Does Joinder of a Forum Defendant Always Prevent Removal?

Though this exception seems straightforward, one must be wary of some risk when removing under these circumstances. In Illinois, for example, each of the federal district courts accept the principle that a case is removable if the forum defendant has not been served at the time of removal. However, this position is not uniformly taken if other circumstances are also present. For instance, the Southern and Northern Districts of Illinois approach removal differently if none of the defendants ' including the forum defendant ' have been served at the time of removal. As discussed below, this is but one issue the practitioner should keep in mind when seeking federal subject matter jurisdiction.

The Southern District of Illinois has employed the “joined and served” exception to the forum defendant rule. In Massey v. Cassens & Sons, Inc., a defendant removed the case from Illinois state court almost immediately after it was filed, before any party was served, and despite the presence of two defendants who were Illinois citizens. 2006 WL 381943, at *1 (S.D. Ill. Feb. 16, 2006). The Massey court stated that, under the plain language of ' 1441(b), the forum defendant rule does not apply if “a resident defendant is not both joined and served” at the time of removal. Id. at *2 (emphasis added). “Where complete diversity is present ' only the presence of a 'joined and served' resident defendant defeats removal.” Id. at *3.

What separates Massey from other decisions, however, is the fact that removal was permitted even though it occurred before any party was served. Cf., Holmstrom v. Harad, 2005 WL 1950672 (N.D. Ill. Aug. 11, 2005); Vivas v. Boeing Co., 486 F. Supp. 2d 726 (N.D. Ill. 2007). The Massey court acknowledged that it was dealing with a rare combination of jurisdictional issues: removal of a diversity case “where both a resident defendant is present and removal takes place before any party is served.” Massey, 2006 WL 381943, at *2 (emphasis added). The court held that “nothing in [section] 1441 or any other statute requires defendants to have been served themselves prior to removing a case to federal court.” Id. at *1 (citations omitted). The court based its decision on the fact that other statutes related to removal “read to explicitly authorize the practice.” Id. (citing 28 U.S.C. ' 1446, which provides that removal must occur within 30 days of defendant's receipt of the complaint “through service or otherwise” (emphasis added)). The Massey court reasoned that it “must be faithful to the language Congress actually employed” in '1441(b). Id. at *3.

Exceptions to the 'Unanimity Rule'

The Massey court also noted that an unserved defendant does not need to consent to removal. This is an exception to the “unanimity rule,” which provides that all defendants properly joined and served when a case is removed must consent to the removal. See Massey, 2006 WL 381943, at *1, fn. 3 (citing Shaw v. Dow Brands, Inc., 994 F.2d 364, 369 (7th Cir. 1993) (lack of consent from a defendant who was served nearly a month after the removal was filed did not defeat subject matter jurisdiction, but notice of removal must explain the reason for that defendant's lack of consent or risk being facially defective)).

This exception to the unanimity rule was also acknowledged in a more recent opinion from the Southern District of Illinois in Pruitt v. Kelly Moore Paint Co. Practitioners should note the Pruitt court's admonishment that, though the unserved defendant's consent may not be required, a removing party nevertheless is required to allege the unserved party's citizenship properly in order to invoke the federal court's diversity jurisdiction. 2007 WL 4226068, at *3 (S.D. Ill. Nov. 13, 2007). The Pruitt court recognized that courts have an independent, non-delegable duty to ensure the existence of subject matter jurisdiction, and should review, sua sponte, the allegations of subject matter jurisdiction. Id. at *1. In Pruitt, the court noted that the plaintiff had insufficiently alleged the citizenship of the unserved co-defendant, but permitted the removing defendant to amend the defective jurisdictional allegations in its notice of removal. Id. at *3 (relying upon 28 U.S.C. ' 1653, which states that “[d]efective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts”).

