The Fifth Circuit issued an important decision on April 7, 2020, Texas Brine Company, L.L.C. v. American Arbitration Assoc. et al, No. 18-31184 (5th Cir. 2020). For the first time, the Court analyzed the propriety of “snap removals.” Those can occur when a plaintiff sues several defendants in state court. Complete diversity between the parties exists, but at least one of the named defendants is a citizen of the forum state. This means that once the forum-defendant is served, the “forum defendant” rule would prevent the non-forum defendant from removing the case to federal court.
A “snap removal” occurs when a named non-forum defendant removes the case to federal court before the named forum-defendant is served. Essentially, it’s a race to remove before service can be effected on the forum defendant. The Fifth Circuit analyzed whether this type of removal is proper, or whether it is contrary to the intent of the forum defendant rule and an abuse of the statute. Relying on the unambiguous statutory language, the Court concluded that “snap removal” is proper: “A non-forum defendant may remove an otherwise removable case even when a named defendant who has yet to be ‘properly joined and served’ is a citizen of the forum state.”
All parties litigating in the Fifth Circuit should be aware of this decision. It is especially important for defendants, because their ability to file a “snap removal” in such situations has a short window. By not acting quickly (before the forum-defendant is served), then one path to removal may be foreclosed.