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holding that under Murphy Bros, "a party's procedural rights cannot slip away before that party has been formally served with process," so that even though defendant in question was probably aware of the suit at virtually the same time as its codefendants who had been served, it would be "unfair to allow the time limitations of 1446(b) to run against [the subject defendant] even though it ha[d] not yet been served with formal process"
Summary of this case from Lee v. Pineapple Management Services, Inc.Opinion
Docket No. 9:00-CV-00025
March 25, 2000
ATTORNEYS FOR GEORGE EDMUND CHANDLER, PLAINTIFF CHANDLER LAW OFFICES, LUFKIN, TX 75901
PHILLIP A. PFEIFER, PFEIFER ASSOCIATES, HOUSTON, TX 77098.
ATTORNEYS FOR ELIZABETH M. FRALEY, DEFENDANT FRALEY FRALEY, DALLAS TX 75202.
MEMORANDUM OPINION
I. INTRODUCTION
Plaintiffs sued the defendants for the wrongful death of Mr. Lang Prescott, Jr in state court in Angelina County, Texas on December 6, 1999. On January 31, 2000, one of the defendants, Memorial Medical Center-Livingston [Livingston], removed the case here on the basis of federal question jurisdiction under the Emergency Medical Treatment and Active Labor Act [EMTALA], 42 U.S.C. § 1395dd. Before me today, is the plaintiffs' Motion to Remand to state court. The plaintiffs contend that the removal was both untimely and faulty and a remand to state court is warranted. The defendants, on the other hand, aver that Livingston has not been properly served to date. Livingston maintains that it filed its Notice of Removal within 30 days of filing its answer in state court. Thus, the defendants contend that removal has been properly effectuated and that this court has jurisdiction over the controversy.
In order for the removal to have been proper, the defendants must have complied with all the requirements of 28 U.S.C. § 1446. The relevant facts to make this determination are all undisputed and essential to the outcome of this case. The original petition was filed in state court on December 6, 1999. On December 16th, the defendant, Memorial Health Systems of East Texas [Memorial Health], was served with process. The person served with citation was Gary L. Whatley, the chief executive officer of Memorial Health. Mr. Whatley was the same person named as the agent for service of process for Livingston. Livingston is the party upon whom the Notice of Removal at issue is based. To date, however, Livingston has not been served with process.
On December 23, 1999, all of the defendants, including Livingston, filed their answers by depositing their answer in the United States Mail. On December 30, 1999, the District Clerk of Angelina County file-stamped that the answer was received and filed. On January 31, 2000 the Notice of Removal was filed in this court by Livingston. On February 24, 2000 the other defendants filed their Joint Motion to Join in the Notice of Removal.
For the convenience of the reader a graph detailing the relevant dates is provided at the end of this opinion.
II. ANALYSIS
A. General Principles
In removal cases the defendant bears the burden of establishing federal jurisdiction over the state-court suit. Carpenter v. Wichita Falls Indep. Sch. Dist., 44 F.3d 362, 365 (5th Cir. 1995) (citingWilson v. Republic Iron Steel Co., 257 U.S. 92 (1921)). Because federal courts are courts of limited jurisdiction, the removal statute is subject to strict construction. Merrell Dow Pharmaceuticals. Inc. v. Thompson, 478 U.S. 804, 810 (1986) (recognizing that removal "determinations about federal jurisdiction require sensitive judgments about congressional intent, judicial power, and the federal system"); Shamrock Oil Gas Corp. v. Sheets, 313 U.S. 100, 107 (1941); Willy v. Coastal Corp., 855 F.2d 1160, 1164 (5th Cir. 1988). Moreover, all doubts about the propriety of removal must be resolved in favor of remand. Dardeau v. West Orange-Grove Consol. Indep. Sch. Dist., 43 F. Supp.2d 722, 730 (E.D. Tex. 1999). The time limit provided in the removal statute, is not jurisdictional. See Powers v. Chesapeake Ohio Ry. Co., 169 U.S. 92, 98 (1898). It is, instead a formal requirement which may be subject to waiver or estoppel. Id.; Ragas v. Tennessee Gas Pipeline Co., 136 F.3d 455, 457 (5th Cir. 1998); Vogel v. U.S. Office Prod. Co., 56 F. Supp.2d 859, 865 (W.D. Mich. 1999). Keeping these general principles in mind, the court will now analyze the particular facts in this case as they relate to the removal statute.
