Novak v. Bank of New York Mellon Trust Co., NA. , 783 F.3d 910 ( 2015 )


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  •           United States Court of Appeals
    For the First Circuit
    No. 13-2543
    LAWRENCE P. NOVAK,
    Plaintiff, Appellant,
    v.
    THE BANK OF NEW YORK MELLON TRUST CO., NA.,
    as Successor to J.P. Morgan Chase Bank, as Trustee,
    on Behalf of Mortgage Loan Trust 2004-2
    Asset-Backed Certificates 2004-2
    f/k/a The Bank of New York Trust Co., and
    SELECT PORTFOLIO SERVICING, INC.,
    Defendants, Appellees.
    APPEAL FROM THE UNITED STATES DISTRICT COURT
    FOR THE DISTRICT OF MASSACHUSETTS
    [Hon. Nathaniel M. Gorton, U.S. District Judge]
    Before
    Howard, Kayatta and Barron,
    Circuit Judges.
    Lawrence P. Novak on brief, pro se.
    Peter F. Carr, II and Eckert Seamans Cherin & Mellott, LLC on
    brief for appellees.
    April 21, 2015
    PER CURIAM.   This appeal requires us to resolve a single
    question: whether a defendant may seek to remove a state-court
    action to federal court before being formally served.     Construing
    the relevant statute, 28 U.S.C. § 1446(b)(1), the Supreme Court has
    held that a defendant's statutory period to remove does not begin
    to run, and a defendant is not required to remove, until the
    defendant has been served.    Murphy Bros., Inc. v. Michetti Pipe
    Stringing, Inc., 
    526 U.S. 344
    , 347-48 (1999).    Plaintiff-Appellant
    Lawrence Novak contends, however, that service is so essential to
    removal that a defendant is precluded from filing a notice of
    removal until after formal service of process.          Because the
    statutory text and legislative history indicate otherwise, however,
    we reject Novak's reading of the statute.       Instead, we conclude
    that service is generally not a prerequisite for removal and that
    a defendant may remove a state-court action to federal court any
    time after the lawsuit is filed but before the statutorily-defined
    period for removal ends.1
    1
    Because Novak has not named a defendant who is a citizen of
    the forum state in this case, we need not consider, and do not
    decide, whether Select Portfolio Servicing's notice of removal
    would have been proper under the forum-defendant rule, 28 U.S.C. §
    1441(b)(2), had one of the defendants in this case been a forum
    defendant. See generally, Gentile v. Biogen Idec, Inc., 934 F.
    Supp. 2d 313, 316-18 (D. Mass. 2013) (discussing various courts'
    approaches to pre-service removal under § 1441(b)(2)); Lothrop v.
    N. Am. Air Charter, Inc., No. 13-10235-DPW, 
    2013 WL 3863917
    , at *2
    (D. Mass. July 11, 2013) (concluding that § 1441(b)(2) "create[s]
    only a narrow exception, in cases involving forum defendants, to
    the generally-accepted rule that 'formal service is not required
    before a defendant can remove'" (citation omitted)).
    -2-
    Invoking   diversity   jurisdiction,   Defendant-Appellee
    Select Portfolio Servicing removed this action from Massachusetts
    state court to the United States District Court for the District of
    Massachusetts.     At the time of removal, Novak had not yet served
    any of the defendants in this action, including Select Portfolio
    Servicing.    The district court denied Novak's motion to remand and
    dismissed the action pursuant to Federal Rule of Civil Procedure
    12(b)(6).     Novak now contends that removal was improper because
    Select Portfolio Servicing had not yet been formally served at the
    time that it sought to remove.2
    In 28 U.S.C. § 1446(b)(1) Congress has set forth the
    period during which a defendant may remove a pending action from
    state to federal court.     That statute specifies that:
    The notice of removal of a civil action
    or proceeding shall be filed within 30 days
    after the receipt by the defendant, through
    service or otherwise, of a copy of the initial
    pleading setting forth the claim for relief
    upon which such action or proceeding is based,
    or within 30 days after the service of summons
    upon the defendant if such initial pleading
    has then been filed in court and is not
    required to be served on the defendant,
    whichever period is shorter.
    2
    This specific argument for remand was only belatedly
    included in a motion to amend Novak's original motion to remand.
    We need not determine whether the district court erred in denying
    Novak's motion to amend, however, because Novak's legal argument
    fails on its merits. See Samaan v. St. Joseph Hosp., 
    670 F.3d 21
    ,
    27 (1st Cir. 2012) (reviewing denial of a motion to remand de novo
    where the facts are not in dispute).
    -3-
    28 U.S.C. § 1446(b)(1) (emphasis added). Congress thus created two
    alternative points at which to fix the defendant's deadline for
    removing: one 30 days following receipt of the initial pleading,
    and the other 30 days following service of process at a time that
    the initial pleading has been filed in state court.   In doing so,
    Congress accounted for variations in state law regarding whether
    the complaint must be included with service of the summons, with
    the goal of making certain that defendants would have access to the
    complaint before being required to file a notice of removal.
    Murphy 
    Bros., 526 U.S. at 351
    .
    Although Novak asserts that removal is not permissible
    before a defendant has been served, we think it is clear that a
    defendant generally need not wait until formal receipt of service
    to remove.   There is no indication that, in using the phrase
    "within 30 days after," Congress intended to prohibit a defendant
    from filing a notice of removal before having been formally served
    and before the 30-day clock has begun to run.         Instead, the
    statute's text, as illuminated by the surrounding provisions, and
    the legislative history both indicate that the statute's reference
    to service is intended only to delineate the particular time when
    a defendant's ability to remove expires.
    Beginning with the statutory language's ordinary meaning,
    we note that "within" has various meanings. Cf. Tyler v. Cain, 
    533 U.S. 656
    , 662 (2001).   When coupled with "after" in the context of
    -4-
    the    removal    statute,    those    meanings   would   have   differing
    consequences.     For example, "within" could be used to signify a
    specific, circumscribed time range.          Webster's New International
    Dictionary 2627 (3d ed. 1993) (defining "within" as "during the
    course of" or "at any time during").            If used in that way, the
    phrase "within 30 days after [service]" would describe a bounded
    time range, beginning with service, both before and after which a
    defendant is unable to remove. Alternatively, if the term "within"
    is used to mean "before the end of" or "not longer in time than,"
    
