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Colin E. Wrabley, left, and Joshua T. Newborn, right, of Reed Smith. Colin E. Wrabley, left, and Joshua T. Newborn, right, of Reed Smith.

It’s no secret that companies sued as defendants generally prefer to litigate in federal court, not state court. Federal courts are presumed to be more predictable, more transparent and less subject to local biases than state courts. So companies haled into state court ordinarily resort to their options to remove the case to federal court, including examining whether the parties are “diverse”—that is, whether all the plaintiffs are citizens of different states than the defendants. The problem with removal based on the parties’ diversity is that it’s typically unavailable for defendants sued in their “home” state by virtue of a federal statute, 28 U.S.C. Section 1441(b)(2), which provides that a civil action cannot be removed on the basis of diversity “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.”

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