The opinion of the court was delivered by: Gettleman, District Judge.
MEMORANDUM OPINION AND ORDER
Plaintiffs Phoenix Container L.P. ("Phoenix") and Yasar Samarah
("Samarah"), as an individual and in his capacity as a general
partner of Phoenix, brought two different suits in state court
alleging breach of contract, breach of fiduciary duties, and
other claims against defendants Joel Schonfeld and Schonfeld &
Weinstein ("the Schonfeld defendants"); Andrea Weinstein
("Weinstein"); Ken Sokoloff ("Sokoloff"); Hollow-Brook Holdings,
L.L.C.; Thomas Bartkovich ("Bartkovich"); James "Governor" Florio
("Florio"); Michael Perrucci; Christopher B. Ferguson; and
Michael Sakimura.. On October 8, 1999, Florio filed a notice of
removal pursuant to 28 U.S.C. § 1446. All named defendants joined
in the notice of removal. The parties do not contest that the
requirements for diversity jurisdiction under 29 U.S.C. § 1332
are met. Plaintiffs have filed a motion to remand the instant
case to the Circuit Court of Cook County, however, for failure to
timely remove. Florio has filed a response in opposition to that
FACTS AND PROCEDURAL HISTORY
This case has a tortured procedural history. On Feb. 11, 1999,
Samarah filed suit in state court against the Schonfeld
defendants and Weinstein alleging that these defendants breached
a contract by convincing Samarah to purchase stock in Phoenix
("case number 99 L 1730"). On February 19, 1999, Phoenix and
Samarah filed a second action in state court ("case number 99 L
2065"), naming as defendants the Schonfeld defendants, Sokoloff,
and Hollow-Brook Holdings, L.L.C., and alleging, inter alia, that
defendants conspired to
dilute Samarah's stock and deprive him of control of Phoenix,
thereby breaching their fiduciary duties.
In the spring of 1999, all defendants named in both state court
suits filed limited appearances for the purpose of filing motions
to quash service of process. Each defendant filed a motion to
quash either for improper service of summons or for lack of
personal jurisdiction. (The Schonfeld defendants filed their
motion to quash for lack of personal jurisdiction on May 4,
1999). With one exception, the state court postponed ruling on
all defendants' motions to quash service.*fn1
On June 24, 1999, plaintiffs filed a motion for leave to file
an amended complaint in case number 99 L 2065. The court notes
that at this juncture, none of the defendants had yet accepted
service of the original complaint. The amended complaint added as
defendants Bartkovich, Florio, Weinstein, Michael Perrucci,
Christopher B. Ferguson, and Michael Sakimura. Bartkovich filed a
motion to quash service of process of the amended complaint and
the court granted his motion. The record contains no evidence
that any of the other new defendants was ever properly served
with the amended complaint. There is also no evidence that the
state court ever granted plaintiffs leave to file the amended
On August 16, 1999, however, the state court granted plaintiffs
leave to file a second amended complaint in case number 99 L
2065. On this same date, the Schonfeld defendants withdrew their
motion to quash service of process with respect to plaintiffs'
original complaint in that case. The state court promptly ordered
the Schonfeld defendants to answer the second amended complaint
within the month.
On September 9, 1999, Florio was served with plaintiff's second
amended complaint. On October 7, 1999, case number 99 L 1730 was
consolidated with case number 99 C 2065. On this same date, the
Schonfeld defendants filed their general appearance and answered
the second amended complaint in case number 99 C 2065. On October
8, 1999, Florio filed a notice of removal pursuant to
28 U.S.C. § 1446, alleging diversity jurisdiction. All of the remaining
defendants consented to the removal.
Plaintiffs argue that the instant lawsuit should be remanded to
the state court because defendants failed to remove either state
case within thirty days of being served with the complaint. Under
28 U.S.C. § 1446(b), a defendant must file a motion to remove an
action from state to federal court within thirty days of service.
The statute reads, "The 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." 28 U.S.C. § 1446(b).
The Supreme Court recently clarified § 1446(b) by holding that
the thirty-day removal period does not begin to run until a
defendant is formally served with the complaint. Murphy Bros. v.
Michetti Pipe Stringing, Inc., 526 U.S. 344, 119 S.Ct. 1322, 143
L.Ed.2d 448 (1999). The Murphy Court held that the statute's
"`service or otherwise' language was not . . . intended to bypass
service as a starter for § 1446(b)'s clock." Id. at 1329. The
Murphy Court reasoned: "In the absence of service of process
(or waiver of service by the defendant), a court ordinarily may
not exercise power over a party the complaint names as
defendant." In so holding, the Court rejected the "receipt rule"
adopted by a majority of courts, including the Seventh Circuit.
See Roe v. O'Donohue, 38 F.3d 298 (7th Cir. 1994).
Examining the parameters of the now discredited "receipt rule"
clarifies what, exactly, the Supreme Court means by "formal
service." Under the "receipt rule," the thirty-day removal clock
began running "on receipt of a copy of the complaint, however
informally." Murphy, 526 U.S. 344, 119 S.Ct. 1322. In adhering
to the receipt rule in Roe, the Seventh Circuit held that
"knowledge of the nature of the claims, and not the state's
technical rules of service, determines timeliness." Roe, 38
F.3d at 303. The Roe court described various situations that
constituted "receipt" even though they did not amount to
"service." One such situation was "a delivery of the complaint by
a process server that is not effective as `service of process'"
because it does not comply with state law service of process
requirements. Id. at 302. In adopting the receipt rule, the
Seventh Circuit disagreed with "other courts [that] have held
that only `service' complying with all technical rules of state
law starts the clock under § 1446(b)." Id. at 302.
The Supreme Court explicitly abrogated Roe in Murphy. The
Murphy Court held that a defendant should be given the same
procedural rights in the removal context that he receives in
other contexts. Murphy, 119 S.Ct. at 1329. The Court analogized
removal to the filing of a responsive pleading in a removed
action under Fed. R.Civ.P. 81(c). Id. The Court concluded:
"[I]t would take a clearer statement than Congress has made . . .
to set removal apart from all other responsive acts, to render
removal the sole instance in which one's procedural rights slip
away before service of a summons, i.e., before one is subject to
any court's authority." Id. Murphy's conclusion, and its
abrogation of Roe, suggest that "formal service" is service
that complies with a state's technical service of process rules
(that is, the same sort of service that would trigger other
Plaintiffs contend that each defendant was formally served at
the moment service of process was initially made. Each defendant,
however, moved to quash service. It is well-settled that a
challenge to service of process is a challenge to the court's
jurisdiction. White v. Ratcliffe, 285 Ill. App.3d 758, 221
Ill.Dec. 113, 674 N.E.2d 906, 911 (2d Dist. 1996). The Seventh
Circuit "has long held that valid service of process is necessary
in order to assert personal jurisdiction over a defendant."
Mid-Continent Wood Prods., Inc. v. Harris, 936 F.2d 297, 301
(7th Cir. 1991) (internal citations and quotation marks omitted).
The defendants preserved their objections to the court's
jurisdiction by filing special and limited appearances for the
purpose of contesting service of process and/or jurisdiction. The
court reads the Murphy Court's holding to mean that the
thirty-day clock did not begin to run during the time ...