Post-removal litigation and the waiver of the right to seek a remand grounded on removal defects.

• Author: Cesarano, Gregory M.

Your client has been damaged to the extent of millions of dollars by a large out-of-state national corporation and has come to you to seek prompt and full compensation for the wrongs committed. You file the lawsuit in state court, intending to litigate energetically for a prompt resolution of the claim, and with confidence that your client will receive local justice from her neighbors on the jury and the judge you socialize with at state and local bar functions. The selection of the state forum, while not essential to the success of the lawsuit, is an important part of the strategy to recover timely and full compensation for your client's injury and damages. The defendant's attorney, however, is also mindful of the perceived imbalances of litigating in state court, and he files a petition to remove the case to federal court because the defendant would much prefer to litigate there.

Eager to plunge into discovery before the national corporation can formulate a comprehensive game plan, upon removal you immediately serve a Rule 30(b)(6) notice of deposition, a request for production, and a request for admissions. Subsequently, you realize that defense counsel filed the petition for removal on the 31st day following receipt of the initial pleading rendering the case removable. You are elated that this "defect" will entitle your client to have the case remanded to state court where both you and your client are more comfortable. You immediately prepare and file a motion to remand on the basis that the defendant's attempt to remove the case was untimely and defective. You leave the office that evening secure in the knowledge that your client's case is back in state court, and the defendant can do nothing about it. Your feeling of security lasts only until you receive the defendant's response to your remand motion which raises something the defense counsel refers to as "waiver of the right to seek a remand." A quick bit of research gives you indigestion as you realize you are now faced with trying to explain to your client how your zealous advocacy may have kept the case in federal court.

Without a doubt almost every practicing attorney, whether on the plaintiff's or defendant's side, has at one time or another opposed or sought the removal of a lawsuit from state to federal court. When the removal petition is defective--for example, not all of the defendants have signed the petition or the one-year limitation on the removal of a diversity action has elapsed--pursuant to 28 U.S.C. [sections] 1447(c), the logical move would be for the plaintiff to seek a remand of the improperly removed case. But what if prior to seeking a remand, the plaintiff initiated discovery in federal court against the defendant or a third party, or sought leave to amend its complaint, or enthusiastically participated in federal court proceedings prior to seeking remand based on the defective removal? By doing so, does the plaintiff waive the right to seek a remand of the lawsuit? This article provides the answer while simultaneously exploring the ramifications to plaintiffs and defendants alike of the application of this powerful litigation weapon--the waiver of the right to seek a remand based on removal defects.

General Removal Concerns

The removal of an action from state to federal court can have extreme consequences for both parties. As a matter of course, once a case is removed to federal court the federal rules of civil procedure become applicable. When compared to most state rules of procedure, the federal rules can alter the scope of discovery as well as timelines for litigation. Litigation in federal court is also generally more expensive and time consuming than most state court actions.(1) More importantly, unlike most state court judges who are elected, federal judges generally are appointed to the bench, and so the independence of the federal judiciary is always a factor when considering removal. Accordingly, defense counsel commonly perceive that in civil actions it is advantageous to litigate in federal court.(2)

The substantive and procedural provisions governing removal are codified in Chapter 28 of the United States Code.(3) These statutes set forth the jurisdictional grounds that warrant removal, the procedure for removal, and the post-removal procedure. The statutes, however, are not all-encompassing. Specifically, [sections] 1447, setting forth the post-removal procedure, does not address the potential waiver of the right to seek a remand grounded on removal defects.(4)

This article tackles the issues associated with the waiver of the right to seek a remand for removal defects prior to the expiration of the 30-day window for motions to remand.(5) The third part of this article summarizes the federal removal statute and the procedure for removal. Next, in particular detail, the article discusses the procedure after removal and the statutory limitations imposed on seeking remand based on removal defects. To that end, this article defines the plaintiffs opportunity to seek a remand for removal defects with a case law analysis that sets forth the situations in which a plaintiff waives the right to seek such a remand as a result of its affirmative conduct in federal court. Finally, it provides several strategies for plaintiffs and defendants alike to consider when planning post-removal litigation.(6)

The Federal Removal Statute and Removal Procedure

Section 1441 of Title 28 of the U.S. Code generally governs the removal of actions to the federal district courts.(7) Presently, there are two instances in which the statute permits removal.(8) Section 1441(a) first authorizes the removal of any state court...