Removal, Statutory Construction, and Constitutional Interpretation
Reprinted with permission from the American Bar Association, The Journal of the Section of Litigation.
At first blush, the removal statute seems simplicity itself. We all know the rule. If a case in which there would be original federal jurisdiction is filed in state court, you may remove the case to federal court so long as you do so within 30 days. The idea is that a plaintiff, particularly one in its home state, should not be able to force into a state forum a defendant that would qualify to have a case heard in federal court. Cases based on federal question jurisdiction and diversity jurisdiction both qualify for removal. But because the theory behind diversity jurisdiction is that an out-of-state defendant may need the protection of federal court to deflect any bias arising from the plaintiff’s choice of forum, an exception applies. A defendant that is a resident of the state in which the lawsuit was filed ordinarily may not remove. In-state defendants are presumed to have nothing to worry about from the home forum.
See, simple. But as so often in the law, not everything is quite as straightforward as it may seem. To begin with, you should immediately notice that removal is governed by a number of different statutory provisions and rules. Section 1441 states the basic rule, section 1446 the procedure, and Federal Rule of Civil Procedure 80 the time limits for answering the complaint after removal. Be particularly wary of the last. You may not have as much time to respond as you think, maybe no more than five days. But other than that, what else is there to know? Plenty.
First, there is the question of what is “removable.” Generally speaking, the rule is that federal jurisdiction must be clear on the face of the complaint. This means a defendant can forget about removing if its defense raises a federal question, not to mention a counterclaim based on federal law. Neither qualifies. But there are still puzzles. What about a diversity case in which the plaintiff or his lawyer tries to prevent removal by seeking only an injunction, perhaps one providing a monetary reward only by way of attorney fees? To get over the jurisdictional minimum, is the injunction measured by its value to the plaintiff (which may be nominal) or the value to the defendant (where costs of compliance, provable by affidavit, can be substantial)? On this the circuits are split or, worse, silent.
Still further, it turns out that the statute is rife with grammatical oddities. Please notice, for example, that section 1446 says that removal must take place within 30 days “after receipt by the defendant, through service or otherwise,” of the initial pleading setting out a claim for relief. What happens if you learn about the case before service and download the complaint from PACER? Does the 30-day period run from the time you first got the complaint, as strict application of the “otherwise” language seems to suggest? The answer is no. The particular wording of the statute had many different purposes, some involving archaic and long-since-abandoned procedures in state court. The Supreme Court long ago nixed the idea that seeing the complaint before it is filed and served sets the 30-day period running, regardless the wording of the statute itself.
But even that clarification did not solve all problems. Although removal is a jurisdictional procedure, as it moves a case from one jurisdiction to another, it turns out that the courts view the procedural provision, section 1446, as not part of removal’s jurisdictional character. Therefore, as the courts are wont to say, the 30-day period is mandatory but not jurisdictional. Translated, this means that you must meet the 30-day period unless it has been waived or the other side is estopped from complaining of a violation.
Waiver can take many forms. For example, if your adversary does not notice that you removed too late, and files no motion to remand, the mandatory bar can be deemed waived under certain circumstances, particularly if a significant amount of time has passed and motions have been considered. She cannot suddenly wake up and claim that the 30-day period should later be enforced.
Less well known is that there can also be a pre-removal waiver. Let’s say your adversary files a state court complaint and tells your client not to worry about it, committing to resolve the matter forthwith and representing that he need take no action, including informing you. Depending on the conduct involved, you may still be able to remove the case months later if the representations are egregious enough and little or nothing has happened in the state court.
Strikingly, none of this actually appears in the statute. It is all a matter of judicial gloss, an interpretation of Congress’s intent, which does not stop here. Removal also has a one-year time limit. If diversity becomes available only after one year because, say, the only non-diverse party was dismissed, you would have diversity jurisdiction in federal court, and so original jurisdiction there. But it’s now too late to remove, even if you were helpless to do so at the start. The thinking appears to be that necessary efficiencies outweigh “homering” concerns.
What’s interesting is that this is waivable too, if the plaintiff fails to file a motion to remand. There’s nothing in the statute to distinguish the 30-day requirement and the one-year requirement, say the courts. But, of course, there’s nothing in the statute telling you that the 30-day requirement was waivable in the first place. But the courts have uniformly found that what’s sauce for the 30-day requirement is sauce for the one-year requirement too. One wonders why, then, on the model of the possibility for pre-removal waiver of the 30-day requirement, fraudulent joinder of a non-diverse party is not sufficient to extend the one-year requirement.
Here’s yet another quirk: Suppose a state court filing has been made based on a state statute. There’s diversity, so you seem to be able to remove. But suppose there’s an argument, once it gets to federal court, that there is no standing in federal court, even if there was standing in state court. There is thus no “original” jurisdiction in federal court. The judge dismisses, sending it back to state court, notwithstanding that the parties are diverse and you are from out of state. Is this right? Isn’t the point of the statute that you should be able to take a case filed by a litigant seeking to “homer” you and move it to a more neutral setting? Why shouldn’t this principle apply here? There’s a case and controversy in state court. Some courts dismiss, but at least one federal court has rejected a remand, looking past the literal language of the statute, another instance of the practical purposes of the statute overcoming a too-literal application of it.
There’s a pattern in all this. Courts have heretofore approached the removal statute practically, seeking to interpret its language to serve its broader purposes, construing the statute’s words to effect a serviceable result. In effect, they have put the language in the larger context of the goal to be achieved, and policy concerns, rather than giving it any pinched meaning. And the results have made the statute work or at least have made it workable, if not always completely predictably.
