Summary
remanding where the removing defendant failed to acquire the consent of party against whom plaintiff had taken an interlocutory default judgment
Summary of this case from Sherrets v. BuechlerOpinion
Civil Action No. 3:04-CV-0239-D.
June 14, 2004
MEMORANDUM OPINION AND ORDER
The question presented by plaintiffs' motion to remand this case to county court is whether defendants can by post-removal severance cure a procedurally defective notice of removal, to which plaintiffs timely objected, in order to satisfy the unanimity-of-removal requirement. Concluding that they cannot, the court denies defendants' motion to sever and grants plaintiffs' motion to remand
I
Plaintiffs sued several defendants in county court, asserting, inter alia, federal question claims within this court's original jurisdiction. They initially effected service of process only on defendant Billie Ruth Williams ("Williams"). After obtaining an interlocutory default judgment against her, plaintiffs then served the remaining defendants, who removed the case to this court. Williams did not join in or consent to removal. Accordingly, their notice was procedurally defective for lack of unanimity, as required under 28 U.S.C. § 1446(a) and Fifth Circuit precedent. See Farias v. Bexar County Mental Health Mental Retardation Servs., 925 F.2d 866, 871 (5th Cir. 1991) ("All defendants who are properly joined and served must join in the removal petition and . . . failure to do so renders the petition defective." (quoting Getty Oil Corp., Div. of Texaco, Inc. v. Ins. Co. of N. Am., 841 F.2d 1254, 1263 (5th Cir. 1988)). On February 5, 2004 all defendants (except Williams) filed a motion in the county court to sever plaintiffs' claims against Williams into a separate lawsuit. Rather than await a ruling, they removed the case to this court. Plaintiffs timely objected to removal based in part on the procedural defect arising from Williams' failure to join in or consent to the notice of removal. They filed a timely motion to remand the case on February 27, 2004. See 28 U.S.C. § 1447(c) ("A motion to remand the case on the basis of any defect in removal procedure must be made within thirty days after the filing of the notice of removal under 1446(a).").
As noted, see infra note 5, plaintiffs contend this removal attempt was also procedurally defective. For purposes of today's decision, however, the court will assume that it was not defective or that the defect was curable.
According to the record, Williams abused the special education students assigned to her classroom and later pleaded guilty to engaging in criminal conduct.
Section 1446(a):
A defendant or defendants desiring to remove any civil action or criminal prosecution from a State court shall file in the district court of the United States for the district and division within which such action is pending a notice of removal signed pursuant to Rule 11 of the Federal Rules of Civil Procedure and containing a short and plain statement of the grounds for removal, together with a copy of all process, pleadings, and orders served upon such defendant or defendants in such action.
The court suggests no view concerning whether this case could be removed anew if the county court on remand severs the action against Williams and the remaining defendants unanimously remove the case. Moreover, even the prospect that this could occur and the removal would be proper does not alter the court's reasoning. Although unusual, cases are sometimes removed and remanded and then later properly removed based on subsequent events that make the case removable. Of course, if the case is removed anew, it would be subject to the random case assignment rules of this court since the merits of the case have not yet been addressed.
Plaintiffs maintain that the case must be remanded because Williams failed to join in or consent to removal. Defendants move to sever Williams from the suit, contending she is not an indispensable party and does not appear to be anything more than a nominal party. They argue that the failure to grant a severance could deprive them of a federal forum for the litigation of federal constitutional claims.
As an alternative ground to support their remand motion, plaintiffs object to defendant Joyce Whisenhunt's ("Whisenhunt's") notice of removal as untimely. The court need not consider this argument. Whisenhunt filed a motion to dismiss on June 9, 2004. The court need not reach this motion because it does not affect the court's disposition of plaintiffs' remand motion and defendants' severance motion.
