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This column completes my discussion of the American Law Institute (ALI)’s newly published Federal Judicial Code Project, which addresses many of the most difficult areas of federal jurisdiction and practice. In my last three columns, I discussed the ALI’s venue recommendations, supplemental-jurisdiction proposal and substantive removal recommendations. In this column, I will discuss the ALI’s proposed revisions to removal procedure. Over the last decade or so, the federal courts, including the United States Supreme Court, have dealt with numerous problems created by ambiguities in the removal statutes governing removal and remand procedures, 28 U.S.C. 1446 and 1447. It is fair to say that the ALI proposals suggest codifications of either the best rule or the emerging majority rule for resolving the various problems raised in these cases. Several innovations clarify civil removal practice Proposed � 1446(a) contains several innovations that clarify removal practice for civil actions. First, it makes clear that � 1446 applies only to removal of civil actions. The current version of � 1446 applies to civil actions, civil proceedings and criminal proceedings. In the ALI’s reasonable view, the term “civil action” encompasses “civil proceedings” as well, and it thus eliminates the language in the current version of � 1446(b) that refers to the removal of civil proceedings. The reference to criminal removal is deleted from proposed � 1446(a), and the procedures for removing a criminal proceeding are set forth in proposed � 1445. Proposed � 1446 eliminates much confusion in the case law as to when a case is removed. Together with proposed � 1446(a)(5), which requires a prompt filing in state court that the civil action has been removed, the proposed � 1446 now makes clear that a civil action is removed, meaning that the federal court acquires jurisdiction over the matter and the state court loses it, upon the filing of the notice of removal. Specifically, � 1446(a)(5) requires that a conformed copy of the notice of removal that is filed in the district court be filed “promptly” in the state court and served upon all parties. It also provides for the filing of what in essence is a “proof of service” in the district court that the state court filings and service on the other parties have been made. These important provisions should eliminate the possibility for conflicting state court and federal court pronouncements in the same case during the time when some parties or the state court may have been unaware of the filing of the notice of removal. To the extent, however, that there is some unavoidable lag, the proposal provides for concurrent state-federal court jurisdiction. Second, consistent with the language in proposed � 1441(a) governing the right of removal, � 1446(a) broadens the removal venue option. The current version of � 1441(a) requires a case to be removed from a state court to the district and division in which the state court action is pending. The proposed version of �� 1441(a) and 1446(b) simply refer to removal to the district in which the civil action is pending. The third proposal addresses an aspect of the “unanimity rule” which requires that all served defendants who are not nominal parties agree to the removal of the case. Under the existing version of � 1446, all such defendants must “join in” the notice of removal. The cases suggested that such defendants signing the notice of removal, or independently filing a written statement that they agreed to the removal of the case, could satisfy this requirement. There is considerable confusion as to what else might constitute consent. Proposed Sec. 1446(a)(4) liberalizes the procedure for determining whether the “unanimity rule” has been satisfied. It provides that the attorney “for one defendant may sign on behalf of other defendants who must join in the removal provided such attorney has previously received the authorization of each defendant, in person or through counsel, on whose behalf the attorney signs the notice of removal.” While innovative, and efficient, this provision is subject to abuse by a defendant who is desperate to remove a case. If a defendant jumps the gun and files a notice of removal before obtaining consent of the other required defendants, the plaintiff or other defendants may seek to remand the case. The ALI commentary to this provision notes that if a contest about consent arises, the district court may resolve the issues as questions of fact. Although the existing version appears to present a bright-line rule that would minimize such battles, as the ALI points out, the courts already must deal with issues about consent and the proper procedures for demonstrating such consent. Thus, the ancillary litigation that is likely to arise under the proposed procedure is arguably no worse. Also, the hearing on consent should be relatively straightforward. Moreover, Rule 11 or the authority to impose costs for improper removal, should provide appropriate safeguards to such gamesmanship. Removal-timing questions have bedeviled the courts, including the Supreme Court over the past few decades. The ALI’s proposal addresses almost