Elshere v. Woodard, 1996 DSD 41
DANIELLE M. ELSHERE,
ERIC WOODARD, M.D.,
[1996 DSD 41]
United States District Court
District of South Dakota - Western Division
MEMORANDUM OPINION AND
ORDER REMANDING TO STATE COURT
Filed Nov 26, 1996
RICHARD H. BATTEY, Chief Judge
NATURE AND PROCEDURAL HISTORY
[¶1] On or about July 8, 1996, plaintiff filed this medical malpractice action in the Seventh Judicial Circuit Court, Pennington County, South Dakota. On September 5, 1996, defendant filed a petition for removal to this Court pursuant to 28 USC §§ 1441 and 1446 based on diversity of citizenship. On September 24, 1996, plaintiff filed a motion to remand asserting that the removal was untimely as to the thirty-day notice provision in 28 USC 1446(b).
[¶2] Plaintiff has attempted to effectuate service upon defendant on three different occasions.
[¶3] (a) First Attempt at Service
[¶4] On July 8, 1996, a copy of the complaint, summons, and a notice of admission of service, together with a letter from plaintiff's counsel was mailed to defendant's home in Massachusetts via express overnight courier. See Affidavit of Attorney Glen H. Johnson at ¶1 (Sept. 24, 1996). The letter also indicates that a courtesy copy of the summons and complaint were sent to defendant's insurance carrier. In his affidavit, defendant states that the documents were "placed in my front door, which was rarely utilized by me or any member of my household" and he was not aware of the mailing or its contents for a period of approximately three weeks. See Affidavit of Eric J. Woodard, M.D. at ¶¶5, 6 (Oct. 15, 1996). Defendant further testifies that immediately upon his discovery of the delivery he contacted his insurance carrier. Id. at ¶7
[¶5] b.Second Attempt at Service
[¶6] On August 6, 1996, a process server left a copy of the summons and complaint at defendant's residence "with a friend who was residing with me at the time." Id. at ¶8.
[¶7] c.Third Attempt at Service
[¶8] Finally, plaintiff has indicated to the Court that defendant was personally served with a new summons and complaint in Pennington County, South Dakota, on September 24, 1996. See Docket #10 at n.1 (Plaintiff's Reply Memorandum on Motion to Remand).
[¶9] On September 5, 1996, defendant filed a petition for removal.
[¶10] The procedure for removal is contained in 28 USC § 1446(b), which provides in pertinent part:
The notice of removal of a civil action or proceeding shall be filed within thirty 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, or within thirty days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter.
28 USC § 1446(b) (emphasis added). As recently stated by the Fifth Circuit Court of Appeals, "[a]s Congress intended the removal statutes to have uniform nationwide application, the effect of . . . alleged state law violations on the removal period is a question of federal law, unaffected by state law definitions or characterizations." Reece v. Wal-Mart Stores, Inc., 98 F3d 839, 843 (5th Cir. 1996) (citing Brown v. Demco, Inc., 792 F2d 478, 480 (5th Cir. 1986)). The failure to file a petition for removal within the thirty-day time limitation of section 1446(b) is sufficient ground on which to remand, and the burden of demonstrating compliance with the timeliness requirement is on the petitioning defendant, not the party moving for remand. 14A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 3739, at 574 (1985) (citing Jones v. General Tire & Rubber Co., 541 F2d 660 (7th Cir. 1976)); Northern Illinois Gas Co. v. Airco Indus. Gases, 676 F2d 270, 273 n.1 (7th Cir. 1982) (stating that "'[t]he burden of proof as to any controverted material issue is upon the party who removed to show that the suit was properly removed.'").
[¶11] The interpretation of the phrase "receipt by defendant, through service or otherwise" lies at the heart of the dispute between the parties. Plaintiff urges this Court to adopt the "receipt rule" and construe the phrase to mean that the thirty-day period began to run when defendant received or came in actual possession of the summons and complaint. In contrast, defendant implores the Court to embrace the "service rule" and construe the phrase to mean that the thirty-day period does not commence until the plaintiff has complied with the requirements for service under the rules of civil procedure.
