Commercial Litigation and Arbitration

Even After 2011 Federal Courts Jurisdiction & Venue Clarification Act, Earlier-Served Defendants Must Consent to Removal within 30-Day Period within Which Later-Served Defendant Must File Notice of Removal

Chakra 5, Inc. v. City of Miami Beach, 2013 U.S. Dist. LEXIS 128692 (S.D. Fla. July 30, 2013):

Defendants seeking removal to federal court under 28 U.S.C. section 1441 must do so according to the procedures in 28 U.S.C. section 1446. Prior to the Federal Courts Jurisdiction and Venue Clarification Act of 2011, Pub. L. No. 112-63, 125 Stat. 758 (codified in scattered sections of 28 U.S.C.) (the "2011 Amendments"), 28 U.S.C. section 1446(b) provided in relevant part that:

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.

28 U.S.C. § 1446(b). Thus, before the 2011 Amendments, section 1446(b) provided a thirty-day time frame for a defendant to file a notice of removal. In cases involving multiple defendants served at different times, courts were divided on whether a later-served defendant had thirty days to remove from the date it was served or from the date the first defendant was served. See Bailey v. Janssen Pharmaceutica, Inc., 536 F.3d 1202, 1205 (11th Cir. 2008) ("In applying [section 1446(b)] to multi-defendant litigation, courts have split over whether each individual defendant has a right to seek removal within thirty days of receipt of service or whether the appropriate time window for § 1446(b) runs from receipt of service by the first-served defendant only – in other words, whether the 'first-served' or 'last-served' defendant triggers § 1446(b)'s limitations period.") (footnote call numbers omitted).

In construing the thirty-day period of the pre-amendment section 1446(b), the majority of circuits, including the Eleventh Circuit in Bailey, adopted a rule allowing the later-served defendant thirty days to remove from the date it was served. See Pietrangelo v. Alvas Corp., 686 F.3d 62, 64-65 (2d Cir. 2012) (agreeing with the Third, Eleventh, Eighth, and Sixth Circuits by adopting the later-served defendant rule, and noting that only the Fourth and Fifth Circuits had adopted variations of the first-served defendant rule). In the 2011 Amendments, Congress codified this later-served defendant rule, stating that, "[e]ach defendant shall have 30 days after receipt by or service on that defendant of the initial pleading or summons . . . to file the notice of removal." 28 U.S.C. § 1446(b)(2)(B) (emphasis added). The 2011 Amendments further clarified that if there is more than one defendant, and the defendants are served at different times, when "a later-served defendant files a notice of removal, any earlier-served defendant may consent to the removal even though that earlier-served defendant did not previously initiate or consent to removal." 28 U.S.C. § 1446(b)(2)(C). In effect, a new thirty-day period begins when each defendant receives service.

A separate, yet inherently related, rule that applies when there is more than one defendant is the rule of unanimity. This rule, codified in the 2011 Amendments as 28 U.S.C section 1446(b)(2)(A), requires that "all defendants who have been properly joined and served must join in or consent to the removal of the action." 28 U.S.C. § 1446(b)(2)(A). The specific question posed by the Motion, and not explicitly addressed in section 1446(b)(2)(A), is when this unanimous consent must be obtained. According to Plaintiffs, an earlier-served defendant must provide its consent prior to the expiration of the thirty-day window within which the later-served defendant must file its notice of removal, consistent with case law predating the 2011 Amendments. According to the City, after the 2011 Amendments there is no longer a time restriction for the earlier-served defendant to provide its consent. The Court is in agreement with the Plaintiffs and determines that circuit precedent is not inconsistent with or overruled by the 2011 Amendments with respect to the deadline for satisfying the rule of unanimity.

In support of its decision to adopt the later-served defendant rule, the Eleventh Circuit in Bailey not only recognized that the rule of unanimity would be applied in the context of the later-served defendant rule, but clearly contemplated that the rule of unanimity must be achieved by the time the later-served defendant files its notice of removal. See Bailey, 536 F.3d at 1207. The Eleventh Circuit articulated the unanimity rule as requiring "all defendants consent to and join a notice of removal in order for [the notice of removal] to be effective." Id. (emphasis added) (citing Russell Corp. v. Am. Home Assurance Co., 264 F.3d 1040, 1050 (11th Cir. 2001)).

Furthermore, according to the Eleventh Circuit:

[t]he last-served rule is not inconsistent with the rule of unanimity. Earlier-served defendants may choose to join in a later-served defendant's motion or not, therefore preserving the rule that a notice of removal must have the unanimous consent of the defendants. The unanimity rule alone does not command that a first-served defendant's failure to seek removal necessarily waives an unserved defendant's right to seek removal; it only requires that the later-served defendant receive the consent of all then-served defendants at the time he files his notice of removal.

Id. (emphasis added).

Cases subsequent to Bailey have required the rule of unanimity be satisfied by the expiration of the time allowed for a later-served defendant to file a notice of removal. ***

Requiring the rule of unanimity be satisfied within the same time period in which the last-served defendant may file a notice of removal is not only consistent with circuit precedent, but is also consistent with congressional intent in passing the 2011 Amendments. The House Judiciary Committee Report on the Federal Courts Jurisdiction and Venue Clarification Act of 2011 (the "Report") indicates that, in passing the revisions to 28 U.S.C. section 1446, Congress sought primarily to resolve the circuit split with regard to the first-served or later-served defendant rule. See H.R. REP. NO. 112-10, at 13-14 (2011) ("The other provisions of paragraph (b)(2) address the main objective of this part of the statute, namely to eliminate confusion surrounding the timing of removal when defendants are served at different times."). With regard to the rule of unanimity, the Report states that "[n]ew subparagraph (b)(2)(A) codifies the well-established 'rule of unanimity' for cases involving multiple defendants. Under that rule, which is generally traced to the Supreme Court decision in Chicago, Rock Island & Pac. Ry. v. Martin, 178 U.S. 245, 251 (1900), all defendants who have been properly joined and served must join in or consent to removal." Id. at 13. By codifying the "well-established" rule, it appears Congress intended the courts to continue to apply the rule of unanimity in the same manner as had previously been applied.

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