II A
The court initially places to one side defendants' assertion in their briefing that Williams does not appear to be anything more than a nominal party. A nominal party need not, of course, join a notice of removal. See, e.g., Pesch v. First City Bank of Dallas, 637 F. Supp. 1530, 1537 (N.D. Tex. 1986) (Fitzwater, J.). But the concept of "nominal party" as defendants are using it in the context of a Rule 21 severance does not have the same meaning when used in connection with fraudulent joinder. Defendants appear to use the term "nominal party" to contrast Williams with a party who is indispensable and therefore cannot be severed. But to demonstrate that Williams has been fraudulently joined and that she need never join in removing the case, defendants must establish "that there is no possibility that [plaintiffs] would be able to establish a cause of action against [her] in a state court." Farias, 925 F.2d at 871 (citing B, Inc. v. Miller Brewing Co., 663 F.2d 545, 549-50 (5th Cir. Unit A Dec. 1981)). They have not done so.B
Defendants' principal argument is that a severance should be granted in the circumstances of this case and that, if granted, it would cure any procedural defect in removal and result in denying plaintiffs' remand motion. Although defendants correctly assert that the court would have federal question jurisdiction in this case and that Williams' failure to join the notice of removal is a procedural rather than subject matter jurisdiction defect, they do not support the premise that a court should grant a Fed.R.Civ.P. 21 severance to cure, post-removal, a procedural defect to which plaintiffs have timely objected.To be sure, a defendant's failure to consent to removal within the statutory 30-day period is a non-jurisdictional defect that can be waived, but defendants do not argue that plaintiffs waived their objection. See Johnson v. Helmerich Payne, Inc., 892 F.2d 422, 423 (5th Cir. 1990) ("The failure of all the defendants to join in the [notice of removal] is not a jurisdictional defect."). And while it is settled that procedural defects in removal are generally cured by the existence of subject matter jurisdiction at the time of judgment, see Grubbs v. General Electric Credit Corp., 405 U.S. 699, 702 (1972), Grubbs and its progeny do not hold that, despite timely objection, a court with subject matter jurisdiction can in its discretion cure a procedural defect through such devices as post-removal severance. Indeed, such a rule would, at a minimum, be incongruous with the well-established principle that the removal statutes are to be strictly construed against removal. See, e.g., Brown v. Demco, Inc., 792 F.2d 478, 482 (5th Cir. 1986) (citing Butler v. Polk, 592 F.2d 1293, 1296 (5th Cir. 1979)). And it would enable a party to circumvent an intentionally-crafted statutory scheme by appealing to a court's discretion. Moreover, a principal reason for the unanimity-of-removal requirement is to prevent individual defendants from splitting the plaintiff's claim between state and federal fora. See Chicago, Rock Island Pac. Ry. Co. v. Martin, 178 U.S. 245, 248 (1900) ("A defendant has no right to say that an action shall be several which a plaintiff elects to make joint."). A court should proceed carefully in embracing procedures that could compromise this salutary purpose.
C
Defendants also posit that plaintiffs' forum manipulation is an "exceptional circumstance" that relieves them of the need to obtain Williams' consent for removal. While the evidence of forum manipulation seems unmistakable in this case, the court must disagree with this argument.
"Exceptional circumstances" permit the court to invoke its equitable powers to uphold removal where the notice of removal is untimely under 28 U.S.C. § 1446(b). But the specter of forum manipulation "does not justify the creation of an exception to the unanimous consent rule." Doe v. Kerwood, 969 F.2d 165, 169 (5th Cir. 1992). Doe distinguishes between the unanimity rule and the other procedural requirements of § 1446(b), concluding that the forum manipulation argument is "based on the interaction between 28 U.S.C. § 1446(b) and the rule itself." Id. at 169. Doe addresses the district court's equitable power to overlook noncompliance with the temporal strictures on removal, not the requirement of unanimity. In citing Doe for a broader proposition, defendants give insufficient attention to its citation to Brown v. Demco, 792 F.2d 478 (5th Cir. 1986), when Doe concludes that "it is within the equitable power of the court to consider such exceptional circumstances on a case-by-case basis." Doe, 969 F.2d at 169 (citing Brown, 792 F.2d at 482). In carving out a narrow exception to the "first-served defendant" rule, Brown recognizes that "[e]xceptional circumstances might permit removal even when a later-joined defendant petitions more than precisely thirty days after the first defendant is served." Id. Brown does not recognize an exception to the rule that the first served defendant must ultimately consent to removal. See id.
