From Hawkins v. Cottrell, Inc., 2011 U.S. Dist. LEXIS 54141 (N.D. Ga. May 19, 2011):

On December 14, 2010, defendant filed a notice of removal in this court seeking to remove the action based on diversity of citizenship. At the time of removal, defendant had not yet been served in the state action. Plaintiffs are both Tennessee residents and defendant is a Georgia corporation with its principal place of business located in Hall County, Georgia. Thus, defendant is a forum defendant, a resident of the state where the action was filed. Defendant also contended that the $75,000 amount in controversy requirement was met.

Plaintiffs *** claim a forum defendant is never entitled to remove an action based on diversity of citizenship. ***

II. Removal by an Unserved Forum Defendant

Under the current removal statute, 28 U.S.C. § 1441, "any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." Id. A federal court has subject-matter jurisdiction over a diversity of citizenship case pursuant to 28 U.S.C. § 1332, but not every diversity case is removable. A non-federal question case "shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought." 28 U.S.C. § 1441(b) (emphasis added). The application of this rule, the so-called "forum defendant" restriction, is the subject of this litigation.

Footnote 3 The Eleventh Circuit and the majority of the federal courts of appeal have held that the forum defendant rule is not a limitation on the subject matter jurisdiction of the district court. Snapper, Inc. v. Redan, 171 F.3d 1249, 1258 (11th Cir. 1999); see also Hurley v. Motor Coach Indus., 222 F.3d 377, 379 (7th Cir. 2000) ("The overwhelming weight of authority, however, is on the 'nonjurisdictional' side of the debate."). The forum defendant rule is instead a statutory impediment to the exercise of jurisdiction. If not raised within 30 days of removal it is considered waived under 28 U.S.C. § 1447(b). Snapper, Inc., 171 F.3d at 1258. Plaintiff timely raised the issue in this matter.

*** [T]he "absurd results" doctrine, applies when "giving the words of a statute their plain and ordinary meaning produces a result that is not just unwise but is clearly absurd." Merritt v. Dillard Paper Co., 120 F.3d 1181, 1188 (11th Cir. 1997). For this exception to apply, however, the result produced must be"truly absurd." Id. This limitation ensures that use of this doctrine is rare. Otherwise, "clearly expressed legislative decisions" are at risk of being replaced by "the policy predilections of judges." Id.

Footnote 7. The "absurd result" doctrine set forth by the Eleventh Circuit is also recognized by the Supreme Court. According to Justice Scalia, when a court is faced with a statute which, if interpreted literally, would produce an absurd result, the court's task is "to give some alternative meaning to the [statutory language] that avoids this consequence." Green v. Bock Laundry Mach. Co., 490 U.S. 504, 527 (1989) (Scalia, J., concurring). To determine this alternative meaning, it is "entirely appropriate to consult all public materials, including the background of [the rule or statute] and the legislative history of its adoption, to verify that what seems to us an unthinkable disposition . . . was indeed unthought of, and thus to justify a departure from the ordinary meaning of the [words in the rule or statute]." Id.

***

Most courts addressing this issue, on either side of the split of authority, have simply agreed without much discussion "[t]hat the literal application of § 1441(b)" favors defendant's position. Sullivan v. Novartis Pharms. Corp., 575 F. Supp. 2d 640, 643 (D.N.J. 2008). In other words, they have conceded that the plain meaning of the second sentence of § 1441(b) allows an unserved forum defendant to remove an action based on diversity of citizenship. However, looking "to the statutory scheme for clarification and contextual reference, " the court is not convinced that the plain meaning of the statute, augmented by the application of the canons of construction, actually supports this result. McLemore, 28 F.3d at 1162 (11th Cir. 1994) (quotation omitted).

First, the court questions whether the "joined and served" language applies when no defendant has been properly joined and served. The statute states that removal in a diversity case is permitted "only when none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought." The "none" in that statement refers to the "parties in interest properly joined and served," which implies that there is at least one defendant that is a party in interest that has been properly joined and served. Otherwise, it makes no sense to examine whether "none" of these parties is "a citizen of the State in which such action is brought." In such a situation, the "none" would be superfluous because where no parties are served, it would be impossible for any party "joined and served" to be a "citizen of the State in which such action is brought." Since "[a] statute should be interpreted so that no words shall be discarded as meaningless, redundant, or mere surplusage," the plain meaning of the statute contemplates a situation where at least one defendant has been joined and served. DBB, 180 F.3d at 1285 (quotation omitted).

Applying the plain meaning of the statute to this case, the court must examine whether any of the parties in interest properly joined and served is a citizen of the state in which the action is brought. Since there is only one defendant, there is no question of fraudulent joinder. It is clear that defendant is properly joined. However, there is no party in interest in this action that has been properly served. This makes removal in this matter is improper, because the court is unable to adequately complete the inquiry required under § 1441(b).

