Gray v. Martin et al
Filing
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MEMORANDUM OPINION & ORDER: The one-year removal clock began to tick on July 1, 2010 and it has long run out. For reasons discussed, it is ORDERED that Penny Gray's Motion to Remand, R. 7 , is GRANTED. This case is REMANDED to the Floyd County Circuit Court. All pending motions are DENIED AS MOOT, and this case shall be STRICKEN from Court's active docket. Signed by Judge Amul R. Thapar on 11/13/2013. (TDA)cc: COR & Floyd Circuit Court
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
SOUTHERN DIVISION
PIKEVILLE
PENNY GRAY,
Plaintiff,
v.
NATHAN MARTIN, et al.,
Defendants.
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Civil No. 13-73-ART
MEMORANDUM OPINION
AND ORDER
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Defendant Esurance Property & Casualty Insurance Company (“Esurance”) removed
this case to federal court on the basis of diversity jurisdiction. But the one-year window for
removal has closed. Therefore, 28 U.S.C. § 1446 bars removal of this case, and the Court
must remand it back to state court.
BACKGROUND
This case arises out of a 2010 traffic accident. Driving in Floyd County, Kentucky,
Penny Gray collided with Nathan Martin. R. 1-1 at 2. Both drivers were citizens of
Kentucky. See id. at 1. On July 1, 2010, Gray sued Martin in state court for negligence. Id.
at 2. Gray’s initial complaint also asserted a breach of contract claim for Underinsured
Motorist (“UIM”) benefits against her insurer, Esurance, a corporate citizen of California.
Id. at 1, 3. Gray amended her complaint to add two more defendants and ultimately settled
with all defendants but Esurance by November 2012. See R. 1 at 2; R. 7-1 at 2 (concurring
with the defendant’s account). Settlement negotiations with Esurance continued, and on May
7, 2013, the parties agreed on an amount to settle the remaining UIM claim “in exchange for
a Full and Final Release.” See R. 7-2. Despite an agreement in principle, Gray and Esurance
haggled over the scope of that release for the next ten weeks. Amid those negotiations, Gray
moved to amend her complaint on June 14, seeking to add bad faith claims against Esurance.
See R. 1-3 (Motion to Amend Complaint). The state judge granted her request on July 3.
See R. 7-3 (Order Granting Motion to Amend). Shortly thereafter, the parties resolved their
differences, and on July 17 they executed a final release agreement that released Esurance
from Gray’s original UIM claim but left her bad faith claims intact. See R. 7-5 at 3–4.
According to Gray, and undisputed by Esurance, the litigants then promptly filed an agreed
order dismissing the UIM claim. R. 7-1 at 3. With only Gray’s bad faith claims remaining,
Esurance removed the case to this Court on July 19, invoking this Court’s diversity
jurisdiction. See R. 1. Gray has now moved to remand. See R. 7.
DISCUSSION
Removal has its limits. Defendants generally may remove a civil action brought in
state court to federal court if they could have originally brought that action in federal court.
28 U.S.C. § 1441(a).
But because removal disrupts state court proceedings, Congress
established certain restrictions on that right. A defendant has only thirty days to seek
removal after receiving either an “initial pleading” indicating the case is removable or an
“amended pleading, motion, order or other paper” indicating the case has become removable.
28 U.S.C. § 1446(b) (2006 & Supp. IV 2010). Additionally, Congress created a narrow
window for initially ineligible cases to become removable based on diversity jurisdiction.
The defendant may not remove a case pursuant to diversity jurisdiction “more than 1 year
after commencement of the action” if that case as “stated by the initial pleading is not
removable.” Id.
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In 2011 Congress added a bad faith exception to the one-year time limit, but that
version of the removal statute does not apply here. See Federal Courts Jurisdiction and
Venue Clarification Act of 2011 (“FCJVCA”), Pub.L. No. 112-63, § 103, 125 Stat. 758, 760
(2011) (providing that a defendant may remove a case more than one year after it
commences if “the district court finds that the plaintiff has acted in bad faith in order to
prevent a defendant from removing the action”). The current version of § 1446 only applies
to cases “commenced, within the meaning of State law, in State court” on or after the
FCJVCA’s effective date, January 6, 2012. § 105, 125 Stat. at 762. This suit commenced
for purposes of state law, and thus the FCJVCA, when the Kentucky circuit court first issued
a summons on July 1, 2010, in response to Penny Gray’s initial complaint. See R. 1-1 at 8
(summons); see also Ky. R. Civ. P. 3.01 (“A civil action is commenced by the filing of a
complaint with the court and the issuance of a summons or warning order thereon in good
faith.”); Ky. Rev. Stat. § 413.250 (“An action shall be deemed to commence on the date of
the first summons or process issued in good faith from the court having jurisdiction of the
cause of action.”).
