As we have previously discussed, removal of a medical device case to federal court can be an important strategic advantage for a defendant manufacturer. Even when proper diversity jurisdiction exists, there are several restrictions that limit a defendant’s ability to remove a case to federal court. One such limitation, set forth in 28 U.S.C. § 1441(b)(2), is often referred to as the “forum defendant rule.” 28 U.S.C. § 1441(b)(2) provides that an action “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” (emphasis added). One potential strategy for avoiding this statutory bar to removal is removing the action before any forum defendant is served with process.
There is a split of authority on how the key phrase “properly joined and served defendants” should be interpreted, with courts coming to different conclusions about whether, in cases in which diversity jurisdiction exists but at least one of the defendants is a citizen of the forum state, an action can be removed to federal court before any in-state defendant is served.
A majority of courts have held that the statute permits removal as long as no in-state defendant has been served. Many have held that a non-forum defendant can remove prior to service of any in-state defendant. See, e.g., Regal Stone Ltd. v. Longs Drug Stores California LLC, 881 F. Supp. 2d 1123 (N.D. Cal. 2012); In re Diet Drugs Prods. Liab. Litig., 875 F. Supp. 2d 474 (E.D. Pa. 2012); Carrs v. AVCO Corp., 2012 WL 1945629 (N.D. Tex. May 30, 2012); Watanabe v. Lankford, 684 F. Supp. 2d 1210, 1219 (D. Haw. 2010); North v. Precision Airmotive Corp., 600 F. Supp. 2d 1263 (M.D. Fla. 2009). Additionally, some courts have held that an in-state defendant itself can remove prior to being served with process. See, e.g., Munchel v. Wyeth LLC, 2012 WL 4050072 (D. Del. Sept. 11, 2012); Ripley v. Eon Labs, Inc., 622 F. Supp. 2d 137 (D.N.J. 2007); Thomson v. Novartis Pharms. Corp., 2007 WL 1521138 (D.N.J. May 22, 2007).
Most courts subscribing to the majority view have permitted removal regardless of whether the removing defendant had itself been served at the time of removal. See, e.g., Boyer v. Wyeth Pharms., Inc., 2012 WL 1449246 (E.D. Pa. Apr. 26, 2012); Poznanovich v. AstraZeneca Pharms. LP, 2011 WL 6180026 (D.N.J. Dec. 12, 2011); Robertson v Iuliano, 2011 WL 453618 (D. Md. Feb. 4, 2011); Hutchins v. Bayer Corp., 2009 WL 192468 (D. Del. Jan. 23, 2009); Massey v. Cassen & Sons, Inc., 2006 WL 381943 (S.D. Ill. Feb. 16, 2006). However, several courts have held that service of at least one defendant must be completed before a notice of removal may be filed. See Gentile v. Biogen Idec, Inc., 934 F. Supp. 2d 313 (D. Mass 2013); Hawkins v. Cottrell, Inc., 785 F. Supp. 2d 1361 (N.D. Ga. 2011); Holmstrom v. Harad, 2005 WL 1950672 (N.D. Ill. Aug. 11, 2005).
The minority view is to look past the plain language of the statute and decline to permit removal prior to service. See, e.g., Standing v. Watson Pharms., Inc., 2009 WL 842211 (C.D. Cal. 2009); Sullivan v. Novartis Pharmaceuticals Corp., 575 F. Supp. 2d 640 (D.N.J. 2008); Oxidine v. Merck and Co., Inc., 236 F. Supp. 2d 517 (D. Md. 2002).
Interestingly, the case law interpreting the phrase “properly joined and served defendants” has been around for many years. Indeed, the majority position was well known when Congress amended the statutes governing removal in 2011 as part of the Federal Courts Jurisdiction and Venue Clarification Act of 2011. Congress chose not to change the phrase “properly joined and served defendants.” In leaving this phrase undisturbed, Congress seemed to indicate its continued intent to permit removal prior to service of the forum defendant(s).
As at least one court has pointed out, “[t]he statute does nothing to prevent sophisticated defendants from electronically monitoring state court dockets so that, as soon as a case is filed, they can speedily remove to federal court.” Regal Stone Ltd., 881 F. Supp. 2d at 1128. Indeed, such monitoring is becoming increasingly common. Defendants that learn about lawsuits before they or their co-defendants are served with process may be able to take advantage of pre-service removal to secure a federal forum that would otherwise be unavailable. Although the case law is not uniform, there is ample authority to support an argument in favor of pre-service removal.