WESTFIELD INSURANCE COMPANY v. INTERLINE BRANDS, INC. et al

Filing 49

OPINION FILED. Signed by Chief Judge Jerome B. Simandle on 3/25/13. (js)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

WESTFIELD INSURANCE COMPANY,
Plaintiff,

HON. JEROME B. SIMANDLE
Civil No. 12-6775(JBS/JS)

v.
OPINION
INTERLINE BRANDS, INC., et
al.,
Defendants.

APPEARANCES:
Stefanie G. Ebert, Esq.
Courtney Dolanay, Esq.
LAW OFFICES OF ROBERT A. STUTMAN, P.C.
500 Office Center Drive
Suite 301
Ft. Washington, PA 19034
Attorney for Plaintiff Westfield Insurance Company
Ralph R. Smith, III, Esq.
DUANE MORRIS LLP
1940 Route 70 East
Suite 200
Cherry Hill, NJ 08003
-andMark McCarthy, Esq., appearing pro hac vice
TUCKER ELLIS
925 Euclid Avenue
Cleveland, OH 4115
Attorneys for Defendants Watts Water Technologies, Inc.,
Watts Regulator Co. and Watts Plumbing Technologies
(Taizhou) Co., Ltd.
SIMANDLE, Chief Judge:
I.

INTRODUCTION
This matter is before the Court on Plaintiff Westfield

Insurance Co.'s motion to remand the instant action to state

court.

[Docket Item 10.]

Removing Defendants Watts Water

Technologies, Inc., Watts Regulator Co., and Watts Plumbing
Technologies (Taizhou) Co., Ltd., ("Watts Defendants" or "Watts")
oppose this motion and argue that the case should remain in
federal court.

[Docket Item 25.]

The Watts Defendants argue

that the action was properly removed on the basis of diversity
jurisdiction since the forum defendants were not properly served
at the time of removal.
This action involves the application of 28 U.S.C. §
1441(b)(2), commonly known as the forum defendant rule for
diversity cases, and 28 U.S.C. § 1446(d), which identifies three
steps a litigant must complete to effect removal.

For the

reasons discussed below, the court concludes that the Watts
Defendants completed the requirements of 28 U.S.C. § 1446(d)
prior to the forum Defendant Interline being served.

Therefore,

the forum defendant rule does not apply to bar removal by the
Watts Defendants and Plaintiff's motion for remand will be
denied.
II. DISCUSSION
The party removing an action to federal court bears the
burden of proving that the federal court has jurisdiction.
Samuel-Basset v. KIA Motors Am. Inc., 357 F.3d 392, 396 (3d Cir.
2004).

"Removal statutes are to be strictly construed against

removal and all doubts should be resolved in favor of remand."

2

Batoff v. State Farm Ins. Co., 977 F.3d 848, 851 (3d Cir. 1992).
Courts are required to strictly construe 28 U.S.C. § 1441 against
removal and rigorously enforce this policy "so that the
Congressional intent to restrict federal diversity jurisdiction
is honored."

Samuel-Basset, 357 F.3d at 396.

Further, by

construing removal statutes strictly, the court gives proper
weight to the Plaintiff's choice of forum.

Zelma v. United

Online Communications, Inc., No. 08-1030, 2008 WL 2625349, at *2
(D.N.J. June 27, 2008)(citing McManus v. Glassman's Wynnefield,
Inc., 710 F.Supp. 1043, 1045 (E.D. Pa. 1989)).
28 U.S.C. § 1441(b)(2), otherwise known as the forumdefendant rule, provides that a "civil action otherwise removable
solely on the basis of the jurisdiction under section 1332(a) of
this title [28 USCS § 1332(a)] 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."

The

forum-defendant rule recognizes that removal on the basis of
diversity jurisdiction is intended to protect out-of-state
defendants from possible local prejudices in state court and
consequently, the need for such protection is absent in cases
where one of the defendants is a citizen of the forum where the
case is filed.

DeAngelo-Shuayto v. Organon USA, Inc., No. 07-

2923, 2007 U.S. Dist. LEXIS 92557, at *8 (D.N.J. December 12,
2007).

Indeed, the Third Circuit has explained:

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If diversity jurisdiction exists because of a fear that
the state tribunal would be prejudiced towards the
out-of-state plaintiff or defendant, that concern is
understandably allayed when that party is joined with a
citizen from the forum state. Indeed, when members from
the forum state are present on both sides of the
controversy, it becomes more difficult to imagine that a
state tribunal would favor one side based upon biases in
favor of its own citizens.
Dresser Indus. v. Underwriters at Lloyd's of London, 106 F.3d
494, 499 (3d Cir. 1997).
However, the forum-defendant rule creates an opportunity for
a plaintiff to engage in procedural gamesmanship to prevent nonforum defendants from removing a case.

