2.7 Removal Jurisdiction
In addition to motions to change venue, removal serves as a device for defendants to avoid the plaintiff's choice of forum. Sections 1441 and 1442 of Title 28 of the U.S. Code cover the removal of cases from state court to federal court. Section 1446, which was substantially amended by the Federal Courts Jurisdiction and Venue Clarification Act of 2011, sets forth the procedure for removal and Section 1447 deals with post-removal procedure, including remands to state court.
2.7.A. General Removal—28 U.S.C. § 1441
It is useful to remember, as the Fourth Circuit observed, that “[r]emoval statutes do not create jurisdiction. They are instead a mechanism to enable federal courts to hear the cases that are already within their original jurisdiction.”/1/ Removal provides a federal forum to defendants wishing to litigate federal claims in federal rather than state court and to defendants in diversity cases filed in the plaintiff's home state court. Because removal jurisdiction requires that the case invoke original federal jurisdiction, the discussion in Chapter 2.3 of federal court jurisdiction is helpful in understanding principles of removal jurisdiction.
The key provision of the principal federal removal statute, 28 U.S.C. § 1441(a), authorizes a defendant to remove from state court to federal court “any civil action brought in a State court of which the district courts of the United States have original jurisdiction ....”/2/ Section 1441(a), in effect, requires federal courts considering removal petitions to decide whether they could have initially exercised jurisdiction over the case./3/ With respect to federal question cases, for instance, “[t]he well-pleaded complaint rule applies to the original jurisdiction of the district courts as well as to their removal jurisdiction.”/4/ Thus, a defendant may not remove based on their federal defenses or a federal counterclaim./5 / In addition, the plaintiff may take advantage of the well-pleaded complaint rule and prevent possible removal by omitting federal claims. The Supreme Court has noted that, “[t]he rule makes the plaintiff master of the claim; he or she may avoid federal jurisdiction by exclusive reliance on state law.”/6 / However, in an exception to the well-pleaded complaint rule, removal may be permitted in those comparatively rare cases where the plaintiff’s state-law claim is completely preempted by federal law./7 /
If federal question or one of the more exotic bases for federal jurisdiction do not apply, general removal jurisdiction must be founded upon diversity. Section 1331 and interpretive common law will govern the removal of diversity cases. However, in a significant limitation to original diversity jurisdiction, removal is permitted only when none of the defendants are citizens of the forum state./8/ All circuits but one, the Eighth, have held that this requirement is not jurisdictional and can be waived if not the subject of a timely motion to remand./9/ The Federal Courts Jurisdiction and Venue Clarification Act now codifies the common law principles that, in multi-defendant cases, all defendants must join in a petition for removal./10/ Fraudulently joined defendants are generally disregarded for purposes of determining diversity or unanimity for removal./11/
Removal jurisdiction does not expand the limitations elsewhere imposed on original federal jurisdiction. For example, the All Writs Act,/12/ which allows federal courts to issue writs in aid of their jurisdiction, but which does not itself provide an independent grant of federal jurisdiction, cannot provide the basis for removal./13/ Similarly, principles of “ancillary jurisdiction” cannot confer the original jurisdiction necessary for removal, because the assertion of jurisdiction over ancillary claims depends initially on original jurisdiction over a case or controversy./14/ In addition, removal otherwise permitted by Section 1441(a) may be barred by Congress if such prohibitions on removal are expressly stated./15/
Under Section 1441(a), the removed “civil action” must also have been pending in a state “court.”/16/ The federal courts are divided on whether removal can extend to proceedings before administrative agencies. Most have applied a functional test, allowing removal in cases when a state agency functions like a court./17/ Other courts have rejected the use of such a test because they found the statutory term “state court” to be unambiguous./18/
