Removal to Federal Court in Multi-Defendant Litigation
Two Rules You Can’t “Wait” To Learn
Article Date: Monday, July 19, 2010
Written By: Chad D. Hansen
Litigation in federal court can offer many advantages over our state court system. But for many practitioners, the complex rule system surrounding federal court jurisdiction – not to mention the expense and pace of federal court litigation – is often a deterrent to removing a matter to federal court. The impediment is created not only by a system of rules that is largely uncodified in the United States Code, but the fact that practitioners must race the removal clock to identify and apply those rules. One overlooked rule or missed deadline is rewarded by a motion to remand, a signal that extensive briefing at significant expense will follow and will effectively stay for as much as a year any progress toward resolving the case on the merits.
This article addresses two rules of removal jurisdiction in multi-defendant litigation that any lawyer practicing or thinking about practicing in federal court must know. First, it is now settled in the Fourth Circuit that the time for removal runs 30 days from the date the last-served defendant is served with the complaint. This means that if defendant A is served with the complaint on day 1 and defendant B is served with the complaint on day 10, removal is timely if defendant A joins defendant B’s notice of removal filed on day 40, even though defendant A seemingly missed its 30-day window for removal. Second, neither a defendant nor her counsel may consent to removal by any means other than a document filed in court signed by the attorney for the party or, if the party is unrepresented, the party itself. Representations by one defendant or their counsel that another defendant consents to or does not oppose removal do not satisfy Rule 11 of the Federal Rules of Civil Procedure, which applies to filings during the removal process.
The Timing of Removal in Multi-Defendant Litigation.
On Feb. 4, 2010, the Fourth Circuit in Barbour v. International Union, 594 F.3d 315 (4th Cir. 2010), adopted the “last-served defendant rule,” which permits earlier-served defendants to join a notice of removal filed by the last-served defendant even if the earlier-served defendants failed to remove within 30 days of their service. The court, in a 2-1 hotly-contested opinion, clarified a removal issue that has stumped federal courts and practitioners in the circuit for almost twenty years and solidified a split between federal circuits that will require intervention by the Supreme Court.
Statutory Background. Tile 28, Chapter 89 of the United States Code provides the statutory framework for removal to federal court. See 28 U.S.C. §§ 1441-1453. Section 1441 identifies the general categories of actions removable, including the two most common categories: federal question jurisdiction (§ 1441(a)) and diversity jurisdiction (§ 1441(b)). Sections 1442 to 1445 and 1452 to 1453 provide special examples of and exceptions to the general removal rules. Section 1451 provides definitions applicable to the entire Chapter and, important here, Sections 1446 to 1450 govern the procedure during and after removal.
Timing of removal is found in 28 U.S.C. § 1446(b), which provides in pertinent part:
The notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within thirty days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter.
(Emphasis added.) The difficulty with § 1446(b) arises from the fact that its express language contemplates only one defendant. It is unlike all other pertinent sections of the removal statute (Title 28, Chapter 89), which contemplate cases with more than one defendant. Compare § 1446(b) with § 1441 (referring to removal by “defendant or defendants”), § 1446(a), (d), and (e) (same), § 1448 (same), § 1453 (referring to “any defendant”). The omission of “defendants” from § 1446(b) created statutory construction issues that have led to considerable judicial and academic debate.
The Split Between and Within the Federal Circuits.
While §1446(a)’s “defendant or defendants” language was easily understood as requiring the consent of all defendants to removal (deemed the “rule of unanimity”), a three-way split arose between the federal circuits about the timing of that consent.
The Fifth Circuit, the first circuit to address the issue, held that, in cases involving multiple defendants, the thirty-day period in § 1446(b) begins to run as soon as the first defendant is served. Brown v. Demco, Inc.
, 792 F.2d 478, 481 (5th Cir. 1986). Thus, “if the first served defendant abstains from seeking removal or does not effect a timely removal, subsequently served defendants cannot remove.” Id.
This became known as the “first-served defendant” rule. See Getty Oil Corp. v. Ins. Co. of N.A.
, 841 F.2d 1254 (5th Cir. 1988).
Subsequent to the Fifth Circuit’s decision, the Sixth, Eighth, and Eleventh Circuits rejected the “first-served defendant” rule in favor of what generally became known as the “last-served defendant” rule. The “last-served defendant” rule “permits each defendant, upon formal service of process, thirty days to file a notice of removal pursuant to § 1446(b).” Bailey v. Janssen Pharmaceutica, Inc.
, 536 F.3d 1202, 1209 (11th Cir. 2008); see also Marano Enters. of Kan. v. Z-Teca Rests., L.P.
, 254 F.3d 753 (8th Cir. 2001); Brierly v. Alusuisse Flexible Packaging, Inc.
, 184 F.3d 527, 532 (6th Cir. 1999). Thus, “[e]arlier-served defendants may choose to join in a later-served defendant’s motion or not, therefore preserving the rule that a notice of removal must have the unanimous consent of the defendants.” Bailey
, 536 F.3d at 1207.
