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    Wisconsin Lawyer
    January 09, 2020

    Removal to Federal Court by Home-State Defendants

    Two U.S. Circuit Courts of Appeal recently upheld a literal interpretation of the federal removal statute, allowing home-state defendants to remove cases from state to federal court because they did so in the time before they were served. These decisions are relevant for lawyers in every matter for which there is potential federal jurisdiction based on diversity of citizenship.

    Allison W. Reimann


    The federal diversity jurisdiction statute – granting federal courts original jurisdiction over matters in which there is complete diversity between the parties and the amount in controversy exceeds $75,0001 – commonly is understood to protect out-of-state parties from local bias of state courts. However, at times, home-state defendants sued in state court may prefer a federal forum despite the lack of concern of local bias; for example, due to familiarity with federal judges, a preference for federal rules, favorable federal precedent, geographic convenience, belief that the federal court will be more sympathetic to the defendant for reasons other than citizenship, or simply gamesmanship. This raises the question: When, if ever, can a home-state defendant remove a lawsuit to federal court based solely on diversity of citizenship? That question has divided federal district courts throughout the United States for years, but the federal circuit courts of appeal are beginning to provide guidance – and Congress also may soon weigh in.

    The federal removal statute states that any civil action brought in state court over which a federal district court would have jurisdiction may be removed by a defendant to the district court where the state action is pending.2 Thus, under most circumstances, a defendant sued in state court may remove the case to federal court if diversity jurisdiction or federal-question jurisdiction requirements are satisfied. However, when the only basis for federal jurisdiction is diversity of citizenship, removal is not allowed “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.”3 This provision, known as the “forum defendant rule,” has been understood to prevent a home-state defendant from removing to federal court based solely on diversity. 

    The forum defendant rule, however, applies to defendants who are “properly joined and served,” raising the question whether a home-state defendant who has not yet been served – whether because of the plaintiff’s delay, unique state-law service requirements, or other reasons – is permitted to remove. That question has deeply divided the federal district courts, even creating splits within individual districts. The plain language of the statute (which appears to prohibit removal only if service has occurred) has been pitted against myriad policy concerns, including avoiding a potentially unseemly race by home-state defendants to remove before service, sometimes only a few hours after filing – a tactic referred to as “snap” removal.

    Although the forum defendant rule has been on the books since 1948, until relatively recently no federal appellate court had definitively weighed in on whether it is permissible for an unserved forum defendant to remove to federal court. However, over the last several months, the Second Circuit and Third Circuit Courts of Appeal have reached this issue. Both courts upheld removal, siding with district courts adopting the literal view of the statute, which allows a forum defendant to remove if it has not yet been served. And this is not the end of the matter: The Fifth Circuit Court of Appeals heard argument on the question in early September 2019, and the panel gave no indication that it intends to part company with the Second and Third Circuits.

    This article provides an overview of courts’ divergent interpretations of the forum defendant rule, the rationale of the recent appellate decisions adopting the “plain language” construction of the statute, and practice considerations for plaintiffs and defendants in light of these recent developments.

    Federal District Courts Are Deeply Divided

    The question of whether an unserved forum defendant may remove to federal court has been the subject of scores of federal district court decisions across the country and resulted in deep divisions both between and within individual districts.

    Allison W. ReimannAllison W. Reimann, Pennsylvania 2009, is an associate attorney at Godfrey & Kahn, Madison, practicing in the areas of civil litigation, government investigations, and antitrust.

    Courts upholding removal have relied primarily on the statute’s plain language.4 They have reasoned that the removal statute is clear and unambiguous: Removal is proper in situations in which the requirements for diversity jurisdiction are satisfied, except when a forum defendant has been “properly joined and served.” Thus, if service has not yet occurred, the statute does not bar removal.

    Further, the courts have reasoned that permitting removal by unserved forum defendants gives effect to every word in the statute, in this situation the phrase “and served.” These courts also adhere to the principle that when a statute is unambiguous, courts should honor its express language unless literal interpretation would lead to absurd results or thwart the purpose of the overall statutory scheme. In these courts’ view, encouraging a race to remove before service does not rise to the level of “absurd” and any concerns about “gamesmanship” are for Congress, not the courts, to fix.   

    Courts holding that unserved forum defendants may not remove to federal court have seen the situation quite differently.5 These courts have held that the “properly joined and served” requirement was intended to prevent fraudulent joinder of defendants to defeat complete diversity, not to create an exception to the forum defendant rule. Further, they have concluded that the literal interpretation of the statute creates the absurd result of encouraging a race to the courthouse to remove before service – and that this age of electronic filing and court docket monitoring only encourages such forum shopping.

    These courts also have been persuaded that permitting removal by a forum defendant is inconsistent with the purpose of the removal statute and diversity jurisdiction, namely, protecting out-of-state defendants from bias. Finally, these courts have reasoned that states have inconsistent service requirements, so allowing removal before service creates inconsistencies in the application of a statute that is intended to be uniform in application.

