A new argument supporting removal of diversity cases prior to service.

• Author: Hughes, Zach

PLAINTIFFS AND DEFENDANTS in complex litigation have always battled over the forum in which a case will be tried, with plaintiffs generally preferring state courts and defendants generally preferring federal courts. When complete diversity exists among the parties, one strategy plaintiffs seeking to avoid federal jurisdiction may employ is to file their case away from their home state in a perceived favorable state court forum in which one of the defendants is a citizen in an effort to trigger the so-called "forum defendant rule" found in 28 U.S.C. [section] 1441(b). (1) In some instances, this can serve as a barrier to removal in cases that otherwise meet all the requirements of federal diversity of citizenship jurisdiction under 28 U.S.C. [section] 1332.

The forum defendant rule prohibits removal to federal court if any of the "properly joined and served defendants" is a citizen of the State in which the case is filed. Although this language has been codified since 1948, it has drawn increasing judicial scrutiny in recent years as electronic case monitoring has enhanced defendants' abilities to learn about eases before they have been formally served, which has, in turn, increased the number of cases being removed before the forum defendant has been served.

The majority of federal district courts have continued to apply the plain language of the statute, ignoring the residency of the unserved forum defendant for purposes of Section 1441(b), and denying plaintiffs' motions for remand. (2) However, a minority of courts have countered that the plain language should be ignored because it produces "absurd" results that are contrary to Congress' presumed intent in drafting the statute. The argument is typically framed as one of plain language versus presumed Congressional intent.

This debate between plain language and presumed Congressional intent is sure to be impacted by the Federal Courts Jurisdiction and Venue Clarification Act of 2011 (the "Act"), which became effective on January 6, 2012. (3) In the Act, Congress revised the law of removal to address several splits of authority that had developed in the modern jurisprudence of removal, but notably, left unchanged the "properly joined and served" language of Section 1441(b). The absence of amendment severely undercuts the notion that Congress intended something other than the plain language that requires proper joinder and service of a forum defendant in order for Section 1441(b) to prohibit removal.

1. Brief History of Section 1441(b)

   The forum defendant rule pre-dates the original enactment of Section 1441(b) in 1948. Under the previous statute, removal was available based on diversity of citizenship only "by the defendant or defendants therein, being nonresidents of that state." (4) This language lent itself to a black and white rule that made service on a forum defendant irrelevant for purposes of the forum defendant rule.

   In 1948, Congress amended the removal statute and created Section 1441(b), which limited the prohibition of the forum defendant rule to instances in which the forum defendant(s) were "properly joined and served." (5) The historical reason for the amended language is unclear. In fact, one court conducted a thorough search of the published legislative history and was "able to locate neither a specific statement from Congress nor from the advisory Committee on Revision of the Judicial Code, regarding the addition of the 'properly joined and served' language." (6) As discussed below, some have speculated that the new language was intended solely to prevent fraudulently joined resident defendants from thwarting otherwise proper removals, but this argument is unconvincing because the fraudulent joinder argument was already available to defendants seeking removal prior to 1948. (7) Moreover, this explanation of Congress' presumed intent completely ignores the "and served" language in Section 1441(b). Whatever the reason for the change in 1948, despite multiple amendments by Congress to various part of the removal statute, the "properly joined and served" language has remained unchanged for more than fifty years. (8)

2. The Majority View: Plain Language of the Statute Must be Followed

   One of the first district courts to analyze thoroughly the issue of removal under Section 1441(b) despite the presence of an unserved forum defendant was Wensil v. E.L Dupont de Nemours and Company. (9) Wensil involved plaintiffs from West Virginia bringing claims against Dupont, Blount Brothers Corporation, and eight other defendants in a South Carolina state court. Plaintiffs served the complaint on Dupont and Blount Brothers, both of which were residents of neither West Virginia nor South Carolina, but Plaintiffs failed to serve any of the other eight defendants, all of whom were residents of South Carolina. Dupont and Blount Brothers removed the case to federal court based on diversity jurisdiction. Plaintiffs moved to remand...