[¶12] Both parties acknowledge the split among federal courts in regard to whether possession or receipt of a copy of the complaint suffices to start the clock running under the removal statute. Several district courts have adopted the "service rule" which was first articulated in Love v. State Farm Mutual Auto. Ins. Co., 542 F. Supp. 65 (N.D. Ga. 1982). See generally Bullard v. American Airlines, Inc., 929 FSupp 1284 (W.D. Mo. 1996); City Nat'l Bank of Sylacauga v. Group Data Servs., 908 FSupp 896 (N.D. Ala. 1995); Apache Nitrogen Products, Inc. v. Harbor Ins. Co., 145 F.R.D. 674 (D. Ariz. 1993); Baratt v. Phoenix Mut. Life Ins. Co., 787 F. Supp. 333 (W.D.N.Y. 1992); Marion Corp. v. Lloyds Bank, PLC, 738 FSupp 1377 (SD Ala. 1990); Hill v. Boston, 706 FSupp 966 (D. Mass. 1989); Goodyear Tire & Rubber Co. v. Fuji Photo Film Co., 645 FSupp 37 (SD Fla. 1986); Hunter v. American Express Travel Related Servs., 643 FSupp 168 (SD Miss. 1986); Thomason v. Republic Ins. Co., 630 FSupp 331 (E.D. Cal. 1986); and Quick Erectors, Inc. v. Seattle Bronze Corp., 524 FSupp 351 (E.D. Mo. 1981). Reflecting upon the legislative history of section 1446(b), the Love court explained:
Prior to 1948, a removal petition was in essence a state court responsive pleading; it was filed in that court within the time permitted to answer a complaint as established by the state's rules of civil practice. In 1948, in an attempt to make the removal procedure more uniform, Congress revised section 1446(b) to provide that the removal petition be filed in federal court "within twenty days after commencement of the action or service of process, whichever is later." 62 Stat. 939 (1948). Under this formulation, of course, the removal period could not begin until service of process had been obtained. A problem arose, however, in those states such as New York which permitted a plaintiff to commence a suit without serving or filing a complaint, merely by serving the defendant with a summons. Under the 1948 version of section 1446(b), in such cases the removal period could expire before a defendant received a copy of the complaint, thus depriving him of an opportunity to remove the action. It was in response to this problem that Congress revised section 1446(b) to permit removal "within twenty [now thirty] days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading." See H.R.Rep. No. 352, 81st Cong., 1st Sess., reprinted in (1949) U.S.Code Cong.Serv. 1254, 1268. Thus, the "through service or otherwise" language was intended to expand the removal period in states following the New York Rule. It was not intended to diminish the right to removal, by permitting a plaintiff to circumvent the already existing requirement of personal service through informal service.
Love, 542 FSupp at 67-68 (footnote and citation omitted), quoted in Tech Hills II Associates, v. Phoenix Home Life Mutual Ins. Co., 5 F3d 963, 967 (6th Cir. 1993).(fn1) The fact that South Dakota is one of those states permitting suit to be commenced merely by serving defendant with a summons has little significance in the resolution of the issue before the Court in light of the fact that plaintiff elected to attempt service by providing both the summons and complaint. See generally SDCL § 15-6-4(b) (permitting commencement by serving summons without the complaint).
[¶13] In contrast, a similarly large number of federal district courts have adopted the "receipt rule" finding that the actual receipt or possession by a defendant of a complaint is sufficient to commence the thirty-day period, irrespective of the technicalities of service of process requirements. See generally Iowa Lamb Corp. v. Kalene Indus., Inc., 871 FSupp 1149 (N.D. Iowa 1994); Mermelstein v. Maki, 830 FSupp 180 (S.D.N.Y. 1993); Kerr v. Holland America-Line Westours, Inc., 794 FSupp 207 (E.D. Mich. 1992); Trepel v. Kohn, Milstein, Cohen & Hausfeld, 789 FSupp 881 (E.D. Mich. 1992); Pillin's Place, Inc. v. Bank One, 771 FSupp 205 (N.D. Ohio 1991); Schwartz Bros., Inc. v. Striped Horse Records, 745 FSupp 338 (D. Md. 1990); Dawson v. Orkin Exterminating Co., 736 FSupp 1049 (D. Colo. 1990); Harding v. Allied Prods. Corp., 703 FSupp 51 (W.D. Tenn. 1989); Conticommodity Servs., Inc. v. Perl, 663 FSupp 27 (N.D. Ill. 1987); and Tyler v. Prudential Ins. Co., 524 FSupp 1211 (W.D. Pa. 1981). See also 14A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 3732 (Supp. 1996); Jean F. Rydstrom, Annotation, When Period for Filing Petition for Removal of Civil Action from State Court to Federal District Court Begins to Run Under 28 USCS § 1446(b), 16 A.L.R. Fed. § 6(a) at 309-315 (1973).
