THOMAS E. JOHNSTON, District Judge.
Pending before the Court are Plaintiff's Motion to Remand, (ECF 5), and Defendants' Motion to Dismiss, (ECF 3). For the reasons discussed herein, the Court
This case arises out of alleged professional malpractice relating to Defendants' prior representation of Plaintiff in another matter. Plaintiff "is a Kentucky Corporation which performs excavation, site work and construction services in several states including West Virginia." (ECF 1, Ex. A (Compl.) ¶ 1.) Defendant Daniels Law Firm, PLLC is a professional limited liability company organized under the laws of West Virginia and Defendant Normal Daniels, Jr. is a resident of West Virginia. (Id. ¶ 2; see ECF 1 at 3 ("Defendants Daniels Law Firm and Mr. Daniels are citizens of West Virginia.").)
On May 16, 2014, Plaintiff filed the complaint against Defendants in the Circuit Court of Kanawha County, West Virginia. (ECF 1, Ex. A.) The complaint includes state-law claims for negligence and breach of contract. (Id.)
On July 17, 2014, Defendants removed this action to this Court solely on the basis of diversity jurisdiction. (ECF 1.) On July 24, 2014, Defendants filed the Motion to Dismiss. (ECF 3.) This motion was fully briefed as of August 11, 2014. (See ECF 8.)
In addition to filing an opposition to the Motion to Dismiss, Plaintiff timely filed the Motion to Remand on August 4, 2014. (ECF 5.) Defendants filed their opposition on August 18, 2014, (ECF 10), and Plaintiff filed its reply briefing on August 25, 2014, (ECF 11). As such, both Plaintiff's Motion to Remand and Defendants' Motion to Dismiss are fully briefed and ready for disposition.
Article III of the United States Constitution provides, in pertinent part, that
Congress provided a right to remove a case from state to federal court under 28 U.S.C. § 1441. This statute states, in relevant part:
28 U.S.C. § 1441(a). "[F]ederal jurisdiction... is fixed at the time the ... notice of removal is filed." Dennison v. Carolina Payday Loans, Inc., 549 F.3d 941, 943 (4th Cir.2008) (citing Mollan v. Torrance, 22 U.S. (9 Wheat) 537, 539, 6 L.Ed. 154 (1824)). "The burden of establishing federal jurisdiction is placed upon the party seeking removal," Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir.1994) (citation omitted), and defendants have the burden to show the existence of federal jurisdiction by a preponderance of the evidence, Johnson v. Nutrex Research, Inc., 429 F.Supp.2d 723, 726 (D.Md.2006) (citing Schwenk v. Cobra Mfg. Co., 322 F.Supp.2d 676, 678 (E.D.Va.2004)).
Section 1447, in turn, governs the remand procedure and provides, in relevant part:
28 U.S.C. § 1447(c). Because removal of civil cases from state to federal court infringes state sovereignty, courts strictly construe the removal statute and resolve all doubts in favor of remanding the case to state court. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 61 S.Ct. 868, 85 L.Ed. 1214 (1941) ("Due regard for the rightful independence of state governments, which should actuate federal courts, requires that they scrupulously confine their own jurisdiction to the precise limits which the [removal] statute has defined."); Mulcahey, 29 F.3d at 151 ("Because removal jurisdiction raises significant federalism concerns, we must strictly construe removal jurisdiction.") (citation omitted); Marshall v. Manville Sales Corp., 6 F.3d 229, 232 (4th Cir.1993) (noting "Congress' clear intention to restrict removal and to resolve all doubts about the propriety of removal in favor of retained state court jurisdiction") (citation omitted).
Defendants argue — and Plaintiff does not contest — that there is complete diversity between the parties and the amount in controversy exceeds $75,000. (See ECF 1, 6, 10, 11.) There is similarly no dispute that Plaintiff did not serve Defendants with the complaint prior to the removal of this action. (See id.) The sole issue in dispute is whether the forum-defendant rule exception to the removal statute bars Defendants from removing this action before Plaintiff serves them with the complaint. (See ECF 6, 10, 11.)
