Jones v. Watts et al
Filing
19
ORDER granting 9 Motion to Remand Signed by Honorable David C. Bramlette, III on 5/31/2011 (ECW)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
WESTERN DIVISION
CATHY D. JONES
PLAINTIFF
VS.
CIVIL ACTION NO. 5:10-cv-189-DCB-JMR
NANCY WATTS,
WELLS FARGO BANK, N.A. AND
JOHN DOES 1-10
DEFENDANTS
MEMORANDUM OPINION AND ORDER
This cause is before the Court on the plaintiff Cathy D.
Jones’s (“Jones” or “plaintiff”) Motion to Remand (docket entry 9).
Having carefully considered the motion and response, the memoranda
and applicable law, and being otherwise fully advised in the
premises, the Court finds as follows:
On October 20, 2010, the plaintiff filed her Complaint in the
Circuit Court of Yazoo County, Mississippi. The Complaint names as
defendants Nancy Watts (“Watts”), Wells Fargo Bank, N.A. (“Wells
Fargo”), and John Does 1 through 10.
The Complaint alleges as
follows: that prior to January 15, 2009, without Jones’s knowledge
or consent, Watts fraudulently obtained Cathy Jones’s personal
information,1 and claiming to be Cathy Jones, she submitted an
application for a loan to Wells Fargo, offering Jones’s residence
and real property as collateral.
On or about March 4, 2009, Wells
Fargo made a loan in Jones’s name, issuing the proceeds in the
1
The personal information Watts obtained included Jones’s photo identification,
proof of insurance, statement of wages, federal income tax information, and other
documents.
1
amount of $66,886.69 to Watts and others on her behalf. On October
5, 2009, Wells Fargo placed insurance on Jones’s residence,2 which
was already covered by property insurance issued by Mississippi
Farm Bureau Insurance Company.
On June 2, 2010, Wells Fargo
informed Jones that it would initiate foreclosure proceedings due
to her failure to make payments on the loan, and on June 30, 2010,
Wells Fargo confirmed to Jones’s counsel that her residence was in
“active foreclosure” status.
When Jones learned of the loan in August, 2009, while speaking
with
Necole
Baker
at
the
Wells
Fargo
office
in
Clinton,
Mississippi, she confirmed that the loan had been obtained by a
third party in her name.
From that time, the plaintiff alleges
that Wells Fargo has had actual knowledge of the fraudulent nature
of the loan transaction.
Jones’s complaint catalogues at least
eight separate instances of her attorney’s communication with Wells
Fargo providing information and evidence about the fraud.
Jones’s
attorney provided Wells Fargo with the F.B.I. case number assigned
to the investigation, a copy of the indictment against Watts, and
a copy of the notice of Watts’s intent to plead guilty to all
counts
of
the
indictment.
On
August
9,
2010,
Wells
Fargo
acknowledged for the first time that the loan had been fraudulently
obtained.
As of the complaint’s filing date, Wells Fargo had not
withdrawn the forced placed insurance, removed itself as loss payee
2
On September 20, 2010, Wells Fargo again placed insurance on Jones’s residence.
2
on Jones’s prior insurance policy,3 or released or voided the
fraudulently obtained mortgage note.
Jones’s complaint includes three counts against Watts — for
identify
theft
intentional
and
fraud
infliction
of
(I),
slander
emotional
of
title
distress
(V);
(III),
two
and
counts
against Wells Fargo — for negligence in issuing the loan (II) and
slander of title (IV); and a final count against both parties — for
intentional and/or negligent infliction of emotional distress (VI).
Jones seeks compensatory damages in an amount not less than
$100,000.00, jointly and severally against Watts and Wells Fargo
(I, II).
not
less
She seeks compensatory and punitive damages in an amount
than
$1,000,000.00
against
Watts
(I,
III,
V)
and
compensatory and punitive damages in an amount not less than
$1,000,000.00 against Wells Fargo (IV, VI).
Jones additionally
seeks a judgment declaring the loan void ab initio and attorneys’
fees with interest and court costs jointly and severally against
Wells Fargo and Watts.