B. Did the removing defendant receive the petition, by service or otherwise, more than thirty days before the notice of removal was filed?
The removing defendant, Livingston, to date has not been served with process. Under 28 U.S.C. § 1446 (b), "[t]he notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading. . . ." The United States Supreme Court recently addressed what is meant by the term "through service or otherwise." See Murphy Bros., Inc. Michetti Pipe Stringing. Inc., 119 S.Ct. 1322 (1999).
In Murphy Bros., the plaintiff filed a complaint in state court on January 26, 1996 and counsel for the plaintiff faxed a courtesy copy of the complaint to one of the defendant's officers three days later.Id. at 1326. The defendant in Murphy Bros. was officially served on February 12, 1996. On March 13, 1996 (30 days after service, but 44 days after receiving the courtesy copy of the complaint) the defendant filed a notice of removal. Id. The Supreme Court outlined four possible situations concerning the time for removal. Id. at 1328-29. They are:
First, if the summons and complaint are served together, the 30-day period for removal runs at once. Second, if the defendant is served with the summons but the complaint is furnished to the defendant sometime after, the period for removal runs from the defendant's receipt of the complaint. Third, if the defendant is served with the summons and the complaint is filed in court, but under local rules, service of the complaint is not required, the removal period runs from the date the complaint is made available through filing. Finally, if the complaint is filed in court prior to any service, the removal period runs from the service of the summons.Id. The Court then held that, under the facts of that case, the time for removal ran from the time of the actual service of the complaint, and not the time the courtesy copy was received. In so holding the Court reasoned that the defendant is not obliged to engage in litigation until they have been notified, and brought under the court's authority, by formal process. Id. at 1325.
None of the four situations described in Murphy Bros. describe the case at bar. Here, two of the defendants have received formal process and the third one to date has not. In addition, all three defendants had the same agent of service. Thus, it is probable that all three defendants were aware of the suit at virtually the same time. The Supreme Court emphasized in Murphy, however, that a party's procedural rights cannot slip away before that party has been formally served with process. Id. at 1329-30. Therefore, it seems unfair to allow the time limitations of 1446(b) to run against Livingston even though it has not yet been served with formal process.
Plaintiffs rely on Reece v. Wal-Mart Store. Inc., 98 F.3d 839 (5th Cir. 1996) in support of remand. In Reece, the Fifth Circuit held that technical errors in the form of service of process do not effect the time limits for removal, provided that actual notice was obtained by the removing defendant. The Reece decision, however, has been abrogated by the Supreme Court in Murphy. See Baum v. Avado Brands. Inc., No. Civ. A. 3:99-CV-0700G, 1999 WL 1034757 at *2 n. 2 (N.D. Tex. Nov. 12, 1999) (recognizing the abrogation). Accordingly, it is of no support to the plaintiffs.
C. Did Livingston voluntarily appear before the state court more than thirty days before filing its notice of removal here?
In Murphy, the Supreme Court indicated that time limits run from the date of service of citation or from the time of waiver of that service. 119 S.Ct. at 1327 ("In the absence of service of process (or waiver of service by the defendant), a court ordinarily may not exercise power over a party the complaint names as a defendant."). Plaintiffs have argued that Livingston voluntarily appeared before the state court, thus waiving service, more than 30 days before filing its notice of removal here. The plaintiffs rely on the fact that Livingston mailed its answer to the state court on December 23, 1999. The answer was not received by the state court until December 30th.
The plaintiffs cite Rule 5 of the Texas Rules of Civil Procedure for the proposition that pleadings are deemed received on the day they are mailed. This rule is commonly referred to as the "mailbox rule." Plaintiffs' position is that since Livingston mailed its answer on the 23rd it had 30 days from then to remove the case-which it failed to do.