Specifically, a plaintiff

could improperly join a forum defendant or refuse to serve a
forum defendant in an attempt to keep the action in state court.
Therefore, Section 1441(b) requires the forum defendant to be
"properly joined and served" in order to eliminate the potential
for abuse.
**8-9.

DeAngelo-Shuayto, 2007 U.S. Dist. LEXIS 92557, at

See also Stan Winston Creatures, Inc. v. Toys "R" Us,

Inc., 314 F. Supp. 2d 177, 181 (S.D.N.Y. 2003).
In this case, the parties do not dispute that the forum
defendants, Interline and MTD Corp., are citizens of the forum
state and are properly joined in this action.

It is also

undisputed that at the time the Watts Defendants filed their
Notice of Removal with the federal court on October 31, 2012, the
forum defendants were not yet served.

Interline was served on

November 5, 2012, and MTD Corp. has not been served yet according

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to the record.

In addition, the Watts Defendants served their

Notice of Removal on the New Jersey Superior Court, Atlantic
County, on November 5, 2012, pursuant to 28 U.S.C. § 1446, the
same day forum Defendant Interline was served.
There are two main issues before the court.

First, the

court must analyze when removal was effected and whether the
service of the forum defendant on November 5th prevents removal.
Second, there is the issue of whether equitable considerations
arising out of Hurricane Sandy militate against removal and in
favor of remand.

Specifically, Plaintiff argues that it was

unable to serve the forum defendant prior to October 31, 2012
because Hurricane Sandy made service impossible in the New Jersey
region.
A.

This opinion will address each issue separately below.
When was removal effective?

Case law in the District of New Jersey clearly holds that
removal is not complete until all three steps prescribed by 28
U.S.C. § 1446(d) are actualized.1

1

In La Maina v. Brannon, 804 F.

The Third Circuit has not directly ruled on this issue.
There are currently three schools of thought as to when removal
is complete. First, some courts have held that removal is
effected simply by filing a notice of removal in the district
court.
First Nat'l Bank v. Johnson & Johnson, 455 F. Supp. 361
(E.D. Ark. 1978). Other jurisdictions have found that the state
and federal courts have concurrent jurisdiction until the notice
is filed with the state court. Berberian v. Gibney, 514 F.2d
790, 792-3 (1st Cir. 1975). Most jurisdictions have held that
removal is effected by filing a copy of the notice of removal in
state court. The Eighth Circuit has expressly held that "[t]he
only rule that logically follows from 28 U.S.C. § 1446(d) is that
removal is effected when the notice of removal is filed with the
5

Supp. 607 (D.N.J. 1992), this court held that all three steps
listed in 28 U.S.C. § 1446(d) must be completed before the state
court is divested of jurisdiction and removal is effected.
Specifically, the court turned to the express language of 28
U.S.C. § 1446(d) which provides:
Promptly after the filing of such notice of removal of a
civil action the defendant or defendants shall give
written notice thereof to all adverse parties and shall
file a copy of the notice with the clerk of such State
court, which shall effect removal and the State court
shall proceed no further unless and until the case is
remanded.
28 U.S.C. § 1446(d).

This statute identifies three steps which

a litigant must take to remove litigation from state court to
federal court: (1) file the notice of removal in the federal
court; (2) give written notice to all adverse parties; and (3)
file a copy of the notice with the clerk of the state court.
Since all three requirements appear prior to the statement that
the completion of these steps "shall effect removal," the plain
meaning of the statute indicates that all three steps must be
satisfied in order to divest the state court of jurisdiction over
the matter.

Consequently, until all three steps are completed,

the action is not removed and the federal court does not have
jurisdiction.
This becomes important when read in conjunction with the

state court and at no other time."
210, 214 (8th Cir. 1996).
6

Anthony v. Runyon, 76 F.3d

forum defendant rule in 28 U.S.C. § 1441(b).

This statute

provides that a civil action otherwise removable solely on the
basis of diversity jurisdiction "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." 28 U.S.C.
§ 1441(b)(2).

