Opinion
Civil Action No. 04-2645, Section "L"(1).
November 3, 2004
ORDER REASONS
Before the Court is the Motion of Plaintiff to Remand the case to the Civil District Court for the Parish of Orleans, State of Louisiana, from which it was removed by the Defendant on September 23, 2004. For the following reasons, the Court hereby GRANTS the Plaintiff's Motion.
I. Factual and Procedural History
This case arises out of injuries allegedly sustained by the Plaintiff while riding as a passenger in a vehicle on Interstate 10. Plaintiff claims that the vehicle in which he was riding was struck in the rear by a vehicle operated by Jonathan Landon and owned by the Hertz Corporation, d/b/a Hertz Rent a Car ("Hertz"). On July 3, 2003, Plaintiff filed a petition for damages in state court against Jonathan Landan and Hertz. Subsequent to the filing of his suit, Plaintiff voluntarily dismissed Landon. Hertz removed the action to this Court on September 23, 2004, based upon diversity of citizenship pursuant to 28 U.S.C. § 1332.
As the basis of his Motion to Remand, Plaintiff claims that the Defendant improperly removed the action for lack of timeliness. Plaintiff relies on the second paragraph of 28 U.S.C. § 1446(b), which establishes the procedure for removal of actions that were not initially removable, but subsequently become removable. That provision 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). Plaintiff claims that removal is untimely because more than one year elapsed between the filing of his petition and Defendant's notice of removal.
Defendant's oppose Plaintiff's Motion contending that equitable considerations warrant an exception to the one year time limit for filing a notice of removal.
II. Analysis
As a general proposition, cases that are not initially removable, but subsequently become removable, may not be removed more than one year after the commencement of the action. Johnson v. Heublein, Inc., 227 F.3d 236, 241 (5th Cir. 2000). In Louisiana, the one-year time limit runs from the date the lawsuit is filed. See La. Code Civ. Proc. Ann. art. 421; New York Life Ins. Co. v. Deshotel, 142 F.3d 873, 885 (5th Cir. 1993). This case commenced on July 3, 2003, and was removed on September 23, 2004, more than one year after commencement. Thus, removal is untimely unless an exception to the one-year time limit applies.
Defendant asks the Court to apply the estoppel exception articulated by the Fifth Circuit in Tedford v. Warner-Lambert Co., 327 F.3d 423 (5th Cir. 2003). In Tedford, the Court reasoned that time requirements in private lawsuits are usually subject to equitable tolling and that the time limit for removal is "merely modal and formal and may be waived." Id at 426. To determine if equitable tolling is appropriate in a particular case, the Court analyzed the conduct of the parties. In Tedford, the Plaintiff clearly engaged in forum manipulation. Plaintiff filed suit against several defendants in state court, including one non-diverse defendant. After discovering that the non-diverse party was not a proper party, the defendants informed the plaintiff of their intention to remove the matter. Within hours, plaintiff added another non-diverse defendant. Plaintiff then signed and post-dated a notice of non-suit as to the non-diverse defendant before the one-year period expired, but did not file the notice until after the one-year period passed. After receipt of the notice of non-suit, defendants removed the matter. Given such clear evidence of forum manipulation, the Fifth Circuit found appropriate the application of an equitable exception in the form of estoppel. Id. at 425. The Court held, "[w]here a plaintiff has attempted to manipulate the statutory rules for determining federal removal jurisdiction, thereby preventing the defendant from exercising its right, equity may require that the one-year limit in § 1446(b) be extended." Id. at 428-29. The Court also emphasized that the defendants had been vigilant in seeking removal. Id. at 428.
