Removal of State Court Actions to Federal Court: Remand

This is Part 8 of an 8-part series which covers:

Part 1 – Federal Question Jurisdiction;

Part 2 – Supplemental Jurisdiction;

Part 3 – Diversity Jurisdiction:  Complete Diversity;

Part 4 – Diversity Jurisdiction:  Amount in Controversy;

Part 5 – Diversity Jurisdiction:  Resident Defendants;

Part 6 – Timing of Removal;

Part 7 – Checklist for Removal;

Part 8 – Remand

Part 8 – Remand

In Part 1 and Part 2 of this Removal series, we discussed removal based on federal question jurisdiction and supplemental jurisdiction.  In Part 3,  Part 4, and Part 5 of this series, we discussed the three requirements for removal based on diversity jurisdiction.  In Part 6, we discussed the time period in which removal must be filed, and in Part 7, we provided a checklist to assist with removing an action.  Finally, in this last installment in the series, we explore the topic of remand.

Motion to Remand

Once a defendant has removed an action to federal court, the plaintiff does have the opportunity to object if he or she believes that removal is improper.  The plaintiff can make an objection by filing a motion to remand in the federal court action.  28 U.S.C. § 1447(c).

If the basis for seeking remand is a lack of subject matter jurisdiction, then the motion for remand can be brought at any time prior to the entry of a final judgment.  28 U.S.C. § 1447(c).  This is because challenges to subject matter jurisdiction can never be waived.  Remand based on subject matter jurisdiction would include a challenge that the allegations in the complaint fail to state a claim that falls within the court’s federal question jurisdiction; a challenge to the residence of one or more of the parties to demonstrate that complete diversity is lacking, or a challenge regarding an insufficient amount in controversy.  In general, remand based on a challenge to the amount in controversy requirement is less common, as a plaintiff essentially is placed in the unusual position of arguing, based on common sense, historical data, or expert opinion, that the categories of damages alleged in the complaint are unlikely to exceed an amount greater than $75,000.00.  Typically, a plaintiff will not want to place such an artificial cap on his or her potential recovery in an action.

If the plaintiff’s basis for removal is based on any reason other than subject matter jurisdiction, then the motion for remand must be filed within 30 days of the filing of the Notice of Removal.  28 U.S.C. § 1447(c).  One of the most common grounds for seeking remand which is not based on subject matter jurisdiction is a challenge to the timeliness of the filing of the Notice of Removal.

Example

Sally is badly injured in a car accident and suffers a traumatic brain injury.  Sally was one of the leading cardio-thoracic surgeons in the country, and as a result of her injuries, she can no longer perform surgeries or practice medicine.  Sally, a resident of Nevada, sues Paul, the driver of the other vehicle and a resident of California.  Sally alleges damages in excess of $15,000 for past and future medical expenses, past and future lost earnings, and pain and suffering.  The complaint also alleges that at the time of the accident, Sally was in the process of moving from the East Coast to Nevada, and she had not yet found employment in Nevada; however, Sally alleged that she had historically earned between $200,000 and $300,000 a year.  Sally serves Paul on August 1, 2021.

The progress of the case is stayed for several months while the parties attempt to privately mediate Sally’s claims; however, mediation proves unsuccessful.  The parties then proceed with their initial discovery obligations and serve their initial disclosures.  In Sally’s initial disclosures, she states that her past medical expenses to date total $600,000.  Based on the information in the initial disclosures, Paul files a Notice of Removal based on diversity jurisdiction on July 15, 2022.  Can Sally make a good faith argument that the case should be remanded to state court?

Yes!  A defendant seeking to remove an action based on diversity jurisdiction must file the Notice of Removal within one year of being served with the complaint.  While Paul properly filed his Notice of Removal within the one-year time limitation, Sally can make a good faith argument that Paul waived his right to removal because grounds for removal were clear on the face of the complaint.  Sally can argue that complete diversity exists between her and Paul.  Paul is not a resident defendant, and the amount-in-controversy requirement was satisfied at the time of filing the complaint, because she alleged in the complaint that she had historically earned between $200,000 and $300,000 a year as a cardiac-thoracic surgeon.  While she was not yet employed at the time of the accident, common sense and historical data demonstrate, by a preponderance of the evidence, that the amount in controversy exceeds $75,000.

Because Sally’s motion to remand will challenge removal based on grounds other than subject matter jurisdiction, Sally must file her motion to remand within 30 days of the filing of the Notice of Removal.

If you would like a copy of this series, please do not hesitate to email me.

 

About Sarah Harmon:

Sarah E. Harmon is a partner at Bailey Kennedy and has over 18 years of experience in the areas of appellate advocacy and civil/business litigation, including breach of contract, fraud, legal malpractice, products liability, complex civil litigation, and many other types of business disputes.  Her experience with appellate advocacy includes appeals from adverse judgments and orders as well as petitions for extraordinary writ relief.  Ms. Harmon can assist clients with obtaining settlements and judgments before going to trial, avoiding errors at trial, and properly preserving issues for an appeal.

If you have any questions about appeals or civil/business litigation, please call or email Sarah Harmon at 702-562-8820 or sharmon@baileykennedy.com.  Additional resources can also be found at www.baileykennedy.com/category/articles/ or linkedin.com/in/sarahharmonbk/.

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