 1446(b). When multiple defendants are served at different times, there is multiple defendants are served at different times, there is a split in authority on application of the timelines to a split in authority on application of the timelines to remove. remove. First First-

• served rule:

served rule:

• The original rule is that the 30 day removal period begins

The original rule is that the 30 day removal period begins to run for all defendants from the date the to run for all defendants from the date the first defendant first defendant to run for all defendants from the date the to run for all defendants from the date the first defendant first defendant is served. If that first is served. If that first-

• served defendant fails to remove

served defendant fails to remove within 30 days, all defendants are barred from removing. within 30 days, all defendants are barred from removing. See Brown v. Demco, Inc. See Brown v. Demco, Inc., 792 F.2d 478, 481 , 792 F.2d 478, 481-

• 82 (5th Cir.

82 (5th Cir. 1986); 1986); Phoenix Container v Sokoloff Phoenix Container v Sokoloff 83 F Supp 2d 928 83 F Supp 2d 928 1986); 1986); Phoenix Container v. Sokoloff Phoenix Container v. Sokoloff, 83 F.Supp.2d 928, , 83 F.Supp.2d 928, 932 (N.D. Ill. 2002); 932 (N.D. Ill. 2002); United Computer Systems, Inc. v. United Computer Systems, Inc. v. AT&T Corp. AT&T Corp., 298 F.3d 756, 762 (9th Cir. 2002). , 298 F.3d 756, 762 (9th Cir. 2002).

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Multiple Defendants: Timing (cont’d) Multiple Defendants: Timing (cont’d)

Mullen & Henzell L.L.P.

p g ( ) p g ( )

• Exception: First served defendant is a sham defendant.

Exception: First served defendant is a sham defendant.

mh

See United Computer Systems, supra See United Computer Systems, supra, 298 F.3d at 762. , 298 F.3d at 762. Later Later-

• served rule:

served rule:

• Modern trend

Modern trend is to give later is to give later-served defendants a full 30 served defendants a full 30 days after service to remove, regardless what previously days after service to remove, regardless what previously served defendants have done. This is to avoid unfairness served defendants have done. This is to avoid unfairness to later to later-served defendants served defendants See Brierly v Alusuisse See Brierly v Alusuisse to later to later served defendants. served defendants. See Brierly v. Alusuisse See Brierly v. Alusuisse Flexible Packaging, Inc. Flexible Packaging, Inc., 184 F.3d 527, 533 (6th Cir. , 184 F.3d 527, 533 (6th Cir. 1999); 1999); Marano Enterprises of Kansas v. Z Marano Enterprises of Kansas v. Z-

• Teca

Teca Restaurants, L.P. Restaurants, L.P., 254 F.3d 753, 757 (8th Cir. 2001); , 254 F.3d 753, 757 (8th Cir. 2001); B il J Ph ti I B il J Ph ti I 536 F 3d 1202 536 F 3d 1202 Bailey v. Janssen Pharmaceutica, Inc. Bailey v. Janssen Pharmaceutica, Inc., 536 F.3d 1202, , 536 F.3d 1202, 1205 1205-

• 06 (11th Cir. 2008) (“trend in recent case law favors

06 (11th Cir. 2008) (“trend in recent case law favors the last the last-

• served defendant rule”).

served defendant rule”).

112 E. Victoria Street 31 31 Santa Barbara, CA 93101

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Multiple Defendants: Joinder Multiple Defendants: Joinder

Mullen & Henzell L.L.P.

p

• The general rule is that

The general rule is that all defendants must join in the all defendants must join in the l d thi t b i t d i th fili d thi t b i t d i th fili

mh

removal removal, and this must be communicated in the filings , and this must be communicated in the filings made with the district court. made with the district court. Doe v. Kerwood Doe v. Kerwood, 969 F.2d , 969 F.2d 165, 168 (5th Cir. 1992); 165, 168 (5th Cir. 1992); Parrino v. FHP, Inc. Parrino v. FHP, Inc., 146 F.3d , 146 F.3d 699, 703 (9th Cir. 1998). 699, 703 (9th Cir. 1998).

• Sometimes, it is not possible to have all defendants

Sometimes, it is not possible to have all defendants provide their consent to the removal at the time the provide their consent to the removal at the time the removal is filed. If fewer than all defendants have joined, removal is filed. If fewer than all defendants have joined, removal is filed. If fewer than all defendants have joined, removal is filed. If fewer than all defendants have joined, the removing defendant should explain the absence of the the removing defendant should explain the absence of the

• ther defendants to avoid the removal notice being found
• ther defendants to avoid the removal notice being found