On November 23, 2010, the defendant Wells Fargo filed a Notice
of Removal.
Removal is based on federal question jurisdiction
under 28 U.S.C. § 1331.
Wells Fargo asserts that removal to the
federal court is appropriate because the plaintiff’s claims raise
substantial federal issues under the USA Patriot Act of 2001, 115
Stat. 272, and the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §§
3
Wells Fargo had previously made itself loss payee of this policy without
Jones’s knowledge or consent in February 2009.
3
1681
et
seq.,
as
amended
by
the
Fair
and
Accurate
Credit
Transactions Act of 2003 (“FACTA”), Public Law 108-159. In support
of the Notice of Removal, Wells Fargo asserts that federal question
jurisdiction does not require the complaint to plead a federal
cause of action as long as it involves “a controversy respecting
the construction and effect of the [federal] laws” which is
“sufficiently real and substantial.”
Grable & Sons Metal Prod.,
Inc. v. Darue Eng’g & Mfg., 545 U.S. 308, 316 (2005).
Wells Fargo
contends that the plaintiff alleges a violation of the Patriot Act
on the face of the complaint, and that Jones’s claim of slander to
title is also appropriate for federal court jurisdiction because it
“presents
a
real
and
substantial
controversy
involving
the
construction and effect of federal law” based on the relationship
of the allegations to federal laws and regulations under the FCRA
and FACTA (docket entry 1).
On December 23, 2010, the plaintiff filed a Motion to Remand
(docket entry 9) pursuant to 28 U.S.C. § 1447 as well as a
Memorandum of Authorities (docket entry 10).
In support of her
Motion to Remand, the plaintiff asserts that removal is improper
due to Wells Fargo’s violation of the rule of unanimity and the
absence of a federal question.
The plaintiff additionally claims
that Wells Fargo improvidently removed this matter and should be
sanctioned.
If the plaintiff is correct that Wells Fargo has
violated the rule of unanimity by failing to obtain consent or
4
joinder to the removal from co-defendant Watts, then it will not be
necessary to examine whether or not this case presents a federal
question.
As the plaintiff explains, according to Getty Oil, “All
defendants who are properly joined and served must join in the
removal petition, and the failure to do so renders the petition
defective.”
Getty Oil Corp. v. Ins. Co. of N. Am., 841 F.2d 1254,
1262 (5th Cir. 1988).
The failure to obtain Watts’s consent or
joinder would constitute a fatal defect in Wells Fargo’s removal
petition.
On January 4, 2011, defendant Nancy Watts filed a Joinder and
Consent to Removal (docket entry 11).
On January 21, 2011,
defendant Wells Fargo filed a Response in Opposition to Plaintiff’s
Motion to Remand, asserting that removal falls under an exception
to the rule of unanimity.
Wells Fargo does not allege that it made any attempt to
contact Watts, and does not allege that it made any attempt to
ascertain whether Watts had been served with process until November
23, 2010, the day Wells Fargo filed its Notice of Removal, which
was three days before the removal period expired.
According to
Michelle Brister, a paralegal working for Wells Fargo’s attorneys,
she telephoned the clerk’s office on November 23, “immediately
prior to filing the Notice of Removal in this action,” and spoke
with an unnamed employee who allegedly informed her “that no
returns of service had been filed with the court.”
5
Brister
Affidavit,
¶
3.
Attached
to
her
affidavit
are
Brister’s
contemporaneous handwritten notes, which also reflect that the
clerk’s office employee informed her that “no returns of service”
had been filed.
Brister Affidavit, Exh. A.
Since there were only
two named defendants in this action, use of the plural “returns”
would indicate that neither Wells Fargo nor Watts had been served
with process.
Brister would have been aware that Wells Fargo had
been served with process, and would therefore have reason to
question whether she had received full and accurate information
from the clerk’s office.
In its response to the plaintiff’s motion to remand, Wells
Fargo asserts that “evidence [of service of process on Watts] had
not yet made its way into the record when Wells Fargo removed the
case on November 23, 2010.”
incorrect.
