BOGGS et al v. HARRIS et al
Filing
17
OPINION on MOTION to Remand to State Court by ANNETTE BOGGS and ROY E. BOGGS 5 . Motion to remand is GRANTED. An appropriate order will be entered. Signed by Chief Judge Joy Flowers Conti on 12/22/16. (jp)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
ROY E. BOGGS, an individual, and
ANETTE BOGGS, his wife
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Plaintiffs,
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v.
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DARWIN D. HARRIS, an individual, and )
GETAWAY TOURS, INC.
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Defendants.
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Civ. No. 16-971
OPINION
CONTI, Chief District Judge
I.
Introduction
Pending before the court is a motion to remand filed by plaintiffs Roy Boggs and
Annette Boggs (“plaintiffs”). (ECF No. 5.) On June 28, 2016, Defendants Darwin Harris
(“Harris”) and Gateway Tours, Inc.
(“Getaway Tours”) (together “removing
defendants”) removed this case to this court based upon diversity of citizenship, after
the only nondiverse defendant in the state action was voluntarily dismissed. (ECF No.
1.)
Plaintiffs argue that the case should be remanded because removing defendants
waived their right to remove, or, in the alternative, because they did not file the notice of
removal within the thirty-day time limit under 28 U.S.C. § 1446(b). As set forth below,
the court finds that removing defendants did not waive their right to remove, but that
1
removing defendants did file an untimely notice of removal. For this reason, plaintiffs’
motion to remand will be granted.
II.
Procedural History
On September 29, 2015, plaintiffs filed a complaint in the Court of Common Pleas
of Beaver County against defendants Harris, Gateway Tours, and Conley-Beaver
Corporation (“Conley-Beaver”). (ECF No. 1). Harris and Getaway Tours filed a timely
answer and asserted a cross-claim against Conley-Beaver. (Id.)
Plaintiffs are citizens of Pennsylvania. (Id. ¶ 2.) Removing defendants Harris and
Getaway Tours are citizens of Michigan. (Id. ¶ 4-5.) Defendant Conley-Beaver is a
resident of Pennsylvania. (Id. ¶ 3.) The inclusion of Conley-Beaver as a defendant at the
commencement of this action precluded the filing of a federal lawsuit based upon
diversity of citizenship.
On May 17, 2016, counsel for plaintiffs informed counsel for Conley-Beaver that
plaintiffs had agreed to dismiss Conley-Beaver from this action upon consent from
Harris and Getaway Tours. (ECF No. 5 ¶ 15.) On May 18, 2016, Harris and Getaway
Tours consented to the discontinuance of Conley-Beaver via email correspondence sent
to counsel for plaintiffs and counsel for Conley-Beaver. (Id. ¶ 16.) 1 On May 18, 2016,
Conley-Beaver sent email correspondence to counsel for plaintiffs confirming Harris’s
and Getaway Tours’ consent to the discontinuance of Conley-Beaver, and requesting
that plaintiffs prepare a stipulation of discontinuance of Conley-Beaver. (Id. ¶ 17.)
All parties agreed at the hearing that this consent would result in the dismissal of the crossclaim, which was filed by removing defendants against Conley-Beaver.
1
2
One May 23, 2016, plaintiffs forwarded all defendants a stipulation for
discontinuance of Conley-Beaver for signature. (Id. ¶ 18.) On May 31, 2016, all
defendants supplied plaintiffs with executed counterparts of the stipulation for
discontinuance. (Id. ¶ 19.) On June 15, 2016, plaintiffs filed the fully executed
stipulation with the state court. (Id.)
On June 28, 2016, Harris and Gateway Tours filed a notice of removal on the
basis of diversity jurisdiction. (Id.)
Since learning on May 17, 2016, about plaintiffs’ intent to dismiss Conley-Beaver
from this action, defendants Harris and Getaway Tours engaged in the following
discovery:
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May 18, 2016, scheduled the independent medical exam (“IME”) for Roy
Boggs;
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May 20, 2016, inquired about dates to conduct a vocational interview of Mr.
Boggs;
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June 8, 2016, completed the vocational interview;
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June 10, 2016, conducted Mr. Boggs’ IME;
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June 14, 2016, deposed plaintiffs;
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June 27, 2016, deposed an administrator from Mr. Boggs’ place of
employment; and
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June 27, 2016, provided notice that a motion to compel would be presented to
the Beaver County Court on June 30, 2016. (ECF No. 5 ¶ 12.)
On July 19, 2016, plaintiffs filed a motion to remand this matter to state court
and a brief in support of the motion. (ECF Nos. 5, 6.) On August 9, 2016, the removing
defendants filed a response in opposition to the motion for remand and a brief in
support of the response. (ECF Nos. 10, 11.)
3
A hearing on plaintiffs’ motion for remand was held before this court on
September 20, 2016. (Minute Entry 9/20/2016.) At that time the court, upon joint
request from the parties, permitted both parties to submit supplemental briefing on the
narrow question whether a voluntary discontinuance of a defendant via stipulation is
analogous to a settlement agreement for the purpose of determining when the thirty-day
removal period provided under 28 U.S.C. § 1446(b) commenced. (Id.) The motion is
now fully briefed and ripe for disposition.
III.
Statement of Facts
Plaintiff Roy Boggs asserts a negligence claim against Harris and Getaway Tours.
Plaintiff Annette Boggs asserts a loss of consortium claim against Harris and Getaway
Tours. Plaintiffs allege in the complaint that:
− on December 26, 2013, Mr. Boggs was operating his vehicle on State Route 18
(ECF No. 1 ¶ 11);
− at approximately 10:39 p.m., Harris, who was operating a bus owned by
Getaway Tours, exited a commercial plaza owned by Conley-Beaver (id. ¶ 1112);
− Darwin Harris negligently crossed over the south bound lane of Route 18
directly into Mr. Boggs’ path, resulting in a collision (id. ¶ 12); and
− Mr. Boggs suffered numerous and severe injuries as a result of the collision
(id.).
IV.
Discussion
28 U.S.C. § 1441(a) authorizes a defendant to remove to federal court “any civil
action brought in a State court of which the district courts of the United States have
original jurisdiction.” The district courts have original jurisdiction over diversity actions
4
“where the matter in controversy exceeds the sum or value of $75,000, exclusive of
interest and costs, and is between citizens of different States.” 28 U.S.C. § 1332(a). 2
A defendant seeking removal of an action must file a petition for removal with the
district court within thirty days of the plaintiff’s service of the complaint upon the
defendant or within thirty days of receipt of a copy of an amended pleading, motion,
order, or other paper from which the defendant may first ascertain that the case has
become removable. 28 U.S.C. § 1446(b). “[T]he burden of establishing removal
jurisdiction rests with the defendant.” Dukes v. U.S. Healthcare, Inc., 57 F.3d 350, 359
(3d Cir. 1995). It is the burden of the party seeking to preserve the district court’s
jurisdiction, typically the defendant, to show that the requirements for removal have
been met. Meritcare Inc. v. St. Paul Mercury Ins. Co., 166 F.3d 214 (3d Cir. 1999); Bell
Atlantic Mobile, Inc. v. Zoning Bd. of Butler Tp., 138 F.Supp.2d 668 (W.D. Pa. 2001)
(noting that defendant bears the burden of proving that removal was proper).
“Once an action is removed, a plaintiff may challenge removal by moving to
remand the case back to state court.” McGuire v. Safeware, Inc., Civ. Action No. 133746, 2013 WL 5272767, at * 1 (E.D. Pa. Sept. 17, 2013) (citing Cook v. Soft Sheen
Carson, Inc., Civ. Action No. 08-1542, 2008 WL 4606305, at*1 (D.N.J. Oct. 15, 2008)).
“Cases may be remanded under § 1447(c) for (1) lack of district court subject matter
jurisdiction or (2) a defect in the removal procedure.” PAS v. Travelers Ins. Co.,7 F.3d
349, 352 (3d Cir. 1993).3 “It is settled that the removal statutes are to be strictly
The parties do not contest that there is complete diversity between the remaining parties and that the
amount in controversy is in excess of $75,000.
