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Susan Hanratty v. George T. Watson and Ts Acquisitions

December 2, 2010

SUSAN HANRATTY, PLAINTIFF,
v.
GEORGE T. WATSON AND TS ACQUISITIONS, INC., DEFENDANTS.



The opinion of the court was delivered by: J. Phil Gilbert District Judge

MEMORANDUM AND ORDER

This matter comes before the Court on plaintiff Susan Hanratty's motion to remand this case to state court (Doc. 16). Defendants George T. Watson has responded to the motion (Docs. 27 & 28).

I. Background

Hanratty originally filed this case on June 8, 2010, in the Circuit Court for the Third Judicial Circuit, Madison County, Illinois. The face of the complaint indicates the plaintiff resided in Illinois and the defendants resided in Texas. Hanratty served the summons and complaint on TS Acquisitions, Inc. ("TSA") on July 1, 2010, and on Watson on July 30, 2010, and the affidavit of service on Watson showing service in Oklahoma was filed in state court on August 11, 2010. TSA did not file a notice of removal within 30 days of being served. On August 30, 2010, Watson filed a notice of removal in this Court on the basis of original diversity jurisdiction along with a written consent from TSA. The notice of removal pleads that Hanratty is a citizen of Illinois, TSA is a citizen of Texas and Watson is a citizen of Oklahoma. Hanratty did not file the notice of removal in the Madison County Circuit Court until October 20, 2010. Hanratty now asks the Court to remand this case on the grounds that TSA's consent to removal was invalid because it was given more than 30 days after service of the summons and complaint and that Watson did not comply with the requirements to file the notice of removal promptly in state court.

A defendant may remove to federal court a case filed in state court if the federal court would have had jurisdiction to hear the case when the plaintiff originally filed it. 28 U.S.C. § 1441(a); Schur v. L.A. Weight Loss Ctrs., Inc., 577 F.3d 752, 758 (7th Cir. 2009). "The party seeking removal has the burden of establishing federal jurisdiction, and federal courts should interpret the removal statute narrowly, resolving any doubt in favor of the plaintiff's choice of forum in state court." Schur, 577 F.3d at 758 (citing Doe v. Allied-Signal, Inc., 985 F.2d 908, 911 (7th Cir. 1993)). No party disputes that the Court would have had original diversity jurisdiction to hear this case had Hanratty originally filed it here. The parties disagree, however, about whether the defendants satisfied several technical requirements of removal.

II. Analysis

A. Unanimity

Hanratty asks the Court to remand this case because TSA's consent is invalid and therefore does not satisfy the requirement that all properly joined and served defendants consent to removal. The law is clear that when a case is removed from state court to federal court under

28 U.S.C. § 1441, all served defendants must join in the notice of removal. McMahon v. BunnO-Matic Corp., 150 F.3d 651, 653 (7th Cir. 1998). The failure of even one served defendant to timely consent to removal in writing renders a notice of removal defective and subject to remand unless the removing defendants adequately explain the justified absence of the missing defendant. Northern Ill. Gas Co. v. Airco Indus. Gases, 676 F.2d 270, 273 (7th Cir. 1982).

If the case stated by the plaintiff's initial pleading is removable, that is, if it states a case over which a federal court has original jurisdiction, the defendant must file a notice of removal within thirty days of receiving the complaint. 28 U.S.C. § 1446(b), ¶ 1. If the case stated by the initial pleading is not removable on its face, the defendant has thirty days from receipt of "an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable." 28 U.S.C. § 1446(b), ¶ 2. If the notice of removal is defective for failure to meet time requirements, the Court should remand the case pursuant to 28 U.S.C. § 1447(c).

The interaction between the relatively simply rules of unanimity and timeliness becomes complicated where multiple defendants are served at different times. Historically, courts have implemented the unanimity and the timeliness requirements by using the "first-served defendant rule," which holds that the thirty-day period for removal under 28 U.S.C. § 1446 begins to run when the first defendant has notice that the case is removable. If the first-served defendant fails to seek removal in a timely manner, it has effectively waived its consent to removal, and it cannot later join a later-served defendant's notice of removal. As a consequence, the later removal cannot be unanimous. See Phoenix Container, L.P. v. Sokoloff, 83 F. Supp. 2d 928, 932-33 (N.D. Ill. 2000).

However, courts concerned with the prospect that a later-served defendant's right to remove a case may expire before he is even served if a prior-served defendant does not act promptly to remove the case have adopted the "later-served defendant rule." Under that rule, each defendant can remove a case within thirty days of being served -- and earlier-served defendants may join in the removal -- regardless of whether the earlier-served defendants exercised their removal rights within thirty days of being served. See Bailey v. Janssen Pharmaceutica, Inc.,536 F.3d 1202, 1208-09 (11th Cir. 2008); Marano Enters. of Kan. v. ZTeca Rests., L.P., 254 F.3d 753, 757 (8th Cir. 2001).

The Seventh Circuit Court of Appeals has not explicitly decided whether to follow the first-served defendant or last-served defendant rule, although it has hinted at various times that it would adopt one or the other. See Boyd v. Phoenix Funding Corp., 366 F.3d 524, 530 (7th Cir. 2004) (allowing for possibility that later-served defendant rule applied in the absence of collusion to create opportunity for remand); compare Phoenix Container, L.P. v. Sokoloff, 235 F.3d 352, 353 (7th Cir. 2000) (noting in dicta that defendants served more than thirty days before the notice of removal was filed were not able to consent to removal because their entitlement to removal had expired).

Watson, of course, objects to application of the first-served defendant rule, noting that the Seventh Circuit Court of Appeals has never explicitly adopted it. He further argues that it would be illogical to allow a later-served defendant's right to remove to expire before it is even aware of a ...


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