Opinion
1:99cv20-C
April 16, 1999
ORDER
THIS MATTER is before the court upon plaintiff's Motion to Remand. Jurisdiction to dispose of that motion is provided by the consent of the parties entered in accordance with 28, United States Code, Section 636(c).
In this action, plaintiff contends that defendants violated Title VII through unlawful employment practices, including sexual harassment; and that a number of state-law torts were committed against her, including battery, assault, intentional infliction of emotional distress, negligent retention by the corporation of her supervisor, and sexual harassment under Chapter 422.2. The action was filed in state court on December 23, 1998, and defendant Emeritus Corporation was served with a summons and a complaint on December 28 1998. Plaintiff waited until January 22, 1999, to have a summons issued for defendant Don King and served him 31 days after serving defendant Emeritus Corporation. Defendant King promptly removed the action to federal court on February 5, 1999. Apparently, Emeritus Corporation, through a number of mishaps and unfortunate situations, including the death of defendant Emeritus Corporation's legal director after she receive process but before she could act on it, did not seek removal within 30 days of receipt of process; instead, its consent to removal of the action was noted in Defendant King's Notice of Removal. Plaintiff timely filed the instant Motion to Remand, citing the failure of removal within 30 days of service of the first defendant under 28 United States Code, Section 1446(b). No claim is made that this court lacks original subject-matter jurisdiction that any party is budge shopping, or that the state court would lack jurisdiction to resolve all disputes upon remand. The issue that has been raised squarely by the respective parties in their briefs is whether the time to remove begins to run upon service of the first defendant or the last defendant?
The statute governing removal is the source of confusion, and it was written during a time when complex, multi-party litigation was not the norm. Despite the lack of clarity, Congress has not seen fit to modify Section 1446(b), which provides, in relevant part, as follows:
The notice of removal in a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based.28 U.S.C. § 1446(b). The statute speaks of the "defendant" in the singular and makes no provision for defendants served in the plural at different times within the liberal and rather complex period for service provided by Rule 4, North Carolina Rules of Civil Procedure.
This statute can be easily manipulated under the federal rules. For example, an unscrupulous plaintiff wanting to remain in a state forum could pick and choose which defendant he wanted to serve first — perhaps a defendant not likely to obtain counsel or a defendant that is a shill. Such a plaintiff could then allow the 30 days to lapse after that service before serving the remainder of the defendants, thus preventing all defendants from exercising their right to remove the action to federal court. The possibility of such a situation was addressed by a district court in Eastern Area Joint Sewer Authority v. Bushkill-Lower Lehigh Joint Sewer Authority, 517 F. Supp. 583, 585, n. 3 (E.D.Pa. 1981), which held, as follows:
If an unserved defendant could not join in the consent to removal before being served, a plaintiff, hoping to prevent removal, could delay serving the remaining defendants until the 30th day, thereby making it difficult, if not impossible, for such defendant to timely consent to the removal.
No ill motives can be ascribed to the plaintiff in this case. She first served the corporate defendant, which is the party most likely to seek removal, and then served the individual defendant. Apparently, the delay that prevented the corporate defendant from seeking removal was not attributable to plaintiff or her counsel, and can only be traced to mishandling by the corporate defendant's agent for service of process and an intervening act of God. Inasmuch as the corporate defendant did not seek removal on its own, no arguments as to equitable tolling are before the court.
A complete discussion of all current case law is found in Yellow Cab Company of Pittsburgh v. Gasper, 994 F. Supp. 344 (W.D.Pa. 1998) (a case nearly identical to the instant case), from which this court will quote length:
It is well-settled, although not explicitly set forth in the statute, that all defendants must join in any petition for removal; this is known as the "rule of unanimity." e.g., Chicago, R.l. P. Ry. Co. v. Martin, 178 U.S. 245, 248, 20 S.Ct. 854, 44 L.Ed. 1055 (1900); Ogletree v. Barnes, 851 F. Supp. 184, 186 (E.D.Pa. 1994); Balestrieri v. Bell Asbestos Mines, Ltd., 544 F. Supp. 528, 529 (E.D.Pa. 1982), (citing cases); Crompton v. Park Ward motors, Inc., 477 F. Supp. 699, 701 (E.D.Pa. 1979) (citing cases).
