The U.S. Court of Appeals for the Third Circuit issued an important decision last month in Encompass Insurance Co. v. Stone Mansion Restaurant, __ F.3d __, 2018 WL 3999855 (3d Cir. Aug. 22, 2018), holding that the presence of a defendant who is a resident of the state where litigation is filed will not prevent the removal of a case that satisfies diversity jurisdiction from state court to federal court if the removal is effectuated prior to service on the forum defendant—a practice that is frequently referred to as snap removal. The applicable rule, known as the forum-defendant rule, provides that a state court civil action may not be removed to federal court on the basis of diversity jurisdiction “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.” 28 U.S.C. §1441(b)(2) (emphasis added). Defendants have increasingly sought to remove otherwise diverse state court cases where a defendant is a citizen of the forum state to federal court prior to service being effectuated on that defendant on the grounds that the plain text of 28 U.S.C. §1441(b)(2) does not apply to cases where the forum defendant has not yet been served. The Third Circuit’s decision, which is the first from an appellate court to directly address the practice of snap removal, will give defendants additional support in seeking to remove cases to federal court outside of the Third Circuit and will increase incentives for defendants to closely monitor electronically available state court dockets to employ snap removal in order to avoid litigating in a potentially less favorable forum.

The Practice of Snap Removal

Snap removal is only available in cases where complete diversity exists and the only impediment to the case being brought in federal court is the presence of an unserved forum defendant. The practice of snap removal has greatly increased over the last several years as the number of electronic court dockets has increased, which has enabled defendants to learn about litigation against them prior to being served and then promptly remove the case to federal court. See Breitweiser v. Chesapeake Energy, 2015 WL 6332625, at *6 (N.D. Tex. Oct. 20, 2015); Valido-Shade v. Wyeth, 875 F. Supp. 2d 474, 478 (E.D. Pa. 2012), summarily aff’d, No. 14-4608 (3d Cir. April 29, 2015). The increase in snap removals also followed Congress’s revisions to 28 U.S.C. §1441(b) in 2011, which emboldened defendants to pursue snap removals because Congress left the operative phrase “properly joined and served” unchanged, which is the basis for snap removals.