Defendant Cannot Assert New Jurisdictional Basis After Removal Period: Fourth Circuit | Practical Law

Defendant Cannot Assert New Jurisdictional Basis After Removal Period: Fourth Circuit | Practical Law

In Wood v. Crane Co., the US Court of Appeals for the Fourth Circuit affirmed a district court's decision to remand and held that the defendant could not amend its notice of removal to assert a basis for federal jurisdiction it had previously omitted from its initial notice after the 30-day period for removal had expired.

Defendant Cannot Assert New Jurisdictional Basis After Removal Period: Fourth Circuit

by Practical Law Litigation
Published on 18 Aug 2014 • USA (National/Federal)
In Wood v. Crane Co., the US Court of Appeals for the Fourth Circuit affirmed a district court's decision to remand and held that the defendant could not amend its notice of removal to assert a basis for federal jurisdiction it had previously omitted from its initial notice after the 30-day period for removal had expired.
On August 15, 2014, the US Court of Appeals for the Fourth Circuit in Wood v. Crane Co. affirmed a district court's decision to remand and held that the defendant could not amend its notice of removal to assert a basis for federal jurisdiction it had previously omitted from its initial notice after the 30-day period for removal had expired (No. 13-1868 (4th Cir. Aug. 15, 2014)).
James Joyner was diagnosed with mesothelioma in March 2012 while working as an electrician for the Coast Guard and the private sector. He filed a complaint in Maryland state court against various manufacturers that allegedly supplied asbestos-containing materials, including certain valves and gaskets. Crane Co. (Crane), a manufacturer of valves and gaskets, removed the case to federal court under the federal officer removal statute (28 U.S.C. § 1442(a)(1)), which allows for removal of suits involving acts under the color of official government business. Crane asserted a federal contractor defense as to the valves, but for strategic reasons, it did not assert the defense as to the gaskets.
Joyner moved to remand the case back to state court and to sever the valve claims against Crane. The district court granted Joyner's motion to sever the valve claims but retained the gasket claims against Crane in federal court. Joyner then filed a notice of abandonment of Crane's valve claims, retaining only his gasket-related claims. The district court construed this notice as a motion to amend his complaint under FRCP 15(a) and granted it, nullifying Crane's federal contractor defense. The district court also found that the 30-day deadline for removal under 28 U.S.C. § 1446(b) prevented Crane from asserting the defense as to the gaskets. As a result, it concluded that no subject matter jurisdiction existed and remanded the case to Maryland state court.
Crane appealed, arguing that it should have been allowed to amend its notice of removal to assert the defense as to the gasket claims under 28 U.S.C. § 1653, which permits amending pleadings to show jurisdiction. Crane also argued that Joyner's abandonment of the valve claims should have been prohibited as a manipulative tactic.
The Fourth Circuit affirmed. It found that:
  • Once the 30-day period in 28 U.S.C. § 1446(b) expires, courts have no discretion to permit amendment of a notice of removal to add new jurisdictional allegations, particularly where the allegations were initially omitted for strategic reasons.
  • 28 U.S.C. § 1653 only provides courts with the discretion to permit amendments to incorrect allegations due to clerical error or mere inadvertence that are already present in the notice of removal.
  • There is no categorical prohibition on tactics meant to evade federal jurisdiction, as district courts have discretion to retain a case to guard against forum manipulation. Here, however, Crane failed to show that the district court abused its discretion by declining to exercise supplemental jurisdiction over the remaining state law claim.
The Fourth Circuit departs from the approach of the US Courts of Appeals for the Fifth and Ninth Circuits, which permit timely removal on all grounds apparent from the complaint, rather than just those cited in the removal notice. Counsel practicing within the Fourth Circuit should carefully consider including all known grounds for federal jurisdiction in an initial notice of removal, or risk waiving them later on after the 30-day period under 28 U.S.C. § 1446(b) expires.