Opinion
Civil Action No. 3:01-CV-2817-M
February 15, 2002
MEMORANDUM ORDER AND OPINION
Before the Court is Plaintiff's Motion to Remand, filed January 18, 2002. For the reasons set forth below, Plaintiff's Motion is GRANTED and the case is remanded to County Court at Law No. 4, cause no. 01-12524, in Dallas County, Texas, for further proceedings.
FACTUAL PREDICATE AND ISSUE
This case arises from the termination of Plaintiff Areta Edling ("Edling") from her employment at Ajilon, L.L.C., later acquired by IMI Systems, Inc. (together "Defendants"), allegedly in violation of the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et seq. Edling filed her Original Petition ("Petition") in state court on November 9, 2001. On November 20, 2001, Defendants were served through their registered agents. They filed their Notice of Removal on December 26, 2001.
Ajilon was served, by hand delivery, through its registered agent, CT Corporation System, 350 N. St. Paul Street, Dallas, Texas 75201, in Dallas on November 20, 2001. IMI Systems was served, by certified mail, return receipt requested, through its registered agent, Blumberg Excelsior Corporate Service, 814 San Jacinto Blvd., Suite 409, Austin, Texas 78701. The Notice of Removal only appends the transmittal record for Ajilon, in which Ajilon's registered agent sent the documents to Ajilon, by Federal Express, second day delivery, on November 20, 2001.
Defendants did not file a response. However, their Notice of Removal states that "Defendants received a copy of the original petition and citation on November 22, 2001. Defendants have filed this notice of removal within the 30-day time period required by 28 U.S.C. § 1446 (b)." The Court infers from this that Defendants argue they did not receive actual notice until November 22, 2001, despite Edling's service on their registered agent on November 20, 2001. The issue presented is thus whether "receipt" of service by Defendant's registered agent triggers the thirty day window under the removal statute.
Notice of Removal at 1 (emphasis added).
CT Corporation System's transmittal form to Ajilon indicates that it sent the documents to Ajilon by Federal Express, second day delivery, on November 20, 2001.
ANALYSIS
The burden of establishing federal jurisdiction is on the party seeking removal. "This extends not only to demonstrating a jurisdictional basis for removal, but also necessary compliance with the requirements of the removal statute." Further, "any doubts concerning removal must be resolved against removal and in favor of remanding the case back to state court." If a defendant does not exercise his removal right diligently, he waives that right. The removal statute provides, in relevant part:
Frank v. Bear Stearns Co., 128 F.3d 919, 922 (5th Cir. 1997).
Albonetti v. GAF Corp.-Chem. Group., 520 F. Supp. 825, 827 (S.D. Tex. 1981).
Cross v. Bankers Multiple Line Insur. Co., 810 F. Supp. 748, 750 (N.D. Tex. 1992). See also Brown v. Demco, Inc., 792 F.2d 478, 482 (5th Cir. 1986) (section 1446 is interpreted strictly against removal); Clinton v. Hueston, 308 F.2d 908, 910 (5th Cir. 1962) ("If any presumption exists it is that a case is outside federal jurisdiction."); Walters v. Grow Group, Inc., 907 F. Supp. 1030, 1032 (S.D. Tex. 1995) (noting that removal statutes are strictly construed and every doubt concerning the propriety of removal is resolved against the removing defendant).
Burr v. Choice Hotels Int'l, Inc., 848 F. Supp. 93, 94-95 (S.D. Tex. 1994).
The notice of removal of 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. . . .
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.28 U.S.C. § 1446 (b) (West 1994).
Here, if receipt by the Defendant's registered agent constitutes "receipt" within the meaning of the statute, the case was improperly removed six days after the necessary deadline; however, if receipt by the Defendant's registered agent does not constitute "receipt" within the meaning of the statute, then the case was timely removed.
Edling argues that even if Defendants received actual notice on November 22, 2001, removal was untimely. The Court disagrees. On Monday, December 24, the deadline for filing Defendants' notice of removal, the clerk's office for the Northern District of Texas was closed by Order of then Chief Judge Jerry Buchmeyer. The Courthouse was also closed on December 25, 2001. If November 22, 2001 is the trigger date for removal, the Court deems the December 26, 2001 filing timely. See Carmouche v. Petit, No. 00-1137, 2001 WL 562017, *1 n. 1 (E.D. La. May 22, 2001) (filing was timely where the clerk's office was closed due to a hurricane on the date of defendant's deadline).
