Monday, August 31, 2009

Pre-Service Removal, Yet Again

We're running out of headlines for these posts: We've already used "Pre-Service Removals -- For The Umpteenth Time" and "Pre-Service Removals: They Keep On Coming."

What's a blogger to do?

Even if we've run out of ideas for creative headlines, we can at least do the non-creative piece of this blogging gig: Report on yet another case involving removal to federal court of an action filed in state court and naming a resident defendant of the forum state. The trick, as regular readers well know, is to remove the case before plaintiff serves the resident defendant, thus avoiding the prohibition on removing cases in which a resident defendant has been joined and served.

The new case is Bivins v. Novartis Pharmaceuticals Corp., No. 09-1087 (RBK/KMW), 2009 WL 2496518 (D.N.J. Aug. 10, 2009). There, Bivins ingested Elidel and claims to have suffered an injury. Bivins (a citizen of Texas) sued Novartis Pharmaceuticals (a Delaware corporation with its principal place of business in New Jersey), Novartis Pharma GmbH (a German corporation), and Novartis AG (a Swiss corporation) in New Jersey state court. Diversity thus existed (Texas plaintiff vs. DE, NJ, German, and Swiss defendants), but the presence of a resident defendant (NJ defendant in NJ state court case) could pose a problem. Under 28 U.S.C. Sec. 1441(b), an action is not removable if a party "joined and served" as a defendant is a "citizen of the State in which such action is brought."

Novartis thus removed the action before plaintiff had served the resident defendant with the complaint. Although courts have split on the question, Judge Kugler denied plaintiff's motion to remand.

"[T]he statutory language is clear. . . . Under the plain meaning of the statute, removal of this case was proper because NPC had not yet been served when it filed its notice of removal." Id. at *2.

Plaintiff asserted that this result was inconsistent with Congressional intent. But the court found there was no statement of Congressional intent in the legislative history that could undermine the express statutory language. "This Court . . . in the absence of 'an extraordinary showing of a contrary congressional intent in the legislative history' [cite omitted] is reluctant to ignore the plain meaning of 28 U.S.C. Sec. 1441(b)." Id.

Plaintiff also made "the policy argument that courts should not reward defendants who monitor electronic dockets and remove cases before plaintiffs have a chance to serve them." Id. Those arguments "'alone are insufficient to overcome the requirement that this Court give meaning to the plain language of the statute.'" Id. (with another cite omitted).

The court thus denied plaintiff's motion to remand, deepening an already wide divide in the district courts on this issue.

We'll continue to watch this issue develop. If you have any ideas for creative headlines for future posts on this topic, please leave 'em in the "comments" below or drop us an e-mail. We're all ears.

1 comment:

Anonymous said...

In his blog post about the Fleeger decision, Mr. Costello wrote: Filing in Minnesota was obviously a transparent means of avoiding a claim-dispositive defense, because Minnesota has a generous statute of limitations for personal injury claims. That’s forum shopping, and most folks think that is a bad thing. Thus, a rule that encourages forum shopping would be, well, a bad rule.

My response: Hmmm. The language above reminded me of this pre-service removal gimmick [even Beck and Herrmann acknowledge that this is a "trick"] that some clever defense lawyer thought up, not believing it would actually work but what the hey let's give it a shot.

To-wit: [Removal to federal court] was obviously a transparent means of avoiding [(non-fraudulent) state court jurisdiction], because [defendants don't want to be in most state courts] for personal injury claims. That’s forum shopping, and most folks think that is a bad thing. Thus, [construing the so-called "plain meaning of the removal statute in a way] that encourages forum shopping would be, well, a bad [construction of the statute].