Rule 5 states in pertinent part:
If any document is sent to the proper clerk by first-class United States mail in an envelope or wrapper properly addressed and stamped and is deposited in the mail on or before the last day for filing the same, the same, if received by the clerk not more than ten days tardily, shall be filed by the clerk and be deemed filed in time. A legible postmark affixed by the United States Postal Service shall be prima facie evidence of the date of the filing.
This court has recently examined Texas Rule 5's effect on removal to federal court in Hampton v. Union Pac. R.R. Co., No. Civ. A. 1:99-CV-647, 1999 WL 1334717 at *2 (E.D. Tex. Nov. 10, 1999). In that opinion, I pointed out that federal, and not, state law governs all removal proceedings. Id. (citing Grubbs v. General Elec. Credit Corp., 405 U.S. 699 (1972)). Furthermore, Rule 5 deals with the situation where a party mails a document to a Texas court clerk by first-class United States mail on or before the last day of a court deadline for filing the document. Under the rule, the document is deemed timely filed if it is received by the clerk within 10 days of its mailing. See Milam v. Miller, 891 S.W.2d 1 (Tex.App.-Amarillo, 1994 writ ref'd). This rule does not assist the plaintiffs' cause. The rule does not state that all documents are deemed filed on the day they are mailed only those that are "mail[ed] on or before the last day for filing the same." Livingston's courtesy answer was not a required pleading because Livingston had not yet received service. Therefore, Livingston was under no obligation to answer. Thus, Rule 5's "mailbox rule" is not applicable and Livingston's state court appearance took place on December 30th when the answer was filed by the state court clerk, and not the 23rd when Livingston mailed its answer.
D. Was the removal defective?
It is undisputed that the defendant, Memorial Health was properly served on December 16, 1999. It has been the rule in this circuit that in cases involving multiple defendants, the 30-day period of 1446(b) begins to run as soon as the first defendant is served. If the first served defendant does not effect a timely removal, subsequently served defendants cannot remove. Getty Oil v. Insurance Co. of North America, 841 F.2d 1254, 1262-63 (5th Cir. 1988); see also Brown v. Demco, Inc, 792 F.2d 478, 481 (5th Cir. 1986); New York Life Ins. Co. v. Deshotel, 142 F.3d 873, 887 n. 4 (5th Cir. 1998). All served defendants must join in the removal, and since the notice of removal must be filed within 30 days of service on the first defendant, all served defendants must join in the removal no later than 30 days from the day on which the first defendant is served. Getty Oil, 841 F.2d at 1254.
Although Livingston has not been served to date, this is irrelevant since Livingston voluntarily filed its answer in state court on December 30, 1999.
The reasoning behind this rule is based on 28 U.S.C. § 1441 (a). Section 1441(a) provides that "the defendant or the defendants" may remove the case. The Fifth Circuit has read these words to mean that if there is more than one defendant, then the defendants must act collectively to remove the case. Doe v. Kerwood, 969 F.2d 165, 167 (5th Cir. 1992). This rule has been disagreed with by at least two other circuits. See Briely v. Alusuise Flexible Packaging. Inc., 184 F.3d 527, 532 (6th Cir. 1999); McKinney v. Board of Trustees of Maryland Community College, 955 F.2d 924, 928 (4th Cir. 1992);compare 14C CHARLES A. WRIGHT, ARTHUR R. MILLER EDWARD H. COOPER,Federal Practice and Procedure: Jurisdiction § 3739 at 336-39 (3d ed. 1998) (recommending permitting a later served defendant 30 days to remove from the time they were actually served with process) with MOORE'S FEDERAL PRACTICE § 107-30[3][a] (3d ed. 1997) (recommending that the 30 day time limit should begin to run from the date of service of the first defendant). Professor Moore has changed his views somewhat. See 16 MOORE'S FEDERAL PRACTICE § 107.30[3][a][i] (3d ed. 1999).
It is apparent that the defendants in this case have failed to follow this rule. Memorial Health did not seek to remove this case until they filed their Joint Motion to Join in Livingston's Notice of Removal on February 24, 2000. This is more than 30 days after Memorial Hospital was initially served with process. Accordingly, under the rule set forth in Getty Oil this case must be remanded for failure to comply with the removal statute because the first served defendant did not remove within 30 days of being served with process. In addition, Livingston's own notice of removal is defective because it did not include the consent of all the defendants. See 14C CHARLES A. WRIGHT, ARTHUR R. MILLER, EDWARD H. COOPER, Federal Practice and Procedure: Jurisdiction § 3731 at 258 (3d ed. 1998) (citing cases).