After the Fifth Circuit adopted, but before other circuit courts rejected, the “first-served defendant” rule, the Fourth Circuit touched upon the issue in a footnote in McKinney v. Board of Trustees of Mayland Community College
, 955 F.2d 924 (4th Cir. 1992). Although not critical to the outcome of the matter, the Fourth Circuit explained in a footnote that:
[W]here B is served more than 30 days after A is served, two timing issues can arise, and the law is settled as to each. First, if A petitions for removal within 30 days, the case may be removed, and B can either join in the petition or move for remand. See 28 U.S.C. § 1448. Second, if A does not petition for removal within 30 days, the case may not be removed.
. at 926 n.3. Courts characterized footnote 3 of McKinney
as adopting a “middle ground” position between the “first-served defendant” and “last-served defendant” rules. As one court explained:
[T]he Fourth Circuit has adopted a position somewhere in between the first-served and last-served-defendant rules. In McKinney, the court held that each defendant has thirty days from the date on which it is served to join in “an otherwise valid removal petition.” Thus, if the original notice of removal filed by an earlier-served defendant is defective in some way, the later-served defendant may not remove, even if it attempts to do so within thirty days of being served.
Fitzgerald v. Bestway Servs., Inc.
284 F. Supp. 2d 1311, 1315 -1316 (N.D. Ala. 2003) (internal citations omitted).
District courts within the Fourth Circuit, including those within North Carolina, themselves became split on whether and how to apply the McKinney
rule. Some courts applied McKinney
without question. See, e.g., Parker v. Johnny Tart Enters.
, 104 F. Supp. 2d 581, 584 (M.D.N.C. 1999). Many, if not most, however, considered the McKinney
“middle ground” approach dicta. See, e.g.
, Gyon v. Basso
, 403 F. Supp. 2d 502, 508 (E.D. Va. 2005) (acknowledging that defendants “urge the court to . . . disregard McKinney
’s dictum that a first-served defendant must file a removal notice within thirty days from the date of service”); Branch v. Coca-Cola Bottling Co.
, 83 F. Supp. 2d 631, 634 (D.S.C. 2000) (holding that the relevant language in McKinney
was not “controlling precedent” and dictum). Nevertheless, many found themselves obliged to follow the Fourth Circuit’s dicta. See, e.g.
, Superior Painting & Contracting Co. v. Walton Tech., Inc.
, 207, F. Supp. 2d 391, 393 n.4 (D. Md. 2002) (finding the dicta “presumptively correct”); Adams v. Emeritus Corp.
, No. 1:99CV20-C, 1999 WL 33321100 (W.D.N.C. Apr. 16, 1999) (finding it “highly persuasive dicta”). A small minority of courts in the Fourth Circuit, boldly adopted the “last-served defendant” rule despite McKinney
’s language. See, e.g.
, Ratliff v. Workman
, 274 F. Supp. 2d 783, 791 (S.D.W. Va. 2003) (finding statement in Footnote 3 “unnecessary to the Fourth Circuit’s actual decision” and, therefore, dictum); Freeman v. Bechtel
, 936 F. Supp. 320, 326 (M.D.N.C. 1996) (distinguishing the facts of McKinney
and adopting the “last-filed defendant” rule).
Barbour: The Split Resolved in the Fourth Circuit.
Accepting the invitation of the District of Maryland to address the split between circuits and rectify the confusion within the Fourth Circuit, the Fourth Circuit resolved the issue in Barbour by adopting the “last-served” defendant rule. In doing so, the Barbour
majority, over a strong dissent, found that the McKinney
footnote “constitutes nonbinding dicta.” 594 F.3d at 321-22. As dicta, the court was free to reject the McKinney
rule without violating the Fourth Circuit’s rules of precedent. See Mentavlos v. Anderson
, 249 F.3d 301, 312 n.4 (4th Cir. 2001) (explaining that only the Supreme Court or the Fourth Circuit sitting en banc can overrule, explicitly or implicitly, prior precedent). The court was also guided by the Supreme Court’s analysis in Murphy Brothers, Inc. v. Michetti Pipe Stringing, Inc.
, 526 U.S. 344 (1999). There, the court held that the triggering event for removal was not the mere receipt of the complaint unattended by any formal service, but the simultaneous services of the summons and complaint, or receipt of the complaint, “through service or otherwise,” after and apart from service of the summons. Id
. at 347-48. The Barbour
court found that Murphy Brothers
lent “credible and persuasive” support for the “last-served defendant” rule because it sought to protect a defendant’s opportunity to remove until after the defendant received proper service of process. Barbour
, 594 F.3d at 323-24. According to the Barbour court, both the “first-served defendant” rule and the McKinney
rule condition the right to removal for subsequently served defendants upon actions taken by previously served defendants, and therefore work an inequity in the removal process that Congress never intended. Id
. at 324.
