Removal, Unanimity, and Personal Jurisdiction After a Federal Claim Collapses
Pat, a citizen of State A, sued in State A state court. Pat named BuildCo, incorporated in Delaware with its principal place of business in State B, and SubCo, a State A corporation wholly owned by BuildCo that operates the job site. The complaint asserts three claims: (1) breach of a $90,000 construction contract against BuildCo; (2) a $20,000 state-law tort against SubCo; and (3) a $30,000 claim against BuildCo under a federal environmental statute. BuildCo's only State A contacts are a website that accepts orders from anyone and one shipment of materials to Pat. Pat served BuildCo on March 4 and SubCo on March 20. On April 1, BuildCo alone filed a notice of removal citing the federal claim; SubCo has appeared but filed no consent. In June, the federal claim was dismissed for failure to state a claim, and Pat moved to remand. BuildCo separately moved to dismiss for lack of personal jurisdiction.
1. Was removal procedurally proper, and should the case be remanded?
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Removal is jurisdictionally possible but procedurally defective. A defendant may remove a case that could have been filed in federal court originally. Claim 3 arises under federal law, so federal-question jurisdiction exists over it, and supplemental jurisdiction can carry the state claims; SubCo's State A citizenship does not trigger the forum-defendant bar because that bar applies only to diversity removal. BuildCo's notice was timely: it was served March 4 and filed April 1, within 30 days. The problem is unanimity. All defendants who have been served and are not nominal must join or consent to removal. SubCo was served March 20, and its 30-day removal window expired April 19. It never consented. The unanimity defect is procedural, not jurisdictional, but it was not cured within the statutory period, and a later consent should not rescue the notice. The court should remand. If the court instead treats the defect as curable, it must give SubCo a chance to consent, but on these facts remand is the proper result.
2. Does the State A court have personal jurisdiction over BuildCo on the contract claim?
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Specific jurisdiction requires purposeful availment, a claim-related contact, and reasonableness. BuildCo's website accepts orders from anyone, which is interactive, but there is only one shipment to Pat. A single isolated sale, without targeting State A customers, is not purposeful availment; the mere foreseeability that a product will enter the forum is not enough. If Pat ordered through a site that specifically markets to State A, or if BuildCo made repeated sales, the result could differ. SubCo's extensive State A contacts cannot be imputed to BuildCo merely because of common ownership; a parent-subsidiary relationship alone does not create an agency relationship. Pat would need to show BuildCo controls SubCo's day-to-day operations or that SubCo acted as BuildCo's agent in the transaction. On these facts, dismissal for lack of personal jurisdiction is likely, though the court might allow limited jurisdictional discovery.
3. After dismissing the federal claim, may the court retain the state claims?
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Once the federal claim is dismissed, the supplemental-jurisdiction statute permits the court to decline supplemental jurisdiction, and the traditional factors - judicial economy, convenience, fairness, and comity - point toward remand. The federal claim was dismissed at the pleading stage, so no federal judicial resources have been invested in the merits; the remaining claims are ordinary state contract and tort claims; and State A has a strong interest in interpreting its own tort law. There is no independent diversity jurisdiction because Pat and SubCo are both State A citizens, and supplemental jurisdiction does not provide an independent basis after the federal claim drops out. The court should remand the state claims. The tolling provision protects Pat's limitations period while the claims were in federal court and for 30 days after dismissal, so refiling in state court is protected.