Snap Removal – A Defense Strategy for Corporate Defendants

By: James H. Milstone

One of the strategies for avoiding nuclear verdicts in tort litigation being considered is removal of cases to federal court.  State courts are seen as dangerous venues, subject to judges who are more friendly to plaintiff counsel than to defendants and with juries that can be more liberal and subject to reptile persuasion.  Federal courts, on the other hand, provide more stable and predictable results, with jury pools from broader locations and judge who do not allow plaintiff counsel to use unfair tactics.  Also, federal courts have better resources with a staff of law clerks to assist judges.  The federal Summary judgment standards are much more favorable for defendants.  Further, federal judges and magistrate move cases more quickly to resolution, and most often have shorter trial calendars.  Where there is large exposure, federal court is almost always preferable to a local state venue.

Federal courts are courts of limited jurisdiction, and the most frequently on the basis of diversity of citizenship.  To qualify for diversity jurisdiction, all plaintiffs must be citizens of states that are different from all defendants, and there must be more than $75,000 at issue (exclusive of interest and costs).  28 U.S.C. § 1332.  [It should be noted that:

1. 1. Corporations are citizens of the state in which they are incorporated as well as in the state where they have their principal place of business.
   2. Limited Liability Corporations (LLC’s) are citizens of the states of all of their members, and if any of their members are LLC’s, all of the members’ members.

However, the statute providing the mechanism for removal of cases from state court to federal court, 28 U.S.C. § 1441 et seq., several additional limitations are added to removal of diversity cases:

1. Removal must be accomplished within 30 days of receipt of the complaint by a defendant (or when the basis for jurisdiction is first discovered) and not more than one year after the commencement of the action in state court. 28 U.S.C. 1446(b)
2. All properly joined and served defendants must sign the removal petition or file a separate written joinder indicating their consent to removal, and consents must be filed within the time limit for removal. 28 U.S.C. 1446(a).
3. Removal is not permitted if a defendant is a citizen of the state in which the suit was filed and was “properly joined and served”. 28 U.S.C 1441(b)(2).

Where a defendant wants to remove but it or another defendant is a citizen of the state where suit was filed, they are often blocked from recourse to federal court by removal.  Often, plaintiff’s counsel will sue a national retail corporation of trucking carrier that is not a citizen of the forum state but add as an additional defendant a local manager or employee who is a citizen of the forum state.

Where this is an anticipated problem, a defendant might be able to obtain removal by a process known as “Snap Removal”.  There is a body of case law that has held that a defendant who is a citizen of the forum can remove the case if they do so before they are served with the summons and complaint.  This can also be used if a co-defendant who is a citizen of the forum state has not yet been served.

Where there has been negotiations and suit is imminent, defendants have used electronic monitoring services to monitor case filing, particularly focusing on state venues where suit is expected to be filed.  Service of process takes time – usually the process must be transmitted to a sheriff’s department or is sent by certified mail, and this can take days.  An alert defendant can remove immediately.  (There are reports of plaintiff’s counsel hiring private process servers to obtain electronic copies of issues summons and serve them personally on defendants minutes after cases are filed to avoid Snap Removal.)

While some federal judges find disfavor with Snap Removal, the case law support it.  There are several federal circuits that have expressly allowed it:

The leading example for the plain meaning doctrine here is Encompass Ins. Co. v. Stone Mansion Rest., Inc., 902 F.3d 147 (3d Cir. 2018). There, a forum defendant filed the notice of removal before service could effectively happen. The court found in favor of the forum defendant as the defendant “availed itself of the plain meaning of the statute.” Id. at 154. The court further explained that: [The plaintiff] has not provided, nor have we otherwise uncovered, an extraordinary showing of contrary legislative intent. Furthermore, we do not perceive that the result in this case rises to the level of the absurd or bizarre. There are simply no grounds upon which we could substitute Encompass’ interpretation for the literal interpretation.

