Court Opinion

ID: 2966754
Source: CourtListenerOpinion
Date Created: 2015-09-22 01:06:03.463159+00
Date Added: 2024-06-11T12:25:59.799512
License: Public Domain

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.

                              O R D E R

     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.

                              O R D E R

    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 LAW-
RENCE & 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 cir-
cumstances, 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, Vir-
ginia, Grover Lee Lovern was involved in an automobile accident.
Arguing that the severity of his injuries was attributable to the defec-
tive 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 Octo-
ber 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.

                    2
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 pre-
scribed 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, estab-
lishing 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,

                    3
        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 "com-
mencement of the action." Id.

In this case, Lovern and General Motors were of diverse citizen-
ship 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 remov-
able." 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 remov-
able or to the case in which their citizenship has been misstated.

Having examined the statutory language and policy, we reject Lov-
ern'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 defen-
dant 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 par-
ties pleaded or knew leads to the conclusion that the extended

                    4
removal period provided by the second sentence of § 1446(b) applies
only when some later development, such as the dismissal of a non-
diverse 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 exis-
tence 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 com-
plaint.

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 plead-
ing 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 consis-
tent 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 stan-
dards 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 sanc-
tions. If a defendant were required to file a notice of removal within

                     5
30 days after the service of the initial pleading, even where that plead-
ing 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 join-
ing 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 defen-
dant time to make an inquiry into the requisites for diversity jurisdic-
tion 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 resi-
dency 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.

                     6
mine whether the police report alone would have triggered the run-
ning of the 30-day clock in order to affirm the district court's
determination that the notice of removal was timely filed.

AFFIRMED

                   7