“facially deficient.” “facially deficient.” Prize Frize, Inc. v. Matrix (U.S.) Inc. Prize Frize, Inc. v. Matrix (U.S.) Inc., , 167 F.3d 1261, 1266 (9th Cir. 1999). 167 F.3d 1261, 1266 (9th Cir. 1999). Andreshak v. Andreshak v. 167 F.3d 1261, 1266 (9th Cir. 1999). 167 F.3d 1261, 1266 (9th Cir. 1999). Andreshak v. Andreshak v. Service Heat Treating, Inc. Service Heat Treating, Inc., 439 F.Supp.2d 898, 902 , 439 F.Supp.2d 898, 902 (E.D.Wis. 2006) (removal notice is defective if no reason (E.D.Wis. 2006) (removal notice is defective if no reason given for failure to join all defendants) given for failure to join all defendants)

112 E. Victoria Street 32 32 Santa Barbara, CA 93101

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Multiple Defendants: Joinder (cont’d) Multiple Defendants: Joinder (cont’d)

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p ( ) p ( )

When defendant must consent? When defendant must consent?

• If the other defendants do not file a consent immediately, there is

If the other defendants do not file a consent immediately, there is lit i th it t th l h th t fil th i itt lit i th it t th l h th t fil th i itt

mh

a split in authority as to the rule when they must file their written a split in authority as to the rule when they must file their written joinders. joinders.

• Some courts hold all defendants must join the removal within 30

Some courts hold all defendants must join the removal within 30 days after the first defendant was served days after the first defendant was served See Getty Oil Corp See Getty Oil Corp days after the first defendant was served. days after the first defendant was served. See Getty Oil Corp., See Getty Oil Corp.,

• Div. of Texaco, Inc. v. Ins. Co. of North America
• Div. of Texaco, Inc. v. Ins. Co. of North America, 841 F.2d 1254,

, 841 F.2d 1254, 1263 (5th Cir. 1988); 1263 (5th Cir. 1988); Teitelbaum v. Soloski Teitelbaum v. Soloski, 843 F.Supp. 614, , 843 F.Supp. 614, 615 (C.D. Cal. 1994). 615 (C.D. Cal. 1994). Oth t it j i d ithi 30 d f i f th t Oth t it j i d ithi 30 d f i f th t

• Other courts permit joinder within 30 days of service of that

Other courts permit joinder within 30 days of service of that defendant.

• defendant. See McKinney v. Board of Trustees of Maryland

See McKinney v. Board of Trustees of Maryland

• Comm. College
• Comm. College, 955 F.2d 924, 927 (4th Cir. 1992).

, 955 F.2d 924, 927 (4th Cir. 1992).

• Ultimately if any defendant objects or fails to join removal is

Ultimately if any defendant objects or fails to join removal is

• Ultimately, if any defendant objects or fails to join, removal is

Ultimately, if any defendant objects or fails to join, removal is improper.

• improper. Hewitt v. City of Stanton

Hewitt v. City of Stanton, 798 F.2d 1230, 1232 (9th , 798 F.2d 1230, 1232 (9th

• Cir. 1986);
• Cir. 1986); Doe v. Kerwood

Doe v. Kerwood, 969 F.2d 165, 167 (5th Cir. 1992). , 969 F.2d 165, 167 (5th Cir. 1992).

112 E. Victoria Street 33 33 Santa Barbara, CA 93101

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Multiple Defendants: Joinder (cont’d) Multiple Defendants: Joinder (cont’d)

Mullen & Henzell L.L.P.

p ( ) p ( )

Unserved defendants: Unserved defendants:

• Some courts hold that all defendants

Some courts hold that all defendants – – served or served or unserved unserved – must join notice of removal must join notice of removal See Getty Oil See Getty Oil

mh

unserved unserved must join notice of removal. must join notice of removal. See Getty Oil See Getty Oil Corp., Div. of Texaco, Inc. v. Insurance Co. of North Corp., Div. of Texaco, Inc. v. Insurance Co. of North America America, 841 F.2d 1254, 1263 (5th Cir. 1988); , 841 F.2d 1254, 1263 (5th Cir. 1988); Teitelbaum Teitelbaum

• v. Soloski
• v. Soloski, 843 F.Supp. 614, 615 (C.D. Cal. 1994).

, 843 F.Supp. 614, 615 (C.D. Cal. 1994).

• Other courts permit each defendant to join in a timely

Other courts permit each defendant to join in a timely O e cou s pe eac de e da

• jo

a e y O e cou s pe eac de e da

• jo

a e y removal within 30 days after service. removal within 30 days after service. McKinney v. Board McKinney v. Board

• f Trustees of Maryland Comm. College
• f Trustees of Maryland Comm. College, 955 F.2d 924,

, 955 F.2d 924, 927 (4th Cir. 1992). 927 (4th Cir. 1992). Fictitiously named/Doe defendants: Fictitiously named/Doe defendants:

• Disregarded for removal purposes. 28 U.S.C.

Disregarded for removal purposes. 28 U.S.C. § § 1441(a); 1441(a); Newcombe v. Adolf Coors Co. Newcombe v. Adolf Coors Co., 157 F.3d 686, 690 , 157 F.3d 686, 690-

• 91 (9th

91 (9th

• Cir. 1998).
• Cir. 1998).