The citizenship of the parties and whether the

parties have been properly joined and served for purposes of
Section 1441(b)(2) is analyzed at the time the action is removed.
Ripley v. Eon Labs, Inc., 622 F. Supp. 2d 137, 141 (D.N.J. 2007).
An issue arises when the forum defendant is served with the
complaint after the non-forum defendant files a notice of removal
in federal court but prior to the non-forum defendant serving the
adverse party and the state court with their notice of removal
pursuant to Section 1446(d).

This was the factual scenario in

Stern v. Bertek Pharmaceuticals, Inc., No. 07-5677, 2008 U.S.
Dist. LEXIS (D.N.J. July 29, 2008).

In Stern, the removing

defendant filed its notice of removal with the federal court and
a week later filed the notice of removal with the state court
pursuant to Section 1446(d) and notified opposing counsel.
Between filing the notice of removal with the federal court and
completing the remaining two steps required by Section 1446(d),
the plaintiff successfully served the forum defendant.

The

plaintiff argued that removal was therefore inappropriate because
the forum defendant had been properly joined and served prior to

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effecting removal.

The removing defendant urged the court to

find that removal had been effected upon the filing of its notice
of removal with the federal court and argued that the forum
defendant's citizenship should be disregarded.
This court rejected the removing defendant's argument and
remanded the case to state court.

This court reasoned that to

hold otherwise would result in disregarding practically all of §
1446(d).

Stern, 2008 U.S. Dist. LEXIS 62066, at **11-12.

Consequently, if a forum defendant is served prior to the
removing party completing all three steps required by Section
1446(d), the forum defendant rule applies to bar removal.
In the present case, the timing is different.

The Watts

Defendants filed their Notice of Removal on October 31, 2012, but
that does not mean that removal was effective on that date.

The

Watts Defendants also needed to serve the Plaintiff with their
Notice of Removal and file a copy of the notice with the Clerk of
the State Court in order to effect removal.

If forum Defendant

Interline, who was served on November 5, 2012, was served prior
to the Watts Defendants effectuating removal, then the forum
defendant rule would apply to bar removal in this case.
Here, the Watts Defendants have submitted sufficient
evidence to prove that they served both Plaintiff's counsel and
the New Jersey Superior Court with their Notice of Removal prior
to Defendant Interline being served.

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It is undisputed by the

parties that Interline was served at 3:58 PM on November 5, 2012,
and that Plaintiff's counsel was served with the Notice of
Removal prior to Interline being served.

The main dispute

between the parties is whether the Clerk of the Superior Court
received the Notice of Removal prior to the Plaintiff serving
Interline.
The court finds the Declaration of Clarence Dickerson is
sufficient to prove that the Watts Defendants filed their Notice
of Removal with the state court prior to the Plaintiff serving
forum Defendant Interline.

Dickerson avers that he is the

Operations Manager for Vicinage I, Superior Court of New Jersey
and as Operations Manager, he oversees the receipt of mail and
delivery to the courthouse.

(Dickerson Decl. ¶¶ 2-3.)

This is

sufficient to show that Dickerson has personal knowledge of when
mail in the Clerk's office is received.
Dickerson attested that the mail was received on November 5,
2012, prior to 3:58 PM.
to the contrary.

The Plaintiff has presented no evidence

The Notice of Removal is stamped "received and

filed" on November 5, 2012.

28 U.S.C. § 1446(d) requires a

removing party to "file a copy of the notice with the clerk of
such State court" in order to effect removal.

The Plaintiff's

argument that removability is measured from when the Clerk opened
and read the notice of removal or from the date the notice was
docketed is without merit and contrary to the plain meaning of

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the statute.

A document is deemed filed when received by the

Clerk, not at a later date when it is processed in due course.
The record is clear that the Watts Defendants filed their
Notice of Removal with the state court on November 5, 2012, prior
to the forum defendant being served later that date.

Therefore,

removal was proper and the forum defendant rule does not apply to
this action.
B.

The effect of Hurricane Sandy on removal

The second issue is whether Hurricane Sandy and the
subsequent entry of Standing Order 12-2 which declared the D.N.J.
Clerk's Office inaccessible from October 29, 2012, through
November 5, 2012, affects the Watts Defendants' removal.
Specifically, the Watts Defendants filed their Notice of Removal
electronically with the federal court on October 31, 2012, which
is clearly within the time frame addressed by Standing Order 122.