The pre-amendment language of § 1446 therefore applies here.
References in this opinion to § 1446 and its subsections accordingly point to the version
predating the FCJVCA. Since Esurance’s removal comes over three years after this suit
began—well outside the statutory window— the Court must grant Gray’s motion to remand.
I.
Esurance’s Removal Comes Over One Year After This Action Commenced.
As Esurance admits, see R. 8 at 3, it has attempted to remove this case “more than 1
year after the commencement of the action.” 28 U.S.C. § 1446(b). Although the Sixth
Circuit has sent mixed signals on whether state or federal law governs when an action
commences for removal purposes, that does not matter here because both state and federal
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law point to the same date. Compare Easley v. Pettibone Mich. Corp., 990 F.2d 905, 908
(6th Cir. 1993) (holding that state law governs), with Brierly v. Alusuisse Flexible
Packaging, Inc., 184 F.3d 527, 534 (6th Cir. 1999) (applying the definition of
“commencement of the action” found in Fed. R. Civ. P. 3 to determine when the one-year
clock began in a diversity action). Kentucky law, as already described, requires two events
to occur to “commence” an action: filing of the initial complaint and issuance of the first
summons from the appropriate court. Since both of those events in this case happened on the
same day—July 1, 2010—Gray’s suit commenced, within the meaning of state law, on that
date. Federal law similarly dates the commencement of this suit at July 1, 2010, when Gray
filed her original complaint. See Fed. R. Civ. P. 3 (“A civil action is commenced by filing a
complaint with the court.”). Esurance, for its part, concedes that the phrase “commencement
of the action” as used in § 1446 refers “to the original complaint commencing a lawsuit.”
R. 8 at 3. Esurance’s notice of removal thus occurred 3 years and 18 days after this suit
commenced.
II.
No Construction or Exception Renders Esurance’s Removal Timely.
So, how does that not end the matter in favor of remand? Esurance offers two
alternative arguments that its notice of removal is timely. First, it invokes the so-called
“revival exception” to the 30-day window, a questionable doctrine that restarts the removal
clock if an amended complaint so substantially alters the nature of the case as to functionally
constitute an entirely new action. R. 8 at 2–4 (citing Johnson v. Heublein Inc., 227 F.3d 236,
241 (5th Cir. 2000)); see also Wilson v. Intercollegiate (Big Ten) Conference Athletic Ass’n,
668 F.2d 962, 965 (7th Cir. 1982) (recognizing the exception). But see Dunn v. Gaiam, Inc.,
166 F. Supp. 2d 1273, 1279 (C.D. Cal. 2001) (doubting the revival exception’s legitimacy);
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Messick v. Toyota Motor Mfg., Ky., Inc., 45 F. Supp. 2d 578, 581 (E.D. Ky. 1999) (same);
Burke v. Atl. Fuels Mktg. Corp., 775 F. Supp. 474, 476 (D. Mass. 1991) (same). Grounding
revival in § 1446(b)’s text, Esurance maintains that Gray’s third amended complaint, by
adding bad faith claims, is so different from the prior version that it amounts to a new “initial
pleading” and, thus, the one-year time limit does not even apply. R. 8 at 4; see also Brierly,
184 F.3d at 534–35 (holding that the one-year rule only applies to cases that were not
removable based on the initial pleading). If correct, Esurance had thirty days to remove from
when Gray added her new claims, making its removal timely. R. 1 at 5.
Even if Esurance is wrong on that score, however, it also invokes the “estoppel”
exception to the one-year removal window, an equitable doctrine—akin to the now-codified
exception for bad faith—which a few courts have adopted. R. 8 at 5–8 (citing Tedford v.
Warner-Lambert Co., 327 F.3d 423, 426–27 (5th Cir. 2003)). Gray’s conduct tolls the oneyear clock, Esurance argues, because “[s]he used the existing lawsuit in an attempt to thwart”
removal. Id. at 8. Gray is further estopped from asserting the one-year rule because the
Floyd County Circuit Court should have dismissed her suit as settled before she added her
claims for bad faith. Id. at 7. Had that occurred, the argument goes, Gray would have been
forced to bring those claims as an entirely new suit, eligible for removable. Id. at 7–8.