The Court recently decided two important cases relating to removal and the Eleventh Amendment. In Wisconsin Department of Corrections v. Schacht, the Court held that the presence of an Eleventh Amendment-barred claim against a State defendant in an otherwise removable case did not deprive the federal court of the removal jurisdiction that would otherwise exist./19/ The Court noted that the Eleventh Amendment “does not automatically destroy jurisdiction” but instead “grants the State a legal power to assert a sovereign immunity defense,” which can be waived./20/ Thus, a State’s successful assertion of an Eleventh Amendment defense after removal prevents the federal court from hearing the barred claim, but it does not destroy removal jurisdiction over the remaining claims, which the court may proceed to hear./21/
In addition, noting its long-standing acknowledgment of the principle that a State’s voluntary appearance in federal court constitutes a waiver of immunity, the Supreme Court held in Lapides v. Board of Regents that a State waived its Eleventh Amendment immunity when it removed a case from state court to federal court./22/ The Court’s holding, however, was limited to a situation in which a state statute waived sovereign immunity from state law suits in state court and in which no valid federal claim was asserted against the State./23/ The Court did not reach the question whether removal of federal claims/24/ or state claims over which the state did not waive sovereign immunity in state courts abrogated a State’s Eleventh Amendment immunity./25/
2.7.B. Federal Officer Removal—28 U.S.C. § 1442
Under 28 U.S.C. § 1442(a)(1), the United States, any federal agency, or any officer of the United States or agency (or person acting under that officer) being sued in their individual or official capacity may remove to federal court any civil action arising from “any act under color of such office.” The statute thus authorizes removal to federal court of state court actions against federal agencies and individuals who are acting in the course of their employment, by or on behalf of the federal government./26/
Federal agencies and officers may, therefore, remove cases under Section 1442 that other defendants could not under Section 1441: “The special right of removal conferred on federal officers by statute has been held to be absolute, and may be exercised even though the action might not have been brought initially in a federal court.”/27/ Removal is proper when none of the other defendants in the action joins in the removal notice or when the federal officer is sued as a third-party defendant rather than as an original defendant./28/
Most significant, federal officers may only remove to federal court state cases in which they have a federal defense, such as absolute or qualified immunity./29/ Without such a federal defense, the Supreme Court declined to interpret Section 1442 to permit removal of cases arising solely under state law./30/ Moreover, federal officers must establish that the state suit is “for an act under color of office.”/31/ To do so, the officer must show a “‘causal connection’ between the charged conduct and asserted official authority.”/32/ Such a connection usually serves as the predicate for a colorable immunity defense./33/ Section 1442, therefore, allows removal only when the federal defendant’s act essentially was ordered or demanded by federal authority, thereby giving rise to the federal defense required by the statute./34/
2.7.C. Removal of Joined State-Law Claims
Should attorneys for plaintiffs file claims in state court that arise under both federal and state law, defendants may remove all claims. The Supreme Court has suggested that “t]he presence of even one claim ‘arising under’ federal law is sufficient to satisfy the requirement that the case be within the original jurisdiction of the district court for removal.”/35/ The presence of related state law claims does not alter the fact that pleaded federal claims constitute “civil actions” within the original jurisdiction of the federal courts for purposes of removal./36/
Federal courts may exercise removal jurisdiction over state law claims joined with removed federal claims under the doctrine of supplemental jurisdiction. The codification of supplemental jurisdiction principles in 28 U.S.C. § 1367, the Court has held, “applies with equal force to cases removed to federal court as to cases initially filed there; a removed case is necessarily one ‘of which the district courts ... have original jurisdiction.’”/37/ Thus, when joined state law claims meet the statutory standards of supplemental jurisdiction, federal courts may exercise removal jurisdiction over both the state and the federal claims.
The Federal Courts Jurisdiction and Venue Clarification Act has clarified what a federal court must do when a federal question claim is joined by a state law claim that is not within the original or supplemental jurisdiction of the federal court. In such case, the entire case may be removed and the district court must then sever and remand the state law claims./38/ This newly drafted provision eliminates the constitutional and interpretive difficulties presented in its predecessor's “ separate and independent” claim language.