[¶14] The parties cite no Eighth Circuit Court of Appeals cases and the Court has not found one which addresses the application of either rule. The three Circuit Courts addressing it have adopted the "receipt rule." Reece v. Wal-Mart Stores, Inc., 98 F3d 839 (5th Cir. 1996); Roe v. O'Donohue, 38 F3d 298 (7th Cir. 1994) (noting that oblique references in Northern Illinois Gas Co. v. Airco Indus. Gases, 676 F2d 270, 273 n.1 (7th Cir. 1982) and Pochiro v. Prudential Ins. Co., 827 F2d 1246, 1248-49 (9th Cir. 1987), do not really tackle the question); Tech Hills II Assocs. v. Phoenix Home Life Mut. Ins. Co., 5 F3d 963 (6th Cir. 1993). Proponents of the "receipt rule" conclude that there is nothing which compels the conclusion that service of process is necessary to commence the removal period. Tech Hills II, 5 F3d at 968. These courts give three reasons for this interpretation:
(1) the rule arises from a straightforward interpretation of the clear statutory language; (2) the legislative history does not lead to the conclusion that the rule is "demonstrably at odds" with Congress' intent in amending section 1446(b), and (3) the rule is consistent with the longstanding principle that the removal statues are to be construed strictly, narrowly and against removal.
Id. (citations omitted).
[¶15] Upon careful review of the existing precedent and legislative history of the rule,(fn2) this Court declines defendant's invitation to adopt the "service rule" and disregard the plain language of the rule.(fn3) This Court believes that if confronted with a choice, the Court of Appeals would be more apt to follow the "receipt rule." To do otherwise would be to ignore the plain reading of section 1446(b). Based on the notion that federal courts are courts of limited jurisdiction, "[w]hatever (slight) ambiguity § 1446(b) poses in application to an ordinary case, such as [this case], may be resolved by the principle that doubts should be resolved against removal." Roe, 38 F3d at 304 (citing Shamrock Oil & Gas Corp. v. Sheets, 313 US 100, 108-09, 61 S. Ct. 868, 871-72, 85 L. Ed. 1214 (1941); Healy v. Ratta, 292 US 263, 270, 54 S. Ct. 700, 703-04, 78 L. Ed. 1248 (1934)). See also Reece, 98 F3d at 840 ("'restricting removal to instances in which the statute clearly permits it . . . is consistent with the trend to limit removal jurisdiction and with the axiom that the removal statutes are to be strictly construed against removal.'" ).
[¶16] The Court need not concern itself with the pitfalls inherently present by application of the "receipt rule" that stem from South Dakota's law permitting suit to be commenced merely by serving defendant with summons or the common practice of sending courtesy copies(fn4) of a complaint prior to the actual filing. The case before the Court poses no similar challenge to a literal reading, and the Court sets these pitfalls aside for consideration another day.
[¶17] The Court's holding is limited to the case before it, the facts of which clearly indicate that defendant, by his own admission, received and possessed a copy of the complaint and summons prior to August 6, 1996, the time of the second attempt to obtain service.(fn5) Such receipt placed him upon notice that should he desire removal to federal court, the federal removal statute must be followed. The Court need not speculate as to why that was not done. The fact that defendant contacted his insurance carrier immediately upon discovery of the complaint further evidences that he was aware of the possible implications involved. See Reece, 98 F3d at 842 ("If a defendant already possessed a copy of the initial pleading, formal service of process would not provide it with any additional information relevant to its decision on whether to remove."). Once the defendant possesses a copy of the complaint, he must decide promptly in which court he wants to proceed. See Roe, 38 F3d at 303. Defendant did not file his petition for removal until September 5, 1996. The notice of removal was untimely because defendant possessed a copy of the complaint more than thirty days prior to the filing of the notice. Because defendant has failed to meet his burden of demonstrating compliance with the timeliness requirement this case must be remanded back to the state court. Accordingly, it is hereby
[¶18] ORDERED that plaintiff's motion to remand (Docket #6) is granted. The above-entitled matter shall be remanded back to the Seventh Judicial Circuit Court, Pennington County, South Dakota, for further proceedings. A judgment shall be issued forthwith.
