With a ‘Snap’ Litigators Have a New Tool To Thwart Forum Shopping | New York Law Journal

As mass tort litigators, we are no strangers to seeing our clients get sued by opportunistic plaintiffs who attempt to keep their cases in state courts by suing these clients on their home turf. But time and time again, we are surprised that litigators outside of the mass tort context are unaware of a defense tactical strategy that can land their clients in federal court more often. That a defendant can remove a state court action to federal court, would probably not be viewed as anything the out of the ordinary or unusual to most litigators. However, that a defendant—under certain circumstances—can remove a case to federal court prior to being served, might be a strategic practice that is less known and by extension, less utilized. Generally, under the applicable removal statutory rules articulated in 28 U.S.C. §§1441-55, removal is permitted where a district court would otherwise have original jurisdiction over the proceeding. See 28 U.S.C. §1441(a). But there is an exception, or limit, to this general rule on removal: In a case where federal jurisdiction is premised upon diversity of the parties, 28 U.S.C. §1441(b)(2) prohibits removal to federal court if a defendant is a citizen of the state where the plaintiff filed action. See 28 U.S.C. §1441(b)(2). Known as the “forum-defendant” rule, the statute provides: “A civil action otherwise removable solely on the basis of [diversity jurisdiction] may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.” It is this highlighted language that has served as a basis for pre-service or “snap” (or “wrinkle”) removal—the process by which a forum defendant in a diversity action, removes a state case to federal court before it has been served in the state court action. Snap removal relies on a plain reading of the statute: The forum defendant rule requires a defendant to be properly joined and served, and when a defendant is not served, arguably pre-service removal is permissible.

Preservice removal has been endorsed by two federal circuit courts relatively recently. The first circuit to uphold the practice was the Third Circuit in Encompass Insurance Company v. Stone Mansion Restaurant, 902 F.3d 147 (3d Cir. 2018). In Encompass, the plaintiff, a citizen of Illinois, sued the defendant in its home jurisdiction of Pennsylvania. Though completely diverse from each other, ordinarily the forum-defendant rule would have applied and prevented the defendant from removing the case to federal court. However, the defendant in Encompass removed the action to federal district court in Pennsylvania prior to accepting service of the complaint. The plaintiff moved to remand the case to state court, but the motion was denied. On appeal, the Third Circuit rejected the plaintiff’s argument that interpreting the statute to permit preservice removal would leave to absurd results. See Encompass, 902 F.3d 147, 152 (3d Cir. 2018). Instead, the Encompass court found the language of 28 U.S.C. §1441(b)(2) to be “unambiguous” reasoning that the “plain meaning” of the statute “precludes removal on the basis of in-state citizenship only when the defendant has been properly joined and served.”