This oversight by itself might not command remand in all instances. But, it must be noted that the removing defendant did not get the other defendants' consent until after the plaintiff complained of this defect in the Notice of Removal. Moreover, each of the defendants is represented by the same counsel so this problem could have been easily avoided. Thus, it seems unfair to allow the defendants the opportunity to fix this mistake after the plaintiffs have already complained about it.
The defendants claim that the Supreme Court in Murphy Bros. impliedly overruled cases like Getty Oil which have held that the first served defendant must remove the case within 30 days of receipt of service. In support of this position, the defendants cite Murphy Bros.'s last paragraph where Justice Ginsburg stated for the Court that:
In sum, it would take a clearer statement than Congress has made to read its endeavor to extend removal time (by adding receipt of the complaint) to effect so strange a change-to set removal apart from all other responsive acts, to render removal the sole instance in which one's procedural rights slip away before service of a summons, i.e., before one is subject to any court's authority.119 S.Ct. at 1329-30. The defendants contend that this paragraph indicates that the Supreme Court recognized the unfairness of attempting to impose a duty to notice removal on a party which has not yet been served. This court could not find any other district court in this circuit which has addressed the issue of Murphy Bros.'s effect on cases like Getty Oil.
Professor Moore has indicated that he thinks such a change may take place in the near future. In his treatise, he states:
For better or for worse, the [Supreme] Court has elevated the importance of proper service in the removal context. In doing so, it has implicitly rejected the policies served by the unanimity rule, that is, to strictly construe the removal statute and to ensure that the choice of forum issue be settled as soon as possible. Thus, it is likely that the Court may decide that the later served defendants may not have their removal right compromised before they are served, and that they ought to have the opportunity to persuade the earlier served defendants to join the notice of removal. Thus, the fairness approach may well supercede the unanimity rule.
16 MOORE'S FEDERAL PRACTICE, § 107.30[3][a][i] (3d ed. 1999). Judge Van Sickle of the Eastern District of Washington has also indicated that he thinks Murphy Bros. stands for the proposition that the first-served defendant rule is no longer good law. Griffith v. American Home Prods. Corp., No. CS-99-344-FVS, 2000 WL 245776 at *5 (E.D. Wash. Feb. 29, 2000). In Griffith, Judge Van Sickle wrote that he believes the Supreme Court's decision in Murphy Bros.'s "casts doubt on the continuing validity of the first-served defendant rule to the extent that that case stands for the proposition that the removal statute should not be so strictly construed as to deny defendants significant procedural rights before becoming parties to an action." Id.
Other courts have analyzed the first-served defendant issue since the decision in Murphy Bros.'s and not based their analysis on that opinion in any manner. See. e.g., Briely v. Alusuisse Flexible Packaging Inc. 184 F.3d 527, 532-33 (6th Cir. 1999) (disagreeing with the Fifth Circuit but not relying on Murphy Bros.'s at all); Branch v. Coca-Cola Bottling Co. Consol., CA No. 0:99-4014- 19, 2000 WL 149305 at *3 (D.S.C. Feb. 9, 2000) (finding the first-served defendant rule applicable in the Fourth Circuit). The Murphy Bros. decision neither mentioned nor addressed the first-served defendant rule. Therefore, this court declines to extend its reasoning to overrule well established Fifth Circuit precedent.
In this case, Memorial Health-the first-served defendant-did not file a notice of removal within 30 days after it was served with process. There is nothing inequitable about requiring the first-served defendant to file its notice of removal within its own 30-day removal period. This is especially true when all the defendants are represented by the same counsel and had the same agent for service of process. Here, Memorial Health received what it was entitled to under § 1446(b)- 30 days from the date it was served in which to file (or join in) a notice of removal. Unfortunately, for the defendant Livingston, this time has run so a remand must be granted.
