By: Dunlap Bennett & David  [5/20/22]

Can a Lawsuit Filed With the Intent to Remain in State Court Actually Avoid Removal?

In December 2021, our office (DBL Tulsa) filed an action in a State of Oklahoma district court against two entity defendants, alleging causes of action sounding in Tortious Interference with Business Relations and Civil Conspiracy emanating from matters pertaining to work restoring the Puerto Rican electrical grid in the wake of Hurricanes Irma and Maria in 2017. This blog is not designed to argue the merits of the claims alleged or the defenses raised, particularly because the matter is pending before the Western District of Oklahoma Federal District Court as this piece is being submitted. Rather, this submission addresses an interesting niche in federal civil procedural law, specifically, the “Forum Defendant Rule” under 28 U.S.C. § 1441(b)(2), which is currently under consideration in the matter referenced here.

Under federal law, a lawsuit sounding only in state law may be filed in federal district court if the amount in controversy “exceeds the sum or value of $75,000, exclusive of interest and costs,” and the matter “is between . . . citizens of different states.” [1] The parties to the action must be completely diverse, i.e., “[N]o plaintiff may be a citizen of the same state as any defendant.” [2]  Under federal law, a corporation is deemed a citizen of the state of its incorporation, as well as the state where its principal place of business is located. [3]  Limited liability companies are deemed citizens of every state in which a member of the LLC is domiciled. [4] 

If the diversity requirements are met, defendants to an action filed in a state court are entitled to remove the litigation from the state court to the federal district court for the district in which the state court sits. [5] However, there exists a proviso to this right of removal if one or more of the defendants to the suit are domiciles of the state in which the matter is filed:

A civil action otherwise removable solely on the basis of the jurisdiction under section 1332(a) of this title 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. [6]

Consequently, if a petition /complaint names at least one defendant that is domiciled in the forum state, it would appear that removal is precluded, right?

This is where this area of civil procedure gets interesting – and muddy. Because of the “properly joined and served” language in this section of the statute, some courts hold that service of process upon the forum defendant is required before removal can be overridden by a timely request on the part of the Plaintiff for remand [7] will be granted. [8]  However, “a majority” of the federal courts who have considered this rule have held, among other things, that a literal application of this section’s language creates an “absurdity.” [9] 

In the matter that spawned this blog post, Plaintiff (represented by DBL Tulsa) opted, as is its recognized right, to avoid pleading causes of action sounding in federal law and filed the suit in an Oklahoma state district court. [10] Moreover, because both Defendants were domiciled in Oklahoma, Plaintiff, an entity incorporated in Puerto Rico but having its principal place of business in Texas, opted to invoke the boundaries of the “Forum Defendant Rule” by filing the action in Oklahoma; in fact, the lawsuit was filed in the very county where both Defendants are domiciled (both share the same address as each entity’s principal place of business). Due to “docket watching” made possible by the modern invention of electronic filing, Defendants filed for removal within 48 hours of Plaintiff filing the instant matter. [11]

In response, Plaintiff filed a Motion for Remand, invoking the “Forum Defendant Rule.”

In their response, Defendants, relying heavily on the authorities cited in footnote 8 of this blog, argued for a strict and literal construction of the “properly joined and served” language of Section 1441(b)(2). Plaintiff, citing to (among others) the authorities calling such an application “an absurdity,” argued in its Motion and Reply that remand is required. As Plaintiff set forth, the authorities Plaintiff relied upon pointed to the history and the purpose of the “Forum Defendant Rule” and its connection to diversity jurisdiction. The latter was created to protect defendants from outside of the forum from local court biases. [12]  The underlying rationale for diversity “evaporates when one of the defendants is a forum state citizen and the likelihood of local bias is reduced, if not eliminated.” [13]

Further, conditioning removal on the actual service of process on at least one forum defendant prevents one form of gamesmanship – “reward[ing] those defendants who win the ‘race to remove’ before plaintiff has a chance to serve properly joined forum defendants” [14] – replacing another form of one-upmanship, i.e., a plaintiff naming a forum defendant that it never intends to prosecute in order to prevent removal. [15]  Finally, because Tenth Circuit jurisprudence requires that ambiguities in laws pertaining to removal militate toward remand, Plaintiff has argued that the matter must be returned to the state court in which it was filed. [16]

As of this writing, the Western District has yet to opine on Plaintiff’s request for remand. Given the fact that the Tenth Circuit has not issued an opinion resolving the dispute, coupled with the fact that a preponderance of district courts within the Tenth Circuit have agreed with the position taken by Plaintiff, it would seem that remand should be the outcome.

