Petition for Writ of Certiorari — Maremmont Corp. v. St. John (No. 09-568)

Supreme Court, U.S.

4 FILED

09-568 NOV 6 - 2009

No. 09-

IN THE

Supreme Court of the United States

MAREMONT CORPORATION,

Petitioner,

We

FLORENCE DIANE ST. JOHN, Individually and as

Administratrix ad Procsequendum of the Estate of

HAROLD ST. JOHN,

Respondent.

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the Third Circuit

PETITION FOR A WRIT OF CERTIORARI

JOHN C. CANONI CARTER G. PHILLIPS*

KASOWITZ, BENSON, JACQUELINE G. COOPER

TORRES & FRIEDMAN LLP JAMES P. YOUNG

1633 Broadway RICHARD E. YOUNG

New York, NY 10019 SIDLEY AUSTIN LLP

(212) 506-1700 1501 K Street, N.W.

Washington, D.C. 20005

(202) 736-8000

Counsel for Petitioner

November 6, 2009 * Counsel of Record

ST A RES RNS AS SS NEES SAIN RSE EDNESLIRPE SAE

WILSON-EPES PRINTING CO., INC. — (202) 789-0096 -— WASHINGTON, D.C. 20002

QUESTION PRESENTED

Whether the Third Circuit erred in holding that a

defendant waived its right to remove a diversity case

to federal court where the defendant filed a notice of

removal less than six hours after the unexpected

dismissal of the only non-diverse co-defendant and

the brief delay was explained by defendant’s need to

confirm the removability of the case.

(1)

11

PARTIES TO THE PROCEEDING

In addition to the parties in the caption, the

following parties were defendants below:

Affinia Group, Inc.

Arvin Industries, Inc.

Borg-Warner Morse TEC

Bosch Braking Systems Corp.

Brake Parts, Inc.

Carlisle Companies, Inc.

Chrysler Motors, LILC

Dana Corp.

EIS Brakes

Ford Motor Co.

General Motors Corp.

Honeywell International, Inc.

National Automotive Parts Association

National Gasket Co.

Pneumo-Abex, LLC

Toyota Motor Sales, USA, Inc.

Trane US, Inc.

Western Auto Supply Co.

RULE 29.6 STATEMENT

Pursuant to Rule 29.6 of the Rules of this Court,

petitioner Maremont Corporation states that

ArvinMeritor, Inc. is its parent corporation and owns

100% of its stock.

TABLE OF CONTENTS

Page

QUESTION PRESENT BD i...0:..0sccecsccsccsseesesevensees 1

PARTIES TO THE PROCEEDING ..................... il

PE hy BO EPA FEE ivaivcsseseriscssenssvssdcencnetoones il

TABLE OF AUTRE CGS ce cccessscesesccescravcssssnscvas Vv

CREE BIUREAI YE oxicsedjraesdescosdepiensmevouin ]

PAF BI ins sihctnte te cco ea bas 1

STATUTORY PROVISIONS INVOLVED............ ]

STATEMENT OF THE CASE........................ eee eee 2

AP, PRCCURL BOCRMPOUIG .occiccescsncedsssersessscesecees 3

FS. PROCOOMIIIS TRGIOW oc s i ccicecisinescsesoscscvsscaseces 4

REASONS FOR GRANTING THE PETITION... 7

[. THE DECISION BELOW CONFLICTS

WITH DECISIONS OF OTHER COURTS

CPE FA er CM iacscseknkixcctvinensecsenca sian eas 7

I. THE COURT OF APPEALS’ WAIVER

STANDARD FAILS TO VINDICATE

DEFENDANTS’ “ABSOLUTE” FEDERAL

PRECEOE PBR N PMID s5caccccchccensiensernavenasssans 13

Il. THE COURT OF APPEALS’ WAIVER

RULING POSES AN ISSUE OF FUNDA-

MENTAL IMPORTANC Bis ccccscosssvescesesscsssseces 18

CPi ie RP MIEY ivehacasdonssetanectanscplectiiagedaeunickenaee: 22

APPENDIX

APPENDIX A: Florence Diane St. John v.

Affina Group, Inc., No. 09-2573 (3d Cir. Sept.

3, 2008) (remand OLder) ...c,..,.0c.scacerscesesasesccconvens la

(111)

iV

APPENDIX B: Florence Diane St. John v.

Affina Group, Inc., No. 09-2501, 2009 U.S.

Dist LEXIS 47787 (D.N.J. June 8, 2009)

eg tu 2) aR Am ere peas br 2a

APPENDIX C: Florence Diane St. John vv.

Carlisle, Inc., No. 09-cv-2501 (D.N.J. May 29,

BD CTPIIRIN CIE Do osvc acc ccecvcescccciccscccocscsnce sees 9a

APPENDIX D: Florence Diane St. John v.