)

• Exception might be if the Doe defendant is described with

Exception might be if the Doe defendant is described with sufficient particularity to prevent any real question as to sufficient particularity to prevent any real question as to the person’s identity. the person’s identity. See Marshall v. CSX Transp. Co., See Marshall v. CSX Transp. Co., Inc.

• Inc. 916 F.Suppp. 1150, 1153 (M.D. Ala. 1995).

916 F.Suppp. 1150, 1153 (M.D. Ala. 1995).

112 E. Victoria Street 34 34 Santa Barbara, CA 93101

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Multiple Defendants: Joinder (cont’d) Multiple Defendants: Joinder (cont’d)

Mullen & Henzell L.L.P.

p ( ) p ( )

True Sham defendants: True Sham defendants: D t d t t D t d t t F i B C t Bd f F i B C t Bd f

mh

• Do not need to consent.

Do not need to consent. Farias v. Bexar County Bd. of Farias v. Bexar County Bd. of Trustees for Mental Health Trustees for Mental Health, 925 F.2d 866, 871 (5th Cir. , 925 F.2d 866, 871 (5th Cir. 1991). The removing defendant has a heavy burden to 1991). The removing defendant has a heavy burden to allege and prove the nondiverse party’s joinder is a allege and prove the nondiverse party’s joinder is a “sham” or “fraudulent ” “sham” or “fraudulent ” Jernigan v Ashland Oil Co Jernigan v Ashland Oil Co 989 989 sham or fraudulent. sham or fraudulent. Jernigan v. Ashland Oil Co. Jernigan v. Ashland Oil Co., 989 , 989 F.2d 812, 815 F.2d 812, 815-

• 16 (5th Cir. 1993);

16 (5th Cir. 1993); Boyer v. Snap Boyer v. Snap-

• On Tools

On Tools Corp. Corp., 913 F.2d 108, 111 (3d Cir. 1990). , 913 F.2d 108, 111 (3d Cir. 1990).

• A weak case is not a sham.

A weak case is not a sham. Joinder of Non Joinder of Non-

• Diverse Party:

Diverse Party: If the court permits a nondiverse party joined after the If the court permits a nondiverse party joined after the removal, the court loses subject matter jurisdiction and removal, the court loses subject matter jurisdiction and the case will be remanded the case will be remanded Curry v U S Bulk Transport Curry v U S Bulk Transport the case will be remanded. the case will be remanded. Curry v. U.S. Bulk Transport, Curry v. U.S. Bulk Transport, Inc Inc., , 462 F.3d 536, 540 (6th Cir. 2006); 462 F.3d 536, 540 (6th Cir. 2006); Cobb v. Delta Cobb v. Delta Exports, Inc. Exports, Inc., 186 F.3d 675, 677 (5th Cir. 1999); , 186 F.3d 675, 677 (5th Cir. 1999); Morris v. Morris v. Princess Cruises, Inc. Princess Cruises, Inc., 236 F.3d 1061, 1068 (9th Cir. , 236 F.3d 1061, 1068 (9th Cir. 2001). 2001).

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Multiple Defendants: Joinder (cont’d) Multiple Defendants: Joinder (cont’d)

Mullen & Henzell L.L.P.

p ( ) p ( )

Right of third party defendants to remove? Right of third party defendants to remove?

• Third party defendants are those joined by the defendant,

Third party defendants are those joined by the defendant,

mh

• Third party defendants are those joined by the defendant,

Third party defendants are those joined by the defendant, rather than by plaintiff. There is a split of authority, rather than by plaintiff. There is a split of authority, though most courts deny third party defendants to remove though most courts deny third party defendants to remove where the original defendants have not done so. where the original defendants have not done so.

• View allowing:

View allowing: Carl Heck Engineers, Inc. v. Lafourche Carl Heck Engineers, Inc. v. Lafourche Parish Police Jury Parish Police Jury, 622 F.2d 133, 135 , 622 F.2d 133, 135-

• 136 (5th Cir. 1980);

136 (5th Cir. 1980); Motor Vehicle Cas. Co. v. Russian River Sanitation Dist. Motor Vehicle Cas. Co. v. Russian River Sanitation Dist., , 538 F.Supp. 488, 491 538 F.Supp. 488, 491-

• 92 (N.D. Cal. 1981).

92 (N.D. Cal. 1981).

• View denying:

View denying: First Nat’l Bank of Pulaski v. Curry First Nat’l Bank of Pulaski v. Curry, 301 , 301 F.3d 456, 461 F.3d 456, 461-

• 62 (6th Cir. 2002);

62 (6th Cir. 2002); Thomas v. Shelton Thomas v. Shelton, 740 , 740 F.2d 478, 486 (7th Cir. 1984); F.2d 478, 486 (7th Cir. 1984); Palisades Collections LLC Palisades Collections LLC v Shorts v Shorts 552 F 3d 327 335 (4th Cir 2008) 552 F 3d 327 335 (4th Cir 2008)

• v. Shorts
• v. Shorts, 552 F.3d 327, 335 (4th Cir. 2008).

