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A Southern District judge has ordered partners in a law firm he sanctioned to attend a legal education program, after one of the attorneys improperly removed a suit from state to federal court.

William Grae, a partner of 90-attorney Chartwell Law Offices and former defense counsel in a personal injury suit, “acted in subjective bad faith” by removing the suit to federal cout, said Judge P. Kevin Castel (See Profile) in Rivas v. Bowling Green, 13-cv-7812. Castel said the removal “may have serious consequences” for the plaintiffs.

The underlying suit was brought by Jose Rivas, who claimed he tripped and fell in April 2010 while working for a bank at 5 Broadway, and sustained severe knee injuries. He and his wife sued building owner Bowling Green Associates and Braun Management in Manhattan Supreme Court, claiming the defendants negligently maintained the premises.

Grae, who represented Bowling Green and Braun, removed the suit to the Southern District in November 2013, noting that the Rivases lived in New Jersey, while the defendants were in New York, and that the amount in controversy was more than the required threshold.

In an order to show cause in early July, Castel said the removal was improper, citing the forum-defendant rule in 28 U.S.C. § 1441(b)(2), which prohibits removal based on diversity jurisdiction if any of the defendants is a citizen of the state in which the case is brought.

Castel ordered Grae and the Chartwell Law Offices to show cause why they should not be sanctioned for violating the rule.

In response, Grae argued removal by an in-state defendant does not destroy subject matter jurisdiction, and that the Rivases forfeited their right to remand the case back to state court by not making a timely request to do so.

“That assertion is entirely correct,” Castel said in a new ruling Thursday, citing 28 U.S.C. § 1447(c). “But a lawyer has no right to improperly remove a case in the hope that the removal defects will not be timely asserted by opposing counsel.”

Grae also sought to justify the removal on the basis that courts have not dealt with such removals with great severity. He said the manner in which the U.S. Court of Appeals for the Second Circuit and district courts have responded to a violation of the forum-defendant rule demonstrates “that removal ‘may,’ in fact, be sought, even though such removal could be subject to a timely remand motion.”

Castel said Grae “appears to confuse ‘may’ with ‘can.’”

“An attorney can act unilaterally in violation of the statute, and the removal nevertheless will be effective, but he may not do so,” Castel said. “The existence of an after-the-fact remedy does not justify the original wrong.”

On the consequences of the removal, Castel said Rivas’ lawsuit would have been heard in state court by at most six jurors from Manhattan and only five of the six would need to agree on the verdict.

Now, the lawsuit will be heard by at least six but as many as 12 jurors selected from five New York counties and the verdict must be unanimous, he said.

Castel concluded that Grae knew the defendant-forum rule and he came forward with no claim to misunderstand it. The judge said he acted with actual knowledge of and in disregard of the prohibitions in the rule.

The judge also found that the Chartwell firm was jointly responsible for the violation.

But he said Grae’s conduct “involved no venality” and the firm truthfully disclosed on the removal papers the fact that revealed a violation. Grae also told the court that, at the time of the notice of removal, they were unaware a violation of the rule could lead to Rule 11 sanctions, “a point that the court considers in mitigation,” Castel said.

Grae said in court papers that he has practiced in Southern District for more than 20 years and he has never been subject to a professional sanction.

While he has always pursued an aggressive style of practice, Grae said, he “has nonetheless striven to adhere to the highest code of conduct and professionalism.”

He said having respond to the order to show cause has “made an indelible impression.”

Castel said he accepts that Grae will not repeat the conduct and that a nonmonetary sanction of a warning was sufficient.

As for Chartwell Law Offices, “a different nonmonetary sanction fits better,” Castel said.

The judge ordered the law firm, within four months, to require each partner or member who practices in litigation and who is admitted to practice in the Southern District to attend a continuing education program.

Castel specified that the program should be on federal subject matter jurisdiction based on diversity of citizenship, the proper basis and procedure for removal of cases to federal court and the certification requirements of Rule 11.

Grae no longer represents the defendants due to a conflict. The case remains in federal court.

Grae and Chartwell—an East Coast regional firm with 17 attorneys in its New York offices— declined to comment, citing firm policy not to comment on pending litigation.

The Rivas’ attorney, Steven Fleckner of Cellino & Barnes, declined to comment.