Monday, June 16, 2008

Of Pre-Service Removals, Yet Again

When we get ourselves worked up in a lather, we just won't stop.

We saw the case of Thomson v. Novartis Pharmaceuticals Corp., No. 06-6280 (JBS), 2007 WL 1521138 (D.N.J. May 22, 2007), last year, and couldn't believe that the world had overlooked the issue: Plaintiff files a complaint naming multiple defendants in, say, New Jersey state court. Only one of the defendants is a New Jersey citizen. Can the defendants remove the case before plaintiff serves the resident defendant, because -- as of that instant -- no party "properly joined and served" as a defendant "is a citizen of the State in which such action is brought"? 28 U.S.C. Sec. 1441(b). Thomson said yes.

Judge Higbee (a New Jersey state mass tort judge) was outraged.

Other judges rejected Thomson's logic.

We're back!

Judge Baylson of the Eastern District of Pennsylvania weighed in on this issue on May 30. See Allen v. GlaxoSmithKline PLC, No. 07-5045, 2008 U.S. Dist. LEXIS 42491 (E.D. Pa. May 30, 2008). There, plaintiff, a citizen of Arkansas, sued only GSK (a Pennsylvania citizen) in Pennsylvania state court. GSK removed before plaintiff served it, insisting that the parties were diverse and no defendant properly joined and served was a citizen of Pennsylvania.

Judge Baylson would have none of it.

The judge plainly doesn't like the defense interpretation of Section 1441(b). Judge Baylson acknowledged that some courts have allowed defendants to remove in this stiuation, but he found the contrary cases to be "more persuasive." Id. at *17.

But Judge Baylson also added a new wrinkle to the world's thinking on this subject. He noted that "the operative phrase" in Section 1441(b) is '''joined and served' and not 'named and served' or simply 'served.'" Id. at *12. The statute thus "contemplates a situation in which one defendant is joined to another defendant, presumably an in-state defendant joined to an out-of-state defendant. The 'joined and served' language therefore can only apply when there are multiple, named defendants." Id. at *12-*13. "Under this interpretation, GSK cannot take advantage of the 'joined and served' language, since it is the only named defendant and since it is an in-state defendant." Id. at *13. Needless to say, Judge Baylson remanded the case.

We have no clue how the courts will ultimately resolve this issue. But Judge Baylson's logic offers a chance to split the baby. If courts care to, they can allow pre-service removal in cases in which both resident and non-resident defendants have been named, but reject it if only one defendant (a resident of the forum state) has been named.

We're not sure about the logic of that approach, but it's a new wrinkle on a percolating issue, and we figured we'd draw it to your attention.

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