A defendant's ability to remove based upon diversity jurisdiction is limited by 28 U.S.C. 1441(b)(2), which provides:
This provision, "commonly known as the `forum defendant rule,' is separate and apart from the statute conferring diversity jurisdiction ... [and] confines removal on the basis of diversity to instances where no defendant is a citizen of the forum state.'" Councell v. Homer Laughlin China Co., 823 F.Supp.2d 370, 377 (N.D.W.Va.2011) (Stamp, J.) (quoting Lively v. Wild Oats Mkts., Inc., 456 F.3d 933, 939 (9th Cir. 2006)). In Councell, Judge Stamp provided the following description of the purpose behind the forum-defendant rule:
Id. at 379 (citation omitted); see also Lively, 456 F.3d at 940 ("The need for such protection is absent, however, in cases where the defendant is a citizen of the state in which the case is brought."). "Within this contextual framework, the forum defendant rule allows the plaintiff to regain some control over forum selection by requesting that the case be remanded to state court." Lively, 456 F.3d at 940; see also Councell, 823 F.Supp.2d at 379 ("[I]f diversity jurisdiction exists and a defendant removes a case in violation of the forum defendant rule ..., the plaintiff may still exercise control over the case by moving for remand.")
The present issue is whether the phrase "properly joined and served" requires a plaintiff to serve the resident defendant in order for the forum-defendant rule to bar removal. (See ECF 6, 10, 11.) Defendants contend that the plain meaning of the phrase "properly joined and served" is that a resident defendant may remove an action after the filing of a complaint in state court, but before the plaintiff effectuates service. (See ECF 10.) Plaintiff argues, in response, that the plain meaning of the forum-defendant rule requires service before removal, or, alternatively, that an interpretation of the rule that permits removal before service leads to absurd results and runs contrary to the legislative intent of the provision. (See ECF 11.)
In the Fourth Circuit, "[t]he general rule is that unless there is some ambiguity in the language of a statute, a court's analysis must end with the statute's plain language (the Plain Meaning Rule)." Hillman v. I.R.S., 263 F.3d 338, 342 (4th Cir. 2001) (citing Caminetti v. United States, 242 U.S. 470, 485, 37 S.Ct. 192, 61 L.Ed. 442 (1917)); see also United States v. Morison, 844 F.2d 1057, 1064 (4th Cir.1988) (quoting I.N.S. v. Cardoza-Fonseca, 480 U.S. 421, 453, 107 S.Ct. 1207, 94 L.Ed.2d 434 (1987) (Scalia, J., concurring)) ("[W]hen the terms of a statute are clear, its language is conclusive and courts are `not free to replace ... [that clear language] with an unenacted legislative intent.'").
There are two exceptions to the Plain Meaning Rule. First, this rule does not apply "when literal application of the statutory language at issue produces an outcome that is demonstrably at odds with clearly expressed congressional intent to the contrary." Hillman, 263 F.3d at 342 (citing Sigmon Coal Co. v. Apfel, 226 F.3d 291, 304 (4th Cir.2000)). Second, the Plain Meaning Rule does not apply "when literal application of the statutory language at issue `results in an outcome that can truly be characterized as absurd, i.e., that is so gross as to shock the general moral or common sense.'" Id. (quoting Sigmon Coal Co., 226 F.3d at 304). "If either of these exceptions apply, then [the court] can look beyond an unambiguous statute and consult legislative history to divine its meaning." Id. (internal quotation marks and citation omitted); see Green v. Bock Laundry Mach. Co., 490 U.S. 504, 527, 109 S.Ct. 1981, 104 L.Ed.2d 557 (1989) (Scalia, J., concurring) (stating that when a court is confronted "with a statute which, if interpreted literally, produces an absurd ... result," the court's "task is to give some alternative meaning ... that avoids this consequence"). However, "the instances in which either of these exceptions to the Plain Meaning Rule apply `are, and should be, exceptionally rare.'" Hillman, 263 F.3d at 342 (quoting Sigmon Coal Co., 226 F.3d at 304); see also Morison, 844 F.2d at 1064 (quoting Burlington N. R.R. Co. v. Bhd. of Maint. of Way Emps., 481 U.S. 429, 107 S.Ct. 1841, 1850, 95 L.Ed.2d 381 (1987)) (stating the Plain Meaning Rule "is departed from only in ... rare and `exceptional circumstances'").
The Fourth Circuit has not addressed the question of whether removal before service defeats the removal bar provided in the forum-defendant rule, and no court in this District has ruled on this issue.