Affina Group, Inc., No. 09-2573 (3d Cir. Oct.

8, 2009) (order denying rehearing and

PTI Gy TID agin ccanceas bvncncen ssa secdessniativiavies lla

V

TABLE OF AUTHORITIES

CASES Page

Akin v. Ashland Chem. Co., 156 F.3d 1030

Ee Ib ohas vaca kuchussesxdectcnasewbiatenayans 10, 11

Al-Hilfy v. Rexnord Indus., LLC, 2008 WL

4610022 (D. Neb. Oct. 15, 2008)................ 8

Aqualon Co. v. MAC Equip., Inc., 149 F.3d

262 (4th Cir. 1998).............. Rey err eee 7

Arthur L. Christoffersen Irrevocable Trust

v. Yellow Book USA, Inc., 2006 WL

2925655 (N.D. Iowa Oct. 11, 2006)............ 8

Barabin v. Albany Intl Corp., 2007 WL

4376181 (W.D. Wash. Dec. 12, 2007) ........ 8, 12

Bedell v. H.R.C. Ltd., 522 F. Supp. 732

Be i iasikdisevavdnonsecapanndintbncbin rin 8

Buckhannon Bd. & Care Home, Inc. v. W.

Va. Dep’t of Health & Human Res., 532

BI Soc cok ss cedenn ya con stare Eron sited, 13

Carlsbad Tech. Inc. v. HIF Bio, Inc., 129 S.

I I ys vcaidan bas uswes sacpcseGésetitessvivaneecia 6, 19

Cavadi v. Bank of Am., N.A., 2007 WL

8226166 (D.N.H. Oct. 30, 2007)................. 8, 10

Cooper Indus., Inc. v. Leatherman Tool

Group, Inc., 532 U.S. 424 (2001) ............... 13

DRI Mark Prods., Inc. v. Meyercord Co.,

194 F. Supp. 536 (S.D.N.Y. 1961).............. 9

Ehleiter v. Grapetree Shores, Inc., 482 F.3d

rr Ce GP, BT eniniessctharscctrtavceciadassiees 17

Ellis v. Coventry Capital I LLC, 2008 WIL.

4396349 (N.D. Ill. Sept. 24, 2008) ............. 8

Forrester v. Penn Lyon Homes, Inc., 553

F.3d 340 (4th Cir. 200B)..........ccescccsesccssssees, 17

Foster v. Chesapeake Ins. Co., 933 F.2d

ST Ce a, SE iotiacess editrerccoccesces 9

Grievance Adm’r v. Fieger, 409 F. Supp. 2d

BSS (5.L). WECM. ZOOS) oc neccvccccedccsccsacne ies 8

v1

TABLE OF AUTHORITIES — continued

Page

Grubb v. Donegal Mut. Ins. Co., 935 F.2d

Eee CURCUe Gey BPE ED crn vccsccvecessntscccncnasesens 10, 11, 16

Guar. Trust Co. v. York, 326 U.S. 99

REED ces oa oar ed nchlau tongs anny aeaaveries 14

Health Care Serv. Corp. v. Pollitt, 78

U.S.L.W. 3050 (U.S. Oct. 13, 2009)........... 18

Heniford v. Am. Motors Sales Corp., 471 F.

BR, TE CAFS, LTO) 5 ccsicinserccercocsscscs coos 12, 15

Hernandez-Lopez v. Commonwealth of

P.R., 30 F. Supp. 2d 205 (D.P.R. 1998) ..... 8

Jerome B. Grubart, Inc. v. Great Lakes

Dredge & Dock Co., 513 U.S. 527 (19985)... 14

Johnson v. Celotex Corp., 701 F. Supp. 553

iin vec asen vdiaesasvbasibesesreane 12, 15

Louts Trauth Dairy LLC v. Risers Corp.,

2002 WL 31951268 (S.D. Ohio Dec. 10,

asc rete ora og. caused gsi ban cucveyina’ 8

Mattel, Inc. v. Bryant, 441 F. Supp. 2d

1081 (C.D. Cal. 2005), affd, 446 F.3d

BR COI Oe, ES oncs i osancacnvieaseexekauevese ... 8, 10

McNutt v. Gen. Motors Acceptance Corp.,

SE rte 8 WO OE ceskicn s cucccsan nes sacesnasissurakecs 19

Mercury Constr. Co. v. Moses H. Cone

Mem't Hosp. (In re Mercury Constr.

Corp.), 656 F.2d 933 (4th Cir. 1981), aff'd

on other grounds, 460 U.S. 1 (1988).......... 17

Miranda v. Rodriguez, 2009 WL 32746

RO Ce a: | ra 8

Murphy Bros. v. Michetti Pipe Stringing,

BA ST FG ee ee 19

Nicholas v. KBR, Inc., 565 F.3d 904 (5th

ap. eal SS AE EEO DOLD RET Ete RIOR MER A 17

Nungesser v. Bryant, 2007 WL 4374022 (D.