The Central District of Illinois has also held that the presence of an unserved forum defendant does not necessarily defeat removal. In Test Drilling Serv. Co. v. Hanor Co., Inc., the plaintiff properly sued, among other defendants, Lloyd Jones Construction, an Illinois company. The plaintiff did not properly serve this company but, instead, mistakenly served Loyd (not Lloyd) Jones ' an individual who was entirely unrelated to the parties' dispute. 322 F. Supp. 2d 953, 954-55 (C.D. Ill. 2003). Normally, a notice of removal must be filed within 30 days of the defendant's receipt of the complaint. Id. at 956 (citing 28 U.S.C. ' 1446(d)). However, if the reason for removal is not apparent on the face of the complaint, a notice of removal may be filed within 30 days of the defendant's receipt of “a copy of an amended pleading, motion, order, or other paper from which it may be ascertained that the case is one which is or has become removable ' ” Id. (citing 28 U.S.C. ' 1446(b)).

The case was not initially removable under ' 1441(b) because it initially appeared to all defendants that an Illinois corporation had been properly served. Test Drilling, 322 F. Supp. 2d at 956. Months later, plaintiff submitted responses to interrogatories indicating that it had inadvertently served the wrong party. Id. at 955-56. Thereafter, and less than 30 days after receiving a “paper” (the interrogatory responses) from which it was first ascertainable that the case had become removable, the case was removed to federal court with the consent of all the defendants who had been properly served at the time. Id. at 956. The Test Drilling court held that removal was proper because, at the time of removal, no Illinois citizen had been properly served as a defendant. Id. at 957.

The Northern District of Illinois has also allowed removal where complete diversity exists and a forum defendant has not been served at the time of removal. See, e.g., Maple Leaf Bakery v. Raychem Corp., 1999 WL 1101326, at *2 (N.D. Ill. Nov. 29, 1999) (plain language of ' 1441(b) permits removal where two forum defendants had not been served, and distinguishing cases where unserved defendant who destroyed diversity had not been served). Be wary, though, that the Northern District, relying upon the Seventh Circuit's Shaw opinion, may remand cases where the removing party fails to indicate why the unserved defendant did not consent to removal. See, e.g., Franke v. Heartland Express, Inc., 2001 WL 436214, at *1-2 (N.D. Ill. Apr. 27, 2001) (not necessary to obtain consent of unserved, fraudulently joined, or nominal defendant prior to removal, but remanding because removing defendant did not explain reason for co-defendant's lack of consent); Howell v. Joffe, 478 F. Supp. 2d 1014, 1019 (N.D. Ill. 2006) (consent of unserved parties not necessary but removing party needs to explain why a defendant has not consented “even if the reason ' is that the defendant has not been served,” and remand appropriate if this defect is not “curable”).

Divergence from Massey

It is also important to consider that the Northern District of Illinois has diverged from the approach taken in Massey, supra, and has remanded a case that was removed before any defendant had been served ' including an unserved forum defendant. In Vivas v. Boeing Co., defendant Boeing, a forum defendant, relied upon ' 1441(b)'s “joined and served” requirement as a basis for removal before any defendants had been served. 486 F. Supp. 2d 726, 733-35 (N.D. Ill. 2007). The court acknowledged that under ' 1446, a defendant may remove before being served with formal process. Id. at 733. The court also acknowledged that an unserved forum defendant will generally not defeat removal under the plain language of ' 1441(b)'s “joined and served” requirement. Id.

However, the court indicated that “the rationale for the joined and served requirement is to prevent a plaintiff from blocking removal by joining as a defendant a resident party against whom it does not intend to proceed, and whom it does not even serve.” Vivas, 486 F. Supp. 2d 726 at 734 (citing Holmstrom v. Harad, 2005 WL 1950672 (N.D. Ill. Aug. 11, 2005), which remanded a case removed by a non-forum defendant prior to service upon any defendant). The court stated that this rationale is not implicated if none of the defendants have been served ' since the 30-day clock to remove under ' 1446 has not started running and plaintiff's intentions towards the forum defendant remain unclear at that point. Id. Consequently, the Vivas court concluded that:

Combining the permission granted in [section] 1446(b) for defendants to file a notice of removal before being served with the joined and served requirement of [section] 1441(b) to allow a resident defendant to remove a case before a plaintiff even has a chance to serve him would provide a vehicle for defendants to manipulate the operation of the removal statutes. Id. at 734 (emphasis added).