There is a broad and growing divide among the district courts as to whether the forum-defendant rule bars pre-service removal based on diversity jurisdiction. See Burgess, 2012 WL 399178, at *2. Indeed, some courts within the same district are divided on this topic. Hensley v. Forest Pharm., Inc., 21 F.Supp.3d 1030, 1035 (E.D.Mo.2014). Compare Terry v. J.D. Streett & Co., No. 4:09CV01471 FRB, 2010 WL 3829201, at *1-2 (E.D.Mo. Sept. 23, 2010) (denying remand), and Thomson v. Novartis Pharm. Corp., Civil No. 06-6280, 2007 WL 1521138, at *3-4 (D.N.J. May 22, 2007) (same), with Perez v. Forest Labs., Inc., 902 F.Supp.2d 1238, 1245-46 (E.D.Mo.2012) (remanding case), and Sullivan v. Novartis Pharm. Corp., 575 F.Supp.2d 640, 645 (D.N.J.2008) (same).
District court opinions addressing this issue follow roughly three approaches. Under the first approach, courts find the plain meaning of the "properly joined and served" language of Section 1441(b)(2) permits an unserved resident defendant to remove the case based on diversity jurisdiction and then applied that plain meaning. See, e.g., Robertson v. Iuliano, Civil Action No. RDB 10-1319, 2011 WL 453618, at *3 (D.Md. Feb. 4, 2011) ("[S]ection 1441(b) does not bar removal because the Maryland defendants ... were not properly joined and served at the time of removal."); Chace v. Bryant, No. 4:10-CV-85-H, 2010 WL 4496800, at *2 (E.D.N.C. Nov. 1, 2010) ("The plain language of Section 1441(b) implies that a diverse but resident defendant who has not been served may be ignored in determining removability. Therefore, 28 U.S.C. § 1441(b) does not apply to bar removal of this action.") (internal quotation marks and citations omitted); Harvey v. Shelter Ins. Co., Civil Action No. 13-392, 2013 WL 1768658, at *2 (E.D.La. Apr. 24, 2013) ("[T]he plain language of the statute must prevail over the plaintiff's policy arguments to the contrary.");
District courts that follow the second approach agree that the plain meaning of Section 1441(b) requires that a defendant be both joined and served in order for the forum-defendant rule to bar removal by a resident defendant. See, e.g., Campbell v. Hampton Rds. Bankshares, Inc., 925 F.Supp.2d 800, 809 (E.D.Va.2013) (finding the plain meaning of the statute "permit[s] removal so long as forum-defendants remove
A minority of courts follow a third approach, which deviates from the other two approaches in the first step of the analysis. These courts analyze the language of Section 1441(b) and, rather than finding it permits pre-service removal, hold that the plain meaning of the forum-defendant rule "conditions removal on the service of at least one defendant such that a forum defendant in a single-defendant case may not remove the case prior to service." FTS Int'l Servs., LLC v. Caldwell-Baker Co., No. 13-2039-JWL, 2013 WL 1305330, at *2 (D.Kan. Mar. 27, 2013) (citations omitted); see, e.g., id. at *3 (remanding the case because the plaintiff had not served the defendant); Howard v. Genentech, Inc., Civil Action No. 12-11153-DPW, 2013 WL 680200, at *3 (D.Mass. Feb. 21, 2013) ("[T]he plain language of section 1441(b) requires at least one defendant to have been served before removal can be effected."); Hawkins, 785 F.Supp.2d at 1368-72
The Court is persuaded by those opinions that find the plain meaning of Section 1441(b)(2) permits pre-service removal by a resident defendant, but a literal application of this plain meaning is contrary to congressional intent and creates absurd results. The forum-defendant rule operates as an exception to diversity jurisdiction. See Councell v. Homer Laughlin China Co., 823 F.Supp.2d 370, 379 (N.D.W.Va.2011). However, the language of the statute clearly states that this exception only applies if a defendant, which is "a citizen of the state in which such action is brought," is both "properly joined and served." See 28 U.S.C. § 1441(b)(2) (emphasis added). Absent these requirements, a literal reading of this statute indicates that the forum-defendant rule does not apply and a resident defendant may remove an action based on diversity jurisdiction. See id. This interpretation is in accordance with the vast majority of district courts that addressed the "properly joined and served" issue. See, e.g., Testosterone Prods., 67 F.Supp.3d at 958-61, 2014 WL 4638679, at *2-4 (describing the pro-removal and pro-remand positions of numerous district courts).
