Filed: September 22, 1997

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 96-1762

(CA-95-102-R)

Grover Lee Lovern,

Plaintiff - Appellant,

versus

General Motors Corporation,

Defendant - Appellee.

ORDER

The Court further amends its opinion filed August 14, 1997,

and amended September 11, 1997, as follows:

On the cover sheet, section 7, line 3 -- attorney Taylor's

name is corrected to read: Paul Brian Taylor.

On the cover sheet, section 7, line 4 -- "Richard Lee

Lawrence, RICHARD LEE LAWRENCE & ASSOCIATES, Roanoke, Virginia, for

Appellant" is deleted.

For the Court - By Direction

/s/ Patricia S. Connor

Clerk

Filed: September 11, 1997

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 96-1762

(CA-95-102-R)

Grover Lee Lovern,

Plaintiff - Appellant,

versus

General Motors Corporation,

Defendant - Appellee.

ORDER

The Court amends its opinion filed August 14, 1997, as

follows:

On the cover sheet, section 7, line 3 -- the line is corrected

to begin "D. Jones, Paul Bradford Taylor, KIRKLAND & ELLIS."

For the Court - By Direction

/s/ Patricia S. Connor

Clerk
PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

GROVER LEE LOVERN,

Plaintiff-Appellant,

v. No. 96-1762

GENERAL MOTORS CORPORATION,

Defendant-Appellee.

Appeal from the United States District Court

for the Western District of Virginia, at Roanoke.

Jackson L. Kiser, Senior District Judge.

(CA-95-102-R)

Argued: May 7, 1997

Decided: August 14, 1997

Before NIEMEYER and HAMILTON, Circuit Judges, and

LEGG, United States District Judge for the

District of Maryland, sitting by designation.

_________________________________________________________________

Affirmed by published opinion. Judge Niemeyer wrote the opinion,

in which Judge Hamilton and Judge Legg joined.

_________________________________________________________________

COUNSEL

ARGUED: Christopher Karl Kowalczuk, RICHARD LEE LAWRENCE & ASSOCIATES, Roanoke, Virginia, for Appellant. Michael

D. Jones, Paul Bradford Taylor, KIRKLAND & ELLIS, Washington, D.C., for Appellee.

ON BRIEF: Richard Lee Lawrence, RICHARD LEE LAWRENCE

& ASSOCIATES, Roanoke, Virginia, for Appellant. Paul F. Brink-
man, KIRKLAND & ELLIS, Washington, D.C., for

Appellee.

_________________________________________________________________

OPINION

NIEMEYER, Circuit Judge:

The removal statute, 28 U.S.C. § 1446(b), provides that notice of

removal of a case from state court to federal court shall be filed

within 30 days after receipt of the initial pleading or, in certain circumstances, within 30 days after receipt of a paper from which "it

may first be ascertained that the case is one which is . . . removable."

In this case we hold that General Motors Corporation timely removed

the case on diversity-jurisdiction grounds when it filed its notice of

removal 28 days after receipt of a police report that first demonstrated

the plaintiff's diverse residency and 8 days after receipt of answers to

interrogatories demonstrating his diverse citizenship, even though the

notice of removal was filed 88 days after service of the complaint

which did not reveal plaintiff's address or citizenship.

I

In 1992, while driving on Interstate Highway 581 in Roanoke, Virginia, Grover Lee Lovern was involved in an automobile accident.

Arguing that the severity of his injuries was attributable to the defective design and manufacture of the seat belt in his Pontiac automobile

manufactured by General Motors Corporation, Lovern filed an action

against General Motors in the Circuit Court of the City of Roanoke,

Virginia, seeking $500,000 in damages.

The initial pleading, which was served on General Motors on October 21, 1994, offered no indication of Lovern's citizenship. After

General Motors filed its grounds for defense, it served interrogatories

inquiring specifically into Lovern's citizenship. On January 23, 1995,

Lovern provided his answers, stating that he was a Virginia citizen.