, 552 F.3d 327, 335 (4th Cir. 2008).

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Written Consent Written Consent

Mullen & Henzell L.L.P.

• There is a split in authority as to whether each defendant

There is a split in authority as to whether each defendant itself must sign a written notice of consent to removal itself must sign a written notice of consent to removal

mh

itself must sign a written notice of consent to removal. itself must sign a written notice of consent to removal.

• In some jurisdictions, it is sufficient for the removing

In some jurisdictions, it is sufficient for the removing defendant to represent to the court in its filing that the defendant to represent to the court in its filing that the

• ther defendants have given their consent
• ther defendants have given their consent

Proctor v Proctor v

• ther defendants have given their consent.
• ther defendants have given their consent. Proctor v.

Proctor v. Vishay Intertechnology, Inc., Vishay Intertechnology, Inc., 584 F.3d 1208, 1225 (9th 584 F.3d 1208, 1225 (9th

• Cir. 2009) (sufficient that at least one attorney of record
• Cir. 2009) (sufficient that at least one attorney of record

sign the notice and certify that the remaining defendants sign the notice and certify that the remaining defendants consent to removal); consent to removal); Harper v. AutoAlliance Int’l Harper v. AutoAlliance Int’l, Inc. Inc., 392 , 392 ); ); p , , F.3d 195, 201 F.3d 195, 201-

• 202 (6th Cir. 2004).

202 (6th Cir. 2004).

• In others, each defendant must sign a timely written

In others, each defendant must sign a timely written notice of consent to the joinder. notice of consent to the joinder. See Pritchett v. Cottrell, See Pritchett v. Cottrell, j j , Inc. Inc., 512 F.3d 1057, 1062 (8th Cir. 2008) (each defendant , 512 F.3d 1057, 1062 (8th Cir. 2008) (each defendant

• r its authorized person must submit a timely written
• r its authorized person must submit a timely written

notice of consent to joinder); notice of consent to joinder); Getty Oil Corp., a Div. of Getty Oil Corp., a Div. of Texaco, Inc. v. Ins. Co. of North America Texaco, Inc. v. Ins. Co. of North America, 841 F.2d 1254, , 841 F.2d 1254, 1262 fn 11 (5th Cir 1988) 1262 fn 11 (5th Cir 1988)

112 E. Victoria Street 37 37

1262 fn. 11 (5th Cir. 1988). 1262 fn. 11 (5th Cir. 1988). (See attachment) (See attachment)

Santa Barbara, CA 93101

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Written consent: (cont’d) Written consent: (cont’d)

Mullen & Henzell L.L.P.

( ) ( )

• Some courts have held that filing an answer in federal

Some courts have held that filing an answer in federal

mh

court effectively is the same as granting express written court effectively is the same as granting express written consent to the removal. consent to the removal. Compare Hernandez v. Six Flags Compare Hernandez v. Six Flags Magic Mountain, Inc. Magic Mountain, Inc., 688 F.Supp. 560, 562 , 688 F.Supp. 560, 562-

• 63 (C.D. Cal.

63 (C.D. Cal. 1988) (answer sufficient) and 1988) (answer sufficient) and Landman v Borough of Landman v Borough of 1988) (answer sufficient), and 1988) (answer sufficient), and Landman v. Borough of Landman v. Borough of Bristol Bristol, 896 F.Supp. 406, 409 (E.D. Pa. 1995) (answer , 896 F.Supp. 406, 409 (E.D. Pa. 1995) (answer insufficient). insufficient).

• A separate notice of removal does not constitute consent.

A separate notice of removal does not constitute consent. Williams v. Equifax Information Services LLC Williams v. Equifax Information Services LLC, 359 , 359 F.Supp.2d 1284, 1286 (M.D. Fla. 2005). F.Supp.2d 1284, 1286 (M.D. Fla. 2005).

112 E. Victoria Street 38 38 Santa Barbara, CA 93101

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Waiver Waiver

Mullen & Henzell L.L.P.

• A defendant may waive the right to remove a state

A defendant may waive the right to remove a state

mh

court action to federal court. court action to federal court. See See Groesbeck v. Groesbeck v. Investments, Inc. v. Smith Investments, Inc. v. Smith, 224 F.Supp.2d 1144 , 224 F.Supp.2d 1144 (E.D. Mich. 2002). (E.D. Mich. 2002). Waiver by Litigating in State Court: Waiver by Litigating in State Court:

• State court defendant may waive right to remove

State court defendant may waive right to remove y g y g “by taking some substantial offensive or defensive “by taking some substantial offensive or defensive action in the state court action indicating a action in the state court action indicating a willingness to litigate in that tribunal before filing a willingness to litigate in that tribunal before filing a notice of removal with the federal court.” notice of removal with the federal court.” Yusefzadeh v. Nelson, Mullins, Riley & Yusefzadeh v. Nelson, Mullins, Riley & Scarborough, LLP Scarborough, LLP, 365 F.3d 1244, 1246 (11th Cir. , 365 F.3d 1244, 1246 (11th Cir. 2004) 2004)

112 E. Victoria Street 39 39

2004). 2004).

