Opinion ID: 2745480
Heading Depth: 3
Heading Rank: 1

Heading: Statutory Time Limits

Text: Section 1446(b) sets forth two thirty-day windows for removal based on pleadings, or other papers, provided by the plaintiff. First, Section 1446(b)(1) states:
or proceeding shall be filed within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based . . . . 28 U.S.C. § 1446(b)(1). Second, Section 1446(b)(3) states: (3) Except as provided in subsection (c), if the case stated by the initial pleading is not removable, a notice of removal may be filed within 30 days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable. Id. § 1446(b)(3). The district court's first remand order, issued after CVS removed the case within thirty days of the initial pleading, is not before us. The question is whether CVS's second notice of removal was timely under Section 1446(b)(3). The district court implicitly held that the Section 1446(b)(1) clock runs in every case from the date of service, regardless of the contents of the complaint. See Romulus III, 2014 -12- WL 2435089, at . Having missed the first thirty-day period, the district court held that CVS must rely on section 1446(b)(3) to sustain its second attempt to remove. Romulus II, 2014 WL 1271767, at . The district court concluded that Section 1446(b)(3) did not apply in this case since CVS had identified no other paper that set forth new information supporting federal jurisdiction over this case. Id. The district court reasoned that information on damages is not new if the defendant could have discovered it earlier through its own investigation. See id. This is not how the statute reads and would produce a difficult-tomanage test. The plaintiffs do argue that the text of the statute supports the district court's reading of Section 1446(b). First, Section 1446(b)(1) includes the mandatory language that [t]he notice of removal of a civil action or proceeding shall be filed within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading. 28 U.S.C. § 1446(b)(1) (emphasis added). The plaintiffs argue that Section 1446(b)(1), by its terms, requires removal within thirty days of service in every case, regardless of whether the complaint evidences removability or not. Section 1446(b)(3) then operates as an exception to allow a defendant to remove outside of this initial thirty-day window if the defendant first . . . ascertain[s] that the case is removable from a subsequent paper. Id. § 1446(b)(3). -13- According to the plaintiffs, Section 1446(b)(3) cannot be invoked if the defendant could have ascertained, -- through some sort of investigative action by the defendant -- that the case was removable at some point prior to the receipt of the plaintiffs' paper. To the contrary, the text of the statute focuses solely on when the plaintiffs' papers reveal removability.5 Section 1446(b)(1) must be understood in conjunction with Section 1446(b)(3), which applies instead of Section 1446(b)(1) if the case stated by the initial pleading is not removable. 28 U.S.C. § 1446(b)(3) (emphasis added). The language of Section 1446(b)(3) makes clear that removability in Section 1446(b)(1) is to be judged by the case as stated on the face of the complaint. When removability is not clear from the initial pleading, Section 1446(b)(3) then looks to the plaintiffs' subsequent papers. Specifically, Section 1446(b)(3) applies when the defendant receives a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable. Id. (emphases added). Even if the case was previously removable, Section 1446(b)(3) does not 5 This case does not concern, nor do we address, a situation where the time limit is triggered by an order as contemplated in Section 1446(b)(3). It is instead limited to those cases in which a plaintiff's pleading or some other paper from the plaintiff is provided to the defendant. -14- apply until removability can first be ascertained from the plaintiffs' own papers. Based on the text of the statute, we hold that the defendant looks to the papers provided by the plaintiffs to determine whether Section 1446(b)'s removal clocks have been triggered. Every circuit to have addressed this issue has likewise adopted some form of a bright-line rule that limits the court's inquiry to the clock-triggering pleading or other paper in order to determine removability. Walker v. Trailer Transit, Inc., 727 F.3d 819, 824 (7th Cir. 2013) (collecting cases); see also Cutrone v. Mortg. Elec. Registration Sys., Inc., 749 F.3d 137, 143-45 (2d Cir. 2014). The bright-line test varies in severity among the circuits. The Seventh Circuit, for example, has explained that the question is whether [the clock-triggering pleading or other paper], on its face or in combination with earlier-filed pleadings, provides specific and unambiguous notice that the case satisfies federal jurisdictional requirements and therefore is removable. Walker, 727 F.3d at 825. The Seventh Circuit highlighted that this rule requires the plaintiff to specifically disclose the amount of monetary damages sought in order to trigger Section 1446(b)'s deadlines. Id. at 824. The Seventh Circuit, though, has not addressed whether Section 1446(b) can be triggered by a simple calculation on the part of the defendant from data revealed by the -15- plaintiff's papers in the absence of a specific damages estimate from the plaintiff. The Second Circuit has also limited the inquiry to the contents of the complaint or later paper, but has allowed the plaintiff to trigger the removal deadlines either by explicitly specif[ying] the