Neither of Esurance’s arguments can be squared with the removal statute. Because
the one-year window for removal has long closed, the Court must grant Penny Gray’s motion
to remand.
A.
The “Revival Exception” Does Not Permit Esurance to Avoid Remand.
Invoking the judicially-created revival exception does not permit Esurance to evade
remand in this case. Two reasons support that conclusion. First, Esurance is wrong to
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ground revival in the phrase “initial pleading.” Despite adding new claims, Penny Gray’s
third amended complaint is not an initial pleading under § 1446. Second, the revival doctrine
only applies to initially removable cases. Since this action was never removable before
Penny Gray filed her third amended complaint, revival does not apply.
An Amended Complaint Is Not an “Initial Pleading”:
The phrase “initial
pleading” cannot serve as a textual hook for the revival exception. Under both Kentucky and
federal law, a complaint is a “pleading.” See Ky. R. Civ. P. 7.01 (listing the complaint
among the types of pleadings); Fed. R. Civ. P. 7(a)(1) (same). Gray’s original complaint is
therefore the “initial pleading” in this case; by definition an amended complaint cannot be
“initial” because it is not first. See Webster’s Third New Int’l Dictionary 1163 (unabridged
ed. 2002) (defining “initial” as “of or relating to the beginning: marking the commencement:
incipient, first”). The plain meaning of § 1446 is thus inconsistent with Esurance’s proposed
construction.
Besides contradicting the removal statute’s plain terms, however, Esurance’s
construction of “initial pleading” is implausible because it would seriously weaken the
statutory design. Congress already anticipated the exact situation in this case, providing a
right of removal based on jurisdictional grounds first introduced in an amended complaint.
But to avoid “substantial delay and disruption,” Congress added the one-year time limit as a
“modest curtailment” of removal based on diversity jurisdiction. See In re Pikeville Sch. Bus
Collision Cases, Civil Nos. 11-158-ART, 11-159-ART, 2011 WL 6752564, at *6 (E.D. Ky.
Dec. 23, 2011) (internal quotation marks omitted).
If the phrase “initial pleading” is
construed to include amended complaints, however, it would “effectively extend the
opportunity for removal to months, indeed even years, later” when sufficiently different
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claims might be added. Id. (internal quotation marks omitted). That would contradict
Congress’s goal in creating the one-year cutoff as a rule-like means of “reducing the
opportunity for removal after substantial progress has been made in state court.” Id. (internal
quotation marks omitted). For the same reason, the judicially-created revival exception is
rightly “questioned as an initial matter.” Dunn, 166 F.Supp.2d at 1279. And while a brightline rule is perhaps unduly harsh, it is the job of Congress, not the Court, to correct that
injustice. Indeed, by adding the new bad faith exception Congress has already demonstrated
that it has the capacity to do just that. See FCJVCA § 103.
So, because Esurance’s construction of § 1446(b) would dramatically undermine the
one-year window for removal in diversity cases, the Court should adopt an alternative
reading if at all possible. See Maracich v. Spears, 133 S. Ct. 2191, 2205 (2013) (citing
Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 180
(2012) (“The provisions of a text should be interpreted in a way that renders them
compatible, not contradictory. . . . [T]here can be no justification for needlessly rendering
provisions in conflict if they can be interpreted harmoniously.”)). And even assuming the
phrase “initial pleading” is somehow ambiguous (it is not), the Court must construe § 1446 in
favor of remand, further weighing against Esurance’s reading. See Brierly, 184 F.3d at 534
(explaining the presumption against removal). Since construing “initial pleading” to include
sufficiently “new” amended complaints would expand the opportunities for removal, the
Court likewise must choose a textually-plausible construction that avoids that result.
Thankfully, an alternative, persuasive interpretation—indeed, the only reasonable one—is
readily available: the plain meaning.
The plain meaning not only favors remand, but best advances Congress’s goal of
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establishing a predictable window for removal.
