For years, federal courts have clashed over the interpretation of procedures for removal, jurisdiction and venue. In a new law that took effect in January 2012, Congress resolved many of these disagreements and clarified lingering ambiguities. This article explains the highlights of the Federal Courts Jurisdiction and Venue Clarification Act of 2011, H.R. 394, P.L. 112-63.
The Act Clarifies Procedures for Removal
First, a quick refresher on removal procedures. A defendant that is sued in state court may remove the lawsuit to federal district court if there is federal question or diversity jurisdiction.1 To initiate the process of removal, a defendant must file a Notice of Removal with the federal district court within 30 days after it is served (or otherwise receives a copy of the complaint). The procedures for removal are set forth in 28 U.S.C. § 1441 et seq.
The Act clears up a number of procedural issues that courts have treated inconsistently. These changes are worthy of careful consideration, as they could affect your company’s right to defend itself in federal court.
Timing of Removal in Cases involving Multiple Defendants
Before the Act went into effect, the removal statute said that “the defendant” had 30 days to remove an action after receiving a copy of the complaint. See former 28 U.S.C. § 1446(b). But the statute did not specify how deadlines would be calculated if multiple defendants were served separately at different times.
Resolving a split in authority, the Act gives each defendant an opportunity to remove within 30 days after being served. 28 U.S.C. §§ 1446(b)(2)(B)–(C). To illustrate how this new provision works, let’s say a complaint names two defendants: A and B. The plaintiff serves A first, but A does not file a timely Notice of Removal. The plaintiff then serves B with the complaint. Under the Act, B still has 30 days from the time it is served to file a Notice of Removal, even though A’s deadline has run out. Put another way, a plaintiff may not deprive a defendant of its opportunity to file a Notice of Removal by serving one defendant first, and then waiting more than 30 days to effect service on a second defendant.2
It is worth emphasizing that this provision comes into play only when multiple defendants are served at different times. If multiple defendants are served on the same day, of course, all defendants will have the same removal deadline.3
Is the Complaint Removable?: When Federal Jurisdiction is Unclear
Assume a state-court complaint makes it clear that there would be federal jurisdiction -- for example, it specifically asserts claims under a federal statute. There is no question that the 30-day clock for filing a Notice of Removal starts to run when a defendant receives a copy of such a complaint. ...
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1State court cases are removed to the federal district where the state court sits.
2The Act also clarifies that an earlier-served defendant may join a later-served defendant’s Notice of Removal, even though the earlier-served defendant’s own 30-day time period has expired. 28 U.S.C. § 1446(b)(2)(C).
3The Act also addresses another issue relating to the removal of multi-defendant cases; it codifies the long-established “rule of unanimity,” under which all defendants who have been properly joined and served must consent to removal. 28 U.S.C. § 1446(b)(2)(A).