2.7.D. Removal Procedure
The statutory procedures for removal are to be strictly construed./39/ A defendant removing a civil action must file in the U.S. district court for the district and division in which the state proceeding is pending a “notice of removal” that contains “a short and plain statement of the grounds for removal” and that attaches the process, pleadings, and orders served upon the defendant in the action./40/ The notice of removal must generally be filed within thirty days. The Supreme Court has clarified what triggers the thirty days to run:
First, if the summons and complaint are served together, the 30-day period for removal runs at once. Second, if the defendant is served with the summons but is furnished with the complaint sometime after, the removal period runs from the receipt of the complaint. Third, if the defendant is served with the summons and the complaint is filed in court, but under local rules, service of the complaint is not required, the removal period runs from the date the complaint is made available through filing. Finally, if the complaint is filed in court prior to any service, the removal period runs from the service of the summons./41/
The thirty days does not being running upon receipt of a faxed courtesy copy of a complaint, unaccompanied by formal service./42/
In a case not originally removable, the defendant may remove to federal court within thirty days of receiving information in an “amended pleading, motion, order or other paper” which allows the defendant to “ascertain ... that the case is one which is or has become removable ....”/43/ The Federal Courts Jurisdiction and Venue Clarification Act has resolved a circuit court split over the so-called “last-served defendant rule.” Under the new provision, each defendant has thirty days to remove, but if the defendants are served at different times, an earlier-served defendant which did not timely remove, may consent to a removal filed by a later-served defendant./44/
In cases founded upon diversity jurisdiction, removal is not permitted more than one year after commencement of the action unless the court finds that the plaintiff has “acted in bad faith in order to prevent a defendant from removing the action.”/45/ Removal is effected when, promptly after filing the notice of removal with the federal court, the defendant files a copy with the clerk of the state court and gives written notice to all adverse parties./46/
2.7.E. Remands—28 U.S.C. § 1447(c)
28 U.S.C. § 1447(c) provides that a motion to remand on grounds other than subject matter jurisdiction must be filed within thirty days of removal. This implies that a motion to remand on subject matter jurisdiction grounds may be filed at any time. The statute further provides that,“[i]f at any time before final judgment it appears that the district court lacks subject-matter jurisdiction, the case shall be remanded.”/47/ Removed civil actions that could not originally have been filed in federal court must be remanded to state courts. The district court has discretion to enter an order awarding attorney’s fees when remanding a removed case to state court under Section 1447(c), unless the removing party has “an objectively reasonable basis for removal.”/48/ Federal courts have a general non-statutory power to remand pendent state claims besides the power to remand cases under the removal statutes. The Court in Carnegie-Mellon University v. Cohill held that federal courts possessing discretion to hear pendent state law claims may remand those claims to state court instead of dismissing them outright./49/
An order denying a motion to remand is not a final judgment and is, therefore, not reviewable until after final judgment, unless certified pursuant to 28 U.S.C. § 1292(b)./50/ Whether an order granting a motion to remand is appealable presents a more difficult question. Although Section 1447(d) quite clearly provides that, with one exception, a remand order is not reviewable on appeal, the Court has not adopted that reading. Instead, the Court has held that "[Section] 1447(d) must be read in pari materia with [Section] 1447(c), thus limiting the remands barred from appellate review by [Section] 1447(d) to those that are based on a ground specified in [Section] 1447(c)."/51/ There is no dispute that, when a district court remands a properly removed case because it lacks subject-matter jurisdiction, the order is unreviewable./52/ Remands based on a procedural defect in the removal petition are not reviewable./53/ When, however, a court remands state law claims as a matter of discretion under Section 1367(c), such an order is not based on the lack of subject matter jurisdiction and is, therefore, reviewable./54/ The Court has not yet quite decided, however, whether an appellate court can look behind the district court's "colorable" characterization of why the motion to remand was granted./55/
2. Defendant is defined narrowly. A state-court plaintiff may not remove a counterclaim, which, had it been an independent action, would have been subject to original federal jurisdiction. Shamrock Oil and Gas Corporation v. Sheets, 313 U.S. 100, 108-09 (1941). Most courts have held that third-party defendants are not entitled to remove under Section 1441. Palisades Collections LLC v. Shorts, 552 F.3d 327, 333 (4th Cir. 2008); Casul v. Modell's NY II, Inc., No. 04 Civ. 7204, 2004 U.S. Dist. LEXIS 19604, *5-6, 2004 WL 2202581, at *1-2 (S.D.N.Y. Sept. 30, 2004); Sanford v. Premier Millwork and Lumber Company, , 571 (E.D. Va. 2002); Johnston v. St. Paul Fire and Marine Insurance Company, 134 F. Supp. 2d 879 (E.D. Mich. 2001); but see Mignogna v. Sair Aviation, Incorporated, 679 F. Supp. 184, 189 (N.D.N.Y. 1988); Soper v. Kahn, 568 F. Supp. 398, 402 (D. Md. 1983); Ford Motor Credit Company v. Aaron-Lincoln Mercury, Incorporated, 563 F. Supp. 1108, 1112-14 (N.D. Ill. 1983).