    The only federal district court in Wisconsin to consider this issue rejected the literal interpretation of the statute.6 In that case, the plaintiff filed suit in Wisconsin state court against one in-state defendant and one out-of-state defendant. The defendants removed to the Western District of Wisconsin almost two weeks later, before service occurred. The plaintiff then voluntarily dismissed the suit but refiled in state court against only the home-state defendant later that day. Less than two hours later, the Wisconsin defendant again removed to federal court, alleging it had not yet been served. The district court granted the plaintiff’s motion to remand, reasoning that the “properly joined and served” requirement was intended to prevent fraudulent joinder and that the removal statute does not require that service occur before removal.  


    Second and Third Circuits Adopt Literal Interpretation

    The forum defendant rule was enacted more than 70 years ago, but no federal court of appeals had definitively weighed in on this split until recently.7 This is because the removal statute expressly precludes appellate review of remand orders,8 and denials of motions to remand are infrequently appealed. However, two federal courts of appeal recently reviewed denials of motions to remand as part of appeals of early dismissals, providing the first two appellate decisions of any significance on this issue. Both courts adopted the “plain language” interpretation of the statute.

    First, in Encompass Insurance Co. v. Stone Mansion Restaurant Inc.,9 the Third Circuit considered a matter in which defense counsel agreed to accept service if the plaintiff filed suit. However, after the complaint was filed, the defendant removed to federal court before accepting service. The district court denied a motion to remand and later dismissed the complaint for failure to state a claim. In upholding removal, the Third Circuit held that the forum defendant rule is unambiguous and “precludes removal on the basis of in-state citizenship only when the defendant has been properly joined and served.”10

    The court concluded that to the extent the “properly joined and served” language was intended to prevent fraudulent joinder, Congress did so with a “bright-line rule” that requires service. Even on the facts of that case – the defendant used “pre-service machinations to remove a case that it otherwise could not” – the court concluded that “the outcome is not so outlandish as to constitute an absurd or bizarre result.”11 If the statute needed revision, the court reasoned that “it is Congress – not the Judiciary – that must act.”12

    In these courts’ view, encouraging a race to remove before service does not rise to the level of “absurd” and any concerns about “gamesmanship” are for Congress, not the courts, to fix. 

    The Second Circuit reached a similar conclusion in 2019 in Gibbons v. Bristol-Myers Squibb Co.13 In that case, the home-state defendants removed several related cases to federal court based on diversity jurisdiction, and the plaintiffs sought remand. The district court denied the motions to remand and then dismissed the actions.

    Like the Third Circuit, the Second Circuit held that the forum defendant rule is unambiguous and prohibits removal only in situations in which the home-state defendant has been served in accordance with state law. The court reasoned that “a statute is not ‘absurd’ merely because it produces results that a court or litigant finds anomalous or perhaps unwise.”14 Similar to the Third Circuit, the Second Circuit also concluded that Congress may have intended the “joined and served” rule to provide an easily administered means of preventing fraudulent joinder, rather than a fact-bound inquiry into a plaintiff’s intent or opportunity to serve. The court also was untroubled that the rule could lead to nonuniform application due to differences in state service laws – for example, some states such as Delaware require a delay between filing and service, increasing the ability of defendants to remove before service – noting that state-by-state variation is not unusual in federal courts.

    Fifth Circuit and Congress to Weigh In

    Since these decisions, federal district courts have followed, with few exceptions, the Second Circuit and Third Circuit’s lead, even outside those circuits. One of those recent cases, Texas Brine Co. v. American Arbitration Association,15 currently is on appeal to the Fifth Circuit. That case was removed by unserved forum defendants two days after the case was filed, during a period when, under state law, service could be accomplished only by the sheriff, not a private process server. In its Fifth Circuit briefs, the plaintiff made familiar policy-based arguments and also contended that the practice of snap removal is an “exceptional circumstance” that justifies rejecting a literal interpretation of the statute.

    During oral argument in early September 2019, the Fifth Circuit panel gave few clues as to which way it was leaning, other than to the extent that its lack of questions may suggest that the court is prepared to join the Second and Third Circuits in adopting the literal interpretation of the statute. However, regardless of how the Fifth Circuit decides that case, a future divide in the federal circuit courts of appeal would be unsurprising considering the frequency with which district courts have split on this issue and the impassioned arguments made by plaintiffs seeking remand.

    Plaintiffs who wish to protect their chosen forum and remain in state court should plan a service strategy before filing and effect service as quickly as state law permits.

    The courts, however, are not the only arena where the issue of “snap removal” currently is being debated. On Nov. 14, 2019, the federal House Subcommittee on Courts, Intellectual Property, and the Internet held a hearing regarding snap removal, during which House Judiciary Chairman Jerry Nadler delivered an opening statement decrying the practice as “gamesmanship” that violates “the spirit and the intent of the federal removal statute,” “tilt[s] the legal playing field in favor of large corporations,” and drains judicial resources.16 Four witnesses testified, providing a range of perspectives on whether Congress should amend the removal statute. Whether Congress will overrule the Second and Third Circuits through amendment to the removal statute, however, remains to be seen.