(docket entry 14).
This statement is
As Brister’s affidavit shows, Wells Fargo’s attorneys
received a certified copy of the Yazoo County Circuit Court record
on December 1, 2010.
(docket entry 14-1).
The record clearly
shows that returns of service for both Watts (served on October 25
by the Sheriff of Madison County, Mississippi) and Wells Fargo
(served on October 26 by process server) were received by the
clerk’s office on November 1, 2010, and docketed and filed in the
case file that same day.
(docket entry 17-1).
In advocating a more lenient application of the rule of
unanimity, Wells Fargo cites rulings of district courts within the
6
Fifth Circuit which have found exceptions to the rule of unanimity,
Waffer v. City of Garland, 2001 WL 1148174 (N.D. Tex. Sept. 19,
2001); Milstead Supply Co. v. Cas. Ins. Co., 797 F.Supp. 569 (W.D.
Tex.
1992),
and
claims
that
Watts’s
incarceration
should
be
analogized to the exceptional circumstances which excused late
consent in Gillis v. Louisiana, 294 F.2d 755 (5th Cir. 2002).
On February 4, 2011, Jones filed a Reply to Defendant’s
Response to Plaintiff’s Motion to Remand (docket entry 17).
plaintiff
contends
that
Wells
Fargo’s
lack
of
“actual
The
or
constructive knowledge regarding service upon Watts prior to the
filing of its Notice of Removal” is of no material importance
(docket entry 17).
While conceding that Waffer and Milstead
support the argument that the rule of unanimity was not violated,
the plaintiff offers contrary support from other district courts
within the Fifth Circuit which do not permit such exceptions and
which support the proposition that these exceptions represent
misinterpretations of the rule of unanimity as applied by the Fifth
Circuit.
Holland v. Hewes, 2009 WL 2225494 (S.D. Miss. July 23,
2009); Forman v. Equifax Credit Inf. Servs. Inc., 1997 WL 162008
(E.D. La. Apr. 4, 1997).
Removal requires the consent of all co-defendants.
Kerwood, 969 F.2d 165, 167 (5th Cir. 1992).
Doe v.
The right of removal
is granted as follows:
(a) Except as otherwise expressly provided by Act of Congress,
any civil action brought in a State court of which the
7
district courts of the United States have original
jurisdiction, may be removed by the defendant or the
defendants, to the district court of the United States for the
district and division embracing the place where such action is
pending. . . .
28 U.S.C. § 1441 (a) (emphasis added). The language “the defendant
or the defendants” means that if there are multiple defendants,
they must remove together.
White
v.
White,
32
Kerwood, 969 F.2d at 167; see also
F.Supp.2d
890,
892
n.2
(W.D.
La.
1998)
(explaining that in interpreting the unanimity requirement of 28
U.S.C. § 1441(a), “courts have read these words to mean that if
there is more than one defendant, then the defendants must act
collectively to remove the case” (citing Kerwood, 969 F.2d at
167)).
The rule of unanimity is a jurisprudential interpretation of
28 U.S.C. § 1441(a),cited above, and 1446(a)-(b):
(a) A defendant or defendants desiring to remove any civil
action or criminal prosecution from a State court shall file
in the district court of the United States for the district
and division within which such action is pending a notice of
removal signed pursuant to Rule 11 of the Federal Rules of
Civil Procedure and containing a short and plain statement of
the grounds for removal, together with a copy of process,
pleadings, and orders served upon such defendant or defendants
in such action.
(b) The notice of removal of a civil action or proceeding
shall be filed within 30 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. . . .
8
The rule is applied with varying degrees of strictness by different
circuits, and the Fifth Circuit has been cited as an exemplar of
the strict application, also known as the first-served defendant
rule, or the “one strike” rule, which does not allow a defendant
who did not remove within the thirty day limitation to join in the
complying removal notice of a co-defendant who was served later
than the first-served. See Getty Oil, 841 F.2d at 1263 (describing
the rule, “all served defendants must join in the petition no later
than thirty days from the day on which the first defendant was
served,” “which is followed by district courts in this Circuit and
others”).