The difficulty in this case stems from the fact that two of the defendants were joined and served more than thirty days after the first defendant was served. The question then arises whether a previously served defendant which did not initially seek removal within thirty days of service upon it of the original complaint may join the removal petition of a new defendant joined outside that thirty-day period. The Third Circuit has not yet decided this question. The statute, speaking as it does only of a singular defendant, provides little guidance, and the two principal treatise writers on federal procedure are split on the issue.
The majority of courts to reach this issue have concluded that the thirty-day clock begins to run when the first defendant is served, and that such a defendant cannot later consent to a removal petition brought by a later-served codefendant. See, e.g., McKinney v. Board of Trustees of Mayland Comm. Coll., 955 F.2d 924, 926 n. 3 (4th Cir. 1992) (allowing removal when first-served defendant removes within thirty days and later-served defendant consents within thirty days of the later service date, but opining that cases in which the later-served defendant is served more than thirty days after the first-served defendant are not removable). . . . [numerous citations omitted].
A few courts, however, have come to the opposite conclusion. In Garside v. Osco Drug, Inc., 702 F. Supp. 19 (D.Mass. 1988), a medical patient filed suit against a drugstore and a pharmaceutical manufacturer. Four years after these defendants were served, she amended her complaint and joined a second pharmaceutical company, which within thirty days removed the case to federal court with the consent of its codefendants. Id. at 20. That defendant then changed its mind and challenged its own removal petition as untimely. Id. The court analyzed the competing approaches to the question of timeliness and concluded that the Wright Miller view was "the more practical and enlightened." Id. at 22. It thus held "that a subsequently served defendant has thirty days to seek removal, even though its co-defendants may be time-barred from doing so." Id. It opined:
Moore's premise would seem to assume that the previously served defendant's failure to remove the case originally indicates that it would not have consented to removal had the two defendants been served simultaneously. In making that assumption, Moore does not give adequate weight to the interplay that often occurs in multi-party litigation. In practice, removal is often as much a matter of trial strategy as it is one of forum selection.
Id. at 21. The court found this result particularly compelling when the defendant, after the case had been assigned to a specific district judge, assailed its own removal petition with a possible forum-shopping motive. Id. at 22.
Likewise, in Eltman v. Pioneer Communications, 151 F.R.D. 311 (N.D.Ill. 1993), plaintiff's decedent sued an electronics manufacturer and several of its subsidiaries for products liability, serving various entities over the space of more than one year. Id. at 312-13. One of the later-served subsidiaries then filed a notice of removal twenty-eight days after it was served. Id. at 313. In denying the motion to remand for untimeliness, the court noted the majority rule but declined to apply it, stating:
The policies behind the thirty-day requirement simply do not justify implication of a strict, mandatory first-served defendant rule into section 1446(b). More importantly, even if barring removal by a later-served defendant is justified in certain circumstances, it is unjustified and inequitable when the later-served defendant is not named until the initial thirty-day period has lapsed.
Id. at 317. The court then recounted the two principles underlying the thirty-day rule — depriving the defendant of the opportunity to see how it was faring in state court before deciding whether to remove and preventing waste of judicial resources arising from having to start the case over again in federal court after significant proceedings had occurred in state court, id. (quoting Wilson v. Intercollegiate (Big Ten) Conference Athletic Ass'n, 668 F.2d 962, 965 (7th Cir. 1982)) — and concluded that neither purpose would be served by applying the majority rule on the facts of the Eltman case:
Allowing a later-named defendant to remove despite the inaction of an earlier-named defendant would not defeat section 1446(b)'s purposes. Such removal does not start the case over because there is no case against the later-named defendant until he is named. There is no waste because judicial resources have not yet been expended. There is no delay because the case against that defendant has just begun. And there is no jockeying for tactical advantage because the "lateness" of the removal petition is due to the fact that the plaintiff did not name that defendant earlier.151 F.R.D. at 317.
Finally, in Collings v. E-Z Serve Convenience Stores, Inc., 936 F. Supp. 892 (N.D.Fla.1996), plaintiff sued her employer in state court in November 1994, alleging retaliatory discharge in violation of the Fair Labor Standards Act. In April 1996, she amended her complaint to add an individual defendant, who petitioned for removal less than a month later. Id. at 893. That court also denied the motion to remand, reasoning:
Allowing the initially served defendant the choice of whether to remove, but binding that decision on later-joined defendants leads to inequitable results. Courts favoring the rule which bars later-served defendants from removing argue that it is unfair to the plaintiff to allow a later-joined defendant to remove. This argument is unpersuasive because it is the plaintiff who has chosen to join the new defendant to the lawsuit, not the later joined defendant.