3
The decision to enter a remand order on the basis of a defect in removal procedure or for
a lack of subject matter jurisdiction is within the discretion of the district court, and,
whether erroneous or not, is not subject to appeal. Cook, 320 F.3d at 437 (citing
2
5
construed against removal and all doubts should be resolved in favor of remand.” Steel
Valley Auth. v. Union Switch and Signal Div., 809 F.2d 1006, 1010 (3d Cir.1987)
(footnote omitted).
Here, plaintiffs make two arguments in favor of remand:
1) removing defendants’ removal was untimely, because it did not comply
with 28 U.S.C. § 1446(b); and
2) removing defendants waived the right to remove, because they invoked the
jurisdiction of the state court and demonstrated a “clear and unequivocal”
intent to litigate in state court.
Plaintiffs’ first argument raises a difficult legal question given the existence of
conflicting case law with respect to when the thirty-day removal period begins under 28
U.S.C. § 1446(b). If this court were to determine that removing defendants waived the
right to removal, this court would be able to resolve this matter without addressing the
question whether removing defendants’ notice of removal was timely filed. This court
will, therefore, first address plaintiffs’ second argument regarding defendants’ alleged
waiver.
A. Defendants’ waiver of the right to remove
Plaintiffs argue that removing defendants waived their right to remove by
demonstrating the intent to litigate in state court. In litigation, a defendant’s waiver of
removal rights must be “clear and unequivocal.” Foster v. Chesapeake Ins. Co., Ltd., 933
Quackenbush, 517 U.S. at 711-12). The United States Supreme Court has noted that
limiting review of remand orders supports “Congress's longstanding policy of not
permitting interruption of the litigation of the merits of a removed case.” Powerex Corp.
v. Reliant Energy Svcs., Inc., 551 U.S. 224, 238 (2007).
A.R. v. Norris, Civ. Action No. 15-1780, 2015 WL 6951872, at *2 (M.D. Pa. Nov. 10, 2015).
6
F.2d 1207, 1218 n.15 (3d Cir. 1991). (“In the context of litigation-based waiver, the ‘clear
and unequivocal’ standard makes sense. Otherwise, in order not to waive the right to
remove defendants would have to remain inactive in the state court, running the peril of
being held in default should a remand from the district court later occur.”). 4
The Third Circuit Court of Appeals has not specifically addressed what
constitutes a “clear and unequivocal” waiver of the right to remove; however, courts
typically find that a defendant has waived his right to remove a case under one of two
scenarios. First, a defendant waives his right to remove when he “attempts to
experiment with the merits of his case in state court and then use removal to get a
second chance or ‘alternative appeal’ route in federal court.” Haun v. Retail Credit Co.,
420 F. Supp. 859, 863 (W.D. Pa. 1976) (citing Rosenthal v. Coates, 148 U.S. 142, 147
(1893); see Sacko v. Greyhound Lines, Inc., Civ. Action No. 13-1966, 2013 WL 2892906
at *2-3 (E.D. Pa. May 31, 2013) (“[W]aiver may be found where a defendant experiments
with the merits of the case in state court and then seeks to remove the case to federal
court, often after receiving an adverse decision.”).
Alternatively, a court may find that a defendant has waived his right to remove a
case to federal court where the defendant takes an affirmative action evincing an intent
to remain in state court. Mancari, 683 F. Supp. at 94 (“In almost all of the cases where
waiver has been found, the courts have concluded that the defendant manifested an
intention to remain in state court by either asserting its rights in the court or by some
other affirmative action taken in the state forum.”); Rockwell v. U. S. Fid. & Guar. Co.,
“The court of appeals in Foster rejected the argument that contractual waivers of § 1441(a) removal
rights must be ‘clear and unequivocal.’” Suter v. Munich Reinsurance Co., 223 F.3d 150, 156 (3d Cir.
2000). Here, plaintiffs do not argue that removing defendants waived their removal rights based upon a
contractual waiver.
4
7
137 F. Supp. 317, 319 (M.D. Pa. 1955) (“The action relied upon [as a waiver] must be
inconsistent with a purpose to pursue the right to remove and clearly indicate an
intention to submit to the jurisdiction of the state court.”). “The right to remove may
also be waived if a defendant takes substantial defensive action in state court before
petitioning for removal.” Bryfogle v. Carvel Corp., 666 F. Supp. 730, 733 (E.D. Pa. 1987).
Under this second scenario, a court will examine the actions taken by the
defendant in state court to determine whether they are substantial and demonstrate an
intent to litigate in state court. “The majority of courts seem to have held that
preliminary conduct by a defendant short of his actual litigation of the merits or his
voluntary invocation of state court jurisdiction for his own purposes does not constitute
a waiver of his right to remove.” Haun, 420 F. Supp. at 863; Selvaggi v. Prudential Prop.
& Cas. Ins. Co., 871 F. Supp. 815, 818 (E.D. Pa. 1995) (“courts generally have held that
the right to remove is maintained where there has been no litigation on the merits and
no prejudice to any of the parties”).
District courts within the Third Circuit have found that most actions taken by a
defendant prior to removal do not constitute a “clear and unequivocal” waiver of the
right to remove. “District courts in our Circuit have found that waiver has not been
established when defendants attend and participate in a scheduling conference, file
preliminary objections, file a praecipe to file a complaint and a praecipe for judgment of
non pros, and file an answer.” Cognetx, Inc. v. Haughton, No. 10-2293, 2010 WL
3370761, at *6 (E.D. Pa. Aug. 26, 2010). District courts have found that conducting
discovery does not automatically constitute a waiver, particularly when the parties are in
the early stages of discovery. Id.; Cook v. Soft Sheen Carson, Inc., Civ. Action No. 08-
8
1542, 2008 WL 4606305, at *4 (D.N.J. Oct. 15, 2008); 14C Charles Alan Wright &
Arthur R. Miller, Federal Practice & Procedure § 3731 (4th ed. 2009) (“A defendant’s
conduct in defending the state court action prior to the end of the two statutory thirtyday periods established by Section 1446(b) will not constitute a waiver of the right to
remove.”).
Courts also closely consider the timing of the defendant’s conduct. “It is clear that
the stage the case is in should be and is crucial when analyzing whether there has been a
waiver of the right to remove. For example, filing a pleading in the early stages of
litigation may not be as clear and unequivocable an act as continuing to present
evidence in a trial.” Mancari, 683 F. Supp. at 94–95; Selvaggi, 871 F. Supp. at 817
(“pleadings that are filed early in the proceedings are rarely construed as clear waivers
of the right to remove.”).
Other circuit courts of appeals have gone so far as to hold that the right to remove
cannot be waived prior to the right existing. Akin v. Ashland Chemical Co., 156 F.3d
1030, 1036 (10th Cir. 1998) (where the “actions in state court by defendant . . . were
taken before it was unequivocally apparent that the case was removable,” they do not
constitute waiver of the right to remove); McKnight v. Illinois Cent. R.R., 967 F.Supp.
182, 186 (E.D. La. 1997) (“[t]he right to remove a case to federal court may be waived by
acts taken in the state court, subsequent to the creation of the right to remove.”); Fain v.
Biltmore Securities, Inc., 166 F.R.D. 39, 40 (M.D. Ala. 1996) (same).
Finally, courts have refused to find a waiver when the defendant’s participation in
the state action was dictated by the rules of the state court or where the defendant’s
failure to act would prejudice him in the state proceedings. Haun, 420 F.Supp. at 859
9
(finding that a defendant’s actions could not be construed as a waiver of the right to
remove where the defendant took these actions to protect himself from default in state
court).
Plaintiffs in this case argue that removing defendants waived their right to
remove by demonstrating a “clear and unequivocal” intent to litigate in state court.
Plaintiffs cite four actions, which they allege demonstrate this intent:
1) removing defendants, Harris and Getaway Tours, filed a cross-claim
against the nondiverse defendant, Conley-Beaver, at the beginning of the
state action;
2) removing defendants engaged in discovery after the case became
removable;
3) removing defendants engaged in alternative dispute resolution (ADR),
including proposals to participate in a high/low non-jury trial in Beaver
County state court, after the case became removable; and
4) removing defendants continue to participate in a related state court action
against them involving property damage claims.
