Last fall we wrote about the Third Circuit’s opinion endorsing the snap removals, making it the first circuit opinion in the country to approve such practice. This week, the United States Court of Appeals for the Second Circuit followed the Third Circuit’s lead and affirmed snap removals.
In Gibbons v. Bristol-Myers Squibb Co., __ F.3d __, 2019 WL 1339013 (2d Cir. Mar. 26, 2019), the Second Circuit resolved a district court split by holding that “28 U.S.C. § 1441(b)(2) is no barrier to the removal of” the cases at issue here. The Appellants included personal injury plaintiffs who attempted to avoid the federal multidistrict litigation by filing their complaints in Delaware state court. While Appellant-Plaintiffs waited for the state court prothonotary to issue writs to be served on Appellee-Defendants, Defendants BMS and Pfizer snap-removed the cases under diversity jurisdiction.
“Snap removal” is the practice of removing an action to federal court based on diversity jurisdiction after the complaint has been filed, but before a forum defendant is served. The practice is premised on a plain reading of the removal statute, 28 USC § 1441(b)(2), which prohibits removal by a forum defendant that has been “properly joined and served.” Snap removal proponents argue that if a forum defendant has not been served, then it does not meet the criteria of section 1441(b)(2) and therefore may remove to federal court. Until September 2018, no circuit court had ruled on snap removal, and at the time the Appellee-Defendants snap-removed the Delaware actions, there were district court splits in both the Second and Third circuits. Appellant-Plaintiffs moved to remand the cases under section 1441(b)(2), arguing that the forum defendants were not entitled to removal. The motions were denied.
On appeal, Appellant-Plaintiffs urged the Second Circuit to depart from the plain meaning of section 1441(b) because, they argued, it produces absurd and non-uniform results. Appellant-Plaintiffs noted that Congress adopted section 1441(b)(2) to avoid fraudulent joinder of defendants meant to destroy diversity. They also raised concerns that some state courts’ procedures – such as those in Delaware – result in a time gap between when a complaint is filed and when it can be served on a defendant, and that lag might contribute to an increase in snap removals from those jurisdictions. Appellant-Plaintiffs argued that such a different result between states was not contemplated by the statute.
The Second Circuit rejected these arguments. First, the Court noted that any purported “absurdity” caused by snap removals did not contravene Congress’s intent to prohibit fraudulent joinder, and therefore did not justify a departure from the statute’s plain text. Second, the Court acknowledged that while individual state court procedures might give defendants greater advantage to snap-remove in certain jurisdictions, such “state-by-state variation is not uncommon in federal litigation, including in the removal context … and it does not follow from the existence of variation that we must look beyond the plain text of section 1442(b)(2).”
Following the rulings by the Second and Third circuits, snap removal is now permitted in the district courts of Connecticut, Delaware, New Jersey, New York, Pennsylvania, and Vermont.
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