Other courts have found equitable grounds to extend the time for removal under § 1446(b) on similar showings of forum manipulation by plaintiffs. For example, in Shiver v. Sprintcom, Inc., plaintiff filed suit against diverse defendants in state court. 167 F.Supp. 2d 962, 962 (S.D. Tx. 2001). After the case was removed, the plaintiff dismissed the suit. Thereafter, plaintiff filed a second, identical suit in state court adding a non-diverse defendant. On the eve of trial, plaintiff non-suited the non-diverse defendant. Defendant removed, and the court denied the motion to remand due to forum manipulation. Id. at 963. See also Kinabrew v. Emco-Wheaton, Inc., 936 F.Supp. 351 (M.D. La. 1996) (denying motion to remand where plaintiff intentionally delayed service of process until the one-year period had expired); Morrison v. Nat'l Benefit Life Ins. Co., 889 F.Supp. 945, 947 (S.D. Miss. 1995) (denying motion to remand where plaintiff admitted to forum manipulation).
In this case, Defendant argues that application of equitable tolling is appropriate. In his state court petition, Plaintiff asserts that the amount in controversy does not exceed $75,000, thereby establishing that federal jurisdictional amount is not satisfied. On August 24, 2004, after the one-year period, Plaintiff sent a settlement demand letter, with supporting medical records attached, to the Defendant, which indicated that the amount in controversy exceeds $75,000. On that basis, and pursuant to § 1446(b), Defendant removed the matter.
The medical records attached to the settlement letter establish that the Plaintiff was diagnosed with a herniated disc on April 13, 2004, by Dr. Kenneth Vogel. On that same date, Dr. Vogel recommended that the Plaintiff be admitted to the hospital for further testing. The Plaintiff did not go to the hospital until June 23, 2004, when he was admitted to Doctor's Hospital. Defendant notes that the Plaintiff did not provide this information until after the one-year period passed and then concludes that the reason the Plaintiff waited was to prevent removal. However, the Defendant offers no evidence to support this presumption or evidence of the Plaintiff's bad faith.
It is troubling that the Plaintiff would expressly state that the case was not worth $75,000 in the initial pleading, when stating an amount in controversy is not necessary to satisfy the pleading requirements of state court, and only after one year change his evaluation of the quantum, particularly when he had a prior medical report that indicated a disc injury. This situation certain gives rise to an aroma of manipulation. The issue, however, is whether this aroma of manipulation is sufficient to trigger the rarely used exception of equitable tolling.
Though suspicious, the record in this case does not present the egregious, clear pattern of forum manipulation as in the above-cited cases. In enacting § 1446(b), Congress intended to reduce the opportunity for removal after substantial progress has been made in state court. Tedford, 327 F.3d at 427 (citing H.R. Rep. No. 889, at 72(1988), reprinted in 1988 U.S.C.C.A.N. 5982, 6032). Tedford addresses an unintended issue created by the rule: that is, that "[s]trict application of the one-year limit would encourage plaintiffs to join nondiverse defendants for 366 days simply to avoid federal court, thereby undermining the very purpose of diversity jurisdiction." Id. However, this Court must balance the exception articulated in Tedford with the general rule that removal jurisdiction is to be strictly construed, as its application "deprives a state court of a case properly before it and thereby implicates important federalism concerns." Frank v. Bear Stearns Co., 128 F.3d 919, 922 (5th Cir. 1997).
In this case, Plaintiff may have delayed by a few months in sending a demand letter and medical records indicating that the federal jurisdictional amount is satisfied. However, such conduct hardly rises to the transparent attempt to circumvent federal jurisdiction presented in Tedford. In Tedford and its progeny, the Court was not required to engage in speculation to interpret the cause of the Plaintiff's conduct. In this case, the Court would have to engage in such speculation, but declines the invitation to do so. Though the Court agrees that the rule lends itself to abuses, the Court also agrees that "it is for the Congress and not this Court to rewrite the provisions of section 1446(b) to curb such abuses." Caudill v. Ford Motor Co., 271 F.Supp. 2d 1324, 1327 (N.D. Ok. 2003).
III. Conclusion
Accordingly, and for the foregoing reasons, the Plaintiff's Motion to Remand is GRANTED. The matter is hereby REMANDED to the Civil District Court for the Parish of Orleans, State of Louisiana.