    id., then the
    phrase "within 30 days after [service]" might simply
    define the specific point at which a case is no longer removable,
    but allow removal at any point up until that time.
    While either of these uses of "within . . . after" might
    seem plausible, other portions of the removal statute make plain
    that the more open-ended use was the intended one. See Robinson v.
    Shell Oil Co., 
    519 U.S. 337
    , 341 (1997) (noting that the "plainness
    or ambiguity" of a statute's language can be determined by "the
    specific context in which that language is used, and the broader
    context of the statute as a whole").           For one thing, we find it
    informative that a later subsection of § 1446 describes "the 30-day
    requirement of subsection (b)" using slightly modified language
    that   tracks    the   more   open-ended    definition.   See    28   U.S.C.
    § 1446(g) ("not later than            30 days after receiving, through
    service, notice of any such proceeding").          This locution counsels
    -5-
    in favor of reading "within 30 days after" as indicating that a
    defendant can remove at any time before the removal period runs,
    including before the clock begins ticking.
    Most tellingly, however, § 1446(b)(1) states that, of the
    two possible removal periods, a notice of removal must be filed
    during "whichever period is shorter."         
    Id. § 1446(b)(1).
           It is a
    "cardinal principle of statutory construction that we must give
    effect, if possible, to every clause and word of a statute."
    Williams v. Taylor, 
    529 U.S. 362
    , 404 (2002) (citation and internal
    quotation marks omitted).        As Novak reads the statute, a defendant
    is precluded from removing before receiving service of process and,
    thus, before either 30-day clock begins to run.             But his reading
    results in two time-bound removal periods of identical length: 30
    days.    Under that construction, the final clause of the subsection
    serves    no    purpose.    To   properly   give   effect   to   the   phrase
    "whichever period is shorter," then, we are compelled to interpret
    the removal "period" to run from the action's inception and,
    accordingly, to read the statute to permit a defendant to file a
    notice of removal before receiving formal service.
    Legislative history supports our reading of the intended
    meaning of "within 30 days after."          The precursor to the current
    removal statute permitted a defendant to remove "at the time, or
    any time before" the defendant was required to respond to the
    complaint under the applicable state law.           28 U.S.C. § 72 (1940)
    -6-
    (repealed 1948) (emphasis added); see also Murphy 
    Bros., 526 U.S. at 351
    .    Certainly, this wording more clearly indicated that
    removal was possible at any time after the state-law action was
    filed.    But there is no indication that Congress intended to
    meaningfully change that possibility when it reworded the statute
    to take account of variations in state law. Indeed, both the House
    and the Senate reports suggest that Congress intended that the
    amended statute would continue only to set the time at which a
    defendant's ability to remove expires and that a defendant may, but
    is not required to, file a notice of removal before the removal
    clock begins to run.     See S. Rep. No. 81-303, at 6 (1949),
    reprinted in 1949 U.S.C.C.A.N. 1248, 1254 (noting that the measure
    reflects that "a defendant is not required to file his petition for
    removal until 20 days [now 30] after he has received (or it has
    been made available to him) a copy of the initial pleading filed by
    the plaintiff . . . ." (emphasis added)); H.R. Rep. No. 81-352, at
    14 (1949), reprinted in 1949 U.S.C.C.A.N. 1254, 1268 (noting that
    "the petition for removal need not be filed until 20 days [now 30]
    after the defendant has received a copy of the plaintiff's initial
    pleading" (emphasis added)).
    Ultimately, Novak does little beyond citing to Murphy
    Brothers for his claim that removal before service comes too early.
    Yet, in noting that service of process "is fundamental to any
    procedural imposition on a named defendant," and thus interpreting
    -7-
    § 1446(b)(1)'s first time period (removal following receipt of the
    initial pleading) to begin to run only once a defendant has been
    
