Commentary: Removal to federal court: Look before you leap

Like many attorneys, you may operate under the impression that federal courts tend to interpret state substantive laws narrowly, and that removal to federal court can benefit a defendant sued in state court on a state law claim. Rightly or wrongly, this is the conventional wisdom. And rightly or wrongly, many attorneys representing defendants in state court are quick to consider removal as an initial step.

This decision should be taken with caution, however, and never without a precise understanding of how removal is achieved. There are numerous procedural and substantive wrinkles in the law governing removal that can trip up an unwary defense attorney.

The right to remove actions from state to federal court is governed by Section 1441 of Title 28 of the U.S. Code, the general removal statute. The statute permits removal only when the federal court would have had original jurisdiction of the action had the plaintiff brought it in federal rather than state court. Thus, cases raising federal questions and cases involving diversity of citizenship may be removed to federal court.

If the initial complaint doesn't meet this litmus test, the case may still be removed if an amended pleading or other filing subsequently provides grounds for removal. For example, if a plaintiff sues a defendant for common law fraud in state court, but in a later amended complaint adds a claim under federal securities law, the defendant then has another 30 days in which to file a notice of removal.

But there is a caveat. Removal was designed to protect out-of- state defendants from perceived local prejudice or, to use the vernacular, being homered. That means a citizen of the state in which an action is filed cannot remove to federal court. So if your client is a Missouri citizen sued in Missouri state court on state law claims, the case is not removable.

Thirty Days and Counting

If you determine that a case is removable, adhere closely to the procedures for removal or the case can be remanded back to state court. First, a written Notice of Removal must be filed in the federal court and signed by the attorney for the removing party or by the party himself. The removing defendant must also file a copy of all process, pleadings, and orders served on the defendant in the state court action.

The notice must be filed within 30 days of service of the initial pleading. Note that this deadline is triggered by formal service, as opposed to informal receipt of a courtesy copy of the complaint. In 1999, the Supreme Court eliminated the so-called courtesy copy trap by which plaintiffs would try to sabotage removal, confusing defendants about the deadline by providing service by some informal means.

The removal statute requires that all defendants must either sign or join in the notice of removal by filing some type of separate written consent. It is not sufficient for the removal notice merely to represent that all defendants consent. In a multi-defendant case you may have to scramble to obtain the written consent of all defendants as the 30-day clock is ticking.

Multiple-defendant cases present the additional problem that the 30-day removal clock usually begins to run from the date of service on the first defendant. Thus, if your defendant was not served until more than 30 days after service on the first defendant - and the first defendant did not remove the case - the majority of courts hold that the case may not be removed.

After the notice of removal is filed in the federal court, the removing defendant must give notice of the removal to all adverse parties and must file a copy of the notice of removal with the state court. At that point, the state court may proceed no further unless and until the case is remanded. In 1998, Congress eliminated the requirement that the removing party post a removal bond.

Remanding

Suppose you represent a plaintiff and observe a procedural defect in the removal procedure used by the defendant. You can move to remand the action to state court, though such motions must be made within 30 days of the removal notice or the defects are waived. That said, the federal court can remand on its own motion if it is apparent that federal subject matter jurisdiction does not exist.

When a plaintiff moves to remand, it is the defendant that has the burden of proving that removal is proper. The defendant must establish both that federal jurisdiction exists and that the defendant complied with the procedural requirements. If the court remands the case in the end, it may require the losing defendant to pay the plaintiff attorney's fees incurred as a result of the removal.

From the defense counsel's point of view, once the federal court has remanded the case to state court, the removal option is kaput. Such orders are generally not reviewable on appeal. Thus, these procedural hoops are, as always, very consequential when disregarded. If you believe your client will get a better hearing in federal court, make sure you bone up on the removal process at the outset.

This article was originally published in The Daily Record, Baltimore, Md., another Dolan Media publication.

Trial lawyer and author Paul Mark Sandler is a partner with Shapiro Sher Guinot & Sandler in Baltimore. Robert B. Levin is also a partner with the firm.

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