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Smethers v. Bell Helicopter Textron Inc.

United States District Court, S.D. Texas, Victoria Division

April 4, 2017

KEVIN D. SMETHERS, et al., Plaintiffs,
v.
BELL HELICOPTER TEXTRON INC, Defendant.

          MEMORANDUM OPINION AND ORDER

          George C. Hanks, Jr. United States District Judge

         Before the Court are Plaintiffs Kevin D. and Cheryl A. Smethers's (together, "Smethers") Amended Motion to Remand. Dkt. 10. After considering the parties' responsive pleading, relevant authority, and for reasons explained below, the Motion to Remand will be granted.

         I. Background

         Smethers filed suit in the 24th District Court of Refugio County, Texas. Smethers named Bell as the lone defendant. Dkt. 1-1. Smethers provided Bell with a courtesy copy of the Complaint on the same day it was filed but before formal service was performed. The 24th District Court issued a citation for Bell to Smethers the next day. A day later, and before being served, Bell filed its Notice of Removal, removing the case to this Court. Bell's sole basis for removal was the complete diversity of citizenship between the parties pursuant to 28 U.S.C. § 1332. Smethers then filed its amended motion to remand pursuant to 28 U.S.C. § 1447(c). The motion to remand asserts that Bell is a forum defendant, having its principal place of business in Fort Worth, Texas. As such, Smethers argues that removal violates the spirit-if not the plain language-of 28 U.S.C. § 1441's 'forum-defendant rule.'

         II. Discussion

         A. Standard of Review

         Generally, a defendant may remove to federal court any state court civil action over which the federal court would have "original jurisdiction." 28 U.S.C. § 1441(a); see Gasch v. Hartford Ace. & Indent. Co., 491 F.3d 278, 281 (5th Cir.2007). Federal courts have "original jurisdiction" over civil actions where the parties are diverse and the matter in controversy exceeds the sum or value of $75, 000, exclusive of interests and costs. 28 U.S.C. § 1332(a). Under the provision known as the forum-defendant rule, "a civil action otherwise removable solely on the basis of [diversity jurisdiction] may not be removed if any 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)(2) (emphasis added).

         District courts must remand cases before them "[i]f at any time before the final judgment it appears that the district court lacks subject matter jurisdiction." 28 U.S.C. § 1447(c). "[D]oubts regarding whether removal jurisdiction is proper should be resolved against federal jurisdiction." Acuna v. Brown & Root Inc., 200 F.3d 335, 339 (5th Cir.2000). The removing party therefore bears the burden of showing by a preponderance of the evidence that removal is proper. Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir.2002).

         B. The Forum Defendant Rule and 'Snap Removal'

         In the present action, it is undisputed that: 1) removal is based solely upon diversity of citizenship; 2) complete diversity exists between the parties; 3) Bell is a citizen of Texas, the forum state; and 4) Bell had not been served at the time of removal. Smethers argues that removal is procedurally improper. Specifically, Smethers argues that Bell engaged in 'snap removal, ' relying upon a loophole in the language of the statute and subverting its underlying legislative intent. Bell counters that the plain language of the statute permits removal here and that-in any case-this is not an example of snap removal. Bell is correct that the plain language of the statute permits removal of this claim. The dispositive issue then is whether the Court should look beyond the plain language of the statute to determine whether to remand the case.

         The alleged loophole known as 'snap removal' is created by the phrase 'properly joined and served' contained in 28 U.S.C. § 1441(b)(2). Judge Boyle of the Dallas division of the United States Southern District of Texas recently and thoroughly examined the phenomenon of snap removal. See Breitweiser v. Chesapeake Energy Corp., CIVIL ACTION NO. 3:15-CV-2043-B, 2015 WL 6322625 (N.D. Tex. October. 20, 2015). Snap removal refers to "the emerging litigation tactic used ... to circumvent the forum defendant rule." Id. at *2. Because removal here is prohibited only where the defendant has been served, defendants can remove "almost immediately after a plaintiff files in state court, but before the plaintiff has the opportunity to formally serve a forum defendant." Id. Judge Boyle further explains that,

The hallmark of a snap removal is its timing: a snap removal occurs (1) just after the state court case has been filed, and (2) just before the plaintiff has the opportunity to serve any forum defendants. This particular timing of events creates a possible loophole in the forum-defendant rule .... This loophole has been used [by forum defendants] with variable rates of success ....

Id. at *3. Essentially, the difference between 'snap' and 'proper' removal is "one of degree, not of kind." See Lovell Maufg Co. v. Cary, 147 U.S. 472, 476 (1893).

         C. District Court Split and ...


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