    served, 526 U.S. at 350
    , the Court gave no indication that a
    defendant was also prohibited from filing a notice of removal
    before service. We read the statute to contemplate otherwise. Our
    interpretation thus aligns with the decisions of other federal
    courts that have considered this question since Murphy Brothers.
    As far as we can tell, every one has concluded that formal service
    is not generally required before a defendant may file a notice of
    removal.   See, e.g., La Russo v. St. George's Univ. Sch. of Med.,
    
    747 F.3d 90
    , 97 (2d Cir. 2014); Delgado v. Shell Oil Co., 
    231 F.3d 165
    , 177 (5th Cir. 2000); Whitehurst v. Wal-Mart, 
    306 F. App'x 446
    ,
    448 (11th Cir. 2008); Sutler v. Redland Ins. Co., No. 12-10656-RWZ,
    
    2012 WL 5240124
    , at *2 (D. Mass. Oct. 24, 2012) (collecting cases).
    And, because "Congress is presumed to be aware of an administrative
    or   judicial   interpretation    of   a   statute   and   to   adopt   that
    interpretation    when   it   re-enacts    a   statute   without   change,"
    Lorillard v. Pons, 
    434 U.S. 575
    , 580 (1978), we find it informative
    that Congress made no effort to cast aside this clear consensus
    among federal courts when it amended § 1446 in 2011 without making
    any substantive change to subsection (b)(1), see Federal Courts
    -8-
    Jurisdiction and Venue Clarification Act of 2011, Pub. L. No. 112-
    63, § 103, 125 Stat. 758, 760.3
    Because the defendant in this case was not precluded from
    removing before receiving service, we AFFIRM the judgment of the
    district court.
    3
    Notwithstanding this consensus, we recognize that the
    Supreme Court's holding in Murphy Brothers means that a defendant
    must receive service before either of § 1446(b)(1)'s 30-day time
    periods are triggered.     Although, as a practical matter, that
    holding may limit the universe of situations in which one period of
    removal is "shorter" than the other, examples remain. Suppose a
    plaintiff files an initial pleading in state court and serves the
    defendant with a summons five days later. Consistent with state
    law, however, the plaintiff does not include the initial pleading
    with that summons.       Forty days after that, the plaintiff
    nevertheless formally provides the defendant with a copy of the
    complaint (or the defendant otherwise receives "the initial
    pleading setting forth the claim for relief"). The defendant might
    attempt to invoke the first clause of § 1446(b)(1) to argue that he
    was only required to remove within 30 days after receiving the
    complaint (a period that would end seventy days after the action
    was commenced). Yet, a "shorter" time period for removal would
    follow from applying the second clause of § 1446(b)(1) -- requiring
    the defendant to have removed thirty days from service at a time
    that the "initial pleading has then been filed in court" (a period
    that would end thirty-five days after the action was commenced).
    -9-
    

Document Info

Docket Number: 13-2543

Citation Numbers: 783 F.3d 910, 2015 U.S. App. LEXIS 6598, 2015 WL 1787621

Judges: Barron, Howard, Kayatta, Per Curiam

Filed Date: 4/21/2015

Precedential Status: Precedential

Modified Date: 10/19/2024