Plaintiffs also argue that this case should be remanded on the ground that removing the
matter to federal court will invite significant delay and expense.
1.
Removing defendants’ cross-claim
Plaintiffs argue that removing defendants waived their right to remove when they
filed a cross-claim against co-defendant Conley-Beaver. Removing defendants respond
that such cross-claims are routinely filed to preserve defenses and claims, and that the
instant cross-claim should not be perceived as evidence that they clearly and
unequivocally intended to waive their right to remove.
10
As established in Haun, a defendant can waive his right to remove through
“voluntary invocation of state court jurisdiction for his own purposes.” Haun, 420 F.
Supp. at 863. Here, the question is whether filing a cross-claim is a voluntary invocation
of state court jurisdiction.
The Third Circuit Court of Appeals has not spoken on this matter, and other
circuits are split about whether a voluntary cross-claim demonstrates a “clear and
unequivocal” intent to litigate in state court. Plaintiffs cite Sood v. Advanced Computer
Techniques, 308 F. Supp. 239, 241 (E.D. Va. 1969), to support their contention that a
defendant waives his right to remove when he files a voluntary cross-claim in state
court. In Sood, the district court held that “the defendant, by filing its plea in abatement
and its cross-action in the State Court, waived its right to remove the case to this Court”
as the defendant “voluntarily invoke[d] the jurisdiction of the state court by seeking its
affirmative aid in his behalf.” Sood, 308 F. Supp. at 241; see Acosta v. Direct Merchants
Bank, 207 F. Supp. 2d 1129, 1133 (S.D. Cal. 2002) (the defendant affirmatively waived
removal rights by filing a voluntary cross-claim); Paris v. Affleck, 431 F. Supp. 878, 880
(M.D. Fla. 1977) (same); Briggs v. Miami Window Corp., 158 F. Supp. 229, 230 (M.D.
Ga. 1956) (same).
While plaintiffs would like the court to broadly adopt the reasoning of the district
court in Sood to find that a cross-claim “voluntarily invokes the jurisdiction of the state
court,” Sood, 308 F. Supp. at 241, this court is hesitant to find that all permissive crossclaims constitute waivers of the right to remove. Sood lays out a rigid requirement,
which forces a defendant to speculate about the likelihood a nonremovable case will
later become removable when making preliminary procedural decisions. Adopting this
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approach would place defendants in precarious positions; they would have to weigh the
value of asserting potentially viable claims against the possibility that the case may
become removable at some point in the future. This court is not inclined to require
defendants to engage in this sort of conjecture, particularly at the outset of litigation,
and concludes that the fact-based approach laid out by the Seventh Circuit Court of
Appeals in Rothner v. City of Chicago, 879 F.2d 1402, 1414–1416 (7th Cir. 1989), and
later adopted by the Fourth Circuit Court of Appeals in Grubb v. Donegal Mut. Ins. Co.,
935 F.2d 57, 59 (4th Cir. 1991), is more persuasive on this matter.
In Rothner, the Seventh Circuit Court of Appeals examined the role of the waiver
doctrine following the adoption of 28 U.S.C. § 1446(b). The court found that as a general
matter the 1948 revisions to the statutory scheme, which included the adoption of
§ 1446(b), “seemed to obviate the need of courts to resort to judicial rules concerning
waiver.” Rothner v, 879 F.2d at 1414. Rothner, however, recognized that the waiver
doctrine is “entrenched in the lower courts,” and that district courts do retain the
“power to remand in extreme situations.” Id. at 1416. Under the approach set out in
Rothner, “a waiver determination involves a factual and objective inquiry as to the
defendant's intent to waive” and should only be found in rare and extreme
circumstances. Id. at 1408.
The Fourth Circuit Court of Appeals likewise adopted this approach, stating:
We are persuaded by this reasoning, and adopt Rothner 's holding that although
a defendant may yet waive its thirty-day right to removal by demonstrating a
“clear and unequivocal” intent to remain in state court, such a waiver should only
be found in “extreme situations.” 5
While the Third Circuit Court of Appeals has not explicitly adopted this approach, the court of appeals
did cite Grubb when determining that a defendant who had asserted claims for indemnification and
5
12
Grubb v. Donegal Mut. Ins. Co., 935 F.2d 57, 59 (4th Cir. 1991). Extreme situations
befitting waiver may include a case that has already been fully litigated on the merits in
state court, Rothner, 879 F.2d at 1416; a case in which the defendant takes “substantial
affirmative steps in the state court after the [nondiverse defendants are] dismissed,”
Grubb, 935 F.2d at 59; or a case where the defendant removes only after “test[ing] the
waters in state court.” Small v. Ramsey, Civ. Action No. 1:10-121, 2010 WL 4394084, at
*4 (N.D.W. Va. Nov. 1, 2010).
Here, removing defendants’ decision to file a permissive cross-claim against
Conley-Beaver does not rise to the “extreme” level described in Rothner and Grubb.
Removing defendants’ decision to file a cross-claim was a defensive strategy. Antol v.
Esposto, 100 F.3d 1111, 1115 n.1 (3d Cir. 1996), amended, (3d Cir. Jan. 20, 1997)
(“[Defendant’s] pleading appears to be defensive in nature and we do not consider it to
be such a substantial affirmative step as to bar removal.”). Removing defendants’ crossclaim was also filed early in the litigation, well before any party had reason to suspect
that the case may become removable. Selvaggi, 871 F. Supp. at 817 (“pleadings that are
filed early in the proceedings are rarely construed as clear waivers of the right to
remove.”). Removing defendants’ cross-claim does not rise to the level of an “extreme
situation” as required under Rothner. As a result, the filing of a cross-claim by removing
defendants does not constitute a bar to removal.
contribution did not take “substantial affirmative steps” that would constitute a bar to removal. Antol v.
Esposto, 100 F.3d 1111, 1115 n.1 (3d Cir. 1996), amended, (3d Cir. Jan. 20, 1997).
13
2.
Removing defendants’ discovery activities
Plaintiffs argue that removing defendants conducted extensive discovery, and in
particular, that removing defendants continued to engage in discovery after the case
became removable. The discovery activities cited by plaintiffs include scheduling,
conducting interviews, and deposing parties. Plaintiffs contend that by engaging in these
activities after the case became removable removing defendants manifested an intent to
remain in state court, thus, waiving their right to remove. Removing defendants argue
that they were required to engage in discovery in order to defend themselves in the state
court action, and that if they had ceased all discovery activities upon ascertaining that
the case had become removable they would have been in violation of the state court’s
orders and rules of procedure.
District courts within the Third Circuit have explicitly held that a defendant’s
discovery activities do not necessarily evince a “clear and unequivocal” intent to waive
the right to remove. Cook, WL 4606305, at *4 (“conducting discovery will not
automatically bar the removal of an action.”); Cognetx, Inc., 2010 WL 3370761, at *6
(finding that defendants who had only recently begun discovery had not displayed a
“clear and unequivocal” intent to waive the right to remove).
Here, removing defendants engaged in limited discovery after the case became
removable on May 23, 2016, and no discovery after they filed the notice of removal. The
discovery conducted after May 23, 2016, was done in accordance with a case
management order entered by the state court, setting a discovery deadline of June 30,
2016, for removing defendants.
14
In Foster v. Chesapeake Insurance Co., Ltd. the Third Circuit Court of Appeals
adopted the “clear and unequivocal” test to avoid the very concern removing defendants
raise. Foster, 933 F.2d at 1218 n.15 (“In the context of litigation-based waiver, the ‘clear
and unequivocal’ standard makes sense. Otherwise, in order not to waive the right to
remove defendants would have to remain inactive in the state court, running the peril of
being held in default should a remand from the district court later occur.”). In Haun, the
court determined that a defendant who wishes to adequately protect himself in state
court, may have to engage in state court activities at the same time that he files a
removal petition, and that for a court to consider this state court activity “as a waiver of
removal would create hardships for the defendant.” Haun, 420 F. Supp. at 863. Given
the court’s decision in Haun and the impending discovery deadline set by the state
court, Harris’s and Getaway Tours’ contention that they would have been unduly
harmed had they discontinued all discovery activities is particularly persuasive.
