# Raymond Street Partners LLC v. Cincinnati Indemnity Company

> District Court, N.D. Ohio · April 25, 2023

URL: https://www.frixlaw.com/law-library/cases/10371974

## Case

- **Court:** District Court, N.D. Ohio
- **Decided:** April 25, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OHIO
EASTERN DIVISION

RAYMOND STREET PARTNERS, LLC, ) CASENO. 1:23 CV 468
Plaintiff,
v. ) JUDGE DONALD C. NUGENT
THE CINCINNATI INDEMNITY Co., MEMORANDUM OPINION
) AND ORDER
Defendant. )

This matter is before the Court on the Plaintiff's Motion to Remand (ECF # 7). The
motion to remand is opposed by the Defendant. (ECF # 9). Having carefully considered the legal
and factual issues raised, and for the reasons that follow, the motion to remand is hereby
GRANTED.
BACKGROUND
Plaintiff, Raymond Street Partners, LLC (“Raymond Street”), filed this action in the
Court of Common Pleas of Cuyahoga County, Ohio on January 9, 2023, against Defendant The
Cincinnati Indemnity Company (“Cincinnati Indemnity”). Defendant removed the action to this
Court on March 8, 2023, before Plaintiff had completed service of process on Defendant.
Defendant asserts removal is proper under 28 U.S.C. § 1441 because this Court has original
jurisdiction over this matter because it is a civil action between citizens of different states and the
amount in controversy exceeds $75,000. See 28 U.S.C. § 1332(A). In this case, Plaintiff is a
limited liability company organized under Indiana law. Defendant is an insurance company
organized under the laws of Ohio with its principal place of business in Ohio. (Complaint, 1,

3) Neither party disputes that the amount in controversy exceeds $75,000 and that diversity
jurisdiction exists. Rather, Plaintiff asserts that Defendant, an Ohio corporation, may not remove
an action based on diversity jurisdiction under the removal statute. Specifically, 28 U.S. C. §
1441(b)(2) provides that where an action is removed solely on the basis of diversity of
citizenship, such action may not be removed if any of the properly joined and served defendants
is a citizen of the state in which the action is brought. Cincinnati Indemnity counters that it had
not been properly served prior to removal, thus removal is permitted. This type of situation has
been referred to by courts as a “snap removal.” See Gordon v. Goodyear Tire & Rubber Co.,
2022 WL 34069 at *4 (N.D. Ohio January 3, 2022).
STANDARD OF REVIEW
Federal courts have limited jurisdiction and may only exercise that power prescribed to
them by the Constitution or the United States Congress. See, e.g., Kokkonen v. Guardian Life
Ins. Co. of America., 511 U.S. 375, 377 (1994). Cases which have originally been filed in state
court may be removed to a federal district court pursuant to 28 U.S.C. § 1441(a) only if the
district court has original jurisdiction over the matter. District courts have original jurisdiction of
civil actions arising under the federal question provision of 28 U.S.C. § 1331 and the diversity of
citizenship provisions of 28 U.S. C. § 1332. A further exception to removal exists if the state
case is removed based solely upon a federal court’s diversity jurisdiction. Such cases “shall be
removable only if none of the parties in interest properly joined and served as defendants is a
citizen of the State in which such action is brought.” 28 U.S.C. 1441(b)(2). This is commonly
referred to as the “forum defendant” rule and “reflects the belief that even if diversity exists, a
forum defendant—a defendant who is a citizen of the state in which it is sued—has no reason to

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fear state court prejudice.” NFC Acquisition, LLC v. Comerica Bank, 640 F. Supp.2d 964, 968
(N.D. Ohio 2009) (citation omitted.)
A plaintiff may challenge a notice of removal in two ways. First, he may assert that the
removed action does not fall within the federal court’s original jurisdiction. 28 U.S.C. § 1441(a)
Second, a plaintiff may assert that there was a procedural defect in removal. The forum defendant
rule has been held to implicate a procedural challenge. Gentile v. Biogen Idec, Inc., 934
F.Supp.2d 313, 316 (D. Mass. 2013).
Courts must strictly construe the removal statutes and all doubts are to be resolved in
favor of remand. Eastman v. Marine Mech. Corp., 438 F.3d 544, 550 (6" Cir. 2006) The Sixth
Circuit has stated:
in the interest of comity and federalism, federal jurisdiction should
be exercised only when it is clearly established, and any ambiguity
regarding the scope of §1446(b) should be resolved in favor of
remand to the state courts.
Brierly, v. Alusuisse Flexible Packaging, Inc., 184 F.3d 527, 534 (6th Cir.1999).