Construed naturally as only the first
complaint, “initial pleading” neatly parallels the trigger for the one-year removal clock—
“commencement of the action.” See Norman v. Sundance Spas, Inc., 844 F. Supp. 355, 357
(W.D. Ky. 1994) (“Congress intended the initial pleading to trigger the one-year cap on
removal.”). And while Congress chose “commencement of the action” to start that clock
instead of, for example, “filing of the initial pleading,” that shift of terminology does not
mean Congress used “initial pleading” in some unconventional, figurative sense. On the
contrary, the different triggers simply reflect the distinct purposes of the removal statute’s
two deadlines. Designed to guarantee a defendant’s notice of removability, the thirty-day
window sensibly lists the documents that might provide such notice. The one-year clock in
diversity cases begins instead with the suit itself (“commencement of the action”), since
Congress adopted that deadline to preserve a plaintiff’s reliance on substantial state court
progress—regardless of newfound federal court jurisdiction. The removal statute therefore
offers no reason not to give “initial pleading” its most natural construction as simply the first
complaint.
The “Revival Exception” Does Not Apply: Grounded not in the phrase “initial
pleading,” revival is rooted in equity rather than text, and it turns out the exception does not
apply here anyway. Revival is based on the judicial intuition that “a willingness on the part
of the defendant to remain in state court to litigate a particular claim should not be
interpreted as a willingness to remain in state court to adjudicate an entirely different claim.”
Wright & Miller, 14C Federal Practice and Procedure—Jurisdiction § 3731 (4th ed.). By
that rationale, revival presumes a case was removable at some point before the amended
complaint—hence, as the doctrine’s name suggests, the new complaint “revives” the right to
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remove. Courts thus emphasize that revival is only available in “initially removable case[s].”
Johnson, 227 F.3d at 241; see also Messick, 45 F. Supp. 2d at 581 (“[T]he revival of the right
to remove is inapplicable because a basis for removal did not exist until the amendment.”
(emphasis added)). This action was not removable, however, prior to Penny Gray’s third
amended complaint. R. 1 at 3 (“The filing of [Gray’s] new claims made this case ripe for
removal for the first time since the lawsuit’s filing in 2010.”). Revival is thus not even an
option in this case.
Regardless, Gray’s latest complaint would not have triggered revival anyway. In the
insurance context, adding bad faith claims to a breach of contract action is hardly analogous
to “a new suit begun that day.” Wilson, 668 F.2d at 965 (internal quotation marks omitted).
To the contrary, plaintiffs almost always bring those claims together. See V. Brandon
McGrath & Blaine J. Edmonds III, A Survey of Kentucky Insurance Law: A Look at the Bad
Faith Cause of Action, 31 N. Ky. L. Rev. 139, 140 (2004) (“Generally, any breach of
contract action against an insurance company includes a bad faith claim, whether or not there
is any evidence of bad faith.”). And that is natural, since bad faith and breach of contract
claims in insurance cases “derive from a common nucleus of operative fact,” making them
part of the same case or controversy. United Mine Workers of Am. v. Gibbs, 383 U.S. 715,
725 (1966). For those courts accepting revival, the distinction between tort and contract
claims arising out of the same factual situation is generally insufficient to restore
removability. See, e.g., Adams v. W. Steel Buildings, Inc., 296 F. Supp. 759, 762 (D. Colo.
1969) (rejecting removal after plaintiff added negligence claims to a breach of warranty
action). So, even if the revival doctrine somehow applied, Penny Gray’s third amended
complaint would not give Esurance a new right to remove.
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B.
The One-Year Window for Removal Has No Unwritten Estoppel Exception.
Although the revival exception may not make removal timely in this case, Esurance
alternatively argues that Penny Gray is estopped from asserting the one-year removal
deadline for two reasons: she structured her lawsuit to defeat removal, and the state court
erred in not dismissing her suit as settled before she added her claims for bad faith. See R. 8
at 7–8. Had the state court not erred, Esurance contends, Gray would have been forced to
file those claims as an entirely new lawsuit, eligible for removal. Id. Neither argument has
merit, however, because § 1446(b) contains no unwritten equitable exception to the one-year
deadline. The Court must accordingly grant Gray’s motion to remand.
The Proper Construction of § 1446: Construing the removal statute is not as easy
as it might seem at first glance. On its face the statute leaves no room for any exceptions at
all: “a case may not be removed on the basis of [diversity jurisdiction] more than 1 year after
commencement of the action.” 28 U.S.C. § 1446(b). Despite this general wording, the oneyear deadline is simply a rule of procedure, and as such, it may be waived. See Music v.
Arrowood Indem. Co., 632 F.3d 284, 287–88 (6th Cir. 2011).
But if § 1446(b)
accommodates waiver, might it permit other unstated exceptions such as equitable estoppel?
The Fifth Circuit stands alone as the only appeals court recognizing an estoppel exception.