Nonetheless, the Court finds that this case presents exceptional circumstances that require deviation from the plain meaning of the forum-defendant rule. The analysis of whether an exception to the Plain Meaning Rule applies begins with legislative history. See Hillman v. I.R.S., 263 F.3d 338, 342 (4th Cir.2001). The removal doctrine has been a part of American jurisprudence since 1789. See Wis. Dep't of Corrs. v. Schacht, 524 U.S. 381, 386, 118 S.Ct. 2047, 141 L.Ed.2d 364 (1998) (citations omitted). However, Congress did not add the "properly joined and served" limitation to the removal statute until 1948. Sullivan, 575 F.Supp.2d at 644 (citing 28 U.S.C. § 114 (1940) and 28 U.S.C. § 1441(b) (1948)). "Courts have generally recognized that the legislative history of the 1948 revision provides no explanation for the inclusion of the `properly joined and served'" language. Howard, 2013 WL 680200, at *6 (citing Sullivan, 575 F.Supp.2d at 644); see Hawkins, 785 F.Supp.2d at 1375 (consulting the Senate and House Committee Reports related to the introduction of the "properly joined and served" language and finding that "[t]he reason behind the addition of the joined and served language is not clear from the legislative history"). "Multiple courts, however, have interpreted" the addition of the "properly joined and served" language "as an effort to prevent gamesmanship by plaintiffs." Goodwin v. Reynolds, 757 F.3d 1216, 1221 (11th Cir.2014) (citing Sullivan, 575 F.Supp.2d at 643). "In the view of these courts, the purpose of the language is `to prevent a plaintiff from blocking removal by joining as a defendant a resident party against whom [the plaintiff] does not intend to proceed, and whom [the plaintiff] does not even serve.'" Id. (citing Sullivan, 575 F.Supp.2d at 645); see also Khashan v. Ghasemi, No. CV 10-00543, 2010 WL 1444884, at *2 (C.D.Cal. Apr. 5, 2010) (citing Stan Winston Creatures, Inc. v. Toys "R" Us, Inc., 314 F.Supp.2d 177, 181 (S.D.N.Y.2003)) (noting that courts have widely interpreted the addition of the "properly joined and served" phrase "as reflecting a Congressional intent to prevent the fraudulent joinder of forum defendants in order to avoid removal"); see generally Pecherski v. Gen. Motors Corp., 636 F.2d 1156, 1160 (8th Cir.1981) ("Section 1441(b) does not qualify the requirement
A literal reading of Section 1441(b)(2) that permits pre-service removal by forum defendants is clearly contrary to the purpose of the "properly joined and served" language. Rather than place a limit on diversity jurisdiction — as intended by the addition of this language — pre-service removal expands diversity jurisdiction by permitting adroit forum defendants to remove diversity actions. See Hawkins, 785 F.Supp.2d at 1377 ("[F]rom the inception of the removal statute, a forum defendant has never been allowed to remove a diversity action.").
Additionally, this plain reading flips the purpose of the "properly joined and served" language on its head. Rather than only providing a shield for defendants against gamesmanship by plaintiffs, the literal interpretation of Section 1441(b)(2) would provide an incentive for defendants to employ gamesmanship, themselves, by racing to remove newly filed actions. See, e.g., Ethington v. Gen. Electric Co., 575 F.Supp.2d 855, 862 (N.D.Oh.2008) (rejecting an interpretation of the forum-defendant rule that would allow defendants to engage in gamesmanship). It defies any notion of common sense that Congress would intend to promote gamesmanship by defendants through the same language it used to prevent gamesmanship by plaintiffs. The Court will not read Section 1441(b)(2) in a manner that would eviscerate the forum-defendant rule and promote results so far afield from the congressional intent behind the statute.
The Court also finds that the plain meaning of the forum-defendant rule statute produces absurd and untenable results. See, e.g., Sullivan v. Nowartis Pharm. Corp., 575 F.Supp.2d 640, 645-46 (D.N.J.