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Waiver (cont’d) Waiver (cont’d)

Mullen & Henzell L.L.P.

( ) ( )

Actions Waiving Right to Remove: Actions Waiving Right to Remove:

• Filing a permissive counterclaim or cross

Filing a permissive counterclaim or cross-claim when not claim when not

mh

• Filing a permissive counterclaim or cross

Filing a permissive counterclaim or cross claim when not claim when not compelled to do so. compelled to do so. Acosta v. Direct Merchants Bank Acosta v. Direct Merchants Bank, , 207 F.Supp.2d 1129, 1132 (S.D. Cal. 2002); 207 F.Supp.2d 1129, 1132 (S.D. Cal. 2002); Westwood v. Westwood v. Fran Frank, 177 F.Supp.2d 536, 541 (N.D. W. Va. 2001); k, 177 F.Supp.2d 536, 541 (N.D. W. Va. 2001);

• Moving to compel arbitration.

Moving to compel arbitration. McKinnon v. Doctor’s McKinnon v. Doctor’s g p g p Associates, Inc. Associates, Inc., 769 F.Supp. 216, 220 (E.D. Mich. 1991); , 769 F.Supp. 216, 220 (E.D. Mich. 1991);

• Seeking a trial continuance after case became removable

Seeking a trial continuance after case became removable without disclosing intent to remove in the interim. without disclosing intent to remove in the interim. Chicago Title & Trust Co. v. Whitney Stores, Inc. Chicago Title & Trust Co. v. Whitney Stores, Inc., 583 , 583 F S 575 577 (N D Ill 1984) F S 575 577 (N D Ill 1984) F.Supp. 575, 577 (N.D. Ill. 1984); F.Supp. 575, 577 (N.D. Ill. 1984);

• Moving for an injunction or summary judgment.

Moving for an injunction or summary judgment. Zbranek Zbranek

• v. Hofheniz
• v. Hofheniz, 727 F.Supp. 324, 325 (E.D. Tex. 1989);

, 727 F.Supp. 324, 325 (E.D. Tex. 1989);

• Filing a motion to dismiss in state court.

Filing a motion to dismiss in state court. Scholz v. RDV Scholz v. RDV S t I S t I 821 F S 1469 (M D Fl 1993) 821 F S 1469 (M D Fl 1993) H fit H fit Sports, Inc. Sports, Inc., 821 F.Supp. 1469 (M.D. Fla. 1993); , 821 F.Supp. 1469 (M.D. Fla. 1993); Heafitz Heafitz

• v. Interfist Bank of Dallas
• v. Interfist Bank of Dallas, 711 F.Supp. 92, 96 (S.D.N.Y.

, 711 F.Supp. 92, 96 (S.D.N.Y. 1989); 1989);

• Moving to dismiss based on forum non conveniens.

Moving to dismiss based on forum non conveniens. Hill Hill v Citicorp v Citicorp 804 F Supp 514 516 804 F Supp 514 516 17 (S D N Y 1992) 17 (S D N Y 1992)

112 E. Victoria Street 40 40

• v. Citicorp.
• v. Citicorp., 804 F. Supp. 514, 516

, 804 F. Supp. 514, 516-17 (S.D.N.Y. 1992) 17 (S.D.N.Y. 1992)

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Waiver (cont’d) Waiver (cont’d)

Mullen & Henzell L.L.P.

( ) ( )

Actions Held Not a Waiver: Actions Held Not a Waiver: Actions which are “preliminary and not conclusive in Actions which are “preliminary and not conclusive in character and which do not actually submit the merits of a character and which do not actually submit the merits of a

mh

character and which do not actually submit the merits of a character and which do not actually submit the merits of a claim for a binding decision do not constitute a waiver of claim for a binding decision do not constitute a waiver of defendant’s right to remove.” defendant’s right to remove.” Beasley v. Union Pac. R.R. Beasley v. Union Pac. R.R. Co. Co., 497 F.Supp. 213, 216 (D. Neb. 1980). , 497 F.Supp. 213, 216 (D. Neb. 1980).

• Filing a motion to dismiss but removing before the state

Filing a motion to dismiss but removing before the state g a

• o
• d s

ss bu e

• g be o e

e s a e g a

• o
• d s

ss bu e

• g be o e

e s a e court ruled. court ruled. Cogdell v. Wyeth Cogdell v. Wyeth, 366 F.3d 1245, 1249 (11th , 366 F.3d 1245, 1249 (11th

• Cir. 2004);
• Cir. 2004);
• Filing an answer.