See Tedford, 327 F.3d at 426–27. District courts within the Sixth Circuit, however, have
consistently rejected invitations to follow that approach. See Riley v. Ohio Cas. Ins. Co., 855
F. Supp. 2d 662, 671 (W.D. Ky. 2012) (citing cases).
As it turns out, whether the removal statute’s one-year deadline contains an estoppel
exception is a particularly knotty question of statutory interpretation. Congress has even
admitted the answer is unclear. See H.R. Rep. No. 112-10, at 15 (2011), reprinted in 2011
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U.S.C.C.A.N. 576, 580 (explaining that the new bad faith exception is designed to settle the
question “[i]n light of some ambiguity in the case law” concerning the availability of
equitable tolling). Despite strong arguments on both sides, the removal statute’s context
suggests it contains no equitable exception.
Construing § 1446(b) is not as simple as reflexively pointing to its text. To be sure,
beginning and ending with a clear text is the cardinal rule of statutory construction. See
Connecticut Conn. Nat. Bank v. Germain, 503 U.S. 249, 253–54 (1992). But when is a text
clear? Congress does not write statutes in a vacuum. See Frank Easterbrook, The Case of
the Speluncean Explorers: Revisited, 112 Harv. L. Rev. 1913, 1914 (1999) (“New statutes fit
into the normal operation of the legal system unless the political branches provide
otherwise.”). Despite their silence, generally worded statutes presumably leave room for
well-established exceptions.
See Caleb Nelson, Statutory Interpretation 180–81 (2011)
(discussing such “clear-statement” or “implied limitation” rules). Thus, as with the shapeshifting robots of Transformers, sometimes there is more to a statute than meets the eye. The
Court must accordingly examine the removal statute’s full legal context to determine what it
truly says about estoppel. Cf. Merck & Co., Inc. v. Reynolds, 559 U.S. 633, 648 (2010) (“We
normally assume that, when Congress enacts statutes, it is aware of relevant judicial
precedent.”).
That context weighs against Esurance. On the one hand, cutting in Esurance’s favor,
there is a “rebuttable presumption” that nonjursdictional time limits are subject to equitable
tolling. See Holland v. Florida, 130 S. Ct. 2549, 2560 (2010). That backdrop was the basis
of the Fifth Circuit’s endorsement of estoppel in Tedford. See 327 F.3d at 426. Generally
speaking, the equitable tolling canon is a fair approximation of congressional intent. See
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Irwin v. Dep’t of Veterans Affairs, 498 U.S. 89, 95 (1990). But another relevant and
longstanding canon cuts against Esurance and the Fifth Circuit: removal statutes are “strictly
construed” in favor of remand. See Brierly, 184 F.3d at 534. The right to remove therefore
must be “clearly established” and Courts must resolve questions “regarding the scope of
§ 1446(b)” against removal. Id.; see also Boyer v. Snap-on Tools Corp., 913 F.2d 108, 111
(3d Cir. 1990) (explaining that “all doubts should be resolved in favor of remand”). The
anti-removal canon reflects both consistent congressional policy and the federalism costs of
displacing state jurisdiction. See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108–09
(1941). Section 1446(b) thus pits two canons directly against each other.
When canons collide, legal doctrine provides few answers. See Nelson, supra at 228.
A statute’s context may suggest, however, that a particular canon does not apply or gives
way to another.
After all, the canons are merely general rules of thumb rather than
unflinching commands.
As such, courts should not assume that the removal statute
incorporates the typical equitable backdrop if there is “good reason to believe that Congress
did not want the equitable tolling doctrine to apply.” United States v. Brockamp, 519 U.S.
347, 350 (1997).
Three clues suggest Congress did not adopt any unwritten equitable
exception to the one-year window for removal.
First, Congress was aware when it enacted the one-year deadline that procedural
gamesmanship could result in harmful forum shopping—and acted accordingly to address it.
Besides adding that deadline, the Judicial Improvements and Access to Justice Act also
amended §1447(c) to require plaintiffs to move for remand based on procedural defects
within thirty days of removal. See Pub. L. No. 100-702, §1016(c)(1), 102 Stat. 4642, 4670
(1988). Congress added this provision in part to prevent parties from “hold[ing] . . . defect[s]
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in reserve as a means of forum shopping if the litigation should take an unfavorable turn.”