Because removing defendants appear to have engaged in only a limited amount of
discovery, as was necessary to protect their defenses in state court, their discovery
activities do not constitute a “clear and unequivocal” waiver of their right to remove.
3.
Removing defendants’ ADR activities
Plaintiffs contend that removing defendants evinced a “clear and unequivocal”
intent to litigate in state court by continuing to engage in ADR activities, specifically
discussions regarding a “binding high/low nonjury trial,” after the case became
removable.
15
While it does not appear that courts within the Third Circuit have specifically
addressed whether engaging in ADR or settlement negotiations demonstrates a “clear
and unequivocal” intent to litigate in state court, it is unlikely that those activities rise to
this level. Engaging in ADR or settlement discussions seems more akin to a preliminary
action, like filing an answer, engaging in discovery, or scheduling a conference, see
Cognetx, Inc., 2010 WL 3370761, at *6, than to litigating a case on its merits. Haun, 420
F. Supp. at 863. In engaging in discussions regarding a “binding high/low nonjury trial,”
removing defendants in this case do not seem to have taken a “substantial defensive
action in state court.” Bryfogle, 666 F. Supp. at 733. Removing defendants also make a
persuasive argument that were the court to find that a defendant who engages in ADR or
settlement discussions waived his right to remove, this decision would discourage
defendants from engaging in those activities. This result would clearly go against public
policy favoring settlement.
The participation of removing defendants in discussions about a “binding
high/low nonjury trial” does not constitute a “clear and unequivocal” waiver of their
right to remove.
4.
Removing defendants’ related state claims
Plaintiffs argue that remand is appropriate here, because there is a related action
pending before the state court. The related action involves property damage claims with
respect to the vehicles involved in the accident. The property damage claims were
initially brought by plaintiffs. The removing defendants, Harris and Getaway Tours,
filed a counterclaim in that action. (ECF No. 5 ¶34). Plaintiffs contend that the personal
16
injury claims and the property damage claims are essentially part of the same state court
action, and the personal injury action should be remanded due to the difficulties and
inefficiencies of litigating what is, in essence, one action in two forums.
Plaintiffs point to Bryfogle to support their contention that a federal action
should be remanded when it is in essence part of a state court action. This argument is
an overly broad interpretation of Bryfogle, which focused not on whether the actions in
question were related, but whether the federal claim was ancillary to the state claim.
Bryfogle v. Carvel Corp., 666 F. Supp. 730, 732 (E.D. Pa. 1987); see Connecticut Bank of
Commerce v. Republic of Congo, 440 F. Supp. 2d 346, 350 (D. Del. 2006) (quoting
Richmond v. Allstate Ins. Co., 624 F.Supp. 235, 236 (E.D.Pa.1985)) (“‘A suit which is
merely ancillary or supplemental to another action cannot be removed from state to
federal court.’”).
The pertinent question here is whether the claim currently before the state court
for property damages is ancillary to the personal injury claim. In International
Organization Masters, the district court opined that there are “no useful working
definitions of ‘ancillary.’” Int'l Org. Masters, Mates & Pilots of Am., Local No. 2 v. Int'l
Org. Masters, Mates & Pilots of Am., Inc. 342 F. Supp. 212, 214 (E.D. Pa. 1972). The
Third Circuit Court of Appeals has not addressed this matter, and district courts within
this circuit vary with respect to the analysis they use for determining if a matter is
ancillary. Connecticut Bank of Commerce v. The Republic of Congo, 440 F.Supp.2d 346
(D.Del.2006) (providing a survey of Third Circuit district court decisions that address
whether a matter is ancillary).
17
That being said, International Organization Masters, which both plaintiffs and
removing defendants cited in their briefs, provides helpful guidance on this question.
According to International Organization Masters, for a case to be removable “[i]t must
be ‘practically severable,’ so as not to do ‘practical violence.’ . . . The mere fact that a
controversy had its origin in a state action does not require remand; the issue is whether
it is a ‘separate suit.’” Int'l Org. Masters, Mates & Pilots of Am., Local No. 2, 342 F.
Supp. at 214. The question of “practical violence” “relates to the state court's power to
fashion a remedy for the wrong committed against the plaintiffs.” Id. at 215.
Here, it does not appear that separating the cases involving personal injury and
property damage claims will cause the sort of “practical violence” envisioned by
International Organization Masters. The state court will retain the power to fashion a
remedy to address the property damage claims even if the personal injury case is
removed to federal court. In fact, this matter is substantively distinct from most of the
cases in which the court examined whether a claim is ancillary, as the majority of those
cases involved garnishment actions. See Id.; Connecticut Bank, 440 F. Supp. 2d at 352;
Scanlin v. Utica First Ins. Co., 426 F. Supp. 2d 243, 245 (M.D. Pa. 2006); Haines by
Midlantic Bank, N.A. v. Donn's, Inc., No. CIV. A. 95-1025, 1995 WL 262534, at *1 (E.D.
Pa. Apr. 27, 1995); Lexington Ins. Co. v. Trustees of Univ. of Pa., Civ. Court No. A 851125, 1987 WL 16041, at *1 (E.D. Pa. Aug. 21, 1987); Richmond v. Allstate Ins. Co., 624
F. Supp. 235 (E.D. Pa. 1985), writ denied, 800 F.2d 1130 (3d Cir. 1986).
The personal injury claims and the property damage claims arising from the
accident on December 26, 2013, are currently being addressed as separate suits, and
plaintiffs provided no evidence to support their contention that the state court will
18
consolidate these actions sua sponte if this court remands. Given that these claims are
currently proceeding as independent actions, it does not appear that removing the
personal injury claims to federal court would cause practical violence or “‘gratuitous[ly]
interfere[ ] with the orderly and comprehensive disposition of a state court litigation.’”
Lexington, 1987 WL 16041, at *1 (quoting Brillhart v. Excess Ins. Co., 316 U.S. 491, 495
(1942)). The court will not remand this case based upon plaintiffs’ argument that the
personal injury claim is related or ancillary to the property damages claim currently
pending in state court.
5.
Delay and expense
Plaintiffs argue that this case should be remanded because the parties have
already committed significant time and expense to the state court litigation. Plaintiffs
also anticipate that this case will be set for trial more quickly at the state court level.
Although the Court is mindful of the[] critical principles [of judicial economy and
cooperative federalism], the executive and legislative branches have enacted
statutes articulating the standards to be used in determining whether a defendant
may remove a particular case to federal court. In particular, 28 U.S.C. §§ 1441,
1446-47 describe the procedures by which a defendant may remove a case to
federal court. [Where defendant] complie[s] with the statutory requirements for
removal, [] this Court will not remand the case on the basis of principles of
judicial economy and cooperative federalism.
Cook, 2008 WL 4606305, at *3; see Jim Arnold Corp. v. Hydrotech Sys., Inc., 109 F.3d
1567, 1572 (Fed.Cir.1997) (“[C]onsiderations of judicial economy cannot trump a clear
rule of law, particularly one that goes to the very power of the court to decide the case.”).
28 U.S.C. § 1446(b) lays out clear requirements with respect to the right to remove this
case. The court will not place judicial economy and fear of delay above these
requirements.
19
6.
Summary
For the reasons set forth above, removing defendants did not waive their right to
remove. Because this court could not conclude that removing defendants waived their
right to remove, the court will address the question whether removing defendants’
notice of removal was timely filed under 28 U.S.C. § 1446(b).
B.
Timeliness of removing defendants’ notice of removal
Plaintiffs argue that this case is not removable because removing defendants did
not file the notice of removal within the required thirty-day time limit. The time
limitation for removal in a case where the initial pleading is not removable is controlled
by 28 U.S.C. § 1446(b), which provides:
If the case stated by the initial pleading is not removable, a notice of removal may be filed
within thirty days after receipt by the defendant, through service or otherwise, of a copy
of an amended pleading, motion, order, or other paper from which it may first be
ascertained that the case is one which is or has become removable, except that a case may
not be removed on the basis of jurisdiction conferred by section 1332 of this title more
than 1 year after commencement of the action.