Filing an answer. See Carpenter v. Illinois Central See Carpenter v. Illinois Central Gulf R.R. Co. Gulf R.R. Co., 524 F.Supp. 249, 251 (M.D. La. 1981); , 524 F.Supp. 249, 251 (M.D. La. 1981);

• Moving to vacate a temporary restraining order.

Moving to vacate a temporary restraining order. Beasley v. Union Pac. R.R. Co. Beasley v. Union Pac. R.R. Co., 497 F.Supp. 213, 217 (D. , 497 F.Supp. 213, 217 (D.

• Neb. 1980);
• Neb. 1980);
• Opposing motion for preliminary injunction.

Opposing motion for preliminary injunction. Miami Miami pp g p y j pp g p y j Herald Pub. Co. v. Ferre Herald Pub. Co. v. Ferre, 606 F.Supp. 122, 124 (S.D. Fla. , 606 F.Supp. 122, 124 (S.D. Fla. 1984); 1984);

• Appointing agent for service of process in forum state.

Appointing agent for service of process in forum state. Wright v. Continental Cas. Co. Wright v. Continental Cas. Co., 456 F.Supp. 1075, 1079 , 456 F.Supp. 1075, 1079 (M D Fl 1978) (M D Fl 1978)

112 E. Victoria Street 41 41

(M.D. Fla. 1978). (M.D. Fla. 1978).

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Waiver (cont’d) Waiver (cont’d)

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( ) ( )

Waivers by Contract: Waivers by Contract:

• Contracts waiving the right to remove to federal court are

Contracts waiving the right to remove to federal court are enforceable.

• enforceable. Pelleport Investors, Inc. v. Budco Quality

Pelleport Investors, Inc. v. Budco Quality

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p y p y Theatres, Inc. Theatres, Inc., 741 F.2d 273, 279 (9th Cir. 1984). , 741 F.2d 273, 279 (9th Cir. 1984).

• Waiver must be “clear and unequivocal” in some jurisdictions.

Waiver must be “clear and unequivocal” in some jurisdictions. See See Haynes v. Gasoline Marketeers, Inc. Haynes v. Gasoline Marketeers, Inc., 184 F.R.D. 414, 416 , 184 F.R.D. 414, 416 (M.D. Ala. 1999). (M.D. Ala. 1999).

• In other jurisdictions ordinary contract interpretation principals

In other jurisdictions ordinary contract interpretation principals

• In other jurisdictions ordinary contract interpretation principals

In other jurisdictions ordinary contract interpretation principals apply.

• apply. See Russell Corp. v. American Home Assur. Co

See Russell Corp. v. American Home Assur. Co, 264 , 264 F.3d 1040, 1048 (11th Cir. 2001); F.3d 1040, 1048 (11th Cir. 2001); Foster v. Chesapeake Ins. Foster v. Chesapeake Ins. Co., Ltd. Co., Ltd., 933 F.2d 1207, 1217 fn. 15 (3rd Cir. 1991). , 933 F.2d 1207, 1217 fn. 15 (3rd Cir. 1991). Courts split on how explicit the contract waiver must be: Courts split on how explicit the contract waiver must be:

• Forum selection clause waives removal:

Forum selection clause waives removal: See Pelleport See Pelleport Investors, Investors, supra, 741 F.2d at 229; supra, 741 F.2d at 229; Dixon v. TSE Int’l Inc. Dixon v. TSE Int’l Inc., 330 , 330 F.3d 396, 397 (5th Cir. 2003) (“Courts of Texas” would have F.3d 396, 397 (5th Cir. 2003) (“Courts of Texas” would have jurisdiction over disputes arising under contract). jurisdiction over disputes arising under contract). jurisdiction over disputes arising under contract). jurisdiction over disputes arising under contract).

• Compare

Compare Hunt Wesson Foods, Inc. v. Supreme Oil Co. Hunt Wesson Foods, Inc. v. Supreme Oil Co., 817 , 817 F.2d 75, 77 (9th Cir. 1987) (contract did not waive right to F.2d 75, 77 (9th Cir. 1987) (contract did not waive right to remove where “The courts of California, County of Orange, remove where “The courts of California, County of Orange, shall have jurisdiction in any action relating to the subject shall have jurisdiction in any action relating to the subject matter or interpretation of this contract”) matter or interpretation of this contract”)

112 E. Victoria Street 42 42

matter or interpretation of this contract ) matter or interpretation of this contract )

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( ) ( )

• A plaintiff should seek to remand based on a

A plaintiff should seek to remand based on a procedural defect procedural defect in the removal notice within thirty days 28 U S C in the removal notice within thirty days 28 U S C § 1447(c) A 1447(c) A

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in the removal notice within thirty days. 28 U.S.C. in the removal notice within thirty days. 28 U.S.C. § 1447(c). A 1447(c). A plaintiff can waive the right to move to remand based on defects plaintiff can waive the right to move to remand based on defects in the notice of removal by failing to bring a motion within 30 in the notice of removal by failing to bring a motion within 30 days.