PEI I eo eee ee 8, 10

Vill

TABLE OF AUTHORITIES — continued

Page

O'Keefe v. State Farm Fire & Cas. Co.,

2009 WL 95039 (S.D. Miss. Jan. 138,

MONEE cos cu nanauceokudaradhedieee oieucaviesenarecuasadeuda icine: 8

Oster v. Standard Life Ins. Co., 2009 WL

1260174 (N.D. Cal. May 6, 2009) .............. 8

Petroleum Pipe Ams. Corp. v. Jindal Saw,

Ltd., 575 F.3d 476 (5th Cir. 2009)............. 17

Powerex Corp. v. Reliant Energy Serus.,

Fb OE Th, BE Ce i ciessscecsesccesvzidecneses 19

Quackenbush v. Allstate Ins. Co., 517 U.S.

UN II 6a 0s5 cactus oss aceutassiancuiasesucaeneriies 19

Regis Assocs. v. Rank Hotels (Mgmt.) Ltd.,

894 F.2d 193 (6th Cir. 1990).......... 7, 12, 13, 14

Resolution Trust Corp. v. Bayside

Developers, 43 F.3d 1230 (9th Cir. 1995).. 7

Roper v. Saxon Mortgage Servs., Inc., 2009

WL 1259193 (N.D. Ga. May 5, 2009)......... 8

Rosenthal v. Coates, 148 U.S. 142 (1893)..... 16

Rothner v. City of Chi., 879 F.2d 1402 (7th

Ra, RENEE cicnizeceisnsaicaisnricaussuacoactmennuiceron passim

Rush v. Oppenheimer & Co., 779 F.2d 885

Re A I iene tca crusts ta wa lecelad aehataseias 18

Schoen v. Presbyterian Health Plan, Inc.,

2009 WL 1299680 (D.N.M. Feb. 19,

DEE Aine cisvosebasedbbeiies asadinvibencoddgckaweietaniadents 8

Snapper, Inc. v. Redan, 171 F.3d 1249

Ce ee. BIE otc di cdnccubecniodvendiesdiccsiintonasdens 7

Stewart v. W. Va. Employers’ Mut. Ins. Co.,

2009 WL 2599306 (S.D. W. Va. Aug. 20,

SE vucesocs estagacacsaoecisaucavakvasacaceiinc ccna 8

Swan v. Cmty. Relations-Soc. Dev.

Comm'n, 374 F. Supp. 9 (E.D. Wis.

DI oc cicet or aac acusuas ede ceakca wea: wcaeeneawenaanaans 8

Tedford v. Warner-Lambert Co., 327 F.3d

ME WH Gr NE cence cn csi cocaeccessdscpanvatina, 7, 16

V1ll

TABLE OF AUTHORITIES — continued

Page

Things Remembered, Inc. v. Petrarca, 516

Ne aul adavaeksevnes 19

Vandeventer v. Guimond, 494 F. Supp. 2d

De CEP, BUR, ITED viacasccoccrecdecscvesarszssceiave: 10

Weltman v. Silna, 879 F.2d 425 (8th Cir.

RPGR el ape ee pe gE ROE Aan 12

Whitten v. Michelin Am. Research & Dev.

Corp., 2006 WL 1645833 (W.D. Tenn.

June 8, 2006).......... RP ond AO A A a DO 8

Wis. Dep't of Corr. v. Schacht, 524 U.S. 381

SCAR AS SA PGE ey ae Te 19

STATUTES

9U.8.C. $§ 1 ef seg. .........5.. oes vasbeadan ies ones 17

28 U.S.C. § 1332........ Se ee ae eae Ga ]

a convcunvucssersesdsssrsencosousiorsbs ]

oc eesesdsasvoce shnsvssosovares 15, 21

ME 5 cies tater suurainscsckehsaneneunesooued 6

RULE

Sup. Ct. R. 10........ Sten ce muae ta tenw nas iekaedeorens 7

LEGISLATIVE HISTORY

H.R. Rep. No. 100-889 (1988) ...........-... 14, 19, 20

SCHOLARLY AUTHORITIES

16 James W. Moore, Moore’s Federal

PRACCCE CBG OC. ZOOS) ooccccsccscescccccscescecssssts-. 8, 10

EK. Farish Percy, Making A Federal Case Of

It: Removing Ctvil Cases To Federal

Court Based On Fraudulent Joinder, 91

SOUS Bs, TRU. TH CD eescese ces dnncosescavecevdsc: 20

PETITION FOR A WRIT OF CERTIORARI

Petitioner Maremont Corporation respectfully

petitions for a writ of certiorari to review the

judgment and opinion of the United States Court of

Appeals for the Third Circuit.