Earlier that month, on January 3, 1995, General Motors also received

a copy of the police report on the accident, which disclosed Lovern's

Virginia residence.

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Eight days after receipt of the interrogatory answers and 28 days

after receipt of the police report, General Motors filed a notice of

removal of the case to the United States District Court for the Western

District of Virginia, asserting diversity jurisdiction under 28 U.S.C.

§ 1332. Lovern moved to remand the case to state court on the ground

that General Motors' notice of removal was filed untimely, having

been filed 88 days after service of complaint on General Motors. The

district court denied the motion, finding that General Motors only

ascertained that the case was removable upon receipt of the police

report and that therefore it had filed its notice within 30 days as prescribed by 28 U.S.C. § 1446. Thereafter, the district court granted

General Motors' motion for summary judgment on the merits.

On appeal, Lovern challenges only the district court's jurisdiction,

contending that the court erred in finding that the case had been

timely removed.

II

The sole question before us -- whether the notice of removal was

timely filed -- requires an interpretation of 28 U.S.C. § 1446, establishing the procedure for removal of any case filed in a state court but

over which the district courts of the United States would have original

jurisdiction. The parties agree that Lovern and General Motors have

diverse citizenship, and they do not dispute any other fact relevant to

the removal. Thus, our review is confined to a de novo review of the

district court's statutory interpretation.

Section 1446 of Title 28, establishing procedures for removal of

any case authorized to be removed by 28 U.S.C. § 1441, provides that

a defendant desiring to remove a civil case from state court to federal

court must file a "notice of removal signed pursuant to Rule 11 of the

Federal Rules of Civil Procedure and containing a short and plain

statement of the grounds." 28 U.S.C. § 1446(a). The notice must be

filed within 30 days after service on the defendant of initial process,

or "[i]f the case stated by the initial pleading is not removable," the

notice may be filed

within thirty days after receipt by the defendant, through

service or otherwise, of a copy of an amended pleading,

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motion, order or other paper from which it may first be

ascertained that the case is one which is or has become

removable.

28 U.S.C. § 1446(b). Finally, the section provides that diversity cases

must in any event be removed not more than one year after "commencement of the action." Id.

In this case, Lovern and General Motors were of diverse citizenship from the time the complaint was first filed in state court, but

Lovern concedes that nothing on the face of his initial pleading

revealed this fact. Nonetheless, he argues that General Motors should

not have the advantage of the extended removal time provided by the

second sentence of § 1446(b) because, he argues, that extended time

applies only if "the case stated by the initial pleading is not removable." In essence, Lovern argues that even when the complaint did not

on its face reveal a basis for federal jurisdiction, General Motors was

bound by the actual status of the parties' citizenship at the time of

service of the complaint and was obliged to remove the case within

30 days after service or lose its opportunity to do so. He argues that

the case of the indeterminate complaint should be resolved against the

defendant, reserving the extended time for removal for the case in

which the parties' citizenship changes and the case becomes removable or to the case in which their citizenship has been misstated.

Having examined the statutory language and policy, we reject Lovern's interpretation. Rather, we conclude that only where an initial

pleading reveals a ground for removal will the defendant be bound to

file a notice of removal within 30 days. Where, however, such details

are obscured or omitted, or indeed misstated, that circumstance makes

the case "stated by the initial pleading" not removable, and the defendant will have 30 days from the revelation of grounds for removal in

an amended pleading, motion, order, or other paper to file its notice

of removal, provided that, in diversity cases, no more than a year shall

have passed from the date of the initial pleading. Various aspects of

the statute lead us to our conclusion.

First, Lovern's interpretation that removability is determined solely

by the objective facts underlying the action and not on what the parties pleaded or knew leads to the conclusion that the extended

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removal period provided by the second sentence of § 1446(b) applies

only when some later development, such as the dismissal of a nondiverse party, eliminates the impediment to federal jurisdiction and

allows removal. But while the belated creation of a ground for federal

jurisdiction is certainly one circumstance in which later removal may

be permitted, the statute is not so limited. It declares that "[i]f the case

stated by the initial pleading is not removable," a notice of removal

may be filed within 30 days after the defendant receives "an amended

pleadings, motion, order or other paper from which it may first be

ascertained that the case is one which is or has become removable."