28 U.S.C. § 1446(b) (emphasis added). 6 The thirty-day time limit is mandatory. Carlyle
Inv. Mgmt. v. Moonmouth Co. SA, 779 F.3d 214, 218 (3d Cir. 2015); Groh v. Groh, 889
F.Supp. 166, 171 (D.N.J. 1995); Balestrieri v. Bell Asbestos Mines, Ltd., 544 F.Supp 528,
529 (E.D. Pa. 1982). The goal of the time-limit provision is to resolve early in which
court system the case will be heard. 14C Charles Alan Wright & Arthur R. Miller, Federal
Practice & Procedure § 3731 (4th ed. 2016).
Because plaintiffs raised no federal question in the complaint and the originally named defendant
Conley-Beaver was a nondiverse party, the action was not initially removable. Therefore, the second
paragraph of § 1446(b) governs.
6
20
Here, plaintiffs and removing defendants agree that email correspondence sent
on May 18, 2016, and May 23, 2016, stated Conley-Beaver was to be dismissed as a
defendant; the parties disagree, however, about whether this correspondence triggered
the thirty-day removal period provided under 28 U.S.C. § 1446(b).
The court’s inquiry into this matter is twofold. The court must first decide
whether the attorney correspondence on May 18, 2016, and May 23, 2016, can be
considered “other paper,” under 28 U.S.C. § 1446(b). If the court determines that 28
U.S.C. § 1446(b) includes this attorney correspondence, the court must determine
whether removing defendants may have ascertained from this correspondence that the
case had become removable. See Rose v. USAA Cas. Ins. Co., Civ. Action No. 09-6005,
2010 WL 2557484, at *3–4 (D.N.J. June 23, 2010); Polk v. Sentry Ins., 129 F. Supp. 2d
975, 978 (S.D. Miss. 2000).
Although the Third Circuit Court of Appeals has not specifically defined “other
paper,” “district courts in the Third Circuit have given the term an ‘embracive
construction’ to include a wide array of documents, including letter communications
between counsel, deposition testimony, stipulations between the parties, answers to
interrogatories, and transcripts.” Costa v. Verizon New Jersey, Inc., 936 F. Supp. 2d 455,
465–66 (D.N.J. 2013); see 14C Charles Alan Wright & Arthur R. Miller, Federal Practice
& Procedure § 3731 (4th ed. 2016). (“The federal courts have given the reference to
‘other paper’ an expansive construction and have included a wide array of documents
within its scope.”).
Several district courts within the Third Circuit have specifically held that written
correspondence between counsel can constitute “other paper” under 28 U.S.C.
21
§ 1446(b). Rose, 2010 WL 2557484, at *4 (finding that a stipulation substituting a
defendant, signed and mailed by the plaintiffs’ attorney, constituted an “other paper”
within the meaning of § 1446(b)); Efford v. Milam, 368 F.Supp.2d 380, 385
(E.D.Pa.2005) (concluding that correspondence from the plaintiffs’ counsel fell within
the purview of “other paper.”); Rahwar v. Nootz, 863 F. Supp. 191, 192 (D.N.J. 1994)
(“plaintiff's statement of damages letter is an ‘other paper’ within the meaning of 28
U.S.C. § 1446(b).”); Broderick v. Dellasandro, 859 F.Supp. 176, 179 (E.D.Pa.1994)
(finding that a letter from the plaintiffs’ counsel indicating that the plaintiffs had
changed residency provided the defendant with notice that the case had become
removable); Hessler v. Armstrong World Indus., Inc., 684 F. Supp. 393, 395 (D. Del.
1988) (finding that letters and statements made by the plaintiffs’ attorney, which
provided adequate notice that the plaintiff had settled with the nondiverse defendant,
triggered the thirty-day removal period). It is clear that attorney correspondence can be
considered “other paper” for the purpose of 28 U.S.C. § 1446(b).
Having concluded that the email correspondence between counsel can constitute
“other paper,” the court must examine the substance of this correspondence in order to
determine when removing defendants may have first ascertained that the case had
become removable. In discussing “other papers,” courts within this circuit “have held
that such documents trigger [28 U.S.C. § 1446(b)’s] thirty-day removal period only when
they are the result of ‘a voluntary act of the plaintiff which effects a change rendering a
case subject to removal (by defendant) which had not been removable before the
change.’” Efford, 368 F. Supp. 2d at 385 (citing DeBry v. Transamerica Corp., 601 F.2d
22
480, 487 (10th Cir.1979)); see Costa, 936 F. Supp. 2d at 466; Rose, 2010 WL 2557484,
at *4.
“In addition, these courts have read [28 U.S.C. § 1446(b)’s] use of the word
‘ascertain’ to mean that the thirty-day removal period is triggered only when these
documents make it ‘unequivocally clear and certain’ that federal jurisdiction lies.”
Efford, 368 F. Supp. 2d at 385 (citing Bosky v. Kroger Tex., L.P., 288 F.3d 208, 212 (5th
Cir.2002)); In re Diet Drugs (Phentermine, Fenfluramine, Dexfenfluramine) Prods.
Liab. Litig., Civ. Action No. 98-20560, 1999 WL 106887, at *2 (E.D. Pa. Mar. 2, 1999)
(“courts have held that an action was properly removed to a federal court where the
plaintiff clearly expressed an intent to voluntarily abandon claims against nondiverse
defendants.”); Polk, 129 F. Supp. 2d at 979–80 (citing Pullman Co. v. Jenkins, 305 U.S.
534 (1939), for the proposition that “notice must clearly and definitively evidence the
plaintiff's desire voluntarily to dismiss any nondiverse defendants.”).
For attorney correspondence to trigger the thirty-day removal period, the
correspondence must show that the plaintiff engaged in a voluntary act which rendered
the case subject to removal, and that the act was “unequivocally clear and certain” from
the correspondence. If plaintiffs engaged in such an act, the time at which that act
became clear to removing defendants will “trigger” the thirty-day removal period under
28 U.S.C. § 1446(b).
Here, the act in question is the discontinuance by plaintiffs of defendant ConleyBeaver. “[C]ourts have held that an action was properly removed to a federal court
where the plaintiff clearly expressed an intent to voluntarily abandon claims against
nondiverse defendants.” In re Diet Drugs, 1999 WL 106887, at *2; see Rose, 2010 WL
23
2557484, at *4 (finding that the plaintiffs’ stipulation substituting a nondiverse
defendant for a diverse defendant constituted a voluntary abandonment of claims
against the removing defendant); Eyal Lior v. Sit, 913 F. Supp. 868, 878 (D.N.J. 1996)
(finding that the plaintiffs’ stipulation removing the nondiverse defendant triggered the
thirty-day removal period under 28 U.S.C. §1446 (b)); Hessler, 684 F. Supp. at 395
(holding that the plaintiff's act of entering into a settlement agreement with the
nondiverse defendant constituted the voluntary abandonment of claims against the
nondiverse defendant); Lesher v. Andreozzi, 647 F.Supp. 920, 921–22 (M.D.Pa.1986)
(same). Here, the discontinuance by plaintiffs of defendant Conley-Beaver was a
voluntary act indicating plaintiffs’ intent to abandon claims against the only nondiverse
defendant. This discontinuance rendered the case subject to removal.
Given that the discontinuance created diversity jurisdiction and made this matter
removable, the court must determine when plaintiffs’ voluntary act of dismissing
Conley-Beaver became “unequivocally clear and certain” to removing defendants, such
that removing defendants could first ascertain that the case had become removable.
There are four different papers identified by the parties that could have first indicated to
removing defendants that the case was removable. These are:
1. the two emails sent by counsel for removing defendants and counsel for
defendant Conley-Beaver on May 18, 2016, which confirm that all
defendants consented to the discontinuance of Conley-Beaver (ECF No. 520);
2. the letter sent by counsel for plaintiffs on May 23, 2016, which contained
the unsigned stipulation for discontinuance with respect to defendant
Conley-Beaver (ECF. No. 5-21);
3. correspondence sent by counsel for Conley-Beaver and counsel for
plaintiffs on May 31, 2016, which contained signed counterparts of the
24
stipulation for discontinuance with respect to defendant Conley-Beaver
(ECF. No. 5-22); and
4. a letter sent by counsel for plaintiffs on June 15, 2016, which confirmed
that the stipulation for discontinuance was filed with the Court of
Common Pleas of Beaver County on June 15, 2016 and included a copy of
that filing.