OPINIONS BELOW

The decision of the court of appeals, Pet. App. la, is

unreported. Its decision denying the petition for

rehearing and rehearing en banc, Pet. App. 11a, is

unreported. The order of the district court, Pet. App.

9a-10a, is unreported. The district court’s decision

granting a stay of its order pending appeal, Pet. App.

2a-8a, is reported at 2009 U.S. Dist. LEXIS 47787.

JURISDICTION

The court of appeals issued its order on September

3, 2009. Pet. App. la. A timely petition for rehearing

and rehearing en banc was denied on October 8,

2009. Jd. at lla. ‘The jurisdiction of this Court is

invoked pursuant to 28 U.S.C. § 1254(1).

STATUTORY PROVISIONS INVOLVED

28 U.S.C. § 1332, which provides:

(a) The district courts shall have original

jurisdiction of all civil actions where the matter

in controversy exceeds the sum or value of

$75,000, exclusive of interest and costs, and is

between —

(1) citizens of different States; ...

28 U.S.C. § 1441, which provides:

(a) Except as otherwise expressly provided by Act

of Congress, any civil action brought in a State

9)

as

court of which the district courts of the United

States have original jurisdiction, may be

removed by the defendant or the defendants, to

the district court of the United States for the

district and division embracing the place where

such action is pending...

(b) Any civil action of which the district courts

have original jurisdiction founded on a claim or

right arising under the Constitution, treaties or

laws of the United States shall be removable

without regard to the citizenship or residence of

the parties. Any other such action 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.

STATEMENT OF THE CASE

The decision below conflicts with decisions of other

courts of appeals on the legal standard that governs

whether a defendant, through conduct in the state

court litigation, has waived the statutory right to

remove a case to federal court. While other federal

courts have held that any such _ litigation-based

waiver must be “clear and unequivocal,” the Third

Circuit held that petitioner waived its removal rights

in a_- situation where petitioner clearly and

unequivocally asserted and pursued its right to a

federal forum by investigating the basis for and

seeking removal within six hours of first becoming

aware of the possible ground for removal. ‘This

decision simply cannot be squared with a defendant’s

statutory entitlement to remove diversity cases to

federal court and the purposes of federal diversity

jurisdiction. In addition, this decision presents an

issue of national importance because of the need to

3

ensure that the standard for waiver is applied evenly

across the country and to ensure that defendants in

cases that become removable due to changed

circumstances during litigation are not deprived of

the right Congress expressly granted them to a

federal forum.

A. Factual Background.

This case is a claim for personal injuries arising

from Harold St. John’s alleged exposure to asbestos.

The action was commenced on June 19, 2008 against

Maremont and several other defendants in the

Superior Court of New Jersey, Middlesex County.

Because complete diversity did not exist among the

defendants when the case was filed, Maremont did

not attempt to remove the case to federal court.

The case proceeded to trial and the parties

appeared for jury selection on May 26, 2009. Before

jury selection commenced, at approximately 9:00

a.m., plaintiffs counsel announced that plaintiff had

reached a settlement with co-defendant Honeywell, a

company headquartered in New Jersey, and the court

dismissed Honeywell from the action. Maremont

then realized for the first time that the case was

potentially removable because it appeared that none

of the remaining defendants was either incorporated

in New Jersey or had its headquarters there, thus

creating complete diversity.

Maremont spent the next few hours confirming that

complete diversity existed (an investigation that

Maremont was obligated to perform by Fed. R. Civ. P.

11) and that review was not completed until 12:50

p.m. Maremont then attempted to obtain the consent

of al! remaining defendants for removal. At 2:54

p.m., less than six hours after it first learned the

surprising news that a basis for removal possibly

4

existed, Maremont electronically filed a Notice of

Removal (“Notice”) with the United States District

Court for the District of New Jersey and then filed

the Notice with the state court clerk at 2:59 p.m. The

time-stamped Notice was then served upon the state

court judge and all of the parties at the trial.

During this time, jury selection proceeded in the

state trial court. When Maremont’s trial counsel

learned after lunch that Maremont would file for

removal, he remained in the courtroom but did not

ask for any strikes for cause. After the notice of

removal was filed, the state trial court continued with

jury selection. Maremont’s trial counsel remained in

the courtroom but did not ask for any peremptory

strikes; the court deemed his nonparticipation in the

peremptory strike process to indicate that he was

“passing” or accepting the jurors. A complete jury

was not selected that day (and the partial jury was

released several days later).

B. Proceedings Below.

The next day, May 27, 2009, plaintiff filed in the

district court a proposed order requiring Maremont to

show cause why the matter should not be remanded

to the state court. At 2:00 p.m., less than two and

one-half hours after Maremont was served with

plaintiffs papers and without any opportunity to file

a written response, the Honorable William J. Martini,

U.S.D.J., conducted a conference call with all the

parties and the state judge. During this call, Judge

Martini announced that he would remand the matter

and issued a remand order on May 29, 2009. Pet.