Four other circuits have addressed snap removal. Each similarly found that a “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.” Texas Brine Co., L.L.C. v. American Arbitration Association, 955 F.3d 482, 487 (5th Cir. 2020); see also Gibbons v. Bristol-Myers Squibb Co., 919 F.3d at 705 (2d Cir. 2019) (holding that “[b]y its text, then, Section 1441(b)(2) is inapplicable until a home-state defendant has been served”); Encompass Ins. Co. v. Stone Mansion Rest. Inc., 902 F.3d 147, 152–54 (3d Cir. 2018); McCall v. Scott, 239 F.3d 808, 813 n.2 (6th Cir. 2001) (“Where there is complete diversity of citizenship, as LSERS concedes there was, the inclusion of an unserved resident defendant in the action does not defeat removal under 28 U.S.C. § 1441(b).”); Goodwin v. Reynolds, 757 F.3d 1216, 1221 (11th Cir. 2014) (assuming arguendo that the forum-defendant rule applies only if a forum defendant is “properly joined and served”).

Courts have noted that Congress has known about snap removal for over twenty years and yet, Congress has retained §1441(b)(2). See Recognition Commc’ns, Inc. v. Am. Auto. Ass’n, Inc., No. 97-CV0945, 1998 WL 119528, at *3 & n.3 (N.D. Tex. Mar. 5, 1998). See also Valerie M. Nannery, Closing the Snap Removal Loophole, 86 U. Cin. L. Rev. 541, 550 (2018) (describing the history of the practice). In 2011, Congress comprehensively amended the removal statute to address a variety of splits in authority and to make the removal scheme easier for litigants and judges to understand. Federal Courts Jurisdiction and Venue Clarification Act of 2011, Pub. L. No. 112- 63, § 103, 125 Stat. 758, 759–62; H.R. Rep. No. 112-10, at 1–2 (2011) (stating that the statute was designed to “bring more clarity to the operation of Federal jurisdictional statutes” and “identify and delete those provisions that were considered controversial”). In 2020, Congress proposed changes to the removal statute without affecting snap removal. See Removal Jurisdiction Clarification Act of 2020, H.R. 5801, 116th Cong. (2020). Nevertheless, Congress has never made an exception for Snap Removal.

Snap Removal requires a strict construction of the statutory language, and has been contested, particularly when there is only one defendant.  The purpose of the 1441’s limitation has always been accepted to be that removal is available to protect non-citizen defendants from local prejudice; and that purpose is not served by Snap Removal.

There are reported cases from lower courts thus rejecting Snap Removal.

See Wilmington Tr., N.A. v. Fid. Nat’l Title Grp., Inc., 604 F. Supp. 3d 1044, 1050 (D. Nev. 2022) (rejecting snap removal and concluding that interpreting the statute to preclude removal where a sole defendant has yet to be served “make[s] grammatical sense” and is “most true to other canons of construction, the statute’s purpose, and legislative intent”).

Confer v. Bristol-Myers Squibb Co., 61 F. Supp. 3d 305, 306 (S.D.N.Y. 2014);

Lone Mountain Ranch, LLC v. Santa Fe Gold Corp., 988 F. Supp. 2d 1263, 1266–67 (D. N.M. 2013) (holding that forum defendants cannot circumvent section 1441(b)(2) through snap removal unless plaintiff names sham defendants or was “dilatory” in failing to accomplish service);

Perez v. Forest Labs., Inc., 902 F. Supp. 2d 1238, 1242–46 (E.D. Mo. 2012) (finding snap removal inconsistent with basic purposes of removal and forum defendant rule);

Vivas v. Boeing Co., 486 F. Supp. 2d 726, 734 (N.D. Ill. 2007) (stating that snap removal “frustrates the consistent efforts of both Congress and the courts”).

Lower courts that have rejected Snap Removal cite interests of federalism, and a view that the statutory language is ambiguous, and that this statutory construction is absurd.  See In re Stephens, 704 F.3d 1279, 1284 (10th Cir. 2013); Deutsche Bank Natl. Tr. Co. v. Old Republic Title Ins. Grp., Inc., 532 F. Supp. 3d 1004, 1011 (D. Nev. 2021) (“Because there are multiple reasonable interpretations of the plain language of [section 1441(b)(2)] . . . the Court finds the language ambiguous.”).

Gentile v. Biogen Idec, Inc., 934 F. Supp. 2d 313 (D. Mass. 2013) (section 1441(b) presupposes that, at the time of removal, at least one defendant has yet to be served so that a sole defendant cannot remove.)

While Snap Removal may prove to be a fight, defense counsel see it as a fight worth having for their targeted corporate defendants.

For more information or questions on how this pertains to cases you are handling please e-mail the author here.