Opinion
Civil Action 01-D-325-N
May 16, 2001
For Plaintiff, Robert C. King, Weaver King; George K. Elbrecht, Monroeville, AL.
For American General, Celia J. Collins, Johnstone Adams Bailey Gordon Harris, Mobile, AL.
MEMORANDUM OPINION AND ORDER
Before the court is Plaintiff's Motion To Remand ("Mot."), filed March 27, 2001. On April 20, 2001, Defendant American General Life Accident Insurance Company ("American General") filed a Response To Plaintiff's Motion To Remand ("Resp."). Plaintiff filed a Reply ("Reply") on April 26, 2001. After careful consideration of the arguments of counsel, the relevant law, and the record as a whole, the court finds that Plaintiff's Motion is due to be granted.
I. REMAND STANDARD
It is well-settled that a defendant, as the party removing an action to federal court, has the burden to establish federal jurisdiction. See Diaz v. Sheprard, 85 F.3d 1502, 1505 (11th Cir. 1996). Removal statutes must be strictly construed because of the significant federalism concerns raised by removal jurisdiction. See Shamrock Oil Gas Corp. v. Sheets, 313 U.S. 100 (1941); Seroyer v. Pfizer, Inc., 991 F. Supp. 1308, 1312 (M.D. Ala. 1997). "All doubts [and uncertainties] about federal court jurisdiction must be resolved in favor of a remand to state court."Seroyer, 991 F. Supp. at 1312 (citing Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994)).
II. FACTUAL BACKGROUND
Plaintiff brought this civil action against Defendants American General and Harry Hinson ("Hinson) in the Circuit Court for Covington County on November 7, 2000. The Complaint alleges three causes of action, breach of contract, fraudulent misrepresentation, and fraudulent suppression.
Plaintiff served Hinson with the Complaint on November 14, 2000. (Pl. Ex. 2.) Plaintiff twice attempted to serve American General by serving the registered agents listed by the Secretary of State of Alabama, but was unsuccessful both times. Plaintiff was finally able to serve American General on February 19, 2001 by serving the president of the corporation. (Id.)
Hinson subsequently filed a Motion To Dismiss in state court on December 6, 2000 and an Amended Motion To Dismiss on March 1, 2001. (Pl. Ex. 2.)
On March 21, 2001, American General filed a Notice of Removal. Plaintiff now moves to remand the case to the Circuit Court for Covington County, pursuant to 28 U.S.C. § 1447 (c). Plaintiff argues that American General's removal is defective because it was effected on March 21, 2001, more than thirty days after service of the Complaint on the first-served Hinson, who was served on November 14, 2000. American General contends that each defendant has its own thirty-day time period in which to initiate removal, and that the earlier served defendant should not be barred from joining its petition for removal. In the alternative, American General says that removal was timely because a federal question could not have been known to exist prior to service of the Complaint on American General.
III. DISCUSSION
Removal is a right afforded by statute. American General removed this action pursuant to paragraphs (a) and (b) of 28 U.S.C. § 1441. The removal statue provides that removal from a state court to a federal court must be within thirty days after the service of the Complaint on the defendant. See 28 U.S.C. § 1446. It is undisputed in this case that American General filed its Notice of Removal more than thirty days after Hinson was served. Although the time limit of section 1446 is not jurisdictional, it is nonetheless mandatory and must be strictly applied. See Webster v. Dow United Technologies Composite Prods., Inc., 925 F. Supp. 727, 729 (M.D. Ala. 1996). Furthermore, where there are multiple defendants, all defendants must join in the petition for removal; this proposition is referred to as the "unanimity rule." See Chicago, Rock Island Pacific Ry. Co. v. Martin, 178 U.S. 245, 248 (1900). Thus, any one defendant may prevent a case from being removed. If a defendant's removal notice fails to meet the procedural requirements of section 1446(b), such as timeliness or unanimity, a court may remand the action to state court upon the plaintiff's timely objection. See 28 U.S.C. § 1447 (c); see also Webster, 925 F. Supp. at 729. Where the plaintiff questions the propriety of a defendant's removal petition, the defendant bears the burden of showing that removal was proper. See Webster, 925 F. Supp. at 729.