App. 9a-10a.

Maremont promptly filed a notice of appeal of the

remand order in the Third Circuit and also asked the

district court to stay its remand order pending the

*)

appeal. The district court granted the stay. Pet. App.

2a-8a. In its written order on the stay motion, the

district court discussed the basis for its remand

order. It explained that the removal was

“Surisdictionally proper” on diversity grounds, but

that it had remanded the case based on a finding that

Maremont had waived its right to remove the case by

“proceed[ing] with trial in_ state court” while

“simultaneously preparing to remove the case to

federal court.” Jd. at 5a. The district court found

that it was “incumbent upon Defendants to notify the

state court and ask for a brief adjournment as soon as

they began contemplating removal. Even if their

request had been denied, merely asking would have

preserved the right.” Jd. at 7a. By “not tellling] the

state court of its plans until six hours later,” the

district court concluded, defendants were able to

“evaluate the potential jury pool and then decide

whether or not to remove.” Id.

On June 25, 2009, prior to any briefing on the

appeal, plaintiff filed a motion in the Third Circuit to

remand the case to the state court or, in the

alternative, to dismiss the appeal, arguing that (1)

Maremont’s removal was. procedurally defective

because the Notice lacked certain attachments; and

(2) the Third Circuit lacked jurisdiction to review the

remand order. Plaintiff had not raised the first issue

in the district court and, as a result, the district court

never addressed it. As to the second issue, the

district court specifically concluded in its order

granting the stay pending appeal that its remand

order was reviewable on appeal. Pet. App. 5a (finding

that 28 U.S.C. § 1447 “does not preclude review of an

order that was based upon a court’s discretionary

decision to remand a case” and citing Carlsbad Tech.

Inc. v. HIF Bio, Inc., 129 S. Ct. 1862, 1867 (2009)).

6

After briefing, but without hearing argument, the

motions panel issued an order on September 3, 2009

(the “Third Circuit Remand Order”), Pet. App. la,

which granted the plaintiffs motion “to the extent

that, for essentially the reasons provided by the

District Court, this matter is REMANDED to the

Superior Court of New Jersey, Middlesex County, for

further proceedings.”! As noted, the sole basis on

which the district court remanded the case was its

finding that Maremont had waived its right to

remove the case to federal court. Accordingly, the

Third Circuit's Remand Order summarily affirmed

the district court’s waiver ruling. By virtue of this

disposition based on plaintiffs motion, however, the

Third Circuit resolved Maremont’s appeal without

ever giving it the opportunity to brief its challenges to

the district court’s waiver ruling.?

The Third Circuit denied rehearing and rehearing

en banc, and also denied Maremont’s motion to stay

the mandate pending the filing of this petition. The

state trial court has assigned a new trial date of

January 19, 2010.

'The Third Circuit also denied as moot Maremont’s motion to

expand the record on appeal to include a transcript of the

proceedings in the state court on May 26, 2009, the day that

Maremont removed the case. Pet. App. la.

2In remanding the case, the Third Circuit correctly rejected

the plaintiffs alternative argument that it should dismiss the

appeal for lack of jurisdiction. Carlsbad Tech., Inc., 129 S. Ct.

1862. In Carlsbad, this Court expressly held that 28 U.S.C.

§ 1447(d) does not bar appellate review of a remand order based

upon a district court’s “purely discretionary” decision to remand

a case. ld. at 1866. As the district court acknowledged, it

ordered a remand “on the grounds of waiver [as] an exercise of

discretion.” Pet. App. 5a-6a. Accordingly, the remand order in

this case falls squarely within the class of orders that this Court

found in Carlsbad to be subject to appellate review.

7

REASONS FOR GRANTING THE PETITION

I. THE DECISION BELOW CONFLICTS WITH

DECISIONS OF OTHER COURTS OF

APPEALS.

The decision below merits review because it

conflicts with the decisions of other courts of appeals.

See Sup. Ct. R. 10(a) (a consideration favoring review

on certiorari is where “a United States court of

appeals has entered a decision in conflict with the

decision of another United States court of appeals on

the same important matter’). The Third Circuit

Remand Order affirmed the district court’s ruling

that Maremont waived its right to removal, Pet. App

la; no other court of appeals would find waiver in the

circumstances posed in this case.