See H.R. Rep. 100-889, at 72 (1988), reprinted in 1988 U.S.C.C.A.N. 5982, 6033. This
change suggests that Congress does not understand the removal statutes to include implicit
bans on opportunistic behavior. Thus, the reasonable inference from the amendment to
§1447(c) is that Congress would have included an explicit exception to the one-year deadline
if it thought that the opportunity for using procedural tricks to defeat removal was
unacceptable.
Second, the amendment to §1447(c) also suggests Congress generally preferred
predictable rules to govern removal procedure. Prior to adoption of the thirty-day limit,
motions for remand only had to be filed “within a reasonable time.” See Snapper, Inc. v.
Redan, 171 F.3d 1249, 1257 n.18 (11th Cir. 1999). In an effort to avoid unnecessary
litigation over removability, however, Congress opted for a clear deadline. See H.R. Rep.
100-889, at 72 (“[T]here is no reason why either State or Federal courts, or the parties,
should be subject to the burdens of shuttling a case between two courts that each have subject
matter jurisdiction.”). The same considerations apply, of course, to the one-year deadline for
removal. Construing that deadline to include a vague estoppel exception would encourage
litigation over forum and frustrate Congress’s general policy favoring clear rules. Although
Congress’s preference has now shifted, as indicated by the newly added bad faith exception,
the context of the 1988 removal amendments suggests Congress did not intend to incorporate
the normal equitable backdrop.
Finally, the strong policy of “comity and federalism” behind the strict construction of
removal statutes suggests that an estoppel exception to the one-year deadline would have
been express.
Brierly, 184 F.3d at 534.
While it is reasonable to presume Congress
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incorporates unwritten equitable exceptions in other contexts, the federalism costs of removal
are too serious to assume that Congress would by implication carve out such a substantial
exception as estoppel. See Palkow v. CSX Transp., Inc., 431 F.3d 543, 555 (6th Cir. 2005)
(explaining that removal is particularly sensitive because it “directly implicates the
constitutional allocation of authority between the federal and state courts”). Removal’s
displacement of state judicial authority is particularly disruptive in our federal system.
Unlike a diversity action initially brought in federal district court, “[r]emoval plucks a case
from a state court of competent jurisdiction, without the state court’s consent, and deposits
the case in the federal system, all at the whim of one of the parties.” See Scott Dodson, In
Search of Removal Jurisdiction, 102 Nw. U. L. Rev. 55, 70 (2008). Given this costly
disruption, Congress likely would not expand removal by implication, even pursuant to
traditional equitable exceptions.
The better assumption is that Congress expressly
demarcates the line between federal and state judicial power. Put simply, the presumption
against removal is a stronger indicator of congressional intent than the regular equitable
backdrop. For this reason, the one-year deadline for removal must be “strictly applied.”
Seaton v. Jabe, 992 F.2d 79, 81 (6th Cir. 1993) (internal quotation marks omitted).
Esurance’s notice of removal is therefore untimely.
Esurance’s Arguments for Estoppel:
It is accordingly unnecessary to address
whether Penny Gray structured her claims to defeat removal, or whether the state court
should have dismissed the suit at some earlier stage. Esurance cites no authority permitting
the Court upon removal to second-guess a Kentucky court’s application of Kentucky rules of
procedure. But even if a state procedural error could somehow make a difference to the
removal deadline, the Floyd County Circuit Court’s timing of dismissal was not error here.
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Assuming for sake of argument that May 7, 2013, is when the parties settled Gray’s UIM
contract claims, as Esurance asserts, dismissal would have been inappropriate at that time.
Voluntary dismissal, as its name implies, is not done sua sponte by the court; it must be
initiated either by the plaintiff or the parties jointly. See Ky. R. Civ. P. 41.01. Yet,
according to Gray—and undisputed by Esurance—the parties did not seek dismissal until
after finalizing the release on July 17, two weeks after the Floyd County judge allowed Gray
to file her third amended complaint. R. 7-1 at 3. Contrary to Esurance’s argument, then, at
the time Gray added her bad faith claims, dismissal of the contract action would have been
improper. There was thus no need for Gray to bring her bad faith claims as an entirely new
suit.
CONCLUSION
The one-year removal clock began to tick on July 1, 2010 and it has long run out. For
the reasons discussed, it is ORDERED that Penny Gray’s Motion to Remand, R. 7, is
GRANTED. This case is REMANDED to the Floyd County Circuit Court. All pending
motions are DENIED AS MOOT, and this case shall be STRICKEN from the Court’s
active docket.
This the 13th day of November, 2013.
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