DISCUSSION
1. Snap Removal
In this case, Plaintiff's counsel provided a copy of the complaint to Defendant’s counsel
before service was completed on the Defendant. Defendant then rushed to remove the action to
federal court arguing that the removal based solely on diversity jurisdiction was proper under the
plain language of 28 U.S. C. § 1441(b)(2) even though the Defendant is a forum defendant. There
are no non-forum defendants in this case. Plaintiff argues that § 1441(b)(2) prohibiting forum

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defendants from removing based upon diversity jurisdiction only applies to defendants that have
been “properly joined and served.”
Many courts have discussed this plain language argument, some have agreed and denied
remand while others refused to apply a plain language statutory interpretation approach finding
that it “leads to the untenable result that forum defendants can remove actions from state court as
long as they do so before they are served.” Ethington v. General Elec. Co., 575 F.Supp.2d 855,
861 (N.D. Ohio 2008)(citation omitted.) In Ethington, Judge Polster thoroughly evaluated the
plain language argument from both sides and rejected it finding:
a literal application of § 1441(b) would allow defendants to always avoid the
imposition of the forum defendant rule as long as they are monitoring state
dockets and avoiding service. See Brown, 2008 WL 2833294, at *5, 2008 U.S.
Dist. LEXIS 55490, at *13; DeAngelo—Shuayto, 2007 WL 4365311, at *3, 2007
U.S. Dist. LEXIS 92557, at *12. The approach advocated by the GE Defendants
would, in addition to eviscerating the forum defendant rule, likewise eviscerate a
plaintiff's well-established right to choice of forum, by essentially precluding a
plaintiff from ever being able to litigate a case in the defendant's own home state
courts if the defendants are sophisticated litigants.
Ethington, 575 F. Supp. 2d at 862. See also, Champion Chrysler Plymouth v. Dimension Service
Corporation, 2017 WL 72694 (S.D. Ohio Feb. 24, 2017)(collecting cases on snap removal,
analyzing statutory interpretation arguments and recommending remand)'; NFC Acquisition,
LLC, supra, 640 F.Supp.2d at 969 (rejecting plain language argument and remanding action
citing Judge Polster’s analysis in Etherington.); El Hassan v. URS Midwest, Inc., 2018 WL
6064869 at *3 (N.D. Ohio Nov. 18, 2018)(Judge Lioi determined that “under the better precedent
The district court adopted the magistrate judge’s report and recommendation and
remanded the case to state court. Champion Chrysler Plymouth v. Dimension Service
Corporation, 2017 WL 1276727 (S.D. Ohio April 6, 2017)
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in this court, a literal interpretation of § 1441(b) is inappropriate because it defeats the forum
defendant rule and its underlying policy.”); Gordon, supra, 2022 WL 34069 at *4 (Judge Lioi
“renews [the court’s] rejection of the practice of snap removals, finding --consistent with other
courts in the Northern District of Ohio— that it simply ‘could not have been the intent of the
legislature in drafting the ‘properly joined and served’ language’ to create an opportunity for the
type of gamesmanship exhibited by defendants...”); Grimm Scientific Industries, Inc. v. Foam
Supplies, Inc., 2022 WL 16569213 (S.D. Ohio Nov. 1, 2022)(reviewed cases involving snap
removal and found “ the better course of action is to follow in the footsteps of a substantial
number of the District Courts within the Sixth Circuit” and reject the “plain language” argument
and snap removal.)
After careful review of similar snap removal decisions in the Northern District of Ohio
and elsewhere, the Court agrees that the literal interpretation of § 1441(b)(2)’s “joined and
served” language would promote the same type of litigant gamesmanship that the forum
defendant rule seeks to limit and “eviscerate a plaintiff's well-established right to choice of
forum”. Etherington, 575 F. Supp. 2d at 862. This is especially true here, where the only
defendant in the case is a forum defendant that could not have been joined by the plaintiff in an
attempt to defeat diversity jurisdiction. Accordingly, the Court finds that Cincinnati Indemnity’s
removal of this case was improper.
2. Removal Improper before Service
Plaintiff argues that Defendant’s removal was procedurally defective because it was taken
before any defendant was served. While Cincinnati Indemnity is the only defendant in this case,
there are a number of cases which have determined that the removal statute assumed that at least

