Removal After the Plaintiff Drops the Only Nondiverse Defendant
On January 6, Priya, an Oklahoma citizen, filed suit in Oklahoma County District Court against Harper, an Oklahoma citizen, and Vance, a Texas citizen. The single negligence claim arose from a collision in Oklahoma City, and the complaint alleged damages 'in excess of $200,000.' On February 3, Priya voluntarily dismissed Harper without prejudice after Harper's insurer accepted liability. Vance received a file-stamped copy of the dismissal order on February 5. On February 20, Vance filed a notice of removal in the Western District of Oklahoma, asserting diversity jurisdiction. Priya moved to remand. She argues that Vance missed the 30-day removal deadline because the original complaint was not removable and that the dismissal was a sham designed to create diversity. Vance responds that the dismissal order is an 'order' under 28 U.S.C. § 1446(b)(3) and that removal is timely. Harper's joinder was not fraudulent; Priya dismissed her because the insurer's policy limit was $50,000 and she wanted a single defendant. The case has not been tried.
1. Should the federal court grant Priya's motion to remand? Explain the removal triggers, the voluntary dismissal, and the one-year limit.
Read the worked answer
No. Removal is governed by 28 U.S.C. §§ 1441 and 1446. A defendant must remove within 30 days of receipt of the initial pleading, but if the case was not initially removable, § 1446(b)(3) gives 30 days after receipt of an amended pleading, motion, order, or other paper from which it first appears that the case is removable. At commencement, complete diversity was lacking because Priya and Harper were both Oklahoma citizens. The February 3 voluntary dismissal of Harper was an order that first made the case removable; Vance received it February 5 and filed February 20, within 30 days. The one-year limit in § 1446(c)(1) does not bar removal because it applies only to removal based on diversity more than one year after commencement, and this removal occurred about six weeks after filing. The voluntary-involuntary rule also supports removal because the dismissal was Priya's voluntary act, not a court-ordered involuntary dismissal. The court should not treat the dismissal as a sham: Priya had a legitimate reason (the $50,000 policy limit), Harper's joinder was not fraudulent, and there is no evidence the dismissal was engineered solely to manipulate federal jurisdiction. The amount in controversy is satisfied by the $200,000 allegation, which is not legally impossible. Deny remand.
2. After remand is denied, Priya moves to amend to re-add Harper. How should the court rule under § 1447(e)?
Read the worked answer
Section 1447(e) applies because Harper is a nondiverse defendant whose joinder would destroy diversity. The court has discretion to deny joinder or permit it and remand. Relevant factors include the plaintiff's motive, the timing of the motion, whether the claim against the new defendant is colorable, prejudice to the defendant, and judicial economy. Priya's quick re-adding of Harper after removal may look like forum manipulation, but she has a colorable claim and originally dismissed Harper only because of the $50,000 policy limit. If she moves promptly, the claim is timely, and Vance shows no bad-faith prejudice beyond returning to state court, the court may permit joinder and remand. If the court finds the motion is solely to defeat diversity, it should deny joinder and keep the case in federal court.