Today, House Judiciary Committee Chairman Jerrold Nadler (D-NY) delivered the following opening statement for the Subcommittee on Courts, Intellectual Property, and the Internet hearing on "Examining the Use of 'Snap' Removals to Circumvent the Forum Defendant Rule":
"Thank you, Mr. Chairman. Corporate defendants have long sought to remove cases based on state law to federal court, believing that the expense and complexity of federal court offers those businesses advantages over less sophisticated plaintiffs with fewer resources.
"'Snap' removals—in which defendants exploit modern technology and a supposed statutory loophole to remove cases that should properly be heard in state court—represent the latest effort to game the system in favor of the wealthy and powerful at the expense of the average citizen and our overloaded federal court system.
"Under well-established law, known as diversity jurisdiction, when a plaintiff sues a defendant who is a resident of another state in state court, that defendant may remove the case to federal court. This provision is intended to protect against possible bias that may occur against an out-of-state defendant. When the defendant is sued in his or her own state, however, removal is not permitted because the concern for bias no longer exists. This is referred to as the forum defendant rule.
"Unfortunately, a combination of modern technology, a desire by some corporations to avoid state courts seemingly at any cost, and a supposed loophole in the removal statute has engendered a new tactic. Some courts have read the forum defendant rule, which requires that a defendant be a citizen of the state where the case is filed, and that it be properly served, to mean that removal to federal court may occur before service of process is completed.
"Many companies, therefore, now use computer programs to monitor court filings in real time and to remove any case against them in their own state by an out-of-state plaintiff before the plaintiff has time to effect service—sometimes in a matter of mere minutes—in an attempt to thwart the forum defendant rule.
"Although this sort of gamesmanship is clearly contrary to the spirit and the intent of the federal removal statute, some courts have ruled that such snap removals are permitted by a plain reading of the text. It is important, therefore, that Congress clarify the statute to put an end to this dubious maneuver.
"Not only do snap removals tilt the legal playing field in favor of large corporations, they also drain judicial resources, impose needless costs on the parties, and delay justice for plaintiffs seeking to hold wrongdoers accountable for the injuries they cause.
"This evasion of the well-established forum defendant rule also threatens state sovereignty and violates federalism principles by denying state courts the ability to shape state law. State courts should be the final arbiters of state law, but snap removals are increasingly putting new state-law questions into federal court.
"Snap removals also increase the complexity, duration, and cost of civil litigation, placing further burdens on plaintiffs, who tend to have fewer resources than comparatively well-funded corporate defendants.
"This issue may seem obscure, but it is a growing problem, and it has a very real impact on the lives of people seeking redress in their state courts. In an era where the courthouse doors are increasingly closed to ordinary Americans, snap removal can seem like just another turn of the deadbolt.
"I look forward to the witnesses’ testimony, and particularly their thoughts on how Congress can fix this important and growing problem. I yield back the balance of my time."