3. See City of Chicago v. International College of Surgeons, 522 U.S. 156, 163 (1997). The Supreme Court previously treated the removal jurisdiction of the federal courts as derivative; the Court reasoned that federal courts could entertain cases removed from state courts only if the state court originally had subject-matter jurisdiction of the suit. See Lambert Run Coal Company v. Baltimore and Ohio Railroad, 258 U.S. 377, 382 (1922). Congress ended this practice in 1986 by amending 28 U.S.C. § 1441(e) to provide that the federal court to which the action is removed “is not precluded from hearing and determining any claim” in the action because the state court “did not have jurisdiction over that claim.” Thus, federal courts may now exercise removal jurisdiction in cases in which they have subject matter jurisdiction but the state courts do not.
4. Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S. 1, 10 n.9 (1983); see also Holmes Group Incorporated v. Vornado Air Circulation Systems, 535 U.S. 826, 830 n.2 (2002).
5. Rivet v. Regions Bank of Louisiana, 522 U.S. 470, 475 (1998) (affirmative preclusion defense resting on prior federal judgment is not a basis for removal); Holmes Group, 535 U.S. at 831-32 (rejecting argument that counterclaim should be regarded as part of a well-pleaded complaint because it would "radically expand" removal jurisdiction).
6. Caterpillar Incorporated v. Williams, 482 U.S. 386, 392 (1987). An “independent corollary” to the well-pleaded-complaint rule is the “artful pleading” doctrine, which holds that “‘a plaintiff may not defeat removal by omitting to plead necessary federal questions.’” Rivet v. Regions Bank of Louisiana, 522 U.S. 470, 475 (quoting Franchise Tax Board, 463 U.S. at 22). If the federal court determines that the plaintiff has “artfully pleaded” claims in this manner, it may allow removal even though no federal question appears on the face of the complaint. Id. The artful-pleading doctrine generally allows removal in cases where federal law completely preempts state-law claims pleaded by the plaintiff. Id.
7. Beneficial National Bank v. Anderson, 539 U.S. 1, 9 (2003); see also Aetna Health Care Incorporated v. Davila, 542 U.S. 200 (2004) (ERISA preempts state law tort claims against ERISA-regulated health providers; defendants may therefore remove state claims).
8. 28 U.S.C. § 1441(b); see Lincoln Property Company v. Roche, 546 U.S. 81, 88 (2005); Caterpillar Incorporated v. Lewis, 519 U.S. 61, 68 (1996) (the “complete diversity” requirement of Section 1332(a), which mandates that the citizenship of each plaintiff must be diverse from the citizenship of each defendant, applies to removal jurisdiction based on diversity); but see 28 U.S.C. § 1453(b) (defendant in class action filed in state court may remove the action “without regard to whether any defendant is a citizen of the State in which the action is brought” and removal may be accomplished without the consent of all the defendants).
11. Whitaker v. Am. Telecasting, Incorporated, 261 F.3d 196, 207 (2d Cir. 2001); Heritage Bank v. Redcom Laboratories, Incorporated, 250 F.3d 319, 323 (5th Cir. 2001).
12. All Writs Act, 28 U.S.C. § 1651(a).
15. Breuer v. Jim’s Concrete of Brevard, 538 U.S. 691, 694 (2003). Certain state-court civil actions, such as those arising under state workers’ compensation laws or the federal Violence Against Women Act of 1994, for example, expressly may not be removed to federal court. 28 U.S.C. §§ 1445(c), (d).
16. McDowell v. Wetterau, Incorporated, 910 F. Supp. 236 (W.D. Pa. 1995) (removal allowed from state justice-of-the-peace court); but see Williams-Willis v. Carmel Financial Corporation, 139 F. Supp. 2d 773, 775 (S.D. Miss. 2001) (removal not allowed from tribal court); DeCoteau v. Sentry Insurance Company, 915 F. Supp. 155 (D. N.D. 1996) (same).