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one defendant had been served, and precludes removal until at least one defendant is served. See
Gentile v. Biogen Idec, Inc., 934 F.Supp.2d 313 (D. Mass 2013).
In Gentile, a New York citizen filed suit in Massachusetts Superior Court against
Biogen, a Massachusetts citizen, and Elan Pharmaceuticals, a non-forum defendant. Elan
removed the action to federal court before either defendant was served. While recognizing the
arguments for and against snap removal based upon the “joined and served” language of §
1441(b), Judge Woodlock determined that a careful reading of all of the words of § 1441(b)
shows that a party in interest must be served prior to removal. Specifically, section 1441(b)(2)
precludes removal “if any of the parties in interest properly joined and served as defendants” is a
forum defendant. The use of the word “any” shows that the statute assumes that at least one party
had been served. Jd. at 318. Judge Woodlock explained:
Precluding removal until at least one defendant has been served protects
against docket trolls with a quick finger on the trigger of removal. Under
the reading I have given to section 1441(b) here, plaintiffs legitimately
seeking to join a forum defendant face the modest burden of serving that
defendant before any others. Ifa plaintiff serves a non-forum defendant
before serving a forum defendant, he has effectively chosen to waive an
objection to the removal by a nimble non-forum defendant who thereafter
removes the case before service upon a forum defendant named in the
complaint. And, even when a forum defendant is served first, my reading
anticipates a situation in which an unserved non-forum defendant may
remove following service on a forum defendant, in hopes of arguing that
joinder of the forum defendant was fraudulent. This reading of the statute
thus accommodates the clear congressional purpose animating section
1441(b)— preventing abuse by plaintiffs in forum selection—while also
closing an unintended loophole incentivizing parallel abuse by defendants
seeking to escape a state forum in which a co-defendant is a citizen, all
without doing violence to the plain language of the statute.
Id. at 322-23.
Several other courts have also determined that § 1441 requires that at least one party in

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interest be joined and served before removal is permitted. See Cincinnati Ins. Co. v. Omega Elec.
& Sign Co., No. 1:22-CV-12964, 2023 WL 372642, at *2 (E.D. Mich. Jan. 24, 2023) (even □□ □
case is “removable” on diversity grounds, it may not be removed unless “any of the parties in
interest [was] properly joined and served as [a] defendant[ ].” 28 U.S.C. § 1441(b)(2)); accord
Murphy v. Inman, No. 17-13293, 2018 WL 8809349, at *12—13 (E.D. Mich. Feb. 21, 2018)
(“Removal is therefore improper before any defendant has been served.’’) (collecting cases);
Coburn vy. Hixson Weight Loss Ctr. & Shot Spot, M.D., Inc., No. 1:21-CV-244, 2022 WL
164541, at *4 (E.D. Tenn. Jan. 18, 2022) (“[B]efore service of any defendant, removal is not
appropriate.”); Allied P & C Ins. v. Dowler, No. 1:21-CV-00119, 2021 WL 4226227, at *4 (S.D.
Ohio July 27, 2021) (holding that § 1441(b)(2) requires that “a party in interest had been served
prior to removal.’’)
Cincinnati Indemnity did not address this argument in its opposition. This interpretation
of § 1441(b)(2) avoids the forum defendant controversy addressed in part 1 above. However,
under either interpretation, Cincinnati Indemnity’s removal is improper.
CONCLUSION
For the reasons stated above, the Plaintiff's Motion to Remand (ECF # 7) is GRANTED.
This action is REMANDED to the Court of Common Pleas for Cuyahoga County, Ohio.
IT IS SO ORDERED.

DONALD C. ft
United States District Judge
DATED: And os, 2 3

Le

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10371974. Public record. Not legal advice.