What has made all that more perplexing is how the courts have recently managed something called “snap” removal. Here’s the issue: As mentioned, the statute provides one initial restriction on removal in diversity cases. As we know, a defendant who is a resident of the state in which a diversity case was filed cannot remove it. But the wording of the statute is that a case may not be removed if any of the defendants “properly joined and served” is a home-state party. What if, reversing the tables on the “service or otherwise” notion, a defendant gets wind of a filing of a complaint in the state courts of the state where it resides and wants to remove? Can it not just remove before it gets served? No service, no restriction. Or so the statute seems to say.
Correct, have said some courts. If a home-state defendant manages to file the removal papers before it is served, it is not limited by the exception to the rule. This, these courts have argued (somewhat rue-fully), is what the language says, even if it is not what was intended. Strict construction requires the courts to enforce what Congress enacted, not what the courts believe it intended to do.
Wrong, say a few dissenters. The intention was to bar home-state defendants from removing diversity cases, so the statute should be construed in that fashion, regardless of the language. Which should operate? The actual language or congressional intent?
Take a moment to consider why this has even arisen. In the relevant cases, a corporate defendant has wanted out of a state court even when it is domiciled in that jurisdiction. Why? No risk of being “homered” in that case, is there? Well, yes and no. On the one hand, the defendant is on home ground. But this ignores the elephant in the room. Plaintiffs often feel much more at home in state courts because these forums often tend to be more plaintiff friendly. The corporation wants out of state court because it does not think it will get a fair shake there, knowing the federal courts to be more even-handed and efficient, at least. There is also often the belief, not always true, that federal judges are better. In effect, these corporations are telling us that the original purposes of removal are not their real concern. They’ve just used removal to solve another, perhaps more pressing, problem. The courts permitting “snap” removal have not really noted this problem, except a bit obliquely by viewing removal as sanctioned by the language, if not the purposes, of the statute and allowing it to happen.
In short, Congress has decided that a home state defendant has no right or reason to fear the state courts, but defendants think otherwise even if the real fear has nothing to do with home state bias at all. But which way does this cut? If it is true that a large corporation does not think it can get a fair hearing in the state court, shouldn’t we want it to be able to get out and lend it a federal forum to ensure fairness? If it had been able to file first, it could have done so in federal court. And fairness is the ultimate end, isn’t it? On pure policy grounds, the removal through the loophole ought to be encouraged, no?
None of the courts deciding on “snap” removal has really probed the policy issues to this extent. They have merely contrasted the language seemingly favoring removal with the policy disfavoring it where a defendant is in its home state. But if fairness is a paramount policy, then doesn’t policy favor removal too? Or does this just go too far? One way or another, it is not at all clear that good policy should prohibit rather than encourage and permit snap removal.
Conversely, the “strict constructionists” suffer from truncated thinking as well. The courts’ dilemma arises from the language “properly joined and served.” No service, no restriction. But is that the only way the language can be read? Another possibility is that Congress meant a defendant that could be properly joined and served, rather than one that has already been properly joined and served. Is there anything in the language or the statute that precludes this result? Or take another approach: Is not the party that removed waiving service? Essentially, it has chosen to forgo the formal procedures of service. Hasn’t it in effect been served? There may be other possibilities too, even if not the most obvious approach to the language. Surely, it does no violence to the language of the statute to construe it this way. So just as the policy, which seems to disfavor snap removal, can be understood as encouraging it, so too the language, which seems to permit removal, can be read to preclude it.
It therefore seems to be that the courts deciding on “snap” removal have done poor work on both sides of the equation. From the standpoint of the largest policy objectives, a corporate defendant worried about the fairness of procedures in even its own state courts has every reason to want to be, and maybe should be allowed to proceed, in a federal court where, but for the plaintiff filing first, it might otherwise be. Likewise, too crabbed an approach to “properly joined and served” means that the anti-homering provision may be vitiated, whereas it would be perfectly sensible to construe the language to maintain its original intent.
At the deepest level, the problem of “snap removal” elucidates the problem of statutory interpretation. Generally speaking, words do not interpret themselves. They arise in a context. Anyone who has ever dealt with the words “hew” or “cleave” knows that you need context—the sentence as a whole and the author’s intention—to know whether these mean “cut apart” or “cling to.” And when dealing with the law, policy matters too. “The law wishes to be the discovery of what is,” the philosopher tells us. It aims at fairness and truth, even if it doesn’t always or ever quite get there. No law should be construed to bring about a manifest injustice, if that can be avoided.
In dealing with any statute, all three things need be considered: words, intention, and policy. None can be considered without the others. Just as the words need intention and policy to be understood correctly, policy ought to be limited by words and intention. Congress’s own determination of what that policy should be is expressed in the words it chose for a purpose it, hopefully, has evinced. Similarly, congressional intention may, particularly in doubtful cases, need the words and the policy to reveal or even correct it. This is what real statutory construction is all about. Too bad the courts at issue did not address “snap removal” in such clear terms.
As a final note, the application of those principles to constitutional interpretation ought not be overlooked. Too often in the modern age the argument has been between so-called “strict constructionists,” who focus on words, and “living constitution” theorists, who dwell on policy concerns. Perhaps these reflections on the removal statute can show us a better way: a three-part process by which words and policy are seasoned by intent. The most striking element of contemporary debates is how little either “originalism” or policy debates on the Constitution have focused on what the founders who wrote the documents themselves intended by what they said. Their prudent judgment may not serve as the last word, any more than Congress’s intention to prevent home-state defendants from removing would be. But surely it is a part, and an essential part, of any interpretation equation.