28 U.S.C. § 1446(b) (emphasis added). Thus, the statute expressly

encompasses the case in which the actual facts supporting federal

jurisdiction remain unaltered from the initial pleading, but their existence has been manifested only by later papers, revealing the grounds

for removal for the first time. It thus appears that the statute does not

preclude defendants from removing a case where their discovery of

the grounds of federal jurisdiction is belated because facts disclosing

those grounds were inadequately or mistakenly stated in the complaint.

Given this interpretation, we will not require courts to inquire into

the subjective knowledge of the defendant, an inquiry that could

degenerate into a mini-trial regarding who knew what and when.

Rather, we will allow the court to rely on the face of the initial pleading and on the documents exchanged in the case by the parties to

determine when the defendant had notice of the grounds for removal,

requiring that those grounds be apparent within the four corners of the

initial pleading or subsequent paper. This test that we adopt is consistent with that espoused by the Third and Fifth Circuits. See Foster v.

Mutual Fire, Marine & Inland Ins. Co., 986 F.2d 48, 53-54 (3d Cir.

1993); Chapman v. Powermatic, Inc., 969 F.2d 160, 163 (5th Cir.

1992).

The interpretation that the grounds for removal must appear on the

face of the initial pleading in order for the 30-day clock then to begin

to run is also consistent with the statute's incorporation of the standards of Rule 11 of the Federal Rules of Civil Procedure. Under Rule

11, a defendant and his attorney who fail to make a reasonable inquiry

into the legal and factual basis of an action prior to filing face sanctions. If a defendant were required to file a notice of removal within

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30 days after the service of the initial pleading, even where that pleading did not reveal a ground for removal, he would often be faced with

an intractable dilemma of either risking Rule 11 sanctions for noticing

removal without making an adequate inquiry or forgoing removal

altogether. The statute did not intend to put a defendant to this choice.

Cf. McKinney v. Board of Trustees of Mayland Community College,

955 F.2d 924, 928 (4th Cir. 1992) (describing the "Hobson's choice"

faced by a later served defendant between foregoing removal or joining hurriedly in the petition of an earlier served defendant and facing

Rule 11 sanctions).

Of course, the extension of the removal period in the case where

the initial pleading does not state the factual or legal bases for

removal should not be allowed to cover strategic delay interposed by

a defendant in an effort to determine the state court's receptivity to

his litigating position. But we are confident that allowing the defendant time to make an inquiry into the requisites for diversity jurisdiction which will satisfy his Rule 11 obligations before filing a notice

of removal will not undercut the statute's goal of preventing undue

delay in removal and the concomitant waste of state judicial

resources. In diversity cases, the statute explicitly safeguards against

such a strategic delay by erecting an absolute bar to removal of cases

in which jurisdiction is premised on 28 U.S.C. § 1332 "more than 1

year after commencement of the action." 28 U.S.C. § 1446(b). This

bar creates, we believe, a sufficient incentive for defendants promptly

to investigate the factual requisites for diversity jurisdiction, including

the citizenship of the plaintiff and the amount in controversy.

In this case, there is no doubt that the original pleading did not

reveal Lovern's citizenship and thus did not reveal grounds for

removal. General Motors had its first actual notice of Lovern's residency when it received a copy of the police report on January 3,

1995,* and of his citizenship when it received Lovern's answers to

interrogatories on January 23, 1995. Because General Motors' notice

of removal was filed within 30 days of both dates, we need not deter-

_________________________________________________________________

* General Motors argues that this notice of residency did not provide

notice of Lovern's citizenship because it did not eliminate the possibility

that Lovern was a student, member of the military, or other person who

might reside in one state but maintain citizenship of another.

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mine whether the police report alone would have triggered the running of the 30-day clock in order to affirm the district court's

determination that the notice of removal was timely filed.

AFFIRMED

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