This reading of the statute necessarily restricts removal to cases where at least one defendant has been served. Several district courts have reached a similar conclusion, albeit under slightly different reasoning. In Holmstrom v. Harad, No. 05-C-2714, 2005 WL 1950672, at *1 (N.D. Ill. Aug. 11, 2005), an out-of-state defendant sought to remove an action based on diversity before service was effected upon it or any of the other forum defendants. The court found that the "'joined and served' requirement makes sense" only "when one [out-of-state] defendant has been served but the named forum defendant has not" and remanded the case because no party had been served prior to removal. Id. at *2; see also Recognition Comms., Inc. v. Am. Auto. Ass'n, No. 3:97-CV-0945-P, 1998 WL 119528, at *3 (N.D. Tex. Mar. 5, 1998) (holding that action that included out-of-state defendant and forum defendant could not be removed by out-of-state defendant prior to service upon any defendant due to language of § 1441(b)).

The conclusion that service is required prior to removal is further buttressed by the Supreme Court's decision in Murphy Brothers, Inc., v. Michetti Pipe Stringing, Inc., 526 U.S. 344 (1999). In Murphy Brothers, the Court interpreted a different provision of the removal statute, 28 U.S.C. § 1446(b), which provides that a notice of removal must 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" or "within thirty days after the service of the summons upon the defendant if such initial pleading has then been filed in court." Murphy Bros., 526 U.S. at 356. The plaintiff in Murphy Brothers had faxed a courtesy copy of the complaint to the defendant 14 days before service of process was effected. The defendant removed the action 30 days after service, but 44 days after receiving the faxed copy of the complaint. The Supreme Court held that the removal was timely, because the time to remove did not begin to run until plaintiff had both been served with process and received a copy of the complaint. Id. at 348. ***

Although Murphy Brothers did not directly address whether service was required before a defendant could remove an action, the Court indicated that the time to remove was "triggered" in all instances after the receipt of service of process. It thus seems safe to assume that service on at least one defendant is required prior to removal. Without service upon any defendant, no party has been "brought under a court's authority" through "formal process." Id. at 347. Additionally, allowing removal prior to service renders the time limit on removal contained within § 1446(b) superfluous. If removal can be effected prior to service, it makes no sense for the removal deadline to begin to run after service of process.

Moreover, the Court implicitly assumed that service of process would always occur prior to removal. See id. at 354 (assuming that service of at least the summons would precede removal in all four possibilities under the statute while stating that "in each of the four categories, the defendant's period for removal will be no less than 30 days from service") (emphasis added)***

The statute's text is therefore not ambiguous, and under its plain meaning defendant was not permitted to remove this action. Remand is therefore required. A number of courts, however, have disagreed with the court's conclusion that the statute is not ambiguous. The court will thus assume, for purposes of argument, that the statute's plain meaning allows removal by an unserved forum defendant. But, even under this assumption, removal is still required, because adopting this meaning would create absurd results. First, there is no conceivable reason why Congress would condition a forum defendant's ability to remove a diversity case on the timing of service. *** An unserved forum defendant is not somehow subject to more presumptive local prejudice than a served forum defendant, and thus it makes no sense to grant the former a federal tribunal while forcing the latter to stay in state court.

Additionally, defendant's reading is ridiculous when placed in the broader context of federal jurisdiction. ***Congress intentionally created a scheme whereby a plaintiff could select its own forum, except when that forum was presumptively prejudicial to the defendant. *** To credit defendant's reading would upset this delicate balance between the competing forum preferences of plaintiffs and defendants. Thus, since defendant's interpretation of the statute produces an absurd result, it is "entirely appropriate to consult all public materials, including the background of [the rule or statute] and the legislative history of its adoption, to verify that what seems to [the court] an unthinkable disposition . . . was indeed unthought of, and thus to justify a departure from the ordinary meaning of the [words in the statute]." Green, 490 U.S. at 527 (Scalia, J., concurring).

Prior to doing so, however, the court will note a final flaw in defendant's argument and the reasoning of the courts that have adopted it. Many courts allowing removal by an unserved defendant relied on decisions where an out-of-state defendant was permitted to remove an action prior to service upon the forum defendant. This ignores the difference between removal by an out-of-state defendant and removal by a forum defendant. ***

The problem is that removal by a forum defendant is easily distinguishable from removal by an out-of-state defendant. Accord Allen, 2008 WL 2247067, at *5 (noting that case where out-of-state defendant removed prior to service on forum defendant was "distinguishable" from case where forum defendant removed prior to service). Allowing removal by an out-of-state defendant when a forum defendant is unserved does not defeat the forum defendant rule and thus does not necessarily lead to an absurd result. Conversely, allowing an unserved forum defendant to remove a diversity action clearly defeats the purpose of the forum defendant rule because it enables a resident defendant, who would not be subject to presumptive local prejudice in the state courts, to obtain a federal forum. This totally eviscerates the forum defendant rule and leads to an absurd result, because it undermines the rationale for having a forum defendant rule at all.