Memorial Health's failure to timely remove this case cannot be blamed on the plaintiffs. This is not a situation where the plaintiff has only attempted to serve one defendant in an effort to forum manipulate. If Memorial Health was the only defendant in this case, its failure to remove within 30 days would clearly constitute a defect in removal. This court sees no reason why Memorial Health's failure to remove in a timely manner should be viewed differently simply because Livingston, another defendant, has yet to be formally served.
See McKinney v. Board of Trustees of Maryland Comm. College, 955 F.2d 924, 926 n. 3 (4th Cir. 1992). In dictum, the Fourth Circuit which disagrees with the Fifth Circuit on the firstserved defendant rule stated:
where B is served more than 30 days after A is served, two timing issues can arise, and the law is settled as to each. First, if A petitions for removal within 30 days, the case may be removed, and B can either join in the petition or move for remand. Second. if A does not petition for removal within 30 days, the case may not be removed.Id. (emphasis added). This is the exact situation we have here.
Moreover, there are not any exceptional circumstances in this case that prevent remanding this case. See Brown v. Demco. Inc., 792 F.2d 478, 482 (5th Cir. 1986) ("Exceptional circumstances might permit removal even when a later-joined defendant petitions more than precisely 30 days after the first defendant is served."). The Fifth Circuit has never published an opinion in which it either found exceptional circumstances or further defined the term. District courts throughout the country have rarely found exceptional circumstances significant enough to prevent remand. The few situations where courts have found exceptional circumstances to exist are not found in this case. The defendants in this case are all represented by the same counsel. Moreover, the defendants all also have the same agent of service. If the agent read the complaint, then the defendant Livingston had actual knowledge of the suit. It is inequitable for the defendant Livingston to remove this case after its co-defendant, who is represented by the same counsel, allowed its 30 day removal period to run. For this reason alone, there are not any equitable considerations which prevent this case from being remanded.
See Intactix Int'l v. Scanline Data Corp., No. Civ. A. 3:99-CV-0049-L, 1999 WL 324675 at * 2 (N.D. Tex. May 13, 1999) (finding no exceptional circumstances); Forman v. Equifax Credit Info. Sys., Inc., Civ. A. No. 97-431, 1997 WL 162008 at * 2, (E.D. La. April 4, 1997) (stating that exceptional circumstances are limited to bad faith and forum manipulation); Castro v. Federal Express Corp., 880 F. Supp. 497, 498 (W.D. Tex. 1995) (finding that no exceptional circumstances existed where a later served defendant did not attempt to contact the first-served defendant); Faulk v. Superior Indus. Int'l. Inc., 851 F. Supp. 457, 459 (M.D. Fla. 1994) (holding that staggering service of multiple defendants was not an exceptional circumstance); Davis v. Rollins Leasing Corp., Civ. A. No. 94-1362, 1994 WL 235056 at * 3 (E.D. La. June 21, 1994) (no exceptional circumstances existed when a first-served defendant failed to timely remove); Basinger v. Federated Dep't Stores. Inc., Civ. A. Nos. 89-5069, Civ. A. 90-0181, 1992 WL 193491 at *3 (July 30, 1992) (discussing Brown).
See Vogel v. U.S. Office Prods. Co., 56 F. Supp.2d 859, 865-66 (W.D. Mich. 1999) (finding exceptional circumstances existed due to the unique facts of the case); White v. White, 32 F. Supp.2d 890, 893 (W.D. La. 1998) (finding exceptional circumstances where it appeared that plaintiffs' counsel was taking advantage of a "removal trap");Milstead Supply Co. v. Casualty Insur. Co., 797 F. Supp. 569, 572-74 (W.D. Tex. 1992) (holding that the failure on the part of a co-defendant to join and consent to a removal petition did not render the removal petition defective because the filing of the service of process did not occur until about three hours before the moving defendant filed the removal petition).
III. CONCLUSION
For the foregoing reasons, the court grants the motion of plaintiff and remands this action to the District Court of Angelina County, Texas on the grounds that the removal was not timely.
The plaintiffs' request for attorney fees is denied since the defendants' removal was based on good faith and there is authority representing the position taken by the defendants.