Under the removal statute, a defendant is “entitled

to have [a] suit removed to a proper federal court as a

matter of right,” and “[i]Jf the requirements of the

removal statute are met, the right to removal is

absolute.” Regis Assocs. v. Rank Hotels (Mgmt.) Ltd.,

894 F.2d 193, 195 (6th Cir. 1990). Although the right

to removal, like virtually all other rnghts, can be

waived, other courts of appeals that have considered

the question uniformly have held that mere

participation in the state court litigation does not

constitute a waiver — instead, the defendant must.

specifically waive its right to removal in a “clear and

unequivocal” manner. See, e.g., Tedford v. Warner-

Lambert Co., 327 F.3d 423, 428 (5th Cir. 2003) (“A

waiver of the right to remove must be clear and

unequivocal; the right to removal is not lost by

participating in state court proceedings short of

seeking an adjudication on the merits.”); Snapper,

Inc. v. Redan, 171 F.3d 1249, 1260-61 (11th Cir.

1999); Aqualon Co. v. MAC Equip., Inc., 149 F.3d

262, 264 (4th Cir. 1998); Resolution Trust Corp. v.

8

Bayside Developers, 43 F.3d 1230, 1240 (9th Cir.

1995); Rothner v. City of Chi., 879 F.2d 1402, 1415

(7th Cir. 1989); see also 16 James W. Moore, Moore's

Federal Practice § 107.18[3][a] (8d ed. 2009) (a

defendant’s “intent to waive the right to remove to

federal court and to submit to state court jurisdiction

must be clear and unequivocal, and the defendant’s

actions must be inconsistent with the right to

remove’ ).3

3 Numerous district courts, in these circuits as well as other

circuits, also have adopted the “clear and unequivocal” standard

for determining whether a defendant waived its right to removal

through its conduct in state court litigation. See, e.g., Stewart v.

W. Va. Employers’ Mut. Ins. Co., 2009 WL 2599306, at *3-4 (S.D.

W. Va. Aug. 20, 2009); Oster v. Standard Life Ins. Co., 2009 WL

1260174, at *1 (N.D. Cal. May 6, 2009); Roper v. Saxon

Mortgage Servs., Inc., 2009 WL 1259193, at *1 (N.D. Ga. May 5,

2009); Schoen v. Presbyterian Health Plan, Inc., 2009 WL

1299680, at *6 (D.N.M. Feb. 19, 2009); O'Keefe v. State Farm

Fire & Cas. Co., 2009 WI, 95039, at *8 (S.D. Miss. Jan. 18,

2009); Miranda v. Rodriguez, 2009 WL 32746, at *1 (M.D. Ga.

Jan. 2, 2009); Al-Hilfy v. Rexnord Indus., LLC, 2008 WL

4610022, at *2 (D. Neb. Oct. 15, 2008); Ellis v. Coventry Capital

I LLC, 2008 WL 4396349, at *4 (N.D. Ill. Sept. 24, 2008);

Barabin v. Albany Int'l Corp., 2007 WL 4376181, at *2 (W.D.

Wash. Dec. 12, 2007); Nungesser v. Bryant, 2007 WL 4374022,

at *9 (D. Kan. Dec. 7, 2007); Cavadi v. Bank of Am., N.A., 2007

WL 3226166, at *2 (D.N.H. Oct. 30, 2007); Arthur L. Christof-

fersen Irrevocable Trust v. Yellow Book USA, Inc., 2006 WL

2925655, at *3 (N.D. lowa Oct. 11, 2006); Whitten v. Michelin

Am. Research & Dev. Corp., 2006 WL 1645833, at *3 (W.D.

Tenn. June 8, 2006); Mattel, Inc. v. Bryant, 441 ¥ Supp. 2d

1081, 1091 (C.D. Cal. 2005), aff'd, 446 F.3d 1011 (9th Cir. 2006):

Grievance Adm v. Fieger, 409 F. Supp. 2d 858, 861 (E.D. Mich.

2005); Louis Trauth Dairy LLC v. Risers Corp., 2002 WL

31951268, at *1 (S.D. Ohio Dec. 10, 2002); Hernandez-Lopez v.

Commonwealth of P.R., 30 F. Supp. 2d 205, 209 (D.P.R. 1998):

Bedell v. H.R.C. Ltd., 522 F. Supp. 732, 738 (E.D. Ky. 1981);

Swan v. Cmty. Relations-Social Dev. Comm'n, 374 F. Supp. 9,

9

The Third Circuit’s holding in this case, however,

represents a clear departure from the legal standards

applied by other courts of appeals.4 The district

court’s “reasons” for finding waiver that the Third

Circuit adopted made no mention of the “clear and

unequivocal” standard, and the district court and the

Third Circuit clearly did not apply that standard.

Maremont plainly did not waive its right to removal

in a “clear and unequivocal” manner. ‘To the

contrary, its conduct during the six hours that are at

issue in this case revealed a “clear” and “unequivocal”

intent to assert its removal rights: after first learning

that the last remaining non-diverse defendant had

settled, Maremont scrambled to prepare and file a

notice of removal.

