Removal prior to service: a new wrinkle or a dead end?

• Author: Lavelle, John P., Jr.

Can a defendant remove a case to federal court from state court in its own home state prior to formal service of the complaint even though it could not remove once formally served? That is the intriguing question posed by a recent series of conflicting decisions in the federal district courts, particularly in the District of New Jersey. (12) The growth of electronic docketing systems and of court docket monitoring services may have opened up a new potential avenue for defendants to remove cases to federal courts.

This twist on removal arises from the precise and peculiar language of the removal statute. Generally, an action may be removed from state court if it could have been filed originally in federal court. (13) When removal's predicated on diversity jurisdiction, there must be complete diversity and the jurisdictional amount must be satisfied; in addition to these prerequisites, an action removed on the basis of diversity jurisdiction must satisfy the additional requirements of the forum defendant rule. (14) The forum defendant rule prohibits removal when one or more of the "parties in interest properly joined and served as [a] defendant[] is a citizen of the State in which such action is brought." (15) As written, the language of the statute requires both joinder and service of a forum defendant for the rule to apply. Many courts explain that the rule reflects the belief that the purpose for diversity jurisdiction, namely the potential that a local court and local jury may be prejudiced against an out-of-state defendant, is not necessary when the defendant is a resident of the forum state. (16)

The language of the rule, however, acknowledges the potential for gamesmanship by a plaintiff, who, for example, joins "as a defendant a resident party against whom it does not intend to proceed, and whom it does not even serve," simply to block removal by an out-of-state defendant. (17) Thus, courts uniformly find that an out-of-state, or non-forum, defendant may remove an action on the basis of diversity jurisdiction after it has been served, even though the complaint names a defendant who resides in the forum state and who has not been served. (18) In so holding, these courts cite to the plain language of the statute. (19) When a non-forum defendant removes before any defendant has been served, or when a non-served forum defendant removes, the language and purpose of section 1441(b) arguably diverge, and courts are divided as to whether the plain language or the perceived policy behind section 1441 (b) controls.

Numerous courts have recently held that removal of a multi-defendant action is proper under the statute's plain language when an action is removed before any defendant is served, regardless of whether the removing defendant is a non-forum defendant (20) or a forum defendant. (21) In both instances, the courts explain that the statute clearly requires both joinder and service, and that the rules of statutory interpretation allow a court to depart from the statute's clear language, only "where a literal interpretation would thwart the purpose of the overall statutory scheme or lead to an...