Unlike in Vivas, the court in Massey adhered to the plain language of ' 1441(b) ' even where no defendant had been served at the time of removal. Although the same was true in Vivas, because it was unclear whether the plaintiff had any intention of proceeding against the forum defendant, the court refused to permit the forum defendant to remove before anyone had been served. The court reasoned that allowing removal in that situation “would frustrate the consistent efforts of both Congress and the courts to determine diversity jurisdiction based on the genuine interests of the parties to the controversy.” Vivas, 486 F. Supp. 2d 726 at 734. Although not directly addressed, further justification for granting plaintiff's remand motion may have been that, unlike Massey (and even Holmstrom), the party seeking removal was a forum defendant ' as opposed to a non-forum defendant. Perhaps it was easier for the Vivas court to lean on the principle of the “forum defendant rule,” reasoning that the forum defendant should not have reason to fear state court prejudice.

Conclusion

The lesson to be learned from these highlighted cases is that a defendant is not always barred from removing a case simply because a co-defendant from the forum state has been joined. Section 1441(b)'s “joined and served” language provides a basis upon which to invoke federal subject matter jurisdiction. However, one should be wary of the restrictions attendant to this maneuver and must consider the following: 1) removal petition must be timely, and set forth the citizenship of the parties to ensure the existence of complete diversity; 2) if all co-defendants have not consented to removal, the petition must also expressly set forth an acceptable reason excusing their consent; and 3) the removing party should carefully consider what, if any, service restrictions might be placed on removal by the federal court. This is especially important given that, even if your opponent does not challenge your removal on any of these grounds, the federal judge considering your petition will likely do so given the court's nondelegable duty to determine whether subject matter jurisdiction exists.

Mary Clare Bonaccorsi is a Partner in the Commercial Litigation practice of Bryan Cave LLP, Chicago. Dmitry Shifrin is an Associate who focuses his practice in litigation in the same office.

A state-court action cannot, as a general rule, be removed to federal court where a resident of the forum state has been joined as a defendant. 28 U.S.C. '1441(b). This is commonly known as the “forum defendant rule.” The rule reflects the assumption that “[federal] diversity jurisdiction is unnecessary because there is less reason to fear state court prejudice against the defendants if one or more of them is from the forum state.” Spencer v. United States Dist. Ct. , 393 F.3d 867, 870 (9th Cir. 2004) (quoting Erwin Chemerinsky, Federal Jurisdiction ' 5.5 (4th ed. 2003)).

'Joined and Served'

There is an exception, however, to the forum defendant rule. Specifically, removal may be permitted if the forum defendant has not been served at the time of removal. Section 1441(b) of the federal removal statute provides that actions based on diversity jurisdiction “shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.” Id. Thus, even if a forum defendant has been joined, a federal court will not remand a case if that defendant has not been both “joined and served” at the time of removal.

Though this exception seems straightforward, one must be wary of some risk when removing under these circumstances. In Illinois, for example, each of the federal district courts accept the principle that a case is removable if the forum defendant has not been served at the time of removal. However, this position is not uniformly taken if other circumstances are also present. For instance, the Southern and Northern Districts of Illinois approach removal differently if none of the defendants ' including the forum defendant ' have been served at the time of removal. As discussed below, this is but one issue the practitioner should keep in mind when seeking federal subject matter jurisdiction.

The Southern District of Illinois has employed the “joined and served” exception to the forum defendant rule. In Massey v. Cassens & Sons, Inc., a defendant removed the case from Illinois state court almost immediately after it was filed, before any party was served, and despite the presence of two defendants who were Illinois citizens. 2006 WL 381943, at *1 (S.D. Ill. Feb. 16, 2006). The Massey court stated that, under the plain language of ' 1441(b), the forum defendant rule does not apply if “a resident defendant is not both joined and served” at the time of removal. Id. at *2 (emphasis added). “Where complete diversity is present ' only the presence of a 'joined and served' resident defendant defeats removal.” Id. at *3.