See also 19A Charles Alan Wright & Arthur R. Miller et
al., Federal Practice and Procedure, Juris. App. Fed. Jud. Code
Revision Pt. III Rptr. Note E & n.7 (2d ed. current through 2010
Update) (citing Getty Oil, 841 F.2d at 1262-63, as representing the
strict application of the first-served defendant limitation on the
rule of unanimity).
The Fifth Circuit follows a first-served defendant application
of the rule of unanimity under which subsequently served defendants
cannot overcome the effect of the first-served defendant failing to
seek timely removal.
Cir. 1986).
Brown v. Demco, Inc., 792 F.2d 478, 481 (5th
Getty Oil overtly accepts this rule:
“In cases
involving multiple defendants, the thirty-day period begins to run
as soon as the first defendant is served.”
9
841 F.2d at 1262-63.
In the event that the first-served defendant does not remove, the
later-served defendant cannot overcome the unanimity requirement.
Air Starter Components v. Molina, 442 F.Supp.2d 374, 378 (S.D. Tex.
2006).
This
interpretation
of
the
rule
is
justified
as
a
reasonable application of the unanimity demand, the strict thirtyday limitation, and the possibility of the defendant waiving
removal by continuing in state court.
Brown, 792 F.2d at 482.
Brown follows the “axiom that the removal statutes are to be
strictly construed against removal.”
Id., citing Butler v. Polk,
592 F.2d 1293, 1296 (5th Cir. 1979).
See also Dodson v. Spiliada
Maritime Corp., 951 F.2d 40, 42 (5th Cir. 1992); Butler v. Polk,
592 F.2d 1293, 1296 (5th Cir. 1979); Samuel v. Langham, 780 F.
Supp. 424, 427 (N.D. Tex. 1992).
Some commentators claim that the first-served defendant rule
creates “inequitable results” because it often leaves subsequently
served defendants with an incredibly short period of time to file
within the requisite thirty-day limitation, an outcome which cuts
against the “underlying policy of removal” — “fairness”.
Brown,
792 F.2d at 482; See also Derek S. Hollingsworth, Comment, Section
1446: Remedying the Fifth Circuit’s Removal Trap, 49 Baylor L. Rev.
157, 158 (1997).
Although in Brown, the Fifth Circuit was not
persuaded by the potential of the rule to produce inequities, even
from the initial acceptance of this rule, the court alluded to the
10
possibility of “[e]xceptional circumstances” which “might permit
removal even when a later-joined defendant petitions more than
precisely thirty days after the first defendant is served,” but no
further illumination was cast on the nature of such exceptions.
Brown, 792 F.2d at 482.
In this Circuit, Brown’s version of the
first-served defendant rule remains the touchstone for evaluating
varying district court applications, which describe the possibility
of exceptions with varying strictness based on the application of
this “general rule.”
See New York Life Ins. Co. v. Deshotel, 142
F.3d 873, 887 n.4 (5th Cir. 1998); Curry v. State Farm Mut. Auto.
Ins.
Co.,
599
F.Supp.2d
734,
740
(S.D.
Miss.
2009)
(citing
Deshotel, 142 F.3d at 887 n.4 (quoting Brown, 792 F.2d at 481 &
n.11)); Dupree v. Torin Jacks, Inc., 2009 WL 366332, at *1 (W.D.
La. Feb. 12, 2009).
In McDonald v. Raycom TV Broad., Inc., 2009 WL 1149569, at *1
(S.D. Miss. Apr. 29, 2009), the district court listed the primary
exceptions to the rule of unanimity recognized by the Fifth
Circuit.
Consent to removal is not required from: (1) improperly
or fraudulently joined parties, id., citing Jernigan v. Ashland Oil
Inc., 989 F.2d 812, 815 (5th Cir. 2003); (2) nominal or unnecessary
defendants, id., citing Farias v. Bexar Cnty. Bd. of Tr. for Mental
Health Mental Retardation Servs., 925 F.2d 866, 871 (5th Cir.