The Fourth Circuit in Barbour thus joined the Sixth, Eighth, and Eleventh Circuits in adopting the last-served defendant rule in holding “that in cases involving multiple defendants, each defendant, once served with formal process, has thirty days to file a notice of removal pursuant to 28 U.S.C. § 1446(b) in which earlier-served defendants may join regardless of whether they have previously filed a notice of removal.” Id
. at 326. By doing so, it resolved confusion within the Fourth Circuit regarding the timing for removal in multi-defendant litigation and, hopefully, helped posture the circuit split for future resolution by the Supreme Court.
“Official and Unambiguous” Consent to Removal.
As referenced briefly above, courts have “uniformly ruled” that the phrase “a defendant or defendants” in § 1446(a) requires that all defendants join in or otherwise consent to a notice of removal. Brodar v. McKinney
, 378 F. Supp. 2d 634, 636 (M.D.N.C. 2005). Known as the “rule of unanimity,” this mandate does not require all of the defendants to sign a single notice of removal. Parker v. Johnny Tart Enters. Inc.
, 104 F. Supp. 2d 581, 583 (M.D.N.C. 1999). “Rather, section 1446 requires that each defendant file a notice of removal, either independently or by unambiguously joining in or consenting to another defendant’s notice,” within the 30-day period following service. Creekmore v. Food Lion, Inc.
, 797 F. Supp. 505, 508 (E.D. Va. 1992) (emphasis added). As the Fourth Circuit has noted, there is no federal jurisdiction when one of the defendants fails to join in, file his own, or officially and unambiguously consent to, a removal petition within 30 days of service. Wilkins v. Correctional Med. Sys.
, No. 90-7155, 1991 WL 68791, at *2 n.2 (4th Cir. 1991).
But what does this really mean for removal in multi-defendant litigation? According to a recent recommendation of Magistrate Judge Trevor P. Sharp in the Middle District of North Carolina in Habitat for Humanity of the N.C. Sandhills, Inc. v. Unsworth
, it means that every defendant must convey to the court, either personally (if pro se) or through that defendant’s counsel, his consent to removal. Case No. 1:09-CV-456 (M.D.N.C.) (10/21/09 docket text order). It is not sufficient for one defendant or her counsel to represent to the court that another defendant consents to removal. Id
The foundation for the court’s decision in Habitat for Humanity
, is Rule 11 of the Federal Rules of Civil Procedure. The United States Supreme Court has interpreted Rule 11 as imposing a non-assignable duty of certification. Pavelic v. LeFlore v. Marvel Entm’t Group
, 493 U.S. 120, 125-26 (1989). It has recognized that the purpose of Rule 11 “is to bring home to the individual signer his personal nondelegable responsibility.” Id
. Section 1446(a) requires “a notice of removal signed pursuant to Rule 11.” 28 U.S.C. § 1446(a). Thus, as the Eastern District of Virginia instructed in Creekmore
, interpreting § 1446(a) and Rule 11 together “requires all defendants, individually, or through their counsel, to voice their consent before the court, not through another party’s attorney.” Creekmore
, 797 F. Supp. at 509.
In holding that the assertion of consent of some defendants by counsel for other defendants does not meet the requirements of § 1446(a) and Rule 11, the court in Habitat for Humanity adopted the rationale of the Eastern District of Virginia in Creekmore
, finding it the “majority view.” As one court has noted, “[d]istrict courts within the Third, Fourth, Fifth, Sixth, Seventh, Ninth, Tenth, and Eleventh Circuit” have endorsed this majority position. Henderson v. Holmes, 920 F. Supp. 1184, 1187 n.2 (D. Kan. 1996). As the Creekmore
court had explained in ordering remand:
Rule 11 does not authorize one party to make representations or file pleadings on behalf of another. Rather, Rule 11 requires that each pleading, motion, or other paper submitted to the court be signed by the party or its attorney of record, if represented. [Certain defendants who failed to sign personally the removal papers] are represented by counsel and clearly are “movants” subject to the requirements of Rule 11. They must file their own signed pleadings. However, the record contains no document, pleading, or motion reflecting their consent to removal and their signatures.
. . .
To allow one party, through counsel, to bind or represent the position of other parties without their express consent to be so bound would have serious adverse repercussions, not only in removal situations but in any incident of litigation.
at 508-09. The court in Habitat for Humanity
went further than Creekmore
, however, reaching the issue of whether the failure to consent “officially and unambiguously” to removal could be cured after the 30-day removal period had run. The court held that it could not be cured, finding it to be a “substantial defect” in the removal proceeding. Habitat for Humanity
, Case No. 1:09-CV-459 (M.D.N.C.) (10/21/09 docket text order). Thus, when removing a matter to the Middle District of North Carolina in a multi-defendant litigation, it is essential that each defendant evidence his consent to removal by signature complying with Rule 11, or such consent may be deemed ineffective and the matter remanded to state court.
Chad Hansen is an associate at Kilpatrick Stockton LLP in Winston-Salem, where he practices complex business litigation.
Views and opinions expressed in articles published herein are the authors' only and are not to be attributed to this newsletter, the section, or the NCBA unless expressly stated. Authors are responsible for the accuracy of all citations and quotations.