Monday, August 25, 2008

Fraudulent Joinder: Right versus Obligation to Remove

Fraudulent joinder is a familiar removal tool for defendants.  The doctrine establishes a right to remove by disregarding a jurisdictional spoiler's citizenship.  And 30 days is a familiar removal deadline for defendants: the removal statute's 30-day clock starts ticking from particular occurrences.  The interrelationship between the right to remove and the obligation (in the clock-ticking sense) is not always clear.   For example, an amended pleading clarifying that the amount in controversy exceeds the jurisdictional minimum starts the 30-day clock, but defendants need not wait for that amended pleading if they choose to remove and attempt to prove the amount by a preponderance of the evidence.  The clock starts ticking, generally, when a court paper makes it obvious, but the right to remove does not depend upon obviousness in the state-court record.  When does the 30-day clock start ticking in fraudulent-joinder cases?   What if the state court petition reveals an obviously bogus claim against the state-court spoiler?  Does this trigger the 30-day clock?  Recently, Judge Martinez didn't quite answer this question, but he did remand a case because "by not clearly stating when they learned of the alleged fraudulent joinder, Defendants have created both ambiguity and doubt in their Notice of Removal,and as a result the court finds that they did not properly remove the action."  Heads up, removers: Download Ayres.pdf   --RR

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