A tactic known as “snap removal” has divided federal district courts. Can a defendant remove a suit filed in its home forum (or the home forum of another defendant) after the plaintiff filed the suit but before service of process? At first blush, 28 U.S.C. § 1441(b)(2) –– the forum defendant rule –– would seem to prevent such removal. That rule applies to civil diversity actions and provides that an action “may not be removed 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). But courts disagree over whether the “properly joined and served” language allows a forum defendant to remove in the time between filing and service. Recently, in Gibbons v. Bristol-Myers Squibb Co., the Second Circuit became the second circuit court to squarely address the issue and approve of a snap removal. The case sheds light on the need for Congress to provide clarity, especially if more circuits begin to follow suit in allowing snap removal.
Gibbons emerged out of litigation against Bristol-Myers Squibb (BMS) and Pfizer surrounding Eliquis, a blood thinning medication. In 2015, plaintiffs across the country first began to sue the drug companies for injuries “attributable to the improper design of Eliquis and the insufficient warning labels that accompanied the drug.” Several iterations of plaintiffs sued in federal court, and the Multidistrict Litigation panel transferred all federal cases pending to the Southern District of New York (SDNY). Judge Cote in the SDNY repeatedly dismissed plaintiffs’ complaints. Still after several dismissals, not all claims against BMS and Pfizer had become part of the MDL. Plaintiffs refiled their cases in Delaware state court. The defendants removed to federal district court in Delaware (their state of incorporation) prior to being served with the complaints.
The plaintiffs asked the district court to remand to state court to no avail. In their motion to remand, the plaintiffs argued “because the only basis for federal court jurisdiction was diversity of citizenship, Defendants’ status as citizens of Delaware meant that removal was prohibited under 28 U.S.C. § 1441(b)(2).” The district court nonetheless transferred the cases to the SDNY, where Judge Cote dismissed them. Still more plaintiffs “adopted a new strategy” by filing suit in Delaware state court, consenting to transfer to federal court in the SDNY, and then asking Judge Cote to remand to Delaware state court. Judge Cote denied those motions and dismissed the claims. Those plaintiffs, along with other actions pending in the SDNY, appealed, challenging (1) the district court’s failure to remand the actions to state court, and (2) the district court’s ruling that the claims were preempted by the Food, Drug, and Cosmetics Act (FDCA).
The Second Circuit affirmed on both challenges. First, the court held that the forum defendant rule, 28 U.S.C. § 1441(b)(2), did not bar removal. The Second Circuit focused on the text of the statute to determine § 1441(b)(2) only barred removal once the home-state defendant “ha[d] been served in accordance with state law.” Since the defendants in this case “removed each of the Transferred Actions to federal court after the suit was filed in state court but before any Defendant was served,” removal was proper.
The plaintiffs made two arguments for the application of the forum defendant rule. Neither persuaded the court.
First, plaintiffs said “applying the text of the statute [would] produce[] an absurd result” because “it is absurd to allow a home‐state defendant to use an exception meant to protect defendants from unfair bias (in the courts of a plaintiff’s home state) and language designed to shield them from gamesmanship (in the form of fraudulent joinder) to remove a lawsuit to federal court.” The Second Circuit found the absurdity argument unpersuasive, arguing Congress may have required service to “limit gamesmanship” and provide a more administrable rule.
Second, plaintiffs argued applying the text of the statute would “lead to non‐uniform application of the removal statute depending on the provisions of state law.” Some states require a delay between filing and service while other states allow the plaintiff to serve immediately. The Second Circuit said variation was not a strong enough consideration to depart from the text of the statute as “state‐by‐state variation is not uncommon in federal litigation, including in the removal context.”
On the substance of the dismissals, the Second Circuit also affirmed the district court, holding the FDCA preempted the state law claims because “they consist of ‘conclusory and vague’ allegations.”
Before last year, snap removal had not been expressly condoned by a circuit court. The Third Circuit first addressed snap removals in 2018, holding in Encompass Insurance Co. v. Stone Mansion Restaurant Inc. that the text of § 1441(b)(2) “precludes removal on the basis of in-state citizenship only when the defendant has been properly joined and served.” While “this result may be peculiar,” the Third Circuit said it “is not so outlandish as to constitute an absurd or bizarre result.” In dicta, other circuit courts weighed in. For example, the Eleventh Circuit in Goodwin v. Reynolds questioned the practice of snap removals. Meanwhile a Sixth Circuit footnote approving of snap removal in McCall v. Scott has been treated as dicta.
District courts in other circuits remain split on snap removals. In fact, “a judicial majority has refused to endorse what seemingly plain meaning compels.” In Delaughder v. Colonial Pipeline, for example, the District Court for the Northern District of Georgia rejected the Third Circuit approach and looked beyond the text of the statute to legislative intent and the possibility of absurd results. The district court found allowing a snap removal would “uniquely undermine the purpose of the forum-defendant rule.” According to the court, the likely purpose of the “properly joined and served” language is to prevent gamesmanship by plaintiffs seeking to block removal by joining an in-state defendant who the plaintiff did not intend to litigate against. Thus the district court found “the fact that the very words included to prevent gamesmanship have opened an avenue for more gamesmanship is an ironic absurdity that the Court will not enforce simply because the words ‘properly joined and served’ appear unambiguous in isolation, and Congress has not provided more guidance on the issue.”
The snap removal tactic is not entirely new, but it has grown with the ease of monitoring electronic dockets. Snap removal appears to be employed most commonly in pharmaceutical product liability cases and by corporate entities in actions brought by individuals. Intuitively, repeat players like large corporations are best positioned and most motivated to monitor electronic dockets. The extent to which one desires to prevent corporate entities from removing more cases to federal court depends at least in part on theories about forum preference.
In sum, district courts remain split on snap removal even as two circuits have recently allowed the practice. The divide has sparked some scholars to propose congressional action. Particularly if more circuits begin to allow snap removals, only Congress can close the loophole.