The Third Circuit nevertheless held that Maremont

waived its right to removal based solely on the fact

that it did not affirmatively tell the state court that

morning that it might file a notice of removal later

that day. ‘This harsh outcome converts the waiver

doctrine into a trap for the unwary and is squarely at

odds with the “clear and unequivocal” standard

applied by other courts of appeals. Those courts have

recognized that important statutory rights cannot be

forfeited by mere inadvertence; forfeiture requires

actions that are knowing and voluntary and that

manifest a clear intent to relinquish — not pursue —

the federal forum.

11-12 (F.D. Wis. 1974); DRI Mark Prods., Inc. v. Meyercord Co.,

194 F. Supp. 536, 537 (S.D.N.Y. 1961).

‘The Third Circuit’s departure is particularly disturbing

because it previously seemed to recognize the principles adopted

by the other circuits. See Foster v. Chesapeake Ins. Co., 933 F.2d

1207, 1217 n.15 (3d Cir. 1991). The court of appeals’ finding of

waiver in this case, however, indicates that Foster is no longer

controlling in the Third Circuit.

LO

Moreover, the Third Circuit’s holding also conflicts

with the holdings of other courts of appeals and lower

federal courts that there can be no waiver until it is

“unequivocally apparent” that the case is removable.

See, e.g., Akin v. Ashland Chem. Co., 156 F.3d 1036,

1036 (10th Cir. 1998) (defendant’s actions in state

court did not constitute waiver because they “were

taken before it was unequivocally apparent that the

case was removable”); Vandeventer v. Guimond, 494

F. Supp. 2d 1255, 1261-62 (D. Kan. 2007); Cavadi v.

Bank of Am., N.A., 2007 WL 3226166, at *2 (D.N.H.

Oct. 30, 2007); Nungesser v. Bryant, 2007 WL

4374022, at *9 (D. Kan. Dec. 7, 2007); Mattel, Inc. v.

Bryant, 441 F. Supp. 2d 1081, 1091 (C.D. Cal. 2005),

affd, 446 F.3d 1011 (9th Cir. 2006); see also 16

Moore’s, supra § 107.18[3][a] Gt “must be

unequivocally apparent that the case is removable”

before a defendant can waive its right to remove). In

contrast to these courts, the Third Circuit found

waiver here, notwithstanding that much of the

“delay” between the time Maremont learned that

Honeywell had settled and the time it removed the

case was attributable to Maremont’s contacting other

counsel to confirm that all other defendants were in

fact diverse. Until Maremont completed this

investigation a few hours later, the removability of

the case was anything but “unequivocally apparent.”

The divergent legal standards applied by the Third

Circuit and other circuits have produced inconsistent

outcomes on similar facts. in particular, the Third

Circuit’s finding of waiver in this case is squarely at

odds with the outcomes of cases in other circuits in

which a defendant’s mere participation in state court

proceedings has not been found to constitute waiver.

For example, in Grubb v. Donegal Mutual Insurance

Co., 935 F.2d 57, 58-59 (4th Cir. 1991) — a case that

1]

bears pertinent similarities to this one — the Fourth

Circuit found no waiver where the state court

dismissed the only non-diverse defendant at the

outset of a summary judgment hearing and the

remaining defendant participated in the hearing and

did not file a notice of removal until a later date. The

Fourth Circuit rejected the argument that the

remaining defendant waived its right to removal by

failing to assert that mght “immediately” upon the

dismissal and instead participating in the hearing,

finding that the defendant’s conduct at the hearing

“did not show a ‘clear and unequivocal’ intent to

waive its rights,” particularly because the defendant’s

counsel “did not go to the hearing with any

knowledge” that a_= possible basis for removal

unexpectedly would arise. /d.

Similarly, in Rothner, the Seventh Circuit found no

waiver after a defendant fully participated in a TRO

hearing in a case that squarely raised a federal

constitutional question and did not file for removal

until almost a week later. Rothner, 879 F.2d at 1403-

04, 1408, 1418-19. In Akin, 156 F.3d at 1086, the

Tenth Circuit found that a defendant was not barred

from removal simply by filing a motion for summary

judgment in the state court because the defendant’s

actions in state court were taken “before it was

unequivocally apparent that the case was removable.”

The Tenth Circuit explained that no waiver could be

found “in the absence of adequate notice of the right

to remove.” Id.

Indeed, even in the context of contractual waivers

of removal rights, where some courts of appeals do

not require waivers to meet the rigorous “clear and

unequivocal” standard, a number of courts of appeals

have found mere silence as to a defendant’s specific

intentions on removal to be insufficient to constitute

iZ

a waiver. See, e.g., Regis, 894 F.2d at 195-96 (no

waiver of removal rights where forum selection clause

only addressed “which country would be the forum for

litigation” and “nothing in the language ultimately

chosen ... suggests any intent on the part of anyone to

waive the right of removal from state to federal

court”); Weltman v. Silna, 879 F.2d 425, 427 (8th Cir.