Plaintiffs point to the May 18th email exchange as evidence that removing
defendants were made aware that the only nondiverse party was being dismissed on that
date and that, consequently, the May 18th correspondence triggered the thirty-day
removal period under 28 U.S.C. § 1446(b). Plaintiffs argue that removing defendants
had until June 17, 2016, to file their notice of removal, and that the notice of removal
filed on June 28, 2016, was untimely.
In the alternative, plaintiffs argue that the May 23rd letter confirmed in writing
that there were no remaining nondiverse defendants in this action. Plaintiffs’ counsel
sent this letter to all defendants and included in it an unsigned stipulation for
discontinuance with respect to defendant Conley-Beaver. Based upon this
communication, counsel for plaintiffs argues that the thirty-day removal period began
on May 23, 2016, removing defendants had until June 22, 2016, to file their notice of
removal, and removing defendants’ notice of removal, filed on June 28, 2016, was
untimely.
Conversely, removing defendants argue that the removal period did not begin
until June 15, 2016, when the stipulation for discontinuance was filed with the court and
Conley-Beaver was formally dismissed as a defendant, or in the alternative, on May 31,
2016, when all parties signed the stipulation for discontinuance. Counsel for Harris and
Getaway Tours argue that because the removal period was not triggered until either
25
June 15, 2016 or May 31, 2016, their notice of removal, filed on June 28, 2016, was filed
within the thirty-day removal period.
1.
May 18, 2016 emails
For the May 18, 2016 email exchange between defendant Conley-Beaver and
removing defendants Harris and Getaway Tours to serve as the triggering event for the
thirty-day removal period, it must have been “unequivocally clear and certain” from this
correspondence that the case had become removable.
The May 18, 2016 email exchange discusses the discontinuance of Conley-Beaver.
The email exchange includes two emails – an initial email sent from Timothy
Montgomery, counsel for Harris and Getaway Tours, and a response email sent from
William Mansour, counsel for Conley-Beaver. While, Laura Tocci, counsel for plaintiffs,
was mentioned in Mr. Montgomery’s email and was copied on both Mr. Montgomery’s
and Mr. Mansour’s emails, plaintiffs’ counsel neither engaged in nor responded to this
email exchange. Plaintiffs state in their brief in support of their motion to remand, that
on May 17, 2016, counsel for plaintiffs orally informed counsel for Conley-Beaver that
plaintiffs intended to dismiss Conley-Beaver from this action upon consent of Harris
and Getaway Tours (ECF No. 6); however, no evidence was provided indicating that
plaintiffs relayed this information, either in writing or otherwise, to Harris and Getaway
Tours at that time.
While the email exchange mentions removing defendants’ “understanding” that
plaintiffs had agreed to dismiss Conley-Beaver, plaintiffs did not confirm this fact in the
May 18th email exchange. In fact, the exchange contains no information from plaintiffs
26
whatsoever; it merely discusses an oral agreement between defendant Conley-Beaver
and plaintiffs, which plaintiffs neither confirmed nor denied.
While counsel for plaintiffs may have made this decision unequivocally clear and
certain during the May 17th phone call, courts typically require “that an ‘other paper’
under 28 U.S.C. § 1446(b) consist of a written document.” Cabibbo v. Einstein/Noah
Bagel Partners, L.P., 181 F. Supp. 2d 428, 431 (E.D. Pa. 2002); see State Farm Fire &
Cas. Co. v. Valspar Corp., 824 F. Supp. 2d 923, 936 (D.S.D. 2010) (finding that oral
communication is typically insufficient to constitute “other paper” and trigger the thirtyday statutory removal period); Entrekin v. Fisher Scientific Inc., 146 F.Supp.2d 594, 612
(D.N.J.2001) (holding that oral communications, “made in an informal setting without
any transcription or simultaneous reduction to written form about such a matter as
settlement negotiations, are incapable of triggering the thirty-day limitation for
removal”); 14B Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure §
3731 (4th ed. 2009) (“Courts ordinarily hold that oral statements do not trigger
removability under the second paragraph of Section 1446(b) because such statements do
not qualify as an ‘other paper.’”).
Given that plaintiffs neither sent not affirmed in writing the content of the May
18th emails, this court cannot conclude that this correspondence makes it “unequivocally
clear and certain” that the case had become removable. As a result, the May 18th emails
did not trigger the thirty-day removal period under 28 U.S.C. § 1446(b).
2.
May 23, 2016 letter
27
The court next examines whether the letter plaintiffs’ counsel sent to all
defendants on May 23, 2016, which included an unsigned stipulation for discontinuance
with respect to Conley-Beaver, made it “unequivocally clear and certain” to Harris and
Getaway Tours that the case had become removable. Unlike the May 18th emails, the
correspondence on May 23, 2016, included written confirmation from plaintiffs that
Conley-Beaver was being dismissed from the case. The only question is whether the
removing defendants could have ascertained through an unsigned, unfiled stipulation
that the matter had become removable.
In Hessler v. Armstrong World Industries, Inc., 684 F. Supp. 393, 393 (D. Del.
1988), the court had to determine whether an informal settlement agreement with the
nondiverse defendant placed the diverse defendants on notice that the case was
removable and, thus, triggered the thirty-day removal period. The court held that the
settlement agreement did not need to be formalized or presented to the court to
commence the removal period, because “formal discontinuance is not a prerequisite for
removability” Id. at 395 (citing Lesher v. Andreozzi, 647 F.Supp. 920, 921
(M.D.Pa.1986)); rather, the court determined that the case became removable when the
diverse party “received adequate notice, both by letters and by statements made in the
Superior Court . . . that the requisites of removability were present.” Id. at 395.
The Hessler decision seems to suggest that an informal – i.e. unsigned and
unfiled – agreement can serve as the triggering event under 28 U.S.C. § 1446(b). Other
district court decisions support this finding. See Rawlings v. Prater, 981 F.Supp. 988,
990 (S.D.Miss.1997) (holding that removal was proper where the plaintiffs voluntarily
abandoned their claims against a nondiverse defendant by entering into a settlement
28
agreement, even though release document had not yet been finalized); Mancari v. AC &
S Co., 683 F. Supp. 91, 93 (D. Del. 1988) (“It is not required that discontinuance of the
nondiverse defendants be in writing or be formalized.”); Rowe v. Johns-Manville, Civ.
Action No. A. 86-6044, 1987 WL 12266, at *2 (E.D. Pa. June 9, 1987) (“any unequivocal
indication of plaintiff's abandonment of its action against settling defendants is
sufficient to effect discontinuance, and a formal written stipulation to that effect is not
required.”); Lesher, 647 F. Supp. at 921 (“We are unpersuaded by plaintiffs' argument
that the [nondiverse] defendants must be formally dismissed from this action before
removal is permissible.”).
These decisions differ from the matter at hand, however, in one significant
manner. These decisions each involved informal settlement agreements, whereas the
instant matter involves an informal stipulation of discontinuance. The court must,
therefore, determine whether an unsigned stipulation is analogous to an informal
settlement agreement for purposes of commencing the thirty-day removal period under
28 U.S.C. § 1446(b).
Removing defendants argue that an unsigned, unfiled stipulation is not similar to
a settlement agreement because such a stipulation is not binding under state law, and
that consequently it does not make the case removable and cannot serve as the
triggering event under 28 U.S.C. § 1446(b). Removing defendants contend that had they
filed a notice of removal prior to the filing of the stipulation on June 15, 2016, “it is likely
that Plaintiffs would have moved to remand as there was not complete diversity.” (ECF
No. 11).