Id. at 895 (citations omitted).
After reviewing all the relevant case law, the court in Yellow Cab took a very pragmatic approach:
I need not decide which line of cases represents the better view in general, as the instant case is readily distinguishable from even the authority upon which defendants rely. It must be remembered that all of the entities joined as defendants in the case sub judice are closely held corporations owned and controlled by one man, defendant Carl Gasper. Thus, Garside is inapposite because there, the later-joined pharmaceutical company had no notice of the pendency of the state court action until it was finally joined as a defendant. The "interplay" between multiple defendants that concerned that court is simply not present here, where it falls to one man — Gasper (and his counsel) — to make strategic and tactical decisions involving litigation strategy.
Id., at 345-48.
Defendants have attempted to distinguish the holding of the Court of Appeals for the Fourth Circuit in McKinney v. Board of Trustees of Mayland Comm. Coll., 955 F.2d 924, 926, n. 3 (4th Cir. 1992), which determined that removal is appropriate when the first-served defendant removes within 30 days and the later-served defendant consents within 30 days of the later service date; but which also rendered an opinion that cases are not removable where the later-served defendant seeks removal more than 30 days after the service of the first, nonmoving defendant. The disputed opinion is found in footnote three, which provides, as follows:
In a different situation, where B is served more than 30 days after A is served, two timing issues can arise, and the law is settled as to each. First, if A petitions for removal within 30 days, the case may be removed, and B can either join in the petition or move for remand. See 28 U.S.C. § 1448. Second. if A does not petition for removal within 30 days. the case may not be removed. See, e.g., Quick Erectors, Inc. v. Seattle Bronze Corp., 524 F. Supp. 351, 354 (E.D.Mo.1981).Id. (emphasis added). While defendants have argued persuasively that such decision is not controlling because it was dicta, it is highly persuasive dicta to this court. In McKinney, the appellate court was faced with a situation where the first-served defendant timely removed, but where plaintiff strung out service of the remaining defendants so that they could not timely join in the removal petition. The decision on whether a later-served defendant could commence removal flowed naturally from the logic used to determine whether a later-served defendant could join in removal. of particular importance is the appellate court's finding that the "law is settled" as to the timing issue involved herein, followed by a recitation of that law. It is beyond the authority of this court to disturb settled law, which is emerging after McKinney as the majority view. See Yellow Cab, supra. The court will remand the case to the North Carolina General Court of Justice, which has jurisdiction to resolve all the claims asserted.
Recognizing the strong arguments defendants have as to the inapplicability of McKinney, actual remand (which would otherwise provide little if any time to perfect an appeal see 28 U.S.C. § 1447 (d)) will be stayed for 31 days from the date this Order is filed. In accordance with 28, United States Code, Section 1292(b), this court must find that this Order involves a question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation While this court firmly believes this decision is in accordance with McKinney, another district court faced with the same issue reached the opposite conclusion. See Freeman v. Betchel, 936 F. Supp. 320 (M.D.N.C. 1996).
Finally, counsel are advised that despite certification from this court, it is within the sound discretion of the appellate court to determine whether such appeal from this Order is warranted, and application to that court must be made within 10 days of entry of this Order. 28 U.S.C. § 1292 (b).
ORDER
IT IS, THEREFORE, ORDERED that plaintiff's Motion to Remand is GRANTED; this matter is certified in accordance with 28, United States Code, Section 1292(b); and actual REMAND is stayed pending resolution of any appeal taken from this Order, which must be lodged within 10 days. In the event it does not appear that an appeal has been lodged within that time, the Clerk of this court is to verify that fact with respective counsel and, upon verification, then send a CERTIFIED COPY of this Order to the appropriate state court.
It appearing that defendants had a reasonable and arguable basis in law for removal, the parties shall bear their own costs, expenses, and fees incurred as a result of removal. 28 U.S.C. § 1447 (c).
This Order is entered in response to plaintiff's Motion to Remand (#9).