1991); and (3) defendants who have not been served by the time of
11
the removal, id., citing Jones v. Houston Indep. Sch. Dist., 979
F.2d 1004, 1007 (5th Cir. 1992). The last exception closely aligns
with a basic statement of the rule itself because in Getty Oil,
explaining the meaning of 28 U.S.C. § 1446(a), the court stated,
“This statute has been interpreted to require that all then served
properly joined defendants join in the removal petition.” 841 F.2d
at 1262 n.9 (emphasis added).
Lenient application of the rule of unanimity’s first-served
defendant interpretation has arisen in highly specific contexts in
district courts within the Fifth Circuit, as Wells Fargo explains
in its Response in Opposition to the Motion to Remand (docket entry
14).
But, while it is no longer entirely accurate that “[t]he
Fifth Circuit has never published an opinion in which it either
found exceptional circumstances or further defined the term,”
White, 32 F.Supp.2d at 893, if reduced from an airtight certainty
to a generalization, this assessment provides a reasonably sound
reflection on the likelihood of the Fifth Circuit finding an
exceptional circumstance which does not fit within the three
previously
referenced
exceptions.
Louisiana,
294
755,
F.3d
759
But
(5th
see,
Cir.
Gillis
v.
(finding
an
e.g.,
2002)
“exceptional circumstance” when consent for removal could not be
properly formally authorized due to circumstances surrounding a
12
defendant corporation’s inability to hold a board of directors
meeting within the time limitation).
Where the later-served defendant was served only a few hours
prior to the first-served defendant’s original petition for removal
and notice of removal, and where the first-served defendant was
“reasonably diligent” in trying to discover whether co-defendants
had been served and therefore had “no actual knowledge” and “no
constructive knowledge” that the co-defendant had been served,
these circumstances have been held to constitute an exception to
the strict application of the rule of unanimity.
Milstead Supply
Co. v. Casualty Ins. Co., 797 F.Supp. 569, 573 (W.D. Tex. 1992).
In order to require that co-defendants must join the first-served
defendant’s petition to remove, these later-served defendants must
have been served by the time of the petition, or be defendants that
the first-served actually knew had been served or should have known
had been served.
Id.
In Waffer v. City of Garland, the district
court found that the absence of the consent of later-served
defendants may not be a fatal flaw to a first-served defendant’s
removal petition when at the time the petition was filed, the
court’s record did not disclose the fact that the later-served
defendant had been served. 2001 WL 1148174, at *2 (N.D. Tex. Sept.
19, 2001).
13
While some Fifth Circuit district courts have permitted such
exceptions to soften the application of the rule of unanimity,
others
have
opined
that
these
lenient
applications
represent
missteps contrary to the Fifth Circuit’s clearly established strict
interpretation of the rule.
Alternative views “do not trump
binding Fifth Circuit precedent” and the “district courts in this
circuit have consistently followed Fifth Circuit precedent and
applied the first-served defendant rule even though the rule has
engendered criticism outside of the circuit.”
2225494 at *3.
Holland, 2009 WL
The Holland court lists other circuits which have
rejected the Fifth Circuit interpretation of the rule.
Id. at *2
(citing Bailey v. Janssen Pharma., Inc., 536 F.3d 1202, 1205 (11th
Cir. 2008); Marano Enters. of Kan. v. Z-Teca Rests., 254 F.3d 753,
755-57 (8th Cir. 2001); Brierly v. Alusuisse Flexible Packaging,
Inc., 184 F.3d 527, 533 (6th Cir. 1999); McKinney v. Bd. of Tr. of
Maryland Cmty. College, 955 F.2d 924, 928 (4th Cir. 1992)).
In
Forman the district court concluded, “[t]he Milstead decision
appears to be fashioning an equitable exception to the general rule
despite
the
non-existence
of
the
‘exceptional
circumstances’
alluded to in Brown and Kerwood.
