United States Court of Appeals

For the Eighth Circuit 

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No. 21-3817

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M & B Oil, Inc.

 Plaintiff - Appellant

v.

Federated Mutual Insurance Company; City of St. Louis

 Defendants - Appellees

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Appeal from United States District Court 

for the Eastern District of Missouri - St. Louis

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Submitted: December 13, 2022

Filed: May 1, 2023

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Before SMITH, Chief Judge, ARNOLD and STRAS, Circuit Judges. 

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STRAS, Circuit Judge.

This case involves a rare procedural maneuver called snap removal. Federated 

Mutual Insurance Company removed an insurance dispute to federal court before 

the plaintiff, M & B Oil, Inc., “properly joined and served” one of the defendants, 

the City of St. Louis. 28 U.S.C. § 1441(b)(2). The question is whether this 

maneuver eliminates the requirement of complete diversity. See id. § 1332(a). The 
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answer is no, so we vacate the order denying remand and send this case back for a 

second look. 

I. 

 M & B suffered a water leak that allegedly caused over $400,000 in property 

damage. After Federated denied coverage, M & B brought a state-law claim for 

breach of contract based on a “[v]exatious refusal to pay” in Missouri state court. 

Mo. Rev. Stat. § 375.420 (emphasis omitted). It was, in other words, a run-of-themill insurance dispute. 

Except for one thing: Federated was not the only defendant. M & B also sued 

St. Louis under a detrimental-reliance theory for failing to “shut off the water” as 

promised. 

In an unusual procedural twist, however, Federated filed a notice of removal

in federal court before M & B could properly serve St. Louis, the only non-diverse 

defendant. Federated’s position was that complete diversity existed: it was a 

Minnesota corporation, M & B was a citizen of Missouri, and St. Louis was not yet 

part of the case. See 28 U.S.C. § 1332(a); see also id. § 1332(c)(1) (explaining that 

“a corporation shall be deemed to be a citizen of every State . . . by which it has been 

incorporated”); id. § 1441(a) (allowing for the removal of civil suits within the 

“original jurisdiction” of the district courts).

The next procedural wrinkle was that M & B filed an amended complaint to

add an inverse-condemnation claim against St. Louis. See Byrom v. Little Blue 

Valley Sewer Dist., 16 S.W.3d 573, 576–77 (Mo. banc 2000) (describing inversecondemnation claims). The new claim alleged that St. Louis was responsible for the 

property damage due to its “unreasonable” use and maintenance of “the [building’s] 

water[-]piping system.” See id.
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Fresh off amending its complaint and serving St. Louis, M & B shifted its 

focus to returning the case to state court. In a motion to remand, it argued that 

subject-matter jurisdiction was absent because there were Missouri citizens on both 

sides. See 28 U.S.C. § 1332(a)(1); see also Lincoln Prop. Co. v. Roche, 546 U.S. 

81, 89 (2005) (explaining that § 1332(a)(1) “require[s] complete diversity between 

all plaintiffs and all defendants”). 

A federal magistrate judge1 denied the motion, but only because St. Louis did 

not officially become part of the case until after it was “properly joined and served,” 

which occurred after Federated had removed it. 28 U.S.C. § 1441(b)(2). The snap 

removal, in other words, had cured the lack of complete diversity. And nothing that 

happened later, including the filing of an amended complaint, made any difference. 

Ordinarily, a decision denying remand is not immediately appealable. See id.

§ 1291; see also Caterpillar Inc. v. Lewis, 519 U.S. 61, 74 (1996) (explaining that 

“[a]n order denying a motion to remand, standing alone, is obviously . . . not final 

and immediately appealable” (brackets and quotation marks omitted)). Here, 

however, the magistrate judge certified the order for immediate review under 28 

U.S.C. § 1292(b). The case presents two novel questions: are “‘snap removals’ [] 

permitted . . . and, if so, under what circumstances [will] amendments” to the 

pleadings “warrant remand”? See 28 U.S.C. § 1292(b) (requiring “a controlling 

question of law as to which there is substantial ground for difference of opinion”). 

So we allowed the appeal to proceed. 

II. 

We are asked to decide whether this case can stay in federal court. Our review 

is de novo. See ABF Freight Sys., Inc. v. Int’l Bhd. of Teamsters, 645 F.3d 954, 958 

(8th Cir. 2011). 

1

A magistrate judge heard the case by “consent of the parties.” 28 U.S.C. 

§ 636(c)(1). 
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A.

Federal district courts have original jurisdiction over civil suits “between . . . 

citizens of different States” when “the matter in controversy exceeds . . . $75,000.” 

28 U.S.C. § 1332(a). The statute contains an important judicial gloss: the parties 

must be completely diverse from one another. See Lincoln Prop., 546 U.S. at 89 

(noting that courts have interpreted the nearly identically worded grant of 

jurisdiction in Article III differently); see Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 

267, 267–68 (1806). No plaintiff can be a citizen of the same state as any defendant. 

See Caterpillar, 519 U.S. at 68. 

The presence of complete diversity and an amount in controversy over 

$75,000 gives plaintiffs the first crack at filing in federal court. See Lincoln Prop., 

546 U.S. at 89. The defendants then get the second chance, a “corresponding 

opportunity” to transfer the case to federal court through a process called removal. 

Id. 

