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Halliday v. Bioreference Laboratories Inc.

United States District Court, D. New Jersey

November 17, 2017




         The complaint in this action was filed in New Jersey Superior Court, Essex County, Law Division, on August 22, 2017. It asserts one state-law claim. On September 8, 2017, the defendant, BioReference Laboratories, Inc. ("BioReference") filed a notice of removal, invoking this court's diversity jurisdiction under 28 U.S.C. 1332(a). (ECF no. 1) Now before the court is the motion (ECF no. 7) of the plaintiff, Stephanie Halliday, to remand the case to state court, pursuant to 28 U.S.C. § 1447(c).

         The parties are diverse and that the matter in controversy exceeds $75, 000. See 28 U.S.C. § 1332(a). Ms. Halliday is a citizen of Texas; BioReference, a New Jersey corporation headquartered in Elmwood Park, is a citizen of New Jersey; and the complaint may reasonably be construed to demand in excess of $75, 000. Ms. Halliday does not dispute this.

         At issue is the applicability, or not, of the "home state" or "forum defendant" exception to removal based on diversity jurisdiction:

A civil action otherwise removable solely on the basis of the jurisdiction under section 1332(a) of this title may not be removed 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). It applies, says Ms. Halliday, because defendant BioReference, a New Jersey citizen, was sued in New Jersey and seeks to remove the action to a New Jersey federal court. If she is correct, then removal-irrespective of whether diversity jurisdiction exists-is barred by statute.[1]

         The issue comes down to a dispute over the phrase "properly joined and served as [a] defendant[]." Id. BioReference says that it filed the notice of removal after the complaint had been filed, but before it had been served, so it is not a party "joined and served as [a] defendant[]" within the meaning of Section 1441(b)(2). This tactic is commonly known as "snap removal, " and it has been discussed in the case law many times before.

         As applied to this case, the doctrine has two dimensions.

         The first involves a factual and legal dispute over whether BioReference was in fact properly served.

         BioReference admits that on September 1, 2017, a week before it filed the notice of removal, a professional process server brought the papers to BioReference's headquarters, where a receptionist signed for them and accepted them. BioReference, however, disputes that this was "proper" (i.e., valid) service, and submits declarations from the receptionists stating that they received the papers but are not authorized to accept service for the corporation. (ECF no. 8-1 at pp. 4-12) Therefore, the argument runs, BioReference may have received the papers at its headquarters, but it had not been properly served with the papers, when it filed its notice of removal on September 8, 2017.

         There is a second, legal dimension to the issue. BioReference admits receipt of the summons and complaint at its headquarters as of September 1, 2017. I can dispose of the "snap removal" claim as a matter of law. It is therefore not necessary that I resolve factual or legal disputes over "proper" service, or ancillary factual disputes about the precise circumstances of receipt.[2]

         I hold that "snap removal" is impermissible here, and that the § 1441(b)(2) "forum defendant" exception bars removal.

         On this issue, Third Circuit guidance is lacking, for the very good reason that such a remand is not appealable. See 28 U.S.C. § 1447(d) (with irrelevant exceptions, "[a]n order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise"); Cook v. Wikler, 320 F.3d 431, 435 (3d Cir. 2003) (holding that a 1996 strengthening amendment to 28 U.S.C. § 1447(c) worked a corresponding expansion in the scope of the § 1447(d) bar to appeal, in effect abrogating earlier case law permitting appeal in some circumstances); McBride v. Twp. of W. Orange, 127 Fed.Appx. 54, 56 (3d Cir. 2005) (citing 28 U.S.C. § 1447(d) and dismissing appeal from § 1447(c) remand)).

         For an overview of the split in district court authority on this question, a good starting point is Williams v. Daiichi Sankyo, Inc.,13 F.Supp.3d 426, 430 (D.N.J. 2014). I find the cases rejecting the "snap removal" tactic to be more persuasive; at least under these circumstances, I believe, removal would be contrary to the legislative intent and purpose. BioReference's interpretation of the statute would "reward defendants for conducting and winning a race, which serves no conceivable public policy goal, to file a notice of removal before the plaintiffs can serve such process." Id. (quoting Sullivan v. Novartis Pharms. Corp.,575 F.Supp.2d 640, 646 (D.N.J. 2008)). See also Brigand v. HMS Host Int'l, No. 14-CV-4813 CCC-SCM, 2015 WL 1268300, at *2 (D.N.J. Mar. 16, 2015); Gentile, ...

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