all of the issues that have arisen in a coherent way. First, although proposed � 1446(b) retains the current distinction for the timing of removal of cases that are initially removable in contrast to those that become removable, and also retains the current 30-day limit for removing cases, it separately enumerates them and adds language to ensure that the parties invoke the correct paragraph. Proposed � 1446(b)(1) pertains to cases that are “ascertainably” removable when commenced, and � 1446(b)(2) pertains to cases that become removable or that were not “ascertainably” removable at the commencement of the action. Section 1446(b)(1) then addresses some of the issues that have confounded the courts over the years. The first issue is the “first-served defendant” issue. The majority rule had been that the 30-day period for removal began to run from the date that the first defendant was served. In a multidefendant case, this rule had the effect of depriving later-served defendants of the possibility of removal. Sensing this unfairness, a number of courts had adopted “last served” rules, or rules of equity to determine whether a case was timely removed. The ALI proposal retains the first served rule, but adds a provision, � 1446(b)(3), that allows the district court the equitable discretion to extend the time for removal. It might have been preferable for the ALI to suggest the “last served” rule to prevent litigation that is certain to arise, but the virtue of the ALI’s provision is that it accords with the general rule that the removal battle be resolved as quickly as possible and the equitable provision should discourage plaintiffs from deliberately serving a relatively friendly defendant or one who may be unaware of the right to removal as a way of preventing removal. Proposed � 1446(b)(1) and (b)(2) codify the rule adopted by the Supreme Court in Murphy Brothers Inc. v. Michetti Pipe Stringing Inc., 526 U.S. 344 (1999), as to what act triggers the 30-day period for cases that are ascertainably removable. Prior to the Murphy Brothers case, some courts had held that the 30-day period ran from the time of receipt of a courtesy copy of the complaint, for example. The Supreme Court, however, held that only formal effective service triggered the 30-day period. Thus, a defendant need not worry about the 30-day period for removing a case until properly served with a paper indicating the possibility of removal. A proposal that provides a flexible solution Proposed � 1446(b)(2) eliminates the provision in the current version of � 1446(b) that limits removal of cases based on diversity jurisdiction to within one year of the commencement of the action. Rather, the proposal provides a flexible solution to the problem of undue delay in � 1447(b). It provides the district court with the discretion, “in the interest of justice” to grant the plaintiff’s timely motion to remand to state court on the ground that a diversity case was removed more than one year after the commencement of the action. Notably, the provision requires a timely motion by the plaintiff; the court may not sua sponte remand the action. Proposed � 1447(c) sets forth the general procedures for remand. The remand provision of � 1447 has engendered considerable confusion. The ALI proposal attempts to deal with such divisions once and for all. First, to improve the clarity of the statute, � 1447(c) is divided into five separately enumerated paragraphs. The first three attempt to codify the better approaches taken by the courts in interpreting the confusing language of the existing statute. Section 1447(c)(1) retains the requirement that a plaintiff make a motion to remand within 30 days after the defendant’s filing of the certificate of the filing of the notice of removal if the plaintiff challenges removal as “in violation of any restriction of the right of removal or any procedure for exercising that right.” However, it also contains a provision designed to deal with the current confusion as to the extent to which a district court may remand sua sponte for procedural defects. It allows the court to issue an order to show cause why remand should not be ordered on the basis of improper removal during the same time period that the plaintiff may make a motion to remand on the same grounds. Under � 1447(c)(2), the district court may remand if it finds that abstention is required, or because a necessary party needs to be joined, or in the exercise of discretion under � 1367(c). Under � 1447(c)(3), the court or any party may raise a subject-matter jurisdiction defect. But rather than the current approach, which would require the court to dismiss the action if the court finds a subject-matter jurisdiction defect, consistent with its “claim specific” proposed approach to supplemental jurisdiction, the court may remand only the claim or claims creating the jurisdictional problem. Georgene M. Vairo is a professor of law and William M. Rains Fellow at Loyola Law School, Los Angeles. She can be reached by e-mail at [email protected]. Professor Vairo is on the board of editors of Moore’s Federal Practice, and writes the Moore’s chapters on removal and venue problems.

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