Oh Snap! Federal Circuit Court Recognizes Viability Of ‘Snap' Removal By In-State Defendant

Author:Ms Katie Fillmore
Profession:Butler Snow LLP
 
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On August 22, 2018, the United States Court of Appeals for the Third Circuit recognized the viability of "snap removal," a litigation tactic whereby a defendant (in-state or otherwise) removes a state court claim to federal court based on diversity of citizenship before any forum defendants are served.

Federal courts possess only the power authorized by the United States Constitution and federal statute. The Constitution and the U.S. Code provide "diversity jurisdiction" to federal courts in civil cases when the amount in controversy exceeds $75,000 and the parties are from different states. Diversity jurisdiction is included in our Constitution because the Framers were concerned that state courts might be biased in favor of "home state" parties. In order for diversity jurisdiction to apply, "complete diversity" is required, meaning, none of the plaintiffs can be from the same state as any of the defendants. Thus, if a plaintiff files suit in a Texas state court forum, the inclusion of any "forum defendants" (individuals or businesses from Texas) would destroy diversity of citizenship. Accordingly, plaintiffs frequently try to name diversity-destroying forum defendants from whom they have no intention of recovering, in an effort to have their case heard in a forum they believe to be most favorable. This practice has led to what is referred to as "forum shopping" or "litigation tourism."

A defendant can utilize 28 U.S.C. § 1441 to remove a state court case to federal court where diversity of citizenship exists. But the statute includes restrictions that limit a defendant's ability to remove a case to federal court, including what is known as the "forum defendant rule" set out in 28 U.S.C. § 1441(b)(2). Section 1441(b)(2) provides that an action "may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought." The language "properly joined and served" has been hotly contested. Parties have debated over whether a defendant should be able to remove a case to federal court before a named forum defendant has been served. Based on the plain meaning of "properly joined and served," many courts have allowed for this practice, called "snap removal."

In Breitweiser v. Chesapeake Energy Corporation, No. 3:15-CV-2043-B, 2015 WL 6322625, at *1 (N.D. Tex. Oct. 20, 2015), the Northern District of Texas recognized the legitimacy of snap removal by a non-forum defendant...

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