Limitation: Timing for Removal in Diversity

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Limitation: Timing for Removal in Diversity

Postby Administrator » Tue Oct 07, 2014 8:13 pm

“No case, however, may be removed from state to federal court based on diversity of citizenship ‘more than 1 year after commencement of the action.’ ” Caterpillar Inc. v. Lewis, 519 U.S. at 69, 117 S.Ct. 467 (quoting 28 U.S.C. § 1446(b)). Section 1446(b) provides:

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, or within thirty days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter.

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). “Generally, the second paragraph of § 1446(b) is designed to allow a defendant to remove a state action when it was not originally removable as stated by the plaintiff's initial complaint in the state court, but has become removable....' ” O'Bryan v. Chandler, 496 F.2d 403, 408 (10th Cir.1974) (citations omitted). The requirement that a defendant timely file the notice of removal is mandatory, although timeliness is not jurisdictional. See United States ex rel. Walker v. Gunn, 511 F.2d 1024, 1026 (9th Cir.1975) (“[T]he statute, insofar as the time for removal is concerned, is imperative and mandatory, must be strictly complied with, and is to be narrowly construed.”); Bonadeo v. Lujan, 2009 WL 1324119, at *6 (citing McCain v. Cahoj, 794 F.Supp. 1061, 1062 (D.Kan.1992)).


FN9. If the Court originally had subject-matter jurisdiction over the case based on the original notice of removal and then subsequently lost that basis of jurisdiction, this Supplemental Notice of Removal may have allowed the Court to exercise subject-matter jurisdiction over the case. Those facts, however, are not presented here.

The next question is whether, given the Court did not have subject-matter jurisdiction on any basis asserted in the Notice of Removal, Wells Fargo may amend or supplement its notice of removal with an additional basis for the Court's subject-matter jurisdiction. Wells Fargo did not file this Supplemental Notice of Removal within the thirty-day period for removal, assuming as Wells Fargo did that the thirty-day period began to ran on the day that Zamora filed her motion seeking leave to amend her pleadings. Zamora sought leave to amend in state court on September 13, 2011. See Doc. 1–13. Wells Fargo filed its Supplemental Notice of Removal on October 18, 2011. This distinction is significant, because courts have shown a greater willingness to allow a defendant to amend a notice of removal within the thirty-day period for removal.FN10 See ARCO Envtl. Remediation, L.L.C. v. Dep't of Health and Envtl. Quality of the State of Mont., 213 F.3d 1108, 1117 (9th Cir.2000) ( “The Notice of Removal ‘cannot be amended to add a separate basis for removal jurisdiction after the thirty day period.’ ”); Geismann v. Aestheticare, LLC, 622 F.Supp.2d 1091, 1095 (D.Kan.2008) (Vratil, J.) (“At any point during this 30–day period, defendant is free to amend the notice of removal.” (citing 14C Wright & Miller, supra, § 3733)).FN11 Following that thirty-day period, the defendant must rely *1302 on 28 U.S.C. § 1653 to amend its notice of removal. See Geismann v. Aestheticare, LLC, 622 F.Supp.2d at 1095. This statute provides: “Defective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts.” 28 U.S.C. § 1653. A defendant must “seek leave of court to amend its notice of removal under 28 U.S.C. § 1653.” Watkins v. Terminix Int'l Co., Ltd. P'ship, 1997 WL 34676226, at *2 (citing Buell v. Sears, Roebuck & Co., 321 F.2d 468, 471 (10th Cir.1963)).FN12 In disallowing a plaintiff to amend on appeal his complaint under 28 U.S.C. § 1653 to assert a federal question to support subject-matter jurisdiction, the Tenth Circuit stated:


FN10. Courts reach this conclusion because the removal statute authorizes filing a notice of removal for up to thirty days once the case becomes removable. See Rossi, Turecamo & Co., Inc. v. Best Resume Serv., Inc., 497 F.Supp. 437, 439 (D.C.Fla.) (“Section 1446(b) delineates the time frame within which the petition for removal must be filed.... During the thirty day removal period provided by section 1446(b) there appears to be no question that the petition may be freely amended.”). The Court has not found any authority indicating that the Tenth Circuit has addressed whether a defendant may freely amend a notice within this thirty-day period. The Court has no occasion to decide this issue under the facts presented, so the Court assumes for purposes of this Memorandum Opinion and Order that the Tenth Circuit would follow this same rule that the majority of other courts have followed.



FN11. While it may not automatically follow that a defendant can assert a new basis of subject-matter jurisdiction to support removal as a matter of right within this thirty-day period, particularly when the facts or evidence supporting the new basis become available to the defendant following removal, a compelling case can be made to allow amendment. The Court does not need, however, to decide that issue, as those are not the facts before the Court.



FN12. The Court notes that Wells Fargo filed this Supplemental Notice of Removal without leave of Court. “The failure to obtain leave results in an amended complaint having no legal effect.” United States ex rel. Mathews v. HealthSouth Corp., 332 F.3d at 296. The Court will, thus, treat the filing without leave of Court of this Supplemental Notice of Removal as a request seeking leave to file the Supplemental Notice of Removal.
David A. Szwak
Bodenheimer, Jones & Szwak, LLC
416 Travis Street, Suite 1404, Mid South Tower
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