What separates Massey from other decisions, however, is the fact that removal was permitted even though it occurred before any party was served. Cf., Holmstrom v. Harad, 2005 WL 1950672 (N.D. Ill. Aug. 11, 2005); Vivas v. Boeing Co. , 486 F. Supp. 2d 726 (N.D. Ill. 2007). The Massey court acknowledged that it was dealing with a rare combination of jurisdictional issues: removal of a diversity case “where both a resident defendant is present and removal takes place before any party is served.” Massey, 2006 WL 381943, at *2 (emphasis added). The court held that “nothing in [section] 1441 or any other statute requires defendants to have been served themselves prior to removing a case to federal court.” Id. at *1 (citations omitted). The court based its decision on the fact that other statutes related to removal “read to explicitly authorize the practice.” Id. (citing 28 U.S.C. ' 1446, which provides that removal must occur within 30 days of defendant's receipt of the complaint “through service or otherwise” (emphasis added)). The Massey court reasoned that it “must be faithful to the language Congress actually employed” in '1441(b). Id. at *3.

Exceptions to the 'Unanimity Rule'

The Massey court also noted that an unserved defendant does not need to consent to removal. This is an exception to the “unanimity rule,” which provides that all defendants properly joined and served when a case is removed must consent to the removal. See Massey , 2006 WL 381943, at *1, fn. 3 (citing Shaw v. Dow Brands, Inc. , 994 F.2d 364, 369 (7th Cir. 1993) (lack of consent from a defendant who was served nearly a month after the removal was filed did not defeat subject matter jurisdiction, but notice of removal must explain the reason for that defendant's lack of consent or risk being facially defective)).

This exception to the unanimity rule was also acknowledged in a more recent opinion from the Southern District of Illinois in Pruitt v. Kelly Moore Paint Co. Practitioners should note the Pruitt court's admonishment that, though the unserved defendant's consent may not be required, a removing party nevertheless is required to allege the unserved party's citizenship properly in order to invoke the federal court's diversity jurisdiction. 2007 WL 4226068, at *3 (S.D. Ill. Nov. 13, 2007). The Pruitt court recognized that courts have an independent, non-delegable duty to ensure the existence of subject matter jurisdiction, and should review, sua sponte, the allegations of subject matter jurisdiction. Id. at *1. In Pruitt, the court noted that the plaintiff had insufficiently alleged the citizenship of the unserved co-defendant, but permitted the removing defendant to amend the defective jurisdictional allegations in its notice of removal. Id. at *3 (relying upon 28 U.S.C. ' 1653, which states that “[d]efective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts”).

The Central District of Illinois has also held that the presence of an unserved forum defendant does not necessarily defeat removal. In Test Drilling Serv. Co. v. Hanor Co., Inc., the plaintiff properly sued, among other defendants, Lloyd Jones Construction, an Illinois company. The plaintiff did not properly serve this company but, instead, mistakenly served Loyd (not Lloyd) Jones ' an individual who was entirely unrelated to the parties' dispute. 322 F. Supp. 2d 953, 954-55 (C.D. Ill. 2003). Normally, a notice of removal must be filed within 30 days of the defendant's receipt of the complaint. Id. at 956 (citing 28 U.S.C. ' 1446(d)). However, if the reason for removal is not apparent on the face of the complaint, a notice of removal may be filed within 30 days of the defendant's receipt of “a copy of an amended pleading, motion, order, or other paper from which it may be ascertained that the case is one which is or has become removable ' ” Id. (citing 28 U.S.C. ' 1446(b)).

The case was not initially removable under ' 1441(b) because it initially appeared to all defendants that an Illinois corporation had been properly served. Test Drilling, 322 F. Supp. 2d at 956. Months later, plaintiff submitted responses to interrogatories indicating that it had inadvertently served the wrong party. Id. at 955-56. Thereafter, and less than 30 days after receiving a “paper” (the interrogatory responses) from which it was first ascertainable that the case had become removable, the case was removed to federal court with the consent of all the defendants who had been properly served at the time. Id. at 956. The Test Drilling court held that removal was proper because, at the time of removal, no Illinois citizen had been properly served as a defendant. Id. at 957.

