Fifth Circuit Affirms “Snap Removal" by Forum Defendant
By Jonathan B. Smith
Forum defendants within the Fifth Circuit's footprint should closely monitor new filings to take advantage of the potential to remove lawsuits from state to federal court.
Through an unpublished opinion issued in December, the Fifth Circuit confirmed the ability of a forum defendant to effectuate a “snap removal” to federal court, including when the forum defendant is the lone defendant in the case. The “forum defendant rule” embodied in 28 U.S.C. § 1441(b)(2) precludes removal of a lawsuit filed in state court—even though complete diversity exists between plaintiffs and defendants—“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.” A snap removal occurs when a case involving a forum defendant is removed to federal court before any forum defendant is properly served with process.
In a 2020 decision from the Fifth Circuit, Tex. Brine Co. v. Am. Arb. Ass’n, Inc., 955 F.3d 482 (5th Cir. 2020), a non-forum defendant removed a Louisiana state court action to federal court before two forum co-defendants had been served with process. Upholding federal court jurisdiction over the action, the Fifth Circuit confirmed the validity of snap removals, agreeing with the Second and Third Circuits that the language of 28 U.S.C. § 1441(b)(2) does not preclude removal unless and until a forum defendant has been “properly joined and served.” Because the non-forum defendant removed the case prior to either forum defendant being “properly . . . served,” the Court held that the forum defendant rule did not require remand of the action to state court.
Despite the rationale employed in Texas Brine, some question remained as to whether the unserved forum defendant—as opposed to a non-forum defendant—could effectuate the removal itself. The ability for such removals has increased in recent years due to electronic alerts that provide immediate notice to corporate defendants and/or their outside counsel upon the filing of a lawsuit. In a handful of cases involving snap removals by unserved forum defendants, federal district courts in Texas had upheld removal, concluding that the rationale of Texas Brine applied, regardless of which defendant removed the case. In a recent unpublished decision, the Fifth Circuit reached the same conclusion as these district courts and held that a forum defendant could effectuate a snap removal.
In Anaya v. Schlumberger Technology Corp., No. 24-20170, 2024 WL 5003579 (5th Cir. Dec. 6, 2024), a New Mexico resident filed a state court action in Reeves County, Texas, against Schlumberger Technology Corporation (“Schlumberger”) over a tractor-trailer accident that occurred in Texas. Schlumberger, the lone defendant and a Texas citizen for jurisdictional purposes, removed the case before being served with process. Relying again, in part, on the decisions from the Second and Third Circuits, the Anaya court held that the relevant statutory language permits pre-service removal irrespective of the removing party: “As this court concluded in Texas Brine, § 1441(b)(2) is unambiguous and inapplicable until the defendant is served. Thus, the plain language of § 1441(b)(2), i.e., ‘properly joined and served,’ creates an exception allowing removal by even a forum defendant prior to being served with process.”
Consequently, corporate defendants based in Texas (as well as in Louisiana and in Mississippi) have an opportunity to remove cases, irrespective of the forum defendant rule, by closely monitoring filings and promptly removing cases before service of process. With respect to snap removals, some additional points to keep in mind:
Diversity jurisdiction must still exist. Therefore, for example, if any defendant is a Texas citizen, a lawsuit filed by a Texas citizen will not be removable on diversity grounds. However, irrespective of any service on a forum defendant, there may be cases where a non-forum defendant can still remove if it can show “that there is no reasonable basis for the district court to predict that the plaintiff might be able to recover against an in-state defendant.” Smallwood v. Ill. Cent. R.R., 385 F.3d 568, 573 (5th Cir. 2004). This is not a snap removal scenario but, rather, application of the well-established “fraudulent joinder” (or “improper joinder”) doctrine.
Similarly, if there are reasonable doubts about the citizenship of the plaintiff, there may be an opportunity for a snap removal. For example, a plaintiff may file suit in state court without alleging its state of citizenship. Alternatively, the plaintiff may allege a nondiverse citizenship but there are legitimate questions about the accuracy of such allegation. Although we are not aware of any reported decisions addressing such a scenario, a forum defendant should be able to remove a lawsuit prior to service of process and, if necessary, seek jurisdictional discovery relating to the plaintiff’s citizenship.
The removal statute requires formal service of process, the propriety and timing of which must be determined by the applicable state law. Courtesy copies of petitions or purported service through methods unauthorized by state law will not preclude a snap removal.
Finally, the unanimous consent rule for removal in diversity actions will still apply. Therefore, if a non-forum defendant is properly served before service upon the forum defendant, then the forum defendant will need to obtain the consent of each properly served non-forum defendant prior to the removal. In practice, this scenario should be rare, particularly if the removal occurs quickly after the action is filed.