1. The Committee report states in relevant part: Subsection (b) of section 1446 of title 28 USC, as revised, has been found to create difficulty in those States, such as New York, where suit is commenced by the service of a summons and the plaintiff's initial pleading is not required to be served or filed until later. The first paragraph of the amendment to subsection (b) corrects this situation by providing that the petition for removal need not be filed until 20 days after the defendant has received a copy of the plaintiff's initial pleading. This provision, however, without more, would create further difficulty in those States, such as Kentucky, where suit is commenced by the filing of the plaintiff's initial pleading and the issuance and service of a summons without any requirement that a copy of the pleading be served upon or otherwise furnished to the defendant. Accordingly the first paragraph of the amendment provides that in such cases the petition for removal shall be filed within 20 days after the service of summons. H.R.Rep. No. 352, 81st Cong., 1st Sess., reprinted in (1949) U.S.Code Cong.Serv. at 1268. See generally Bullard, 929 FSupp at 1286 n. 1.
2. On the subject of legislative history, this Court adopts the well articulated reasoning set forth in the Roe decision:
Like the judges who decided Tech Hills, we see no escape from the language of the statute. Some district courts have emphasized that the legislative history of the 1949 amendment does not contain a clear statement that "or otherwise" covers the situations to which we referred above, but courts are not authorized to disregard express language just because the legislative history does not echo "and we really mean it!" See Pittston Coal Group v. Sebben, 488 US 105, 115, 109 S. Ct. 414, 420-21, 102 LEd2d 408 (1988); Swain v. Pressley, 430 US 372, 378-79, 97 S. Ct. 1224, 1228- 29, 51 LEd2d 411 (1977). Committee reports show that one function of the amendment is to ensure that the time does not begin until the defendant has a copy of the pleadings; if the plaintiff effects service without enclosing a copy of the complaint (as some states allow), the defendant need not guess whether the case is removable. H.R.Rep. No. 352, 81st Cong., 1st Sess. (1949). See Ardison v. Villa, 248 F2d 226 (10th Cir. 1957). But this objective explains the phrase "a copy of the initial pleading setting forth the claim for relief"; it does not explain or limit the scope of "or otherwise". Indeed, by emphasizing the link between possessing a copy of the pleadings and the time for removal, the 1949 deliberations strongly suggest that we should take "or otherwise" seriously: knowledge of the nature of the claims, and not the state's technical rules of service, determines timeliness.
Roe, 38 F3d at 303.
3. According to the Seventh Circuit Court of Appeals, the "or otherwise" language must mean something different from service. Roe, 38 F3d at 302. The Roe court set forth the following three principal classes of receipt which do not amount to "service":
First, a delivery of the complaint by a process server that is not effective as "service of process" (perhaps because it does not include a copy of the summons, perhaps because of shortcomings of the kind to which defendants point here); second, an attempt at service by mail under Fed.R.Civ.P. 4(d), or its state counterparts, that is not effective because the recipient refuses to sign and return the acknowledgment; third, the transmission of the complaint from one defendant to another before the process server or mail arrives at the door.
Id. at 302-303.
4. See generally Robert P. Faulkner, The Courtesy Copy Trap: Untimely Removal from State to Federal Court, 52 Md. L. Rev. 374 (1993).
5. Absent plaintiff's first attempted service, defendant's petition for removal filed on September 5, 1996, would not have been defective in light of the fact that it was filed within thirty days of the second attempted service of August 6, 1996. In view of the undisputed fact of the receipt of the pleadings contained in attorney Johnson's letter of July 8, 1996, the Court need not conduct an evidentiary hearing.