Tyler V. Snow, J.
When I first began attending the annual Utah Bar Convention, I recall rather enjoying the “Opening General Session and Business Reports” that opened the convention. In particular, the presentation of the state and federal judiciary reports from then-Utah Supreme Court Chief Justice Christine Durham and U.S. District Judge Dee Benson were always entertaining. The repartee between the two jurists was often humorous, and underlying the humor was a good-natured competition about which court system was better (or busier, or less-funded, or what have you).
Given that I appear in both federal and state courts in Utah, I will wisely leave that debate to the judges. There are differences between each court system, however, of which every civil litigator should be aware, particularly for defendants who are deciding whether to remove to federal court. This article discusses when a case is eligible for removal based on diversity of citizenship and considerations in deciding whether to remove.
CAN I REMOVE?
The United States Court of Appeals for the Tenth Circuit has stated that “there is a presumption against removal jurisdiction.” Laughlin v. Kmart Corp., 50 F.3d 871, 873 (10th Cir. 1995) (citation omitted). In light of that presumption, “[a]s the parties invoking the federal court’s jurisdiction…, [the removing] defendants bear the burden of establishing that the requirements for the exercise of diversity jurisdiction are present.” Martin v. Franklin Capital Corp., 251 F.3d 1284, 1290 (10th Cir. 2001) (citation omitted). In determining whether the defendant can meet the burden of establishing jurisdiction through removal, the defendant must assess four principal factors: (A) timing; (B) amount in controversy; (C) diversity of the parties; and (D) the forum defendant rule.
According to the U.S. Code, generally “[t]he notice of removal of a civil action or proceeding shall be filed within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading.” 28 U.S.C. § 1446(b)(1). Alternatively, the notice of removal should be filed “within 30 days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter.” Id.
Even if your case does not appear to be removable when you first review the complaint, remain vigilant because it may become removable later through dismissal of a co-defendant or otherwise. [I]f the case stated by the initial pleading is not removable, a notice of removal may be filed within 30 days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.” Id. § 1446(b) (3). However, if more than one year has passed since the commencement of the action, generally the case “may not be removed.
Id. § 1446(c)(1).
AMOUNT IN CONTROVERSY
To remove a case to federal court based on diversity jurisdiction, the amount in controversy requirement must be satisfied. The U.S. Code provides that “[t]he district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs.” 28 U.S.C. § 1332(a).
Where a Utah state court case is filed as a Tier 3 case under Utah Rules of Civil Procedure 8(a) and 26(c)(3), in which the plaintiff must allege that it is “claiming $300,000 or more in damages,” Utah practitioners may assume that this factor is easily met. However, in certain circumstances, showing something more than the tier designation may be required.
In Young Electric Sign Co. v. Hartford Casualty Insurance Co., No. 2:13-CV-120-DN, 2013 U.S. Dist. LEXIS 74022 (D. Utah May 24, 2013), the complaint requested “damages in the...