The Fifth Circuit Court of Appeals recently addressed so-called "Snap Removals" in the case of In re Levy, 52 F.4th 244, 245 (5th Cir. 2022). In Levy, the plaintiff, Calvin Levy, petitioned the Fifth Circuit for a writ of mandamus directing the district court to remand the suit to state court for want of jurisdiction.
The suit arose from a traffic collision. Levy is a citizen of Louisiana, as is the driver of the other vehicle, defendant Emile Dumesnil. At the time of removal by diverse defendant Zurich American Insurance Company, neither Dumesnil nor defendant Dynamic Energy Services International, LLC, had been served with process.
Levy initiated the suit in Louisiana state court against the three defendants. Zurich-the only defendant that had received service of process-promptly removed to federal court, asserting that removal was proper under28 U.S.C. § 1441(b)(2), otherwise known as the "forum-defendant rule." That statute provides that an "action otherwise removable solely on the basis of [diversity] jurisdiction under [28 U.S.C. § 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." (Emphasis added.)
According to Zurich, it could remove to federal court because Dumesnil-a citizen of the forum state-had not yet been served. The problem for defendants, however, was the passage insection 1441(b)(2) that limits it to "action[s] otherwise removable" on no basis other thansection 1332(a), the statute that confers diversity jurisdiction. By readingsections 1441(b)(2) and1332(a) together, removal undersection 1441(b)(2) is permissible only if complete diversity exists among allnamedparties: Each plaintiff must be diverse from each defendant,i.e., there must be what is known as "complete diversity."
The Fifth Circuit ordered the district court to remand the suit to state court, holding:
The defendants mainly rely onTexas Brine Co., LLC v. American Arbitration Association, Inc., 955 F.3d 482 (5th Cir. 2020), where we authorized the use ofsnapremovals in this circuit. The parties inTexas Brinewere completely diverse; indeed, we began our analysis by confirming as much.Id.at 485 ("Here, the district court had subject-matter jurisdiction because each defendant was diverse from the plaintiff."). Furthermore, the extra-circuit cases we relied on inTexas Brineall confirmed that their parties were completely diverse as well."[T]he forum-defendant rule is a procedural rule and not a jurisdictional one."Texas Brine, 955 F.3d at 485. Accordingly, it cannot confer jurisdiction where jurisdiction does not exist.
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The key is that where-as here-there is no other basis for subject matter jurisdiction, no case can be successfully removed unless diversity is complete. That follows from the fact that a case is not removable if the plaintiff could not have brought it in federal court in the first instance, and diversity must be complete for a matter relying solely on diversity jurisdiction to be filed initially in federal court. A further limitation is that a defendant may not remove an otherwise-removable matter if any properly joined defendant is a citizen of the forum. But under§ 1441(b)(2), as quoted above, that further limitation applies only to resident defendants that have been served by the time of removal.
That is what[New York Life Insurance Co. v. Deshotel, 142 F.3d 873 (5th Cir. 1998)] says: Complete diversity is still required even if one or more defendants have not been served; citizenship is what counts. So in asituation of complete diversity, a case can be removed despite the presence of a resident defendant, but only if that defendant is unserved.Texas Brinegoverns a case with complete diversity.
In re Levy, 52 F.4th 244, 247-48 (5th Cir. 2022).
Thus, Levy makes clear that the "Snap Removal" rule can allow defendants to successfully avoid the forum state defendant rule set forth in 28 U.S.C. § 1441(b)(2), but never allows defendants to avoid the requirement for complete diversity set forth in 28 U.S.C. § 1332(a).
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