29
Removing defendants rely heavily on First Star Savings Bank v. American Title
Insurance Co., Civ. Action No. 94-3716, 1994 WL 475273 (E.D. Pa. Aug. 29, 1994), to
support their argument. First Star, however, is highly problematic. Like the instant
matter, First Star involved a removing defendant who filed a notice of removal after
learning from the plaintiff’s counsel that the plaintiff intended to consent to the
dismissal of the only nondiverse defendant. The removing defendant was in receipt of
this information via a letter from the plaintiff’s counsel on or about June 8, 1994. First
Star, 1994 WL 475273, at *2. The removing defendant filed for removal on June 16,
1994, before the stipulation was signed or filed. Id. While the parties disagreed about the
timeliness of the defendant’s removal with respect to whether the letter from plaintiff’s
counsel triggered the thirty-day removal period, the court did not resolve the dispute on
that basis. Id. at n.5. Instead, the court found that because the nondiverse party had not
yet been formally dismissed from the action, there was no diversity of citizenship;
consequently, the court remanded due to lack of subject-matter jurisdiction. Id. at 3.
To support its finding that the state court action had not yet become removable,
the court relied on Hutton v. Temple University, 703 F. Supp. 391 (E.D. Pa. 1989), for
the proposition that “the record of the state court is considered the sole source from
which to ascertain whether a case originally not removable has become removable.” Id.
(citing Hutton, 703 F. Supp. at 392). Based on this directive from Hutton, the district
court examined the state court record, found that the parties had not signed and filed
the stipulation, and determined that diversity jurisdiction did not exist. Id.
The reliance of the court in First Star on Hutton, however, is misplaced. In
support of its statement that “the state court is considered the sole source from which to
30
ascertain whether a case originally not removable has become removable” the court in
Hutton cited Bandag of Springfield, Inc. v. Bandag Inc., 537 F. Supp. 366 (W.D. Mo.
1981).7 In Bandag, the district court remanded a case on the ground that the nondiverse
defendants had never been dismissed and that, consequently, there was no diversity
jurisdiction. Bandag, 537 F. Supp. at 368. The court stated that it determined that the
nondiverse party had not been dismissed “[f]rom the records supplied to the Court.” Id.
While it is clear from the court’s opinion that it relied on state court records to decide
removability, it does not follow that the decision to use state court records to make this
decision means that state court records are the only source a federal court can consider
when deciding whether a case has become removable. This inference is improperly
drawn by the court in Hutton, and the court in First Star mistakenly adopted and relied
upon it. In addition to being flawed due to the improper inferences drawn from the case
law, this inference is also in direct conflict with the myriad of decisions that have found
that 28 U.S.C. § 1446(b) can be triggered by “other papers” not filed in the state court
proceedings. A.S. ex rel. Miller v. SmithKline Beecham Corp., 769 F.3d 204, 210–211 (3d
Cir. 2014) (triggering of 28 U.S.C. § 1446(b) based upon an order in another case); Akin
v. Ashland Chem. Co., 156 F.3d 1030, 1035–1036, 1035 n.2 (10th Cir. 1998) (triggering
based upon an answer to interrogatory); Efford, 368 F.Supp.2d at 385 (triggering based
upon attorney correspondence); Rahwar, 863 F. Supp. at 192 (triggering based upon
“statement of damages” letter); Broderick, 859 F.Supp. at 179 (triggering based upon
The court in Hutton cited Moore's Federal Practice ¶ 0.168 [3.–5–6] at 599 (2d ed. 1996).
While this section of Moore’s Federal Practice in its second edition did reference that the state
court record is the sole source from which to ascertain whether a case has become removable,
this reference does not appear in the most recent edition of Moore’s Federal Practice. See 16-107
Moore's Federal Practice - Civil § 107.140 (3d ed. 2016).
7
31
letter indicating change of residency); Hessler, 684 F. Supp. at 395 (triggering based
upon informal settlement). Given that the majority of courts in and outside of the Third
Circuit seem to reject the First Star’s basic presumption that district courts cannot look
outside the state court record to ascertain whether a case has become removable, this
court is unpersuaded by the reasoning and holding in First Star.
While the case law is not perfectly clear about whether an unsigned stipulation
can trigger the thirty-day removal period under 28 U.S.C. § 1446(b), this court finds two
decisions particularly instructive – Eyal Lior v. Sit, 913 F. Supp. 868 (D.N.J. 1996), and
King v. Bell & Howell Mail Processing Systems Co., Civ. Action No. 97-1303, 1997 WL
285969 (N.D. Ill. Apr. 24, 1997). In Eyal Lior the district court found that an unsigned
stipulation of dismissal triggered the thirty-day removal period under 28 U.S.C. §
1446(b). In Eyal Lior, the removing defendants received an unsigned copy of a
stipulation dismissing all claims against the nondiverse defendant via facsimile on
November 10, 1995. Eyal Lior, 913 F. Supp. at 877. On November 23, 1995, counsel for
the defendants signed the stipulation. On November 28, 1995, counsel for the plaintiffs
signed the stipulation and filed it with the court. Id at 873. The removing defendants
filed their original removal petition on November 28, 1995, and filed an amended
removal petition on December 14, 1995. Id. at 873, 878. The removing defendants
argued that the matter did not become removable until the stipulation was filed on
November 28, 1995. The court rejected this argument, finding instead that the case
became removable on November 10, 1995, when the removing defendants received the
unsigned copy of the stipulation, and that consequently the thirty-day removal period
began on that date. Id. at 878. While the court’s decision in Eyal Lior suggests that a
32
stipulation – like a settlement agreement – need not be signed or reduced to its final
terms to trigger the removal period under 28 U.S.C. § 1446(b), the court did not fully
explain the reasoning behind this decision. It is somewhat unclear as to why or how the
court in Eyal Lior determined that an unsigned stipulation enabled the removing
defendant to ascertain that the case had become removable.
While Eyal Lior offers some guidance, the court finds the district court’s decision
in King v. Bell & Howell Mail Processing Systems Co. particularly persuasive. In King,
the plaintiff originally filed a case against Bell and Howell Company (“Bell and Howell”).
King, 1997 WL 285969 at *1. The plaintiff later learned that the appropriate defendant
was Bell and Howell Mail Processing Systems Company (“Bell and Howell Mail”). Id.
Bell and Howell filed a motion to dismiss on December 20, 1996, which the plaintiff did
not oppose, and on January 6, 1997, the plaintiff was granted leave to amend her
complaint to add Bell and Howell Mail as a defendant. On January 29, 1997, Bell and
Howell’s motion to dismiss was granted, leaving Bell and Howell Mail as the sole
defendant. On February 25, 1997, Bell and Howell Mail filed a notice for removal based
on diversity. Id. The court in King was tasked with determining whether the thirty-day
removal period began on January 6, 1997, when Bell and Howell Mail was joined to the
case knowing that Bell and Howell’s pending motion to dismiss was unopposed or
whether the removal period began on January 26, 1997, when Bell and Howell was
formally dismissed. Id. at *2.
The court acknowledged that the law in this area is “not fully consistent, but the
majority have held that the time period begins to run once the removing party gains
knowledge of the facts supporting removal, not when a pertinent order or pleading is
33
subsequently entered or filed.” Id. at *3. The court also recognized that 28 U.S.C. §
1446(b) does not require formality or limit federal courts to the “technical procedural
rules of state courts.” Id. at *3–4. Based upon this reasoning, the court in King decided
that “Bell & Howell Mail could first ascertain that the case would be removable when
informed by plaintiff's counsel that Bell & Howell Mail would be added as a party and
that the dismissal of Bell & Howell would not be opposed,” and that “[s]ince the notice
of removal was not filed until more than 30 days after the amended complaint adding
Bell & Howell Mail, the notice of removal was untimely.” King, 1997 WL 285969, at *4.
Like in King, which involved an unopposed motion, this case involves an
unopposed stipulation to discontinue. Here, removing defendants received written
confirmation from all parties on or before May 23, 2016, that plaintiffs would be
dismissing Conley-Beaver and that all parties consented to this stipulation. While this
stipulation was not formal and may not have been perfected under state rules, this court
concludes under the reasoning set forth in King that removing defendants could
ascertain on May 23, 2016, that the case had become removable through plaintiffs’
written expression of intent to voluntarily dismiss the nondiverse defendant. As made
clear in Hessler and King, neither formality nor perfect compliance with state
procedural practices is required to trigger the thirty-day removal period under 28 U.S.C.
