Lawyer Sanctioned For Removing Case After Deadline Passed


The right of a defendant to remove a case to federal court is set forth in several statutes. To remove the defendant normally has to prove that there is federal jurisdiction. In this slip and fall case, the defendant had to show that the plaintiff and defendant were citizens of different states and that the amount in controversy exceeded $75,000. There is also a rule that no case can be removed more than one year after it was first filed.

Here, in Hajdasz v. Magic Burger, LLC, No. 19-12528 (unpublished) (11th Circuit, March 11, 2020), the case was a slip and fall case. The plaintiff had medical expenses of $26, 434, 31 and some future medical expenses. An expert testified that those expenses would be $2,800 per year for 22 years. The defendant then removed the case. The federal court remanded the case back to the state court and assessed Rule 11 sanctions in the amount of $2750 against the lawyer. The lawyer appealed the sanctions award.

Result: sanctions were affirmed. The lawyer’s decision to remove a case more than one year after it was filed was unreasonable. The explanation:

Because Metsch’s decision to remove his clients’ case is the basis for the Rule 11 sanctions, we review that law here. Any removal to federal court on the basis of diversity jurisdiction must satisfy both the substantive jurisdiction requirements of 28 U.S.C. § 1332 and the “procedural requirements regarding the timeliness of removal” pursuant to 28 U.S.C. § 1446. Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744, 756 (11th Cir. 2010). Where the requirements for diversity jurisdiction can be derived from the face of the complaint, “notice of removal of a civil action or proceeding shall be filed within 30 days after the receipt by the defendant . . . of a copy of the initial pleading.” 28 U.S.C. § 1446(b)(1). Where, as here, the complaint does not state facts that satisfy diversity jurisdiction, “a notice of removal may be filed within 30 days after receipt by the defendant . . . of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.” Id. § 1446(b)(3). This late-removal procedure has a time limit, however, as a case that comes to satisfy the substantive requirements of federal diversity jurisdiction may not be removed “more than 1 year after the commencement of the action.” Id. § 1446(c)(1). The sole exception to this one-year removal cutoff is where “the district court finds that the plaintiff has acted in bad faith in order to prevent a defendant from removing the action.” Id. § 1446(c)(1). Bad faith is shown where the district court determines that “the plaintiff deliberately failed to disclose the actual amount in controversy to prevent removal.” Id. § 1446(c)(3)(B).

Here, Metsch removed his client’s case beyond the one-year anniversary of the filing of the complaint. Thus, one-year bar was plainly implicated. Id.. § 1446(c)(1). Metsch argues nonetheless that his client was excepted from the one-year deadline for two reasons: (1) Hajdasz’s refusal during discovery to provide a damages calculation amounted to “bad-faith”; and (2) our cautionary language in Lowery v. Alabama Power Co., where we stated that, in the context of a § 1446(b)(3)-type removal, a defendant removing a case to federal court must possess a document containing an “unambiguous statement that clearly establishes federal jurisdiction.” 483 F.3d 1184, 1213 n.63 (11th Cir. 2007). For these reasons, Metsch contends he had no option but to wait until Hajdasz moved in writing for a directed verdict of more than $75,000—which just happened to occur at the end of trial—before removing the case, and thus his decision to remove the case was not frivolous.

The district court found that Metsch’s invocation of the bad-faith exception to § 1446(c)(1) was “insupportable.”[9] We agree.[10] The district court found that the plaintiff’s discovery objections were well-taken and that there was no “bad-faith pattern” or failure to disclose the amount in controversy. Metsch has not demonstrated that the district court abused its discretion in so ruling.

Further, as the district court noted, the delay in learning the total damage amount was squarely attributable to Metsch:

The most telling factor in this particular case is the timeline of the discovery and the lack of any effort by Magic Burgers to take any steps whatsoever within the one-year removal period to compel [Hajdasz’s] damages response which it now alleges [Hajdasz] “deliberately withheld to avoid removal.”

Hajdasz v. Magic Burgers, LLC, No. 6:18-cv-01755-ACC-LRH, 2018 WL7436133, at *8 (M.D. Fla. Dec. 10, 2018) (emphasis added). Indeed, Magic Burgers took Hajdasz’s deposition 10 months after the suit was filed, asked only a few questions at that deposition pertaining to the damage amount, and neglected to move to compel answers to those deposition questions for nearly 16 months after the complaint was filed. And not once did Magic Burgers seek to compel responses to written discovery regarding damages. Because of Metsch’s lack of diligence, the one-year deadline passed. His untimely attempt to remove during trial, accordingly, was arguably frivolous. And therefore the district court did not abuse its discretion in so ruling. See A.S. ex rel. Miller v. SmithKline Beecham Corp., 769 F.3d 204, 212 (3d Cir. 2014) (finding that the bad-faith exception to the one-year limit applies only where a defendant can demonstrate “(1) that he has been pursuing his rights diligently, and (2) that some extraordinary circumstances stood in his way.” (quoting Pace v. DiGuglielmo, 544 U.S. 408, 418 (2005))).

Federal removal rules are tricky and contain traps for the unwary. Federal judges often find ways to remand cases to state court, even where it seemed clear that there was removal jurisdiction. In this case, a bad decision to remove cost a lawyer $2,750.

Edward X. Clinton, Jr.

http://www.clintonlaw.net

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