Written by: Jasmine Englert
Snap removal is the practice of removing a state action to federal court based on diversity jurisdiction after the Petition has been filed in state court, but before a forum defendant has been served the Petition.
Based on the plain reading of the removal statute which prohibits removal by a forum defendant, 28 USC § 1441(b)(2), a defendant cannot remove an action otherwise removable on the basis of jurisdiction if any party in interest properly joined and served as defendants is a citizen of the State in which such action is brought. The 5th Circuit explained there is a narrow window of time for a defendant who knows the Petition has been filed, to remove the case to federal court prior to being “properly joined and served” by a forum defendant. See Tex. Brine Co. v. AAA, 955 F.3d 482 (5th Cir. 2020); Gibbonc v. Brystol-Myers Squibb Co., 919F.3d 147 (2d Circ. 2019), Encompass Inc. Co. v. Stone Mansion Rest., Inc., 902 f.3d 147 (3d Cir. 2018.)
In Texas Brine, a claim arose after an arbitration fell apart due to claims of undisclosed conflicts by the arbitrators. Tex. Brine Co. at 484-485. Texas Brine Company, LLC (“TBC” and citizen of Texas), filed suit in the Civil District Court of New Orleans, alleging that defendants, AAA (citizen of New York) and the two arbitrators (both citizens of Louisiana), engaged in intentional and wrongful fraudulent conduct in connection with the arbitration proceedings and sought damages in excess of $12 million dollars. Id.
Before the arbitrators had been served, AAA filed a removal to the Eastern District of Louisiana (“EDLA.”) Id. Subsequently, all three defendants filed Answers and moved to dismiss the claims under Rule 129(c) of the Federal Rules of Civil Procedure. Id. TBC followed by moving to remand, disagreeing with the contention that the three defendants were properly joined. Id. The EDLA denied the remand holding that the plain language of the statute did not bar snap removal and granted the defendants dismissals with prejudice. Id. TBC appealed to the 5th Circuit and the 5th Circuit stated that they look to, “the plain meaning [of the language of the statute] and absurdity.” Id. at 486. Per the 5th Circuit, “The forum-defendant rule's procedural barrier to removal was irrelevant because the only defendant “properly joined and served”, AAA, was not a citizen of Louisiana, the forum state.” Id. TBC tried to argue that the result was absurd and defeated Congress’s intent and that the language in the statute at issue, “properly joined and served,” was meant to prevent plaintiffs from naming forum defendants merely for the purpose of destroying diversity and that purpose was not served based on the EDLA decision. Id. The 5th Circuit determined that the absurdity bar, which was a high bar, was not met, and that snap removal was “rational”. Id. The 5th Circuit held, “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.” Id. at 487.
What was left unanswered by the 5th Circuit in the Texas Brine case, was whether a forum defendant could move for snap removal if they have not yet been served. Other Circuits have answered this question, “Yes,” a non-served forum defendant can move for snap removal to federal court. Part 2 of this Article will provide an answer to this question as it relates to the Eastern District, Western District, and Middle District of Louisiana.
Part 2 of this series can be found here.