The Fifth Circuit, in Reece v. Wal-Mart Stores, Inc., followed the plain meaning of § 1446 to hold that the time period for removal commenced when there is actual "receipt" of the petition by the defendant, regardless of the means by which the defendant received the petition. This "receipt rule" was adopted by the Circuit in lieu of the "service rule," which required that the thirty day window under § 1446 was not triggered until a defendant was actually served with process. The Reece court held that the delivery of a complimentary copy of the initial pleading to the defendant's CEO triggered the time clock for removal, rather than when the defendant received formal service of process in the mail. However, the court noted that the "receipt rule" could be subject to abuse and thus declined to "establish a bright-line rule regarding the meaning of `receipt' by a corporation." Reece was abrogated by Murphy Brothers, Inc. v. Michetti Pipe Stringing, Inc. There, the plaintiff filed a petition in state court and sent the petition, by facsimile, to one of the defendant's officers three days later. The defendant was not formally served until a few weeks thereafter. The defendant removed to federal court within thirty days of service of process, but within forty-four days of receipt of the petition by facsimile. The Eleventh Circuit joined the Fifth in adopting the "receipt rule" and finding removal untimely. The Supreme Court reversed, stating that "[u]nless a named defendant agrees to waive service, the summons continues to function as the sine qua non directing an individual or entity to participate in a civil action or forgo procedural substantive rights." In doing so, it expressly rejected the "receipt" rule:
Reece v. Wal-Mart Stores, Inc., 98 F.3d 839, 840 (5th Cir. 1996), abrogated by Murphy Brothers, Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344 (1999)
Barr v. Zurich Ins. Co., 985 F. Supp. 701, 702-03 (S.D. Tex. 1997).
Reece, 98 F.3d.at 843.
526 U.S. 344 (1999). Baum v. Avado Brands, Inc., No. 99-700-G, 1999 WL 1034757, *2 (N.D. Tex. Nov. 12, 1999), noted this abrogation.
Id. at 351.
[T]he so-called `receipt rule' — starting the time to remove on receipt of a copy of the complaint, however, informally, despite the absence of any formal service — could, as the District Court recognized, operate with notable unfairness to individuals and entities in foreign nations. Because facsimile machines transmit instantaneously, but formal service abroad may take much longer than 30 days, plaintiffs `would be able to dodge the requirements of international treaties and trap foreign opponents into keeping their suits in state courts.
Id. at 356 (internal citations omitted).
As a general rule, under the "receipt rule," a corporation was considered to have received a petition when an agent authorized to accept service of process was served. Although Murphy Brothers rejected the "receipt rule" in favor of the "service rule," nothing in the opinion leads the Court to dispense with the general rule that formal service of process, rather than informal service, on a registered agent of a corporation triggers the thirty day period for removal.
Tech Hills II Assoc. v. Phoenix Home Life Mutual Ins. Co., 5 F.3d 963, 968 (6th Cir. 1993) (cited by Reece, 98 F.3d at 841); Barr, 985 F. Supp. at 702 (receipt of the state petition by a temporary mail clerk at the office of the defendant's registered agent triggered the thirty day window).
Prescott v. Memorial Med. Center-Livingston, No. 00-25, 2000 WL 532035, *5 (E.D. Tex. March 25, 2000) (time period began from service on registered corporate agent); Fidelity Funding, Inc. v. Pollution Research and Control Corp., No. 98-1691, 1999 WL 20955, *3 (N.D. Tex. Jan. 7, 1999) (Solis, J.) (Stating the general rule); Vinson v. Sheraton Operating Corp., No. 01-1444, No. 2001 WL 1090793, *2 (E.D. La. Sept. 14, 2001) ("the initial petition, which was served upon [defendant's] registered agent for service of process was sufficient to start the thirty-day period for removal"); Walker v. Nabors Offshore Drilling, Inc., 91 F. Supp.2d 907, 908 (E.D. La. 2000) (notice of removal was untimely because it was filed over thirty days after service on defendant's registered agent).
As stated by the district court for the Southern District of Texas in Barr,
Registered agents exist to receive process; they are in the business of receiving legal correspondence. Defendant chose this one. Unlike the situation where it is unreasonable to allow a plaintiff to give notice of suit by serving the run-of-the-mill corporate employee, this case involves service upon an individual employed by a designated agent. It behooves corporations to select registered agents who employ individuals trained to handle such matters.
Barr, 985 F. Supp. at 703.
It would be unreasonable, burdensome, and inefficient to provide defendants who designate a registered agent an extension, beyond that given to defendants without a registered agent, on the start time of this strict removal window. The Court is suspect of the imaginative "lost homework" responses that would likely surface from this flexible system under which the designated registered agent calibrates the statutory time clock. Although no Fifth Circuit case has addressed this precise issue in the aftermath of Murphy Brothers, this Court concludes that the general rule that a defendant's time for removal begins to run from the date of plaintiffs service on the defendant's registered agent was not dismantled by Murphy Brothers.
Defendants were served through their corporate registered agent on November 20, 2001. Their deadline for filing their Notice of Removal was December 20, 2001. They did not remove by this deadline. The Court thus GRANTS Edling's Motion and REMANDS this case to the County Court at Law No. 4, Dallas County, Texas, for further proceedings.
SO ORDERED.