Further, Plaintiff effectively served forum defendant

Interline with process on November 5, 2012, which is also
encompassed within Standing Order 12-2's time frame.
Standing Order 12-2 "declare[d] the inaccessibility of all
Clerk's Offices for purposes of Federal Rule of Civil Procedure
6(a)(3)2 and Federal Rule of Criminal Procedure 45(a)(3) from

2

Fed. R. Civ. P. 6(a)(3) provides:
Inaccessibility of the Clerk's Office. Unless the court
orders otherwise, if the clerk's office is inaccessible:
(A) on the last day for filing under Rule 6(a)(1), then
10

October 29, 2012 through and including November 5, 2012. . . .
The next accessible day may be November 7, 2012, or such later
date if extended by further Order."
In this case, Fed. R. Civ. P. 6(a) does not apply because
the issue before the court is not how to compute time and
Standing Order 12-2 does not affect the court's analysis of this
motion to remand.

The purpose of Standing Order 12-2 was simply

to automatically extend the deadlines for filing, not for
prohibiting filing by those who were able to do so on the
electronic system after the hurricane.

Here, the Notice of

Removal was filed timely and the motion to remand was also filed
timely in accordance with the removal statutes.

Consequently,

there is no need to rely on Fed. R. Civ. P. 6(a) to adjust the
computation of time.

Since Standing Order 12-2 deals exclusively

with the computation of time under Rule 6 and does not suspend
all filings with the court from October 29, 2012, through
November 5, 2012, Standing Order 12-2 does not affect the date of

the time for filing is extended to the first accessible
day that is not a Saturday, Sunday, or legal holiday; or
(B) during the last hour for filing under Rule 6(a)(2),
then the time for filing is extended to the same time on
the first accessible day that is not a Saturday, Sunday,
or legal holiday.
Fed. R. Civ. P. 6(a)(1) addresses how to compute any time period
specified in the Federal Rules, Local Rules, court order or statute
that does not specify a method of computing time.
Fed. R. Civ. P.
6(a)(2) addresses how to compute a time period stated in hours.
11

the filing of the Notice of Removal or service on the forum
defendant Interline.
Due to the electronic filing capabilities of the court, the
Watts Defendants were able to file their Notice of Removal on
October 31, 2012, on the electronic filing system (CM/ECF)
despite the fact that the Clerk's Office was physically
inaccessible on that date.

In addition, it is clear that at the

time the Notice of Removal was filed, forum defendant Interline
was not yet served.

Standing Order 12-2 does nothing to alter

this outcome.3
The Plaintiff argues that this result is inequitable in
light of the fact that the forum defendant could not be served
due to Hurricane Sandy and was successfully served immediately
after the storm subsided.

However, the Watts Defendants

correctly point out that the Plaintiff filed its complaint in
state court on October 10, 2012 and chose to serve the non-forum
defendant when it had notice that Hurricane Sandy would hit the
Northeast.

The Plaintiff could have delayed serving process on

all defendants until after the storm or alternatively, could have

3

The court has found no case law to the contrary. As
recently as 2010, a district court noted that "[i]n fact,
somewhat surprisingly, the Court has found virtually no
treatment, in any jurisdiction, regarding the interplay between
the computation of deadlines and the perpetual availability of
electronic filing in the district courts." Pugh v. South
Carolina Department of Public Safety, No. 10-1187 (RBH-BHH), 2010
U.S. Dis. LEXIS 141232, at *4 (D.S.C. Aug. 20, 2010).
12

served process on the forum defendants prior to the storm.

The

Plaintiff made a choice, wittingly or not, to pursue service on
the non-forum defendant rather than delay serving the non-forum
defendant until after the hurricane.

The Plaintiff had notice

that severe weather was headed towards the forum state and did
not adjust its method or timing for serving process accordingly.
Therefore, equity will not apply to alter the application of
the removal statutes.

Removal of this case was proper because,

as discussed above, at the time removal was effected, the forum
defendant had not been properly joined and served.

Removal of

this case on the basis of diversity of citizenship was thus
timely and proper.
Accordingly, Plaintiff's motion to remand will be denied.4
III.

CONCLUSION
For the reasons discussed herein, the Plaintiff's motion to

remand will be denied.

The accompanying Order will be entered.

March 25, 2013
Date

s/ Jerome B. Simandle
JEROME B. SIMANDLE
Chief U.S. District Judge

4

The Plaintiff also requests an award of attorney fees for
expenses incurred as a result of filing this motion to remand.
Under 28 U.S.C. § 1447(c), “[a]n order remanding the case may
require payment of just costs and any actual expenses, including
attorney fees, incurred as a result of the removal.” In this
case, removal was not improper and Plaintiff's motion for
attorney fees will be denied.
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