This Court considers such
broadening
the
of
impermissible.”
the
exception
to
1997 WL 162008 at *2.
14
general
rule
to
be
It has been argued that in Murphy Bros., Inc. v. Michetti Pipe
Stringing, Inc., 526 U.S. 344 (1999), the Supreme Court eliminates
the
possibility
of
the
first-served
requirement, overruling Brown and Getty.
defendant
unanimity
However, Air Starter
explains the Fifth Circuit’s response to such arguments: “Although
the Eighth Circuit has held that the Supreme Court’s opinion in
Murphy Bros. is inconsistent with the first-served rule, no Fifth
Circuit case has so held.”
Air Starter, 442 F.Supp.2d at 380.
In
Murphy Bros., the Supreme Court stated that the removal provisions
should be read “in light of a bedrock principle” that “[a]n
individual or entity named as a defendant is not obliged to engage
in litigation unless notified of the action, and brought under a
court’s authority, by formal process” and that the “time to remove
is triggered by simultaneous service of the summons and complaint
....”
526 U.S. at 347-48.
As Air Starter explains, courts in the
Fifth Circuit asked to consider Murphy Bros. as overruling the
first-served rule have declined to read the “bedrock principle” as
disallowing this interpretation of the rule of unanimity.
442
F.Supp.2d at 380-81.
The Notice of Removal in this case was filed by Wells Fargo on
November 23, 2011.
Watts subsequently filed her consent to Wells
Fargo’s notice of removal on January 4, 2011.
Because the rule
places great stress on the order in which defendants are served, it
15
is crucial to note that Wells Fargo is not the first-served
defendant in this case.
Watts was served on October 25, 2010, and
Wells Fargo was served on October 26, 2010.
Watts’s Joinder and
Consent to Removal of January 4, 2011 (docket entry 11), was not
filed within any possible accounting of thirty days from service of
process, either her own or that of Wells Fargo.
Because Watts was
the first-served defendant, the thirty days would be calculated
based on her own service on October 25, 2010. Therefore, this case
does not present a question of alternative conclusions based on the
strict or lenient application of the rule of unanimity, firstserved defendant rule.
Even if both defendants were permitted
thirty days from the date on which they were served and Wells Fargo
instead of Watts had been the first, Watts far exceeded the thirtyday limitation that the statute establishes in 28 U.S.C. § 1446(b),
joining Wells Fargo’s removal petition more than two months after
she was served.
At its heart, the unanimity rule does not permit
a later-served defendant to void the decision or procedural error
of a first-served defendant.
Watts, who was the first-served
defendant in this case, allowed her thirty days to expire without
petitioning to remove. Wells Fargo should not be permitted to void
Watts’s decision by petitioning for removal without obtaining her
consent.
16
If a case presents no exceptional circumstances, the rule of
unanimity
will
not
permit
a
delay
that,
for
any
individual
defendant, would exceed thirty days from service, regardless of
whether the first-served rule or the more lenient rule is applied.
The clear language of 28 U.S.C. § 1446(b), even applied leniently,
requires a defendant to petition for removal or to consent to
removal at least within thirty days of service.
When a court
relaxes the thirty days from service requirement, the court bases
such a decision on a finding of exceptional circumstances rather
than by declining to apply the first-served defendant rule.
The
court allows the later-served defendant to file thirty days from
its own service.
In Milstead, there was a significant time lag between the
service of the individual defendants such that the first-served
defendant, Transportation Insurance, served on May 14, 1992, filed
a timely petition to remove with the federal district court at 5:01
p.m. on June 15, 1992, the same day on which the later-served
defendant’s return of service was filed with the state court only
hours before, at 2:05 p.m.
797 F.Supp. at 570, 573.
Even though
Transportation Insurance was “reasonably diligent in attempting to
ascertain” whether its co-defendant had been served, at the time of
filing the Court noted that it had “no actual knowledge” and “no
constructive knowledge” of the service of Casualty Insurance.
17
Id.
In Milstead, the court described how the rule should not be applied
to create what could be labeled a “removal trap.”
Id.; See also
Hollingsworth, Removal Trap, supra, at 165 (criticizing the Fifth
Circuit’s
first-served
defendant
requirement
as
leading
to
“inequitable results” “most prevalent in suits involving multiple
defendants where plaintiff’s attorneys can manipulate service of
process among unsuspecting defendants in order to preclude their
opponents from availing themselves of the statutory right of
removal.”)