    Practice Considerations

    At least for now, there is better support than ever for defendants considering a snap removal. Whether representing a plaintiff or a defendant, lawyers must consider the possibility of removal from state court by an unserved forum defendant.

    Plaintiffs who wish to protect their chosen forum and remain in state court should plan a service strategy before filing and effect service as quickly as state law permits. For example, nothing in Wisconsin’s service law requires a delay between filing and service. If a home-state defendant nonetheless is able to remove before service, unless the case was filed within the Second and Third Circuits, there is ample authority (including in Wisconsin) to marshal in support of a motion to remand.  Plaintiffs also should check for developments in the pending Fifth Circuit case.

    Individuals or businesses on notice that a lawsuit is imminent likewise should consider whether, assuming diversity requirements are met, a federal forum is preferable. If so, they should monitor dockets and have counsel ready to act when the complaint is filed. While some federal judges previously have found such snap removal’s distasteful, the recent appellate authority provides new affirmation of the practice’s legitimacy. Even in Wisconsin, with only a single district court decision coming down against removal, the interpretation of the removal statute that prevents snap removal hardly is entrenched. At least until a competing appellate decision arrives, the literal interpretation of the forum defendant rule is likely to increasingly emerge as the majority view in district courts.

    Meet Our Contributors

    What is one of the most unusual or memorable legal matters you have worked on?

    Allison W. ReimannOne of the most unusual and memorable matters I have worked on was an antitrust case in which I represented a prom-dress boutique defending against allegations that it monopolized the local prom-dress market. That case raised questions about the scope of the market for prom dresses, for example, whether boutiques compete with department stores and the internet and whether “high-end” dresses are a distinct product market.

    At one point I obtained several years of back issues of the annual prom-dress editions of teen fashion magazines for research purposes. I had them in a box in my office for quite a while, provoking lots of questions from coworkers. This case also is a good memory because it was dismissed on a motion for summary judgment, primarily because the court determined that the prom-dress market was much broader than the plaintiff alleged, meaning our client did not have market power.

    Allison W. Reimann, Godfrey & Kahn, Madison.

    Become a contributor! Are you working on an interesting case? Have a practice tip to share? There are several ways to contribute to Wisconsin Lawyer. To discuss a topic idea, contact Managing Editor Karlé Lester at (800) 444-9404, ext. 6127, or email Check out our writing and submission guidelines.


    1 28 U.S.C. & 1332.

    2 28 U.S.C. § 1441(a).

    3 28 U.S.C. § 1441(b)(2).

    4 Examples of cases within the Seventh Circuit permitting removal by unserved forum defendants include the following: D.C. v. Abbott Labs. Inc., 323 F. Supp. 3d 991, 996 (N.D. Ill. 2018); In re Yasmin & Yaz (Drospirenone) Mktg., Sales Practices & Relevant Prods. Liab. Litig., MDL No. 2100, 2010 WL 3937414 (S.D. Ill. Oct. 4, 2010); Massey v. Cassens & Sons Inc., No. 05-CV-598, 2006 WL 381943 (S.D. Ill. Feb. 16, 2006).

    5 Examples of cases within the Seventh Circuit ordering remand following removal by unserved forum defendants include the following: Hoffman Bikes Inc. v. Pacific Cycle Inc., No. 17-CV-483-JDP, 2017 WL 4174923 (W.D. Wis. Sept. 20, 2017); In re Testosterone Replacement Therapy Prods. Liab. Litig., 67 F. Supp. 3d 952, 962 (N.D. Ill. 2014); Holmstrom v. Harad, No. 05 C 2714, 2005 WL 1950672 (N.D. Ill. Aug. 11, 2005).

    6 See Hoffman Bikes, 2017 WL 4174923. The author’s law firm represented the defendant in this case.

    7 In 2001, the Sixth Circuit appeared to adopt the view that an unserved forum defendant can remove, but it did so with little reasoning and its statement arguably was dicta. See McCall v. Scott, 239 F.3d 808, 813 n.2 (6th Cir. 2001).

    8 28 U.S.C. § 1447(d).

    9 Encompass Ins. Co. v. Stone Mansion Rest. Inc., 902 F.3d 147 (3d Cir. 2018).

    10 Id. at 152.

    11 Id. at 153-54.

    12 Id. at 154.

    13 Gibbons v. Bristol-Myers Squibb Co., 919 F.3d 699 (2d Cir. 2019).

    14 Id. at 705.

    15 Texas Brine Co. v. American Arbitration Ass’n, No. 18-6610, 2018 WL 4927640 (E.D. La. Oct. 11, 2018).


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