However, such is not a certainty. The split in authority creates a conundrum for plaintiffs seeking to keep a matter in the state court of its choosing, i.e., how can removal be prevented? The clock for defendants seeking removal does not technically begin to tick until service of a summons. [17] As it pertains to the litigation that is the subject of this blog, Plaintiff had, under Oklahoma law, up to 180 days to effect service of the action upon Defendants (the lawsuit was filed on December 14, 2021). [18]  However, precisely because Defendants were “docket watching,” the Notice of Removal was filed within two days, on December 16, 2021, before either Defendant was served. [19] It would appear that in order to ensure that the “Forum Defendant Rule” is applied by a federal court in a manner consistent with keeping the matter in state court, the plaintiff should be prepared to effect service upon forum defendants on the day the matter is filed – especially in jurisdictions that have found a strict construction of Section 1441(b)(2) acceptable.

This appears to be the very “absurdity” the dissenting courts have sought to avoid, but until this rule is either modified by Congress or resolved by the U.S. Supreme Court, counsel for plaintiffs seeking to utilize the “Forum Defendant Rule” will need to contemplate same day filing.

For more information on how Dunlap Bennett & Ludwig can help your business, contact us by calling 800-747-9354 or emailing clientservices@dbllawyers.com.


[1] 28 U.S.C. § 1332(a)(1).

[2] Grynberg v. Kinder Morgan Energy, L.P., 805 F.3d 901, 905 (10th Cir. 2015). Between the two, “a corporation’s principal place of business is a more important contact than the place of incorporation, and this is particularly true in situations where the corporation does little, or no, business in the latter place.” Restatement (Second) of Conflict of Laws § 145, cmt. e (1971).

[3] Schmidt v. Int’l Playthings, LLC, 503 F.Supp.3d 1060, 1082 (D.N.M. 2020).

[4] Siloam Springs Hotel, L.L.C. v. Century Surety Co., 781 F.3d 1233, 1237-38 (10th Cir. 2015).

[5] 28 U.S.C. § 1441(a). The procedure for removal is set forth in 28 U.S.C. § 1446.

[6] 28 U.S.C. § 1441(b)(2).

[7] Remand of the matter to the state court in which the matter was originally filed is covered under 28 U.S.C. § 1447, particularly subsection (c).

[8] Three circuits appear to hold this position.  See Texas Brine Co., LLC. v. Am. Arbitration Ass’n, Inc., 955 F.3d 482, 485 (5th Cir. 2020); Encompass Ins. Co. v. Stone Mansion Rest. Inc., 902 F.3d 147 (3d Cir. 2018); Gibbons v. Bristol-Myers Squibb Co., 919 F.3d 699 (2d Cir. 2019).

[9] Seee.g., Pratt v. Alaska Airlines, Inc., 21-cv-84-DWC, 2021 U.S. Dist. LEXIS 91092 at *6 – *7 (W.D. Wash. May 12, 2021) (stating that the majority view holds that “snap removals” are “untenable,” and counting cases finding “snap removals” are incompatible with the “text, history, and purpose of the Forum Defendant Rule” (id. at fn. 12)); In re McGill Revocable Living Trust, 16-cv-707-GKF-TLW, 2017 U.S. Dist. LEXIS 2100 at *3 and *6 (N.D. Okla. Jan. 6, 2017) (Forum Defendant Rule requires remand where a forum Defendant was unserved at the time removal was sought; applying the language of Section 1441(b)(2) strictly produces “absurd results”);  Turtle Factory Bldg. Corp. v. McGrath Real Estate Holdings, LLC, 20-cv-03099-RMG, 2021 U.S. Dist. LEXIS 34850 at *6 (D.S.C. Jan. 28, 2021) (“the Court is persuaded by the opinions that find the literal application of § 1441(b)(2) is contrary to congressional intent and creates absurd results”); Billie v. Vallance, Civ. No. RDB-21-0477, 2021 U.S. Dist. LEXIS 158816 at *7 (D. Md. Aug. 23, 2021) (After pointing out that the Fourth Circuit [similar to the Tenth Circuit] “has not ruled on this issue,” the Billie court articulated the Fourth Circuit’s approach to statutory interpretation: “[T]he Fourth Circuit departs from the plain meaning rule of statutory interpretation ‘when literal application of the statute results in (1) absurdity, or (2) an outcome at odds with clearly expressed congressional intent’” (quoting Sommer of BMW of North America, LLC, Civ. No. RDB-20-3027, 2021 U.S. Dist. LEXIS 89209, 2021 WL 1890651 at *2 (D. Md. May 11, 2021)).

