In Culkin v. CNH America, LLC, 2009 WL 196359 (E.D. Va. 2009), the Rocket Docket affirmed 28 U.S.C. 1446(b)’s one-year absolute limit on removal of actions to federal court, refusing to extend the one-year limit through equitable tolling despite Plaintiff’s delayed service of the Complaint.
Plaintiff filed a Virginia state court action against Defendant CNH (a construction equipment manufacturer), its global parent, and retailer, alleging products liability. Defendant removed the action and Plaintiff moved to remand. More specifically, Plaintiff filed his Complaint on August 30, 2007 in the Circuit Court of Loudoun County, Virginia. The Complaint named four defendants: CNH America, LLC (CNH), CNH Global, N.V. (CNH Global), Case IH (Case), and Neff Rental, Inc. (Neff) (collectively, “Defendants”). Plaintiff served CNH on August 25, 2008, Case on August 26, 2008, and Neff on September 26, 2008 (CNH Global presumably was never served).
Neff was not served within the one-year required by Virginia law—Va.Code § 8.01-275.1—and therefore Plaintiff filed a motion for voluntary nonsuit against Neff under Va. Code § 8.01-380 on September 29, 2008. The Circuit Court granted this motion on or about October 6, 2008. On October 9, 2008, CNH filed a Notice of Removal with the Circuit Court under the argument that the matter was not immediately removable based on complete diversity until Neff was dismissed (i.e., CNH argued that Plaintiff and Neff were Virginia residents). Though there was a dispute as to whether Plaintiff was a Virginia resident or not, the Court ultimately held that a determination of Plaintiff’s residency was irrelevant since no Defendant removed the matter within one-year of service as required by 28 U.S.C. 1446(b), such that no matter whether the case was removable when the Complaint was filed or when Neff was nonsuited, the case certainly was not removed within one-year of commencement under any circumstance and therefore required remand to state court.
According to 28 U.S.C. § 1446(b), in a civil action or proceeding not removable when first filed:
"a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, 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, except that a case may not be removed on the basis of jurisdiction conferred by section 1332 of this title more than 1 year after commencement of the action."
Thus, the statute first requires a party seeking removal to file the notice of removal within thirty days of receipt of a pleading making the case removable. Defendant filed a notice of removal within thirty days of receipt of the order from the Circuit Court granting Plaintiff's voluntary non-suit against Neff. Assuming this order made the case removable for the first time because Neff, as a Virginia corporation with its principal place of business in Virginia, was the only non-diverse party to this action, after the Circuit Court dismissed Neff the remaining parties qualified for diversity jurisdiction. 28 U.S.C. § 1332.
In any event, § 1446(b) requires the party seeking removal to do so within “1 year after commencement of the action” where federal subject-matter jurisdiction is based on diversity. 28 U.S.C. § 1446(b). To apply this requirement to the situation at hand, the Court was required to determine when the action “commenced” for purposes of § 1446.
According to the Court, “[I]t is well-settled that state law governs the determination of the ‘commencement of the action’ for the purpose of the one year limit on removal.” US Airways, Inc. v. PMA Capital Ins. Co., 340 F.Supp. 2d 699, 704 (E.D. Va. 2004) (collecting cases). A case is commenced in the Commonwealth of Virginia when it is filed with the court. Rule 3:2 of the Rules of the Supreme Court of Virginia (“A civil action shall be commenced by filing a complaint in the clerk's office .... the action is then instituted and pending as to all parties defendant thereto.”). Therefore, according to the Court, Defendant filed its Notice of Removal more than one-year from the date of “commencement” of the action, which was August 30, 2007, the date on which Plaintiff filed the Complaint with the Circuit Court.
Defendant requested that the Court toll the one-year time period in § 1446 and asserted that Plaintiff cannot request the benefit of this time limit because of its inequitable conduct in delaying service of the Complaint. CNH asserted that Plaintiff: (1) delayed for nearly a year before attempting service on any Defendant; (2) failed to serve Neff within one-year because it did not conscientiously look for Neff's current registered agent; and (3) included Neff as a defendant, with no intention of proceeding against it, to block diversity jurisdiction.
While the Court noted that other circuits allow equitably tolling of the one-year limit in § 1446(b), the Fourth Circuit has referred, in dicta, to the one-year limitation in 28 U.S.C. § 1446(b) as an “absolute bar” to removal. Lovern v. General Motors Corp., 121 F.3d 160, 163 (4th Cir. 1997). District courts within this circuit have interpreted Lovern as precluding equitable tolling of the one-year limit. Wise v. Gallagher Bassett Servs., 2002 U.S. Dist. LEXIS 16286, *5–8, 2002 WL 2001529 (D. Md. 2002); Mantz v. St. Paul Fire and Marine Ins. Co., 2003 U.S. Dist. LEXIS 10123, 2003 WL 21383830 (S.D. W.Va. 2003)(“The Fourth Circuit has said plainly that ‘in diversity cases, [28 U.S.C. § 1446(b) ] ... erect[s] an absolute bar to removal of cases in which jurisdiction is premised on 28 U.S.C. § 1332 more than 1 year after commencement of the action.’”).
The Court concluded that equitable tolling is not available within this Circuit. Even assuming that it were, however, the Court found that the circumstances presented in this case did not trigger such equitable considerations in that the delayed service of the Defendants did not constitute “inequitable conduct.” As such, the Court remanded the matter based on Defendants’ failure to abide by the time limits in 28 U.S.C. 1446(b).
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