Commercial Litigation and Arbitration

Removal — Can the One-Year Time Limit in § 1446(b) be Equitably Extended? Circuit Split

From Zendejas v. Shell Oil Co., 2008 U.S. Dist. LEXIS 104462 (D. Ariz. Dec. 10, 2008):

The Ninth Circuit has not yet addressed whether the one-year time limit in § 1446(b) may be equitably extended. Defendants ask the Court to follow the Fifth Circuit's approach and hold that the one-year deadline may be equitably extended in the event of forum manipulation by the plaintiff. In Tedford v. Warner-Lambert Company, 327 F.3d 423 (5th Cir. 2003), the Fifth Circuit reasoned that although Congress may have intended to limit diversity jurisdiction, it did not intend to allow plaintiffs to circumvent it altogether.... The court found 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." ...

Not all circuits agree. The Eleventh Circuit holds that the one-year limit in § 1446(b) is an absolute bar to removal. See Burns v. Windsor Insurance Co., 31 F.3d 1092, 1097 n.12 (11th Cir. 1994). The Eleventh Circuit reasons that the plaintiff is the master of his claim and the defendant's right to remove is limited.... The Eleventh Circuit notes that Congress was aware of the possibility that some plaintiffs would use the one-year limit to intentionally avoid federal jurisdiction and approved the limit nonetheless....

Held: “The Court need not decide between these two positions because Defendants would not be entitled to an equitable extension of the one-year period even under the Fifth Circuit's approach.”

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