• days. Maniar v. FDIC

Maniar v. FDIC, 979 F.2d 782 (9th Cir. 1992); , 979 F.2d 782 (9th Cir. 1992); Harris v. Harris v. Hyman Hyman, 664 F.2d 943, 944 , 664 F.2d 943, 944-

• 45 (5th Cir. 1981).

45 (5th Cir. 1981).

• Can the “no

Can the “no-

• local defendant” limitation be waived

local defendant” limitation be waived absent a absent a timely motion for remand? Courts are split: timely motion for remand? Courts are split: Defect can be Defect can be waived: waived: In re Shell Oil Co. In re Shell Oil Co., 932 F.2d 1518, 1522 (5th Cir. 1991); , 932 F.2d 1518, 1522 (5th Cir. 1991); Korea Exchange Bank v. Trackwise Sales Corp. Korea Exchange Bank v. Trackwise Sales Corp., 66 F.3d 46, 50 , 66 F.3d 46, 50 (3d Ci 1995) (3d Ci 1995) D f t t b i d D f t t b i d H t D Ch H t D Ch (3d Cir. 1995). (3d Cir. 1995). Defect cannot be waived: Defect cannot be waived: Hurt v. Dow Chem. Hurt v. Dow Chem. Co. Co., 963 F.2d 1142, 1145 (8th Cir. 1992) , 963 F.2d 1142, 1145 (8th Cir. 1992)

• Lack of subject matter jurisdiction

Lack of subject matter jurisdiction is never waived. 28 U.S.C. is never waived. 28 U.S.C. § 1447(c); 1447(c); Libhart v. Santa Monica Dairy Co. Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, , 592 F.2d 1062, § 1447(c); 1447(c); Libhart v. Santa Monica Dairy Co. Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, , 592 F.2d 1062, 1065 (9th Cir. 1979); 1065 (9th Cir. 1979); American Fire & Cas. Co. v. Finn American Fire & Cas. Co. v. Finn, 341 U.S. , 341 U.S. 6, 17 6, 17-

• 18 (1951) (lack of subject matter jurisdiction successfully

18 (1951) (lack of subject matter jurisdiction successfully raised for the first time on appeal). raised for the first time on appeal).

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Appellate Review Appellate Review

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pp pp

Governing Statute: 28 U.S.C. Governing Statute: 28 U.S.C. § § 1447(d): 1447(d): “A d di t th St t t f hi h “A d di t th St t t f hi h

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• “An order remanding a case to the State court from which

“An order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise, it was removed is not reviewable on appeal or otherwise, except that an order remanding a case to the State court except that an order remanding a case to the State court from which it was removed pursuant to section 1443 of from which it was removed pursuant to section 1443 of this title 28 USCS this title 28 USCS § 1443 shall be reviewable by appeal 1443 shall be reviewable by appeal this title 28 USCS this title 28 USCS § 1443 shall be reviewable by appeal 1443 shall be reviewable by appeal

• r otherwise.”
• r otherwise.”

Orders Denying Motion to Remand: Orders Denying Motion to Remand:

• With limited exceptions this is an interlocutory order and

With limited exceptions this is an interlocutory order and

• With limited exceptions this is an interlocutory order and

With limited exceptions this is an interlocutory order and there is no right to immediate appeal. Appeal lies from there is no right to immediate appeal. Appeal lies from final judgment. final judgment. Cervantex v. Bexar County Civil Service Cervantex v. Bexar County Civil Service Comm’n Comm’n, 99 F.3d 730, 734 (5th Cir. 1996). , 99 F.3d 730, 734 (5th Cir. 1996).

• A party can ask for immediate review by filing an

A party can ask for immediate review by filing an extraordinary writ of mandamus under 28 U.S.C. extraordinary writ of mandamus under 28 U.S.C. § § 1651, 1651, although this is reserved for “extreme situations.” See although this is reserved for “extreme situations.” See Rohrer, Hibler & Replogle, Inc. v. Perkins Rohrer, Hibler & Replogle, Inc. v. Perkins, 728 F.2d 860, , 728 F.2d 860,

112 E. Victoria Street 44 44

• e ,

b e & ep og e, c e s

• e ,

b e & ep og e, c e s, 8 d 860, , 8 d 860, 863 (7th Cir. 1984). 863 (7th Cir. 1984).

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pp ( ) pp ( )

Order Granting Remand: Order Granting Remand:

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• With limited exceptions, order remanding a case based

With limited exceptions, order remanding a case based

• n the lack of subject matter jurisdiction or a procedural
• n the lack of subject matter jurisdiction or a procedural

defect under 28 U.S.C. defect under 28 U.S.C. § § 1447(c) is “not reviewable on 1447(c) is “not reviewable on appeal or otherwise.” 28 U.S.C. appeal or otherwise.” 28 U.S.C. § § 1447(d). 1447(d). See Things See Things Remembered, Inc. v. Petrarca Remembered, Inc. v. Petrarca, 516 U.S. 124, 128 (1995). , 516 U.S. 124, 128 (1995).