§ 1446(b). See Johnson v. Allison, No. 3:12-CV-0041, 2012 WL 2061462, at *4 (M.D. Pa.
June 7, 2012) (quoting Tyler v. Prudential Ins. Co. of Am., 524 F. Supp. 1211, 1213 (W.D.
Pa. 1981)) (“The fact that ‘service under state service practice has not been perfected
does not in and of itself prevent removal.’”); Lesher by Lesher v. Andreozzi, 647 F. Supp.
920, 921 (M.D. Pa. 1986) (“‘Even if the parties were found not to have perfected a
34
discontinuance under state court procedure, this Court determines plaintiffs' counsel's
[action] established the prerequisites for removal diversity jurisdiction under 28 U.S.C.
1441(b).’”) (quoting Heniford v. American Motors Sales Corp., 471 F.Supp. 328 (D.
S.C.1979)); Erdey v. Am. Honda Co., 96 F.R.D. 593, 599 (M.D. La.), on reconsideration
in part, 558 F. Supp. 105 (M.D. La. 1983) (“Where plaintiff, by his voluntary act has
definitely indicated his intention to discontinue the action as to the nondiverse
defendant . . . the case then becomes removable under 28 U.S.C. § 1446(b). The
technicality of how plaintiff's intention is expressed is of no moment—it is the
expression of the intent by plaintiff which makes the case removable.”) (citations
omitted).
While the stipulation itself may not have been signed by all the parties on May
23, 2016, 8 even absent such perfection the unsigned stipulation put removing
8
The court need not examine when the parties “perfected” their stipulation of
discontinuance with respect to Conley-Beaver, because perfect compliance under state
procedural rules is not necessary to trigger 28 U.S.C. § 1446(b). Johnson, 2012 WL 2061462, at
*4; King, 1997 WL 285969 at *3–4; Lesher, 647 F. Supp. at 921. Here, it appears likely that a
state court would have found that plaintiffs complied with the Pennsylvania Rules of Civil
Procedure on or before May 23, 2016, thus making the discontinuance of Conley-Beaver
enforceable. In Pennsylvania, voluntary discontinuances are governed by the Pennsylvania
Rules of Civil Procedure. Pa.R.C.P. 229(a) (“A discontinuance shall be the exclusive method of
voluntary termination of an action, in whole or in part, by the plaintiff before commencement of
the trial.”). Pennsylvania Rule of Civil Procedure 229(b)(1) states that “a discontinuance may not
be entered as to less than all defendants except upon the written consent of all parties or leave of
court upon motion of any plaintiff or any defendant for whom plaintiff has stipulated in writing
to the discontinuance.” Pa.R.C.P. 229(b)(1). A discontinuance against less than all defendants,
therefore, requires either the written consent of all parties or an order of the court. It does not
require both. See Toney v. Chester Cty. Hosp., 961 A.2d 192, 197 (Pa. Super. 2008), aff'd, 36
A.3d 83 (Pa. 2011) (“[i]n the absence of consent by all parties, leave of court was required to
effectuate the discontinuance.”); Hileman v. Morelli, 605 A.2d 377, 381 (Pa. Super. 1992)
(finding that a court could enter a discontinuance against less than all defendants upon leave of
court, even without a written petition or the consent of all parties).
All parties agree that as of May 23, 2016, the stipulation for discontinuance with respect
to defendant Conley-Beaver was informal, insomuch as it had not yet been filed. By its plain
language, however, Rule 229 allows for the discontinuance of a party upon the written consent
35
defendants on notice that the case had become removable. Because each party received
written confirmation, on or before May 23, 2016, indicating that all the other parties
of all parties – not the filing of this consent. While neither party presented, and this court is not
aware of, a Pennsylvania state court decision in which a party attempted to enforce an informal
discontinuance, removing defendants analogize this case to Vetenshtein ex rel. Vetenshtein v.
City of Philadelphia, 755 A.2d 62 (Pa. Commw. Ct. 2000), wherein a defendant attempted to
enforce an informal amendment to a pleading. In Vetenshtein, the plaintiff’s original complaint
included both federal claims and common law tort claims. Id. at 64. After the plaintiff became
aware that the defendant intended to remove the case to federal court based upon the federal
claims, plaintiff orally agreed not to pursue these claims in order to avoid the possibility of
removal. Id. The plaintiff sent a letter to the defendant confirming this agreement. Id. When the
plaintiff later attempted to revive the federal claims, the court held that the plaintiff’s letter did
not discontinue the federal claims, because the letter did not follow the Pennsylvania Rules of
Civil Procedure. Specifically, the court held that the letter attempted to amend the pleadings
without complying with the requirements of Pennsylvania Rule of Civil Procedure 1033, which
sets forth the exclusive method for amending pleadings. Id. at 66.
Removing defendants argue that Pennsylvania Rule of Civil Procedure 1033 is analogous
to Pennsylvania Rule of Civil Procedure 229(b)(1), because “[Pa.R.C.P] 1033, like Pa.R.C.P []
229, requires that a party may amend a pleading to add or delete a new cause of action or party,
only by filed consent of the adverse party or leave of court.” (ECF No. 15 n.2.) This comparison,
however, overlooks a crucial difference between these rules. Rule 1033 allows a party to amend
its pleading “either by filed consent of the adverse party or by leave of court.” Pa.R.C.P. 1033.
Rule 229, on the other hand, allows a party to discontinue an action with respect to less than all
defendants either by “written consent of all parties or leave of court.” Pa.R.C.P. 229(b)(1).
While Rule 1033 explicitly requires that consent be filed with the court, Rule 229 sets out no
such requirement. In fact, this difference in phrasing shows that the legislature had the capacity
and know-how to adopt a procedural rule requiring that consent be filed with the court, but that
instead the legislature chose to adopt a more lenient standard with respect to discontinuances,
requiring merely that consent to a discontinuance be in writing, rather than requiring that
parties file the consent with the court.
As of May 23, 2016, all parties had provided written consent to the discontinuance of
Conley-Beaver. On May 18, 2016 counsel for Conley-Beaver and counsel for Harris and Getaway
Tours sent emails to all parties evincing a clear intent to consent to the discontinuance. Koleski
v. Park, 525 A.2d 405, 407 (Pa. Super. Ct. 1987) (“Stipulations are interpreted according to the
intent of the parties.”). On May 23, 2016, plaintiffs responded by sending a proposed stipulation
and cover letter evincing their intent to discontinue the action with respect to Conley-Beaver.
The language of Rule 229 does not require that the parties sign the stipulation itself. The Rule
establishes no requirements with respect to the form of this consent, beyond that it be in writing
and that it come from all parties. See Pa.R.C.P. 229(b)(1). Because all parties provided the
written consent to the stipulation of discontinuance on or before May 23, 2016, as required
under Rule 229(b)(1), the stipulation of discontinuance became enforceable on that day. Even
were the parties required to perfectly comply with technical state procedural rules in order to
trigger § 1446(b), it is likely that plaintiffs complied with these procedures on May 23, 2016.
This conclusion is further supported by the well-established rule that “all doubts should be
resolved in favor of remand.” Steel Valley Auth., 809 F.2d at 1010.
36
were consenting to the discontinuance of Conley-Beaver, removing defendants’ receipt
of the unsigned stipulation triggered the thirty-day removal period under 28 U.S.C. §
1446(b). Harris and Getaway Tours had thirty days from May 23, 2016 – that is, until
June 22, 2016 – to file their notice of removal. Harris and Getaway Tours filed their
notice of removal on June 28, 2016. This notice of removal was filed outside the thirtyday removal period and is untimely. Consequently, plaintiffs’ motion to remand must be
granted.
V. Conclusion
For the reasons set forth above, while the court does not find that any of the
actions removing defendants took in state court, including filing a cross-claim at the
outset of litigation, engaging in limited discovery prior to filing for removal,
participating in ADR, and continuing to pursue related, though non-ancillary state
claims, constituted a waiver of their removal rights, the court must remand on the basis
that removing defendants filed an untimely notice of removal. Plaintiffs’ motion is,
therefore, granted.
An appropriate order will be entered.
Dated: December 22, 2016
/s/ Joy Flowers Conti
Joy Flowers Conti
Chief United States District Judge
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