The Northern District of Illinois has also allowed removal where complete diversity exists and a forum defendant has not been served at the time of removal. See, e.g., Maple Leaf Bakery v. Raychem Corp., 1999 WL 1101326, at *2 (N.D. Ill. Nov. 29, 1999) (plain language of ' 1441(b) permits removal where two forum defendants had not been served, and distinguishing cases where unserved defendant who destroyed diversity had not been served). Be wary, though, that the Northern District, relying upon the Seventh Circuit's Shaw opinion, may remand cases where the removing party fails to indicate why the unserved defendant did not consent to removal. See, e.g., Franke v. Heartland Express, Inc., 2001 WL 436214, at *1-2 (N.D. Ill. Apr. 27, 2001) (not necessary to obtain consent of unserved, fraudulently joined, or nominal defendant prior to removal, but remanding because removing defendant did not explain reason for co-defendant's lack of consent); Howell v. Joffe , 478 F. Supp. 2d 1014, 1019 (N.D. Ill. 2006) (consent of unserved parties not necessary but removing party needs to explain why a defendant has not consented “even if the reason ' is that the defendant has not been served,” and remand appropriate if this defect is not “curable”).

Divergence from Massey

It is also important to consider that the Northern District of Illinois has diverged from the approach taken in Massey, supra, and has remanded a case that was removed before any defendant had been served ' including an unserved forum defendant. In Vivas v. Boeing Co., defendant Boeing, a forum defendant, relied upon ' 1441(b)'s “joined and served” requirement as a basis for removal before any defendants had been served. 486 F. Supp. 2d 726, 733-35 (N.D. Ill. 2007). The court acknowledged that under ' 1446, a defendant may remove before being served with formal process. Id. at 733. The court also acknowledged that an unserved forum defendant will generally not defeat removal under the plain language of ' 1441(b)'s “joined and served” requirement. Id.

However, the court indicated that “the rationale for the joined and served requirement is to prevent a plaintiff from blocking removal by joining as a defendant a resident party against whom it does not intend to proceed, and whom it does not even serve.” Vivas, 486 F. Supp. 2d 726 at 734 (citing Holmstrom v. Harad, 2005 WL 1950672 (N.D. Ill. Aug. 11, 2005), which remanded a case removed by a non-forum defendant prior to service upon any defendant). The court stated that this rationale is not implicated if none of the defendants have been served ' since the 30-day clock to remove under ' 1446 has not started running and plaintiff's intentions towards the forum defendant remain unclear at that point. Id. Consequently, the Vivas court concluded that:

Combining the permission granted in [section] 1446(b) for defendants to file a notice of removal before being served with the joined and served requirement of [section] 1441(b) to allow a resident defendant to remove a case before a plaintiff even has a chance to serve him would provide a vehicle for defendants to manipulate the operation of the removal statutes. Id. at 734 (emphasis added).

Unlike in Vivas, the court in Massey adhered to the plain language of ' 1441(b) ' even where no defendant had been served at the time of removal. Although the same was true in Vivas, because it was unclear whether the plaintiff had any intention of proceeding against the forum defendant, the court refused to permit the forum defendant to remove before anyone had been served. The court reasoned that allowing removal in that situation “would frustrate the consistent efforts of both Congress and the courts to determine diversity jurisdiction based on the genuine interests of the parties to the controversy.” Vivas, 486 F. Supp. 2d 726 at 734. Although not directly addressed, further justification for granting plaintiff's remand motion may have been that, unlike Massey (and even Holmstrom), the party seeking removal was a forum defendant ' as opposed to a non-forum defendant. Perhaps it was easier for the Vivas court to lean on the principle of the “forum defendant rule,” reasoning that the forum defendant should not have reason to fear state court prejudice.

Conclusion

The lesson to be learned from these highlighted cases is that a defendant is not always barred from removing a case simply because a co-defendant from the forum state has been joined. Section 1441(b)'s “joined and served” language provides a basis upon which to invoke federal subject matter jurisdiction. However, one should be wary of the restrictions attendant to this maneuver and must consider the following: 1) removal petition must be timely, and set forth the citizenship of the parties to ensure the existence of complete diversity; 2) if all co-defendants have not consented to removal, the petition must also expressly set forth an acceptable reason excusing their consent; and 3) the removing party should carefully consider what, if any, service restrictions might be placed on removal by the federal court. This is especially important given that, even if your opponent does not challenge your removal on any of these grounds, the federal judge considering your petition will likely do so given the court's nondelegable duty to determine whether subject matter jurisdiction exists.

Mary Clare Bonaccorsi is a Partner in the Commercial Litigation practice of Bryan Cave LLP, Chicago. Dmitry Shifrin is an Associate who focuses his practice in litigation in the same office.