Thus while defendants correctly urge that forum manipulation may amount to an "exceptional circumstance," they read the exception too broadly. Tedford v. Warner-Lambert Co., 327 F.3d 423 (5th Cir. 2003), and White v. White, 32 F. Supp.2d 890 (W.D. La. 1998), are distinguishable. In Tedford the Fifth Circuit held that the plaintiff's forum manipulation warranted equitable tolling of the § 1446(b) one-year time limit on removal in a diversity case, not elimination of the unanimous consent requirement. Tedford, 327 F.3d at 428-29. Similarly, White held that patent forum manipulation justified upholding removal where a subsequently-served defendant's notice of removal was untimely under the "first-served defendant" rule. See White, 32 F. Supp.2d at 894. Defendants fail to note that, in White, the subsequently-served defendant "removed the case with the requisite, written consent of its co-defendant." Id. at 892. Neither Tedford nor White supports invoking the "exceptional circumstance" doctrine to excuse the absence of unanimous joinder in removal at some point in time.
Because "exceptional circumstances" do not eliminate the requirement that all defendants who are properly joined and served must join in the notice of removal, even if the court were to find that plaintiffs' forum manipulation is an "exceptional circumstance," it is unclear how the court could grant relief. In this case a properly-joined and -served defendant has neither joined in nor consented to removal and apparently will not do so even if given additional time. Defendants suggest that Williams' consent is a "moot point" because plaintiffs' forum manipulation deprived them of their ability to discuss removal with her during the statutory 30-day period. But the absence of a 30-day window to discuss removal can be cured under the "exceptional circumstance" doctrine if all properly joined and served defendants eventually join in or consent to removal. The problem defendants face is not that they were unable to discuss removal with Williams during the 30-day period but that she is apparently unwilling to join in or consent to removal even now.
Given her personal circumstances, see supra note 2, it is doubtful that she is interested in defending herself in this civil action, but that fact is immaterial in analyzing the controlling law.
III
Plaintiffs request an award of costs, expenses, and fees. 28 U.S.C. § 1447(c) provides that "[a]n order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal." The decision to award attorney's fees is a matter of discretion. Avitts v. Amoco Prod. Co., 111 F.3d 30, 32 (5th Cir. 1997); Miranti v. Lee, 3 F.3d 925, 928 (5th Cir. 1993). The ultimate question considered by the court when applying § 1447(c) is "whether the defendant had objectively reasonable grounds to believe the removal was legally proper" at the time of removal. Valdes v. Wal-Mart Stores, Inc., 199 F.3d 290, 292-93 (5th Cir. 2000). In this case, defendants did not. Accordingly, plaintiffs are entitled to recover their attorney's fees and expenses, limited to the "fees and costs incurred in federal court that would not have been incurred had the case remained in state court." Avitts, 111 F.3d at 32. Plaintiffs may apply for an award no later than 30 days from the date this memorandum opinion and order is filed if the parties cannot agree on the amount.* * *
Accordingly, the court concludes that plaintiffs' motion to remand this case must be granted. Defendants' attempt to remove this case is procedurally defective because Williams — a defendant properly joined and served — neither joined in nor consented to removal, plaintiffs timely objected, and there is no indication that the unanimity requirement can be cured. The court cannot grant a severance to cure this defect. The court grants plaintiffs' February 27, 2004 motion to remand and remands this case to County Court at Law Number 3 in Dallas County, Texas. The court denies defendants' motion to sever. The clerk of court shall effect the remand according to the usual procedure.