amount of monetary damages sought or [by] set[ting] forth facts from which an amount in controversy in excess of $5,000,000 can be ascertained. Cutrone, 749 F.3d at 145 (emphasis added). The Second Circuit explained that, even under a bright-line rule, defendants must still 'apply a reasonable amount of intelligence in ascertaining removability.' Id. at 143 (quoting Whitaker v. Am. Telecasting, Inc., 261 F.3d 196, 206 (2d Cir. 2001)). Although defendants must apply a reasonable amount of intelligence, they have no independent duty to investigate whether a case is removable. Id. Citing the same language, the Ninth Circuit has stated that the defendant must 'apply a reasonable amount of intelligence in ascertaining removability.' Kuxhausen v. BMW Fin. Servs. NA LLC, 707 F.3d 1136, 1140 (9th Cir. 2013) (quoting Whitaker, 261 F.3d at 206). For example, [m]ultiplying figures clearly stated in a complaint is an aspect of that duty. Id. We agree with the Second Circuit that a plaintiff's pleading or later paper will trigger the deadlines in Section 1446(b) if the plaintiff's paper includes a clear statement of the -16- damages sought or if the plaintiff's paper sets forth sufficient facts from which the amount in controversy can easily be ascertained by the defendant by simple calculation. The defendant has no duty, however, to investigate or to supply facts outside of those provided by the plaintiff. As a policy matter, the plaintiffs argue that a defendant should have a duty to investigate removal early in litigation in order to avoid gamesmanship and to resolve removal as efficiently as possible. The plaintiffs explain: If there were no deadline by which a defendant must disclose information in its possession that supports removal, a defendant could strategically litigate a case in state court until it could assess how it was faring there, or decide whether to remove based on its assessment of how much disruption a change of forum would cause the plaintiff. It would also enable a defendant to use delay (as CVS seems to have tried to do here) as a weapon with the hope of exhausting the plaintiff's patience or resources. The plaintiffs note that CVS's second attempt at removal was based on data calculated from information CVS possessed from the beginning of this litigation, but the second notice of removal was not filed until seventeen months after the case was initially brought. Imposing an obligation on a defendant to investigate and remove early and quickly, they say, would ensure the efficient resolution of removal questions. They argue, moreover, that this burden would not weigh too heavily on a defendant since the -17- defendant need only establish the amount in controversy by a reasonable probability. There are contrary policy arguments that Congress could have considered. In the absence of something like a bright-line approach, plaintiffs would have no incentive to specify estimated damages early in litigation. Defendants would protectively remove when faced with an indeterminate complaint in order to avoid missing the mandatory window for removal under Section 1446(b)(1). This would be particularly problematic in CAFA cases, since the large number of class members and the high requirement for the amount in controversy often will be difficult to ascertain immediately. See Cutrone, 749 F.3d at 145. If a defendant sought to later remove under Section 1446(b)(3), the district court would face the unenviable task of determining whether the defendant should have previously discovered that the case was removable. Determining what the defendant should have investigated, or what the defendant should have discovered through that investigation, rather than analyzing what was apparent on (or easily ascertainable from) the face of the plaintiff's pleadings, will not be efficient, but will result in fact-intensive mini-trials. The plaintiffs are also in a position to protect themselves from the gamesmanship of which they warn. Roth v. CHA Hollywood Med. Ctr., L.P., 720 F.3d 1121, 1126 (9th Cir. 2013). The Ninth Circuit explained, [i]f plaintiffs think that their -18- action may be removable and think, further, that the defendant might delay filing a notice of removal until a strategically advantageous moment, they need only provide to the defendant a document from which removability may be ascertained. Id. By filing a complaint or subsequent paper that meets the bright-line rule, the plaintiffs will trigger one of the thirty-day clocks in Section 1446(b), and will force the defendant to remove immediately or lose the opportunity to do so later. Id. We follow, as we must, the Congressional policy choice inherent in the statutory text. As we have previously explained, the obvious purpose of starting the 30-day clock only after the defendant's receipt of a 'paper' revealing the case's removability is to ensure that the party seeking removal has notice that the case is removable before the limitations period begins to run against it. Woburn Five Cents Sav. Bank v. Robert M. Hicks, Inc., 930 F.2d 965, 970 (1st Cir. 1991). To determine whether the Section 1446(b) clocks have begun to run, therefore, we focus exclusively on the pleadings and other papers provided by the plaintiffs. The defendant must remove within thirty days of a paper, filed by the plaintiffs, that explicitly specifies the amount of monetary damages sought or sets forth facts from which an amount in controversy in excess of $5 million can be readily ascertained. See Cutrone, 749 F.3d at 145. -19-