17. See, e.g., Volkswagen de Puerto Rico Incorporated v. Puerto Rico Labor Relations Board, 454 F.2d 38, 44 (1st Cir. 1972); Maryland Commissioner of Financial Regulation v. Western Sky Financial LLC, Civ. No. WDQ-11-0735, 2011 WL 4894075, *4 (D. Md. Oct. 12, 2011) (applying the functional test, but finding that it was not met); Gottlieb v. Lincoln National Life Insurance Company, 388 F. Supp. 2d 574 (D. Md. 2005); Civil Rights Division ex rel. Joseph v. Asplundh Tree Expert Company, No. 08-60493-CIV, 2008 WL 2616154, *5 (S.D. Fla. May 15, 2008) (finding that the functional view goes byond the statutory language of Section 1441, but applying the functional test in absence of guidance from Eleventh Circuit); BellSouth Telecommunications v.Vortec Telecommunications, 185 F. Supp. 2d 1280 (N.D. Fla. 2002). The Seventh Circuit’s use of a functional test in Floeter v. C.W. Transport Incorporated, 597 F.2d 1100, 1102 (7th Cir. 1979), was questioned by the Circuit in Wirtz Corp. v. United Distillers and Vintners North America Incorporated, 224 F.3d 708, 713 (7th Cir. 2000) (stressing need to examine Floeter decision in greater detail and limiting its holding to its facts).
18. See, e.g., Porter Trust v. Rural Water Sewer and Solid Waste Management District No. 1, 607 F.3d 1251, 1254-55 (10th Cir. 2010); Oregon Bureau of Labor and Industries ex rel. Richardson v. U.S. West Communications Incorporated, 288 F.3d 414, 419 (9th Cir. 2002); Sun Buick, Incorporated v. Saab Cars USA, Incorporated, 26 F.3d 1259, 1261-67 (3rd Cir. 1994); Johnson v. Albertson's, LLC, 3:08CV236/MCR/MD, 2008 U.S. Dist. LEXIS 602302008, *3-5 WL 3286988, *1 (N.D. Fla. Aug. 6, 2008).
20. Id. at 389 (citations omitted). The Supreme Court also rejected the argument that a remand was appropriate under 28 U.S.C. § 1447(c). If an Eleventh Amendment defense pertains to subject-matter jurisdiction, Section 1447(c) requires a remand only when the entire case is without subject-matter jurisdiction, not when jurisdiction is lacking over only one claim within the case. Id. at 391–92.
22. Lapides v. Board of Regents, 535 U.S. 613, 624 (2002).
23. Id. at 617. See Omosegbon v. Wells, 335 F.3d 668, 673-74 (7th Cir. 2003); Bank of Lake Tahoe v. Bank of America, 318 F.3d 914, 916–19 (9th Cir. 2003) (Nevada waived Eleventh Amendment immunity from state-law claims by joining in removal to federal court). Plaintiff’s Section 1983 damages claim against the State was barred since a State was not a “person” for purposes of such a claim. Lapides v. Board of Regents, 535 U.S. 613, 617 (2002) (citing Will v. Michigan Department of State Police, 491 U.S. 58, 66 (1989)). The Lapides Court accordingly noted that the U.S. district court might remand the state-law tort claims against the State to state court under the supplemental jurisdiction standards referred to in 28 U.S.C. § 1367(c)(3). Lapides, 535 U.S. at 618, 624.
24. Since Lapides, several Courts of Appeal have extended its holding and found that states waive their Eleventh Amendment immunity from suit over federal claims as well when they remove such claims to federal court. Lombardo v. Pennsylvania, 540 F.3d 190, 198 (3rd Cir. 2008) (state waives immunity from suit but retains immunity from liability); Meyers v. Texas, 410 F.3d 236, 240-50 (5th Cir. 2005), cert. denied, 550 U.S. 817 (2007); Embury v. King, 361 F.3d 562, 564 (9th Cir. 2004); Estes v. Wyoming Department of Transportation, 302 F.3d 1200, 1206 (10th Cir. 2002).