However, in this case, there is no apparent attempt to
manipulate the service of process.
The two named defendants were
served within one day of each other.
The state court’s record
indicates that Watts had actually been served, and the defendants
knew from the complaint that Watts was a co-defendant. This is not
a case in which a co-defendant was served on the very date that the
thirty-day period for removal expired in order to defeat removal.
The
district
court
in
Waffer,
applying
Milstead’s
more
generous interpretation of the statute, did not require consent
from the City of Garland’s co-defendant, Jacobs.
at *2.
2001 WL 1148174
The district court explained that Jacobs’s consent was not
required because “at the time of removal, the case file at the
state courthouse did not disclose that Jacobs had been served.”
Id.
However,
the
facts
in
the
case
before
this
Court
are
distinguishable from those in Waffer. In this case, although Wells
18
Fargo’s attorneys were not aware that the state courthouse records
disclosed that Watts had been served, the court record actually did
include the requisite notation.
Wells Fargo’s lack of accurate
information
of
about
the
contents
the
court
record
is
not
equivalent to the inaccurate court record, which encumbered the
City of Garland in Waffer.
The
Fifth
Circuit
permitted
removal
in
the
exceptional
circumstances of the Gillis case where the consent of one defendant
corporation required formal authorization to take place at a
meeting of the Board of Directors, which proved difficult to
schedule before the thirty days expired.
294 F.3d at 759.
The
chairman of the Board attempting to schedule the meeting was also
a plaintiff in the case.
Id.
The Court determined that the facts
of the Gillis case fit Getty Oil’s equitable exception.
Id.
This
case does not involve a similar hardship to obtaining the consent
of a co-defendant.
Here, there are no indications of any attempt
on the plaintiff’s part to delay service of process.
Wells Fargo
was not in the position of failing to comply with the rule of
unanimity due to a corporate co-defendant’s unavoidable scheduling
conflicts.
Watts did not file her Joinder and Consent to Removal
(document entry 11) until after the plaintiff challenged removal in
the absence of Watts’s consent (document entry 10).
19
Watts’s imprisonment cannot be analogized to the Gillis case’s
exceptional
circumstances.
Jones
provided
Wells
Fargo
with
documentation of Watts’s indictment and intent to plead guilty, and
Wells Fargo had reason to realize that she was in prison.
There is
no indication that, as in the Gillis case, Wells Fargo was foiled
in an attempt to contact Watts prior to the expiration of the
thirty days because Wells Fargo at no point maintains that it
attempted to contact either Watts or her attorneys.
Here, Watts’s
incarceration had no bearing on Wells Fargo’s failure to obtain her
consent in a timely manner.
The Getty Oil case’s circumstances parallel those of the case
before the Court in that the Getty Oil defendants who filed the
petition for removal also claimed that, at the time of filing, they
did not know that the co-defendant had been served.
1263 n.12.
841 F.2d at
Yet, in Getty Oil, the later-served defendants joined
the petition to remove within thirty days of their own service,
even though this was fifty-one days after the service of the firstserved defendant.
Id. at 1262.
Here, while Wells Fargo also
claims that it did not know that Watts had been served at the time
it filed its petition to remove, Watts’s consent was not within
thirty days after she was served, in addition to not being within
thirty
days
of
the
first-served
defendant.
As
referenced
previously, the Getty Oil case provided the firmly established rule
20
regarding first-served defendants, currently applied in the Fifth
Circuit.
See Hollingsworth, Removal Trap, supra, at 162-66.
In this district, in the Holland case, the court applied the
Getty Oil Fifth Circuit standard, emphasizing that the defendants
should have been aware of all co-defendants whose consent was
necessary to remove because all were named in the original state
court complaint, 2009 WL 2225494 at *4, as both Wells Fargo and
Watts were in this case.
Additionally, in Holland, the court
mentioned that all defendants were served by a date which permitted
two weeks in which to coordinate removal.
