Fifth Circuit Gives Defendants Powerful New Tool With Approval of "Snap Removal"
Amid the disruptions and despair being wrought by the COVID-19 pandemic, the United States Court of Appeals for the Fifth Circuit quietly issued an important civil procedure ruling yesterday approving of “snap removal.” Although it may sound obscure, snap removal is a unique and powerful tool for defendants seeking to move cases from state to federal court, and it now has the blessing of the Fifth Circuit.
Generally, a case filed in state court may not be removed to federal court based on diversity of citizenship jurisdiction when one of the defendants is a citizen of the forum state. This is known as the “forum-defendant” rule.1 The statute codifying that rule, however, only prohibits removal of diversity cases “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” (emphasis added). If you polled a handful of lawyers at a cocktail party (before the days of social distancing, of course), most would likely advise that cases cannot be removed based on diversity jurisdiction if one of the defendants is a citizen of the forum state. But what if the forum defendant has not yet been served?
In Texas Brine Co. v. American Arbitration Association,2the Fifth Circuit joined the Second, Third and Sixth Circuits in holding that the forum-defendant rule does not bar so-called snap removals where the forum defendant has not yet been served at the time of removal. The court held that the plain language of the forum-defendant rule was “inapplicable until a home-state defendant has been served in accordance with state law.” Although the court recognized that allowing snap removals might be an “odd” result, it was not so absurd or preposterous to justify departing from the text of the statute. In short, the court summarized its holding as follows: “A non-forum defendant may remove an otherwise removable case even when a named defendant who has yet to be ‘properly joined and served’ is a citizen of the forum state."
To use the snap removal strategy and avoid the application of the forum-defendant rule in cases that otherwise satisfy the requirements for diversity of citizenship jurisdiction, defendants and their counsel should be monitoring court dockets for new filings instead of waiting on formal service of process. In this regard, it should also be remembered that a defendant can remove a case from state court before that defendant is formally served.3Thus, if a federal forum is desired, defendants can benefit from proactive monitoring of court dockets and snap removals before service.
[1] 28 U.S.C. § 1441(b)(2).
[2] No. 18-31184, 2020 U.S. App. LEXIS 10849 (5th Cir. Apr. 7, 2020).
[3] See, e.g., Delgado v. Shell Oil Co., 231 F.3d 165, 177 (5th Cir. 2000): “We read § 1446(b) and its ‘through service or otherwise’ language as consciously reflecting a desire on the part of Congress to require that an action be commenced against a defendant before removal, but not that the defendant have been served.”