25. Whether removal of state-law claims over which the state had not waived sovereign immunity in state court waives such immunity seems to have divided the courts. Embury, 361 F.3d at 566 (implicitly finding a waiver); compare Stewart v. North Carolina, 393 F.3d 484, 490-91 (4th Cir. 2005) (finding no waiver of immunity over state claims to which it would have been immune in state court); see also Meyers, 410 F.3d at 249-50 (criticizing Stewart).
26. The statute also permits removal by any person acting under the authority of a federal officer. For an interesting recent decision interpreting this provision, see Watson v. Philip Morris Companies, 551 U.S. 142 (2007) (holding that cigarette manufacturer could not use § 1442(a)(1) to remove claims of false advertising on the grounds that it was heavily and actively regulated by the Federal Trade Commission; statute requires delegation of power or authority). See also Isaacson v. Dow Chemical, 517 F.3d 129 (2d Cir. 2008) (finding chemical companies that produced Agent Orange are persons acting under color of federal office); Kaye v. Southwest Airlines Co., No. 3:05-CV-0450-D, 2005 U.S. Dist. LEXIS 18389, 2005 WL 2074327 (N.D. Tex. Aug. 29, 2005) (airline could not use provision to remove because its collection of certain fees was not sufficiently controlled by the government).
29. In Jefferson County v. Acker, 527 U.S. 423 (1999), federal judges were permitted to remove to federal court collection actions filed by the county in state court seeking payment of an occupational license fee. The judges asserted an ultimately unsuccessful federal defense on the grounds of intergovernmental tax immunity. See also Isaacson v. Dow Chemical, 517 F.3d 129, 138-40 (2d Cir. 2008) (holding that the defense does not have to be an immunity defense in case involving government contract).
32. Willingham v. Morgan, 395 U.S. 402, 409 (1969) (citation omitted). Such a connection was established by the federal judges in Jefferson County whose legal theory was that the county’s enforcement action was grounded upon their being engaged in the occupation of federal judges.
35.Wisconsin Department of Corrections v. Schacht, 524 U.S. 381, 386 (1998) (citing College of Surgeons, 522 U.S. at 163–66). See also Exxon Mobil Corporation v. Allapattah Services, Inc., 545 U.S. 546, 563 (2005) (“College of Surgeons stressed that a district court has original jurisdiction of a civil action for purposes of § 1441(a) as long as it has original jurisdiction over a subset of the claims constituting the action.”) (emphasis supplied).
37. City of Chicago v. International College of Surgeons, 522 U.S. 156, 165 (1997) (citing 28 U.S.C. § 1367(a)) (further citation omitted).
38. 28 U.S.C. § 1441(c).
40. 28 U.S.C. § 1446(a).
41. Murphy Brothers. v. Michetti Pipe Stringing Incorporated, 526 U.S. 344, 354 (1999) (interpreting what is now 28 U.S.C. § 1446(b)(1).
42. Murphy Brothers v. Michetti Pipe Stringing Incorporated, 526 U.S. 344 (1999). The “initial pleading” in the statute refers not only to the complaint but also to any pleading “contain[ing] sufficient information to enable the defendant to intelligently ascertain the basis for removal.” Whitaker v. American Telecasting Incorporated, 261 F.3d 196, 203 (2d Cir. 2001) (quoting Brooklyn Hospital Center v. Diversified Information Technologies Incorporated, 133 F. Supp. 2d 197, 201 (E.D.N.Y. 2001)).
43. 28 U.S.C. § 1446(b)(3). See, e.g., Eyak Native Village v. Exxon Corporation, 25 F.3d 773, 779 (9th Cir. 1994), cert. denied, 513 U.S. 1102 (1995) (plaintiffs’ reply brief, filed two years after commencement of action in state court, set forth removable federal claim which triggered thirty-day removal period).
45. 28 U.S.C. § 1446(c)(1). The Federal Courts Jurisdiction and Venue Clarification Act of 2011, P.L. 112-63, added provisions relating to ascertaining the amount in controversy in diversity cases. 28 U.S.C. § 1446(c)(2).
46. Id. § 1446(d).
47. Id. § 1447(c).
51. Carlsbad Technology v. HIF Bio, Inc., , 638 (2009)