In
lawsuits where the sole source of federal subject-matter jurisdiction is
diversity of citizenship, Congress imposed a repose-like feature on the ability
to remove the matter to federal court. For
example, after the expiration of a specified time, there is no removal
jurisdiction when a plaintiff dismissed a non-diverse defendant beyond the
specified time.
For
cases filed before January 6, 2012, the applicable statute reads: “[A] case may not be removed on the basis of
[diversity] jurisdiction more than 1 year after commencement of the
action.” [Former] 28 U.S.C. § 1446(b).
For
cases filed on or after January 6, 2012, the applicable statute reads: “A case may not be removed … on the basis of
[diversity] jurisdiction more than 1 year after commencement of the action,
unless the district court finds that the plaintiff has acted in bad faith in
order to prevent a defendant from removing the action.” [Current] 28 U.S.C. § 1446(c)(1).
A
civil action is commenced on the date that the civil action was commenced in a
state court within the meaning of that state’s law. In Alabama, a civil action is commenced when
the complaint is filed and the filing fee is paid or a hardship exemption is
obtained. Ala. R. Civ. P. 3(a). Thus, in Alabama, the one-year repose-like
feature starts to run when the complaint is successfully filed in a state
court.
Under
the former § 1446(b), most Circuits, including the Eleventh Circuit, rigidly
applied the one-year rule regardless of the plaintiff’s behavior. The Fifth Circuit adopted an “equitable”
exception that would be applied when the plaintiff was especially outrageous in
keeping a non-diverse defendant in the lawsuit for one year. This exception was rather narrowly applied in
the Fifth Circuit.
The
current § 1446(c)(1) allows for an exception to the one-year rule when a
plaintiff has “acted in bad faith.” To
date, no federal court has had to address what constituted “bad faith”
sufficient to allow an exception. I
would expect that federal courts will look to how courts in the Fifth Circuit
applied the “equitable” exception and will require overwhelming evidence that
the plaintiff knowingly acted in a manner intended to “run out the clock” and
was particularly egregious in not dismissing the non-diverse defendant before
the expiration of the one-year deadline.