[10] As the “master of the claim,” a plaintiff is entitled to avoid removal to federal court “by choosing not to plead a federal claim even if one is available.” Turgeau v. Admin. Review Board, 446 F.3d 1052, 1060 (10th Cir. 2006) (citation omitted).

[11] Defendants were able to watch the dockets that are presented on the Oklahoma Supreme Court Network, www.oscn.net, because Plaintiff had dismissed a similar action (but with a federal claim included) several moths earlier and opted to dismiss that filing in response to Defendants filing a Motion to Dismiss under Fed. R. Civ. P. 12(b)(6). Under Oklahoma law, Plaintiff was entitled to re-file the matter dismissed on grounds other than the merits within one year of the dismissal. Okla. Stat. tit. 12 § 100.

[12] Ziady v. Curley, 396 F.2d 873, 875 (4th Cir. 1968).

[13] In re McGill Revocable Living Trust, 2017 U.S. Dist. LEXIS 2100 at *3.

[14] Lone Mt. Ranch, LLC v. Santa Fe Gold Corp., 988 F.Supp.2d 1263, 1266-67 (D.N.M. 2013) (citing to Sullivan v. Novartis Pharms. Corp., 575 F.Supp.2d 640, 646 (D.N.J. 2008)). See also In re McGill Revocable Living Trust, 2017 U.S. Dist. LEXIS 2100 at *5 (conditioning removal on service of a defendant not only prevents gamesmanship on the part of the plaintiff (by adding a forum defendant simply to avoid removal), it also “‘protects against docket trolls with a quick finger on the trigger of removal’”) (quoting Gentile v. Biogen, Inc., 934 F.Supp.2d 313, 322 (D. Mass. 2013)); Woods v. Dr Pepper Snapple Grp., Inc., CIV-19-1162-F, 2020 U.S. Dist. LEXIS 32794 at *6 (W.D. Okla., Feb. 26, 2020) (“[I]t it makes no sense for Congress to enact the ‘properly joined and served’ language in order to prevent gamesmanship on the part of a plaintiff only to have that language allow for a different type of gamesmanship by a defendant, such as hasty removal in order to avoid the forum defendant rule”).

[15] See Lone Mt. Ranch, LLC v. Santa Fe Gold Corp., 988 F.Supp.2d at 1266 (“The Court also notes that the purpose of the ‘properly joined and served’ language in the rule was to prevent plaintiffs from adding a forum defendant solely to prevent removal, i.e. fraudulent joinder”). 

[16] “Because of a presumption against removal, ‘ambiguities should be resolved in favor of remand.’” Reifenberger v. Autovest, LLC, 20-cv-571-DAK-JCB, 2021 U.S. Dist. LEXIS 12354 (D. Utah Jan. 21, 2021) (quoting Fajen v. Foundation Reserve Ins. Co., 683 F.2d 331, 333 (10th Cir. 1982). See also Aguayo v. AMCO Ins. Co., 59 F. Supp. 3d 1225, 1279 (D.N.M. 2014) (“Removal statutes are strictly construed, and ambiguities should be resolved in favor of remand”) (citation omitted).

[17] See 28 U.S.C. § 1446(b)(1); a defendant has 30 days from receipt of the action to file for removal.

[18] Okla. Stat. tit. 12 § 2004(I).

[19] Service was effected on both Defendants, via their mutual Registered Agent, on December 23, 2021 – seven days after the lawsuit was filed in state court.


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