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Pennsylvania Amendment Snaps Back At Snap Removal


January 21, 2022 at 6:48:32 PM

<p style="text-align: justify;">On January 18, 2022, the Pennsylvania Supreme Court formally amended the Pennsylvania <a href="">Rules of Civil Procedure</a> clarifying that original service of process is satisfied per Rule 400(b) by a sheriff or competent adult in cases of state to federal court and permitting pre-service or “snap” removal pursuant to 28 U.S.C. § 1441. This change was initiated when the Pennsylvania legislature heeded the clarion call of the Third Circuit Court of Appeal’s call to action in <em>Judiciary Encompass Ins. Co. v. Stone Mansion Rest. Inc</em>., 902 F.3d 147, 154 (3d Cir. 2018), which identified conflicts between §1441, its “forum defendant” exception in Section 1441(b), and the former Rule 400 leading to inconsistencies across the state and a split amongst the circuit courts.</p>
<p style="text-align: justify;">Specifically, Section 1441(a) provides that a state action may be removed to a federal court where there is federal subject matter jurisdiction, including where there is complete diversity of citizenship between all plaintiffs and all defendants. Further, Section 1441(b) states the “forum defendant” exception: an action otherwise removable on the basis of diversity jurisdiction “may not be removed if any of the parties in interest properly joined <strong><u>and</u></strong> served as defendants is a citizen of the State in which the action is brought.” Section 1441(b) (emphasis added). In conflict, Rule 400(a) provides that the sheriff must serve original process of civil actions within the Commonwealth. While former Rule 400(b) enumerated certain civil actions to allow original service of process by sheriff or competent adult, Rule 400.1 carves out an exception for the service of original process in Philadelphia County. In turn, this tension led to different interpretations per venue, fostered the principle of “snap” removal, and in practice, has led to docket monitoring now available with increases in technology, professional service of process industries,  and a race-to-the federal courthouse where prospects may be more favorable.</p>
<p style="text-align: justify;">In <em>Encompass, </em>Encompass Insurance Co., the defendant agreed to accept electronic service of process instead of requiring formal service of the complaint, however, when the plaintiff then filed suit against the defendant in the plaintiff’s home state and sent the defendant a copy of the filed complaint and a service acceptance form via email, counsel for defendant refused to accept service and thereafter removed the action to federal court. The <em>Encompass</em> court found that the face of Section 1441(b) does not prevent removal where the in-state defendant has yet to be properly served under the state law at issue, here, Pennsylvania. In noting how the district courts within the state and country were split, the <em>Encompass </em>court decided narrowly and ultimately kicked the issue to the Pennsylvania legislature. <em>See</em> <em>Parker Hannifin Corp. v. Fed. Ins. Co</em>., 23 F.Supp.3d 588, 596 (W.D. Pa. 2014) (concluding that “the forum defendant rule does not apply to this case because plaintiffs failed to properly serve [the in-state defendant] prior to removal of this case to federal court”).</p>
<p style="text-align: justify;">In turn, the Pennsylvania Civil Rules Committee proposed an amendment to Rule 400 enumerating circumstances of “snap” removal under Rule 400(b) which has formally been adopted per Order No. 727. In its report, the Committee notes that amended rule is intended to ameliorate “snap” removal and the holding of <em>Encompass</em>, as such polarized outcomes defeat the purpose of the Pennsylvania Rules of Civil Procedure in obtaining speedy determinations to actions. <em>See </em>Pa. R.C.P. 126. This amendment takes effect April 1, 2022.</p>
<p style="text-align: justify;">Practically, this change will make it difficult, but not impossible, for in-state defendants to remove a case from state court to federal court under diversity jurisdiction and signals the Pennsylvania court’s broadening interpretation of what it means to avail oneself to the forum state.</p>
Thanks to Kendall Hutchings for her contribution to this article.  If you have any questions, please contact <a href="">Matthew Care.</a>

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