The basic question raised by Plaintiff's Motion is whether Hinson's failure to file a notice of removal within the thirty-day period after he received the Complaint precludes the later-served American General from removing this action, or whether each defendant has thirty days after he or she is served with the complaint to file a notice of removal of the action. Courts are split on applying the thirty-day rule to cases with multiple defendants. The Eleventh Circuit has not yet addressed the issue. However, the majority of courts have held that the thirty-day removal period begins to run for all defendants on the date the first defendant receives the initial complaint. This is known as the first-served rule. See Brown v. Demco, Inc. 792 F.2d 478 (5th Cir. 1986); Innovacom. Inc. v. Haynes, 1998 WL 164933 (N.D. Cal. 1998); Holder v. City of Atlanta, 925 F. Supp. 783 (N.D. Ga. 1996); Weimer v. City of Johnstown, 931 F. Supp. 985 (N.D.N.Y. 1996); D. Kirschner Sons, Inc. v. Continental Cas. Co., 805 F. Supp. 479, 482 (E.D. Ky. 1992); East v. Long, 785 F. Supp. 941, 945 (N.D. Ala. 1992)
A minority of courts have allowed each defendant an opportunity to remove within thirty days from the day that defendant received the complaint. This is known as the last-served rule. See Brierly v. Alusuisse Flexible Packaging. Inc., 184 F.3d 527, 533 (6th Cir. 1999);McKinney v. Board of Trustees, 955 F.2d 924 (4th Cir. 1992); Ford v. United Motors Mfg., 857 F. Supp. 707 (N.D. Cal. 1994); Garside v. Osco Drug, 702 F. Supp. 19 (D. Mass. 1988)
The Court finds the reasoning of courts following the majority rule to be more persuasive, especially in light of the fact that removal statues are to be narrowly construed. Even the McKinney court, which applied the minority rule, noted that it would be a "different situation" if Defendant B was served more than thirty days after Defendant A. Under those circumstances, the court held that "the law is settled" and that once "A does not petition for removal within 30 days, the case may not be removed." McKinney, 955 F.2d at 926 n. 3. This case is precisely the "different situation" explained by the McKinney court.
Here, American General was served with the Complaint more than thirty days after Hinson. At that time Hinson had waived removal by not filing a Notice of Removal within thirty days after service on him of the Complaint. Thus, the removal was defective. Furthermore, equitable factors weigh in favor of the application of the first-served rule because no evidence suggests that Plaintiff was manipulating the system. This is not a case, for example, in which Plaintiff deliberately avoided removal by delaying service upon a defendant anticipated to seek removal. Twice Plaintiff sought to serve American General and was unsuccessful. (Pl. Ex. 2.) Therefore, this case is due to be remanded to the state court.
American General's alternative argument also fails. American General argues that removal was timely in this case under the second paragraph of section 1446(b), which permits removal within thirty days of the time at which it first became apparent that federal jurisdiction existed. The statute 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 be first be ascertained that the case is one which is or has become removable. . . .28 U.S.C. § 1446 (b) (emphasis added); see also Webb v. Home Depot, U.S.A., Inc., 2000 WL 351992 (M.D. Ala. 2000) (supporting the general proposition that a removal is timely as long as the defendant could not have known before the date of some later received pleading, motion, order, or other paper that the requisites of removability existed). The plain purpose of this language "is to permit the removal period to begin only after the defendant is able to ascertain intelligently that the requisites of removability are present." See Webb, 2000 WL 351992 at *2 (M.D. Ala. 2000) (quoting Smith v. Bally's Holiday, 843 F. Supp. 1451, 1454 (N.D. Ga. 1994)).
American General argues that it was not until it was served with the initial complaint that the removable nature of this case became apparent. (Resp. at 7.) American General suggests that Hinson, the former district manager of the insurance company, could not have known that an ERISA plan was involved, thus raising a federal question. ( Id. at 12.) However, the initial pleading served on Hinson was the exact same pleading served on American General. The Complaint obviously provided sufficient information to ascertain whether the case was removable, as evidenced by the fact that American General removed the case after reading the Complaint. See Lovern v. General Motors Corp., 121 F.3d 160 (4th Cir. 1997) (stating that courts should look to whether the initial pleading provided sufficient information to ascertain the presence of federal jurisdiction and not look to the subjective knowledge of the defendants). Furthermore, American General argues that "Plaintiff could readily have avoided the resulting delay by accurately describing the plan in his Complaint." (Resp. at 12.) With this argument, American General asks the Court to find that Plaintiff, who was recruited by and worked for Hinson, should have known this case was subject to ERISA, while at the same time finding that Hinson could not have realized this case was preempted by ERISA. If ERISA preemption applies, it applies regardless of who was a defendant at the time.
Because it was apparent to American General that the action was removable, the Court finds that the action should have been removed within thirty days from the Complaint's service. Furthermore, the Court is persuaded by the reasoning of the courts following the majority "first-served rule." Therefore, this thirty-day removal period began on November 14, 2000, when Plaintiff served Hinson. Therefore, American General's Notice of Removal was untimely. Plaintiff's meritorious Motion was filed within thirty days after the filing of American General's Notice Of Removal and therefore his objection is deemed timely under 28 U.S.C. § 1447 (c). Consequently, the court finds that Plaintiffs' Motion To Remand is due to be granted.
IV. ORDER
Based on the foregoing, it is CONSIDERED and ORDERED that Plaintiff's Motion To Remand be and the same is hereby GRANTED, and that this action be and the same is hereby REMANDED to the Circuit Court of Covington County, Alabama, pursuant to 28 U.S.C. § 1447 (c). The Clerk of Court is DIRECTED to take all steps necessary to effectuate said remand.