If you do a lot of procedural fencing in court, particularly removal motions to federal court or getting a case remanded to state court, you’ll want to take a look at the latest case from the 6th U.S. Circuit Court of Appeals on the topic.
The upshot is that an untimely petition to remove a diversity case from state court to federal court can’t be challenged with an untimely motion to remand, unless, of course, diversity jurisdiction itself is being called into question.
In Music v. Arrowood Indemnity, Carpenter sued Music for auto negligence. Arrowood, Music’s insurer, wouldn’t defend the case and Carpenter got a default judgment against Music.
Music wasn’t collectable, so Carpenter sued his own insurer for unisured motorist benefits. He filed in state court. There wasn’t enough at stake to go to federal court.
Globe, in turn, sued Music for indemnity. Music declared bankruptcy, identified Carpenter’s uninsured motorist claim as a liability, but didn’t list Arrowood as an estate asset.
After Music got a complete discharge, he sued Arrowood in a Kentucky state court for not defending him against Carpenter’s auto negligence suit.
Arrowood removed the case to federal district court under 28 U.S.C. § 1446(b). Nobody claimed there was a problem with diversity or the amount in controversy.
But Music claimed that Arrowood waited too long to remove the case. 28 U.S.C. § 1446(b) requires removal within one year of “commencement” of the state court action.
The federal district court said Music waited too long to challenge the removal and dismissed Music’s motion to remand. 28 U.S.C. § 1447(c) provides 30 days to file a remand motion after a case has been removed from state court.
Here’s how the Sixth Circuit sorted it all out.
There’s a first-party, third-party and fourth-party claim, so it’s not exactly clear whether Arrowood’s removal motion was filed within a year after the state-court action commenced. For analytical purposes, the Sixth Circuit assumed the removal motion was late.
But Music’s motion to remand was late as well.
So the issue is whether the one-year removal limit is jurisdictional, in which case, it can be challenged at any time. If it’s procedural, then it is waived if not timely challenged.
There is no published precedent in the Sixth Circuit on the issue but every circuit considering the matter has concluded that the one-year limit is procedural. And, the U.S. Supreme Court, in Caterpillar Inc. v. Lewis, 519 U.S. 61, 75 n.13 (1996), has hinted as much.
The Sixth Circuit’s bottom line:
Upon review, we hold that the one-year time limitation rule for removal, 28 U.S.C. § 1446(b), is procedural, not jurisdictional, and therefore subject to forfeiture.