Id. In this case, the
defendants were served within a day of each other; therefore, they
had ample time in which to coordinate consent before filing a
timely petition to remove. In Holland, defendant Nationwide Mutual
Fire Insurance Company claimed exceptional circumstances because
its attorney attempted to obtain consent from all parties before
the deadline but was ultimately unable to do so. Id.
In the
present case, Wells Fargo does not allege that it made any effort
to contact Watts herself or her attorneys until after the deadline
was long past.
In Holland, the court record appeared to be
incomplete, id., but in Wells Fargo’s case, the court record was
complete although Wells Fargo’s attorneys failed to ascertain that
information.
appears
to
The Holland court concluded that, “[w]hile counsel
have
taken
reasonable
21
steps
to
coordinate
timely
joinders of removal, that fact does not render the circumstances in
this case exceptional.”
Fargo’s
attorneys
Id. at *5.
appear
to
It cannot be said that Wells
have
taken
reasonable
steps
to
coordinate timely joinders of removal; therefore, in this case, the
circumstances
are
likewise
not
so
exceptional
as
to
warrant
avoidance of the rule’s strictures.
This case does not fall within any of the other exceptions
clarified by the Fifth Circuit, in, for example, the Jernigan case,
where all co-defendants had not consented but where improper
defendants had been joined in an attempt to destroy diversity
jurisdiction.
989 F.2d at 815.
In this case, there is no
allegation that Jones attempted to improperly join Watts to avoid
federal court jurisdiction.
Nor is Wells Fargo’s failure to obtain Watts’s consent excused
under the exception in the Farias case where consent was not
required
from
nominal
parties,
against
whom
“there
is
no
possibility that the plaintiff would be able to establish a cause
of action ... in state court.”
925 F.2d at 871 (quoting B., Inc.
v. Miller Brewing Co., 663 F.2d 545, 549 (5th Cir. Unit A Dec.
1981)).
It is possible for the plaintiff to establish a cause of
action in state court against both Wells Fargo and Watts.
The Jones v. Houston Indep. Sch. Dist. case also does not
provide an exception suitable to the case at hand.
22
In that case,
the failure of all defendants to join in filing timely removal was
excused because the defendant who had not joined the removal
petition had not been served when it was filed.
979 F.2d at 1007.
In the case before this Court, both defendants had been served at
the time Wells Fargo filed the removal petition.
Wells Fargo
violated the requirements of the rule of unanimity as interpreted
by
the
Fifth
Circuit
by
filing
for
removal
without
first
ascertaining the consent of its co-defendant, Nancy Watts.
The
plaintiff
improvident removal.
requests
sanctions
based
on
Wells
Fargo’s
The Court finds that Wells Fargo’s argument
that its failure to obtain Watts’s consent to remove should be
excused on the basis of exceptional circumstances is not entirely
without any arguable support, and does not warrant sanctions.
Because the Court does not reach the federal question issue, it
declines to address sanctions on that basis.
The Court does not accept Wells Fargo’s arguments that its
failure to obtain consent from its co-defendant Watts before
petitioning for removal should be excused due to exceptional
circumstances. The Court will continue to follow the Fifth Circuit
precedent by applying the first-served defendant interpretation of
the rule of unanimity and will not depart from the Fifth Circuit’s
strict
application
of
the
rule.
Even
if
a
more
lenient
interpretation were applied in this case, Wells Fargo would still
23
be unable to override the decision or procedural error of Watts,
the first-served defendant, to allow the thirty day limitation to
expire without petitioning this Court for removal.
Accordingly,
IT IS HEREBY ORDERED that the plaintiff Cathy D. Jones’s
motion to remand (docket entry 9) is GRANTED, and this action shall
be remanded to the Circuit Court of Yazoo County, Mississippi;
FURTHER ORDERED that the plaintiff’s request for sanctions is
DENIED.
A separate order remanding this case to the Circuit Court of
Yazoo County, Mississippi, shall follow.
SO ORDERED, this the 31st day of May, 2011.
/s/ David Bramlette
UNITED STATES DISTRICT JUDGE
24
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