 Removal has its own set of rules. Perhaps the most important one is that it is 

only available if “original jurisdiction” exists. 28 U.S.C. § 1441(a). By original 

jurisdiction, we mean the case must satisfy the same requirements as if it had 

“initially been filed” here: complete diversity and over $75,000 in controversy. 

Krispin v. May Dep’t Stores Co., 218 F.3d 919, 922 (8th Cir. 2000). No one disputes 

that the amount in controversy exceeds $75,000, and both the magistrate judge and 

Federated thought that complete diversity existed because removal occurred before 

M & B served St. Louis. 

There is only one problem: service does not matter in evaluating the diversity 

of the parties. See Pecherski v. Gen. Motors Corp., 636 F.2d 1156, 1160–61 (8th 

Cir. 1981); see also 16 James Wm. Moore et al., Moore’s Federal Practice

§ 107.52[1] (3d ed. 2023) (declaring that “whether defendants have been served is 

irrelevant; diversity for purposes of removal is based on the citizenship of all the 

parties named in the complaint”). The citizenship of “all named plaintiffs and all 
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named defendants” count, Lincoln Prop., 546 U.S. at 84, “regardless of service,” 

Pecherski, 636 F.2d at 1161. 

Under that rule, today’s case is “a fish out of water” in federal court. Am. 

Fiber & Finishing, Inc. v. Tyco Healthcare Grp., LP, 362 F.3d 136, 139 (1st Cir. 

2004). From the beginning, M & B sued two defendants: St. Louis and Federated. 

One of them is a fellow Missourian, so there has never been complete diversity. And 

without complete diversity, there is no “original jurisdiction.” 28 U.S.C. § 1441(a). 

B. 

Snap removal has nothing to do with the complete-diversity requirement. It 

offers a potential solution to a different problem: the forum-defendant rule. See 

Holbein v. TAW Enters., Inc., 983 F.3d 1049, 1053 (8th Cir. 2020) (en banc); see 

also Couzens v. Donohue, 854 F.3d 508, 513 (8th Cir. 2017). First enacted in 1887, 

the forum-defendant rule keeps certain “otherwise[-]removable” cases in state court 

if any “properly joined and served” defendant “is a citizen of the state in which such 

action is brought.” 28 U.S.C. § 1441(b)(2); see Holbein, 983 F.3d at 1057. 

So what happens if the action is removed before the plaintiff “properly join[s] 

and serve[s]” the forum-state defendant? 28 U.S.C. § 1441(b)(2). Although we have 

yet to weigh in on the question, many courts have held that the forum-defendant rule 

does not apply. A defendant can remove the case to federal court, assuming there is 

“original jurisdiction,” if the forum-state defendant has yet to be “properly . . . 

served.” Id.; see Tex. Brine Co. v. Am. Arb. Ass’n, 955 F.3d 482, 485–87 (5th Cir. 

2020); Gibbons v. Bristol-Myers Squibb Co., 919 F.3d 699, 704–07 (2d Cir. 2019); 

Encompass Ins. Co. v. Stone Mansion Rest. Inc., 902 F.3d 147, 151–54 (3d Cir. 

2018); McCall v. Scott, 239 F.3d 808, 813 n.2 (6th Cir. 2001). 

Even if we assume these courts are right, snap removal cannot cure a lack of 

complete diversity. Remember that the forum-defendant rule only applies when the 

case is, in the words of the statute, “otherwise removable,” meaning there is “original 
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jurisdiction.” 28 U.S.C. § 1441(a), (b)(2). It then adds a further limitation based on 

the citizenship of the defendant. It does not subtract the requirement that the parties 

be completely diverse. See Pecherski, 636 F.2d at 1160; see also In re Levy, 52 

F.4th 244, 247 (5th Cir. 2022) (per curiam) (describing the forum-defendant rule as 

a “further limitation” on the right to remove). 

Indeed, as we recently explained, the forum-defendant rule is not 

jurisdictional at all. See Holbein, 983 F.3d at 1053. Violating it does not destroy 

jurisdiction. Id. Complying with it cannot create jurisdiction either. See Pecherski, 

636 F.2d at 1160; Levy, 52 F.4th at 247–48. Snap removal or not, an absence of 

complete diversity makes a federal forum unavailable. See 28 U.S.C. §§ 1441(a), 

1447(c). 

C. 

Except in one situation: when a plaintiff has fraudulently joined a non-diverse 

defendant. See Filla v. Norfolk S. Ry. Co., 336 F.3d 806, 809–11 (8th Cir. 2003). 

There is reason to doubt that any fraudulent-joinder argument will succeed now that 

M & B has amended its complaint to include an inverse-condemnation claim against 

St. Louis. See Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 374 (1978)

(noting that the addition of a claim against a non-diverse third-party defendant 

destroyed complete diversity “just as surely as if [the plaintiff] had sued [the thirdparty defendant] initially”); Bailey v. Bayer CropScience L.P., 563 F.3d 302, 307 

(8th Cir. 2009) (recognizing that joinder of a non-diverse defendant following 

removal defeats diversity jurisdiction). Still, given that no court has addressed it, 

we leave it to the magistrate judge to do so in the first instance. See Meyers v. Iowa 

Bd. of Regents, 30 F.4th 705, 710 (8th Cir. 2022); see also BP p.l.c. v. Mayor & City 

Council of Balt., 141 S. Ct. 1532, 1543 (2021). 
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III. 

We accordingly vacate the order denying remand and return the case to the 

magistrate judge for reconsideration. 

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