This concern regarding a potential race to remove litigation is far from academic. There is substantial evidence that sophisticated defendants monitor court dockets for the chance to hastily remove new complaints. See, e.g. Testosterone Prods., 67 F.Supp.3d at 961-62, No. 14 C 1748, 14 C 4856, 2014 WL 4638679, at *5 (N.D.Ill. Sept. 15, 2014) (noting the defendant acknowledged that it monitored court dockets). For example, in Schilmiller v. Medtronic, Inc., the court addressed a series of cases in which the plaintiffs filed fourteen complaints with only state-law claims against Medtronic, Inc. in Jefferson County, Kentucky. 44 F.Supp.3d 721, 723-27 (W.D.Ky.2014). Medtronic removed every single one of these cases within two business days of each filing before, "as a practical matter," it was even possible for the plaintiffs to serve the defendants. Id. at 726-27. While the Medtronic defendants did "not admit to gamesmanship in monitoring the state court docket," the court found "their pattern of behavior in jack rabbit removal [to be] obvious." Id. The Court will not interpret Section 1441(b)(2) in a way that incentivizes such patently absurd gamesmanship on the part of defendants and provides a unique tool for savvy forum defendants to control the forum of litigation. See, e.g., Sullivan, 575 F.Supp.2d at 646 ("As a matter of common sense, the court is confident, beyond any doubt, that Congress did not add the `properly joined and served'" language in order to reward defendants for conducting and winning a race, which serves no conceivable public policy goal, to file a notice of removal before the plaintiffs can serve process.). See generally McKinney v. Bd. of Trs. of Mayland Cmty. Coll., 955 F.2d 924, 927 (4th Cir.1992) ("[T]he removal procedure is intended to be fair to both plaintiffs and defendants alike.") (internal quotation marks and citation omitted).
Additionally, under a literal reading of the "properly joined and served" language, plaintiffs in different states would not be similarly situated in their control of the forum of litigation. In some states, such as West Virginia, there are minimal procedural or institutional barriers for plaintiffs to quickly serve defendants after filing a complaint. By contrast, in other jurisdictions, the local rules and customs require a gap between filing and service. See, e.g., Testosterone Prods., 67 F.Supp.3d at 961, 2014 WL 4638679, at *5 (noting that, "[e]ven for the most diligent plaintiff, there will be a gap before process can be served" in the Circuit Court of Cook County because "Illinois law typically requires the county sheriff to serve summons" and "recordkeeping and docketing technology
For the foregoing reasons, the Court finds that, in cases involving only resident defendants, the forum-defendant rule bars resident defendants from removing an action pursuant to diversity jurisdiction before effectuation of service.
For the reasons discussed above, the Court
The Court
Next, in Cook v. Bob Evans Farms, Inc., Judge Goodwin discussed the divide among courts in interpreting the "properly joined and served" phrase in the forum-defendant rule. Civil Action No. 2:11-cv-01017, 2012 WL 407261, at *3 (S.D.W.Va. Feb. 8, 2012). However, the court found that the parties lacked complete diversity and, as such, again did not "reach the forum defendant rule or the purported [service] exception." Id. at *4.
In Burgess v. Infinity Financial Employment Services, LLC, this Court addressed the "properly joined and served" issue and noted that "[c]ourts are divided on the question of whether removal is proper in cases involving an unserved forum defendant." Civil Action No. 2:11-cv-00946, 2012 WL 399178, at *2 (S.D.W.Va. Feb. 7, 2012) (citing Vitatoe v. Mylan Pharm., Inc., Civil Action No. 1:08cv85, 2008 WL 3540462, at *2-3 (N.D.W.Va. Aug. 13, 2008)). However, the Court decided Burgess on other grounds and did not reach the present issue. See id. at *2-6.
As Defendants note, Congress chose to retain the "properly joined and served" language when it substantively amended Section 1441(b) in 2011. See Federal Courts Jurisdiction and Venue Clarifications Act of 2011, Pub.L. No. 112-63, § 103, 125 Stat. 758. Nonetheless, there is one glaring deficiency with Defendants' interpretation of the 2011 congressional action — there was no single judicial interpretation of the "properly joined and served" language for Congress to ratify. As discussed at length above, district courts across the country are sharply divided on this topic. Absent some further indication of legislative intent, the Court will not interpret this relative silence on the part of Congress as ratification of any particular interpretation of the "properly joined and served" language. See, e.g., Testosterone Prods., 67 F.Supp.3d at 960-61, 2014 WL 4638679, at *3 ("[T]here is no basis to read into the amended forum-defendant rule any Congressional intention to adopt one line of district court decisions and reject another. Congress's silence on the topic is just that — silence."); Perez, 902 F.Supp.2d at 1241 n. 4 ("Because this action was commenced after January 6, 2012, the Federal Courts Jurisdiction and Venue Clarifications Act of 2011 ... applies to this case. The Court notes, though, that the changes to Section 1441(b) do not impact the Court's analysis on the relevant issues.").