• “[R]eview is unavailable no matter how plain the legal

“[R]eview is unavailable no matter how plain the legal error in ordering the remand ” error in ordering the remand ” Kircher v Putnam Funds Kircher v Putnam Funds error in ordering the remand. error in ordering the remand. Kircher v. Putnam Funds Kircher v. Putnam Funds Trust, 547 U.S. 633, 642 (2006). Ban on appellate review Trust, 547 U.S. 633, 642 (2006). Ban on appellate review avoids the delay that could result if remand orders were avoids the delay that could result if remand orders were appealable and the case could be recalled from the state appealable and the case could be recalled from the state court court Liberty Mutual Ins Co v Ward Trucking Corp Liberty Mutual Ins Co v Ward Trucking Corp 48 48 court.

• court. Liberty Mutual Ins. Co. v. Ward Trucking Corp.

Liberty Mutual Ins. Co. v. Ward Trucking Corp., 48 , 48 F.3d 742, 745 (3d Cir. 1995); F.3d 742, 745 (3d Cir. 1995); In re Loudermilch In re Loudermilch, 158 F.3d , 158 F.3d 1143, 1145 fn. 4 (“prevents a case from repeatedly 1143, 1145 fn. 4 (“prevents a case from repeatedly ricocheting in and out of state court”) ricocheting in and out of state court”)

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pp ( ) pp ( )

Limited Exceptions: Limited Exceptions: Ci il i ht bl d 28 U S C Ci il i ht bl d 28 U S C § 1443 d 1443 d

mh

• Civil rights case removable under 28 U.S.C.

Civil rights case removable under 28 U.S.C. § 1443 and 1443 and minimal diversity class actions under 28 U.S.C. minimal diversity class actions under 28 U.S.C. § § 1453. 1453.

• If a case is remanded on grounds other than those stated

If a case is remanded on grounds other than those stated i 28 U S C i 28 U S C § 1447( ) th d i l bl 1447( ) th d i l bl in 28 U.S.C. in 28 U.S.C. § 1447(c), the order is appealable. 1447(c), the order is appealable. Examples: Examples:

• Remand based on waiver of right to remove.

Remand based on waiver of right to remove. E.g. E.g., , appeal lies where remand based on determination that appeal lies where remand based on determination that defendant waived right to remove based on forum defendant waived right to remove based on forum defendant waived right to remove based on forum defendant waived right to remove based on forum selection clause. selection clause. Kamm v. ITEX Corp. Kamm v. ITEX Corp., 568 F.3d 752, , 568 F.3d 752, 757 (9th Cir. 2009); 757 (9th Cir. 2009); Snapper, Inc. v. Redan Snapper, Inc. v. Redan, 171 F.3d , 171 F.3d 1249, 1252 1249, 1252-

• 60 (11th Cir. 1999).

60 (11th Cir. 1999).

• If the motion to remand based on procedural defects is

If the motion to remand based on procedural defects is

• If the motion to remand based on procedural defects is

If the motion to remand based on procedural defects is made after the 30 day period, the order is reviewable. made after the 30 day period, the order is reviewable. See See In re Bethesda Mem. Hosp. Inc. In re Bethesda Mem. Hosp. Inc., 123 F.3d 1407, , 123 F.3d 1407, 1410 (11th Cir. 1997). 1410 (11th Cir. 1997).

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Contact Mullen & Henzell L.L.P. Contact Mullen & Henzell L.L.P.

Mullen & Henzell L.L.P.



We are available to help with California matters. We are available to help with California matters.

mh



Email: Email: jkatz@mullenlaw.com jkatz@mullenlaw.com



Website: Website: www.mullenlaw.com www.mullenlaw.com



We are a 54 year We are a 54 year-

• old law firm including complex business
• ld law firm including complex business

and civil litigation, and one of the largest and most well and civil litigation, and one of the largest and most well-

• established law firms in Santa Barbara, California. We

established law firms in Santa Barbara, California. We , litigate throughout the Central Coast and across litigate throughout the Central Coast and across California. California.



We also handle real estate and business transactions, We also handle real estate and business transactions, , estate planning and litigation, and employment and labor estate planning and litigation, and employment and labor counseling. counseling.



We often serve as local counsel, including in the Central We often serve as local counsel, including in the Central

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e o te se e as oca cou se , c ud g t e Ce t a e o te se e as oca cou se , c ud g t e Ce t a District of California and in Santa Barbara state court, for District of California and in Santa Barbara state court, for

• ut
• ut-
• of
• f-
• state lead counsel.

state lead counsel.

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