1989) (no waiver of removal rights where party

contractually consented to subject matter jurisdiction

and venue in state court, but the contractual

provision “did not address removal’).

The Third Circuit’s decision also is at odds with the

outcomes of decisions of district courts in other

circuits. For example, in one case, the defendant

learned during closing arguments that the case had

become removable, and the district court found no

waiver despite the fact that the defendant did not

state its intention to file for removal until the

following day (at 2:00 p.m.), after jury deliberations

had begun but before the jury had reached a verdict.

See Heniford v. Am. Motors Sales Corp., 471 F. Supp.

328, 335 (D.S.C. 1979). Similarly, in Johnson v.

Celotex Corp., 701 F. Supp. 553, 556 (D. Md. 1988),

the district court found no waiver when, after weeks

of trial, the case became removable and the defendant

did not notify the court of its intention to remove

until the following day. ‘The court held that the “facts

here indicate that defendant Celotex acted promptly

and in full complhance with [§] 1446(b) when it

indicated in state court that it intended to exercise its

right of removal.” Jd. See also Barabin v. Albany

Intl Corp., 2007 WL 4376181, at *1-2 (W.D. Wash.

Dec. 12, 2007) (no waiver where defendant did not file

a notice of removal for 12 days after case became

removable, during which time defendant filed various

motions, including their trial briefs).

13

In sum, it is plain that if Maremont’s removal

petition had been filed in a trial court in most, if not

all, other circuits, its statutory right to removal

would not have been forfeited by its mere

participation in the jury selection. This is precisely

the kind of decision by geography that this Court

grants certiorari to prevent. The removal statutes

deserve uniform interpretation and application; only

this Court can ensure that they are applied

consistently.

This case is an appropriate vehicle for resolving

this circuit conflict because the facts governing the

waiver issue are straightforward and undisputed. By

granting this petition, this Court would provide

meaningful guidance concerning when the right to

remove is waived by litigation conduct.®

Il. THE COURT OF APPEALS’ WAIVER STAN-

DARD FAILS TO VINDICATE

DEFENDANTS’ “ABSOLUTE” FEDERAL

RIGHT TO REMOVAL.

The “clear and unequivocal” standard for waiver

applied by other courts of appeals is the only

standard that is faithful to the statute. As those

courts have recognized, when properly invoked, a

defendant’s right to removal is “absolute.” Regis, 894

F.2d at 195. In diversity cases, the “absolute” nature

5 The fact that the Third Circuit’s decision is unpublished

does not render this case an inappropriate vehicle for certiorari.

This Court routinely grants certiorari with respect to

unpublished decisions, particularly when those decisions

squarely implicate circuit conflicts. See, e.g., Cooper Indus., Inc.

v. Leatherman Tool Group, Inc., 532 U.S. 424, 430-31 (2001)

(unpublished Ninth Circuit decision implicating circuit conflict);

Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep't of Health &

Human Res., 532 U.S. 598, 602 (2001) (unpublished Fourth

Circuit decision implicating circuit conflict)

14

of the right is consistent with the important purposes

that it serves: it gives defendants a “right to a federal

forum,” and the “motivating concern” is to “protect

litigants against local prejudice, influence, and

discrimination.” Rothner, 879 F.2d at 1407. See

Guar. Trust Co. v. York, 326 U.S. 99, 111 (1945)

(“Diversity jurisdiction is founded on assurance to

non-resident litigants oof courts free from

susceptibility to potential local bias.”); see also

Jerome B. Grubart, Inc. v. Great Lakes Dredge &

Dock Co., 513 US. 527, 546 n6 (1995) (“the

presupposition for diversity jurisdiction” is “a concern

with local bias”).

A federal right of this importance cannot be waived

through inadvertence or a few hours’ silence by

counsel. A defendant must clearly and unequivocally,

through affirmative actions or statements, assert its

intention to remain in state court and forego the

federal forum. As the Sixth Circuit has noted, “[t]he

right of removal is statutory and, generally, it is the

waiver of a statutory right that must be set forth, not

the intent to rely on the statute.” Regis, 894 F.2d at

195.

Indeed, the Third Circuit’s harsh waiver standard

is inconsistent with the specific provisions of the

removal statute. Congress was well aware that cases

could suddenly become removable in the middle of a

proceeding due to “a change of parties as an action

progresses toward trial in state court.” H.R. Rep. No.

100-889, at 72 (1988). Congress dealt with this

frequent occurrence through two specific provisions.

First, to address changed circumstances generally,

Congress provided that a defendant has 30 days to

file a notice of removal after receipt of a “copy of an

amended pleading, motion, order or other paper from

which it may first be ascertained that the case is one

—

qn

which is or has become removable.” 28 U.S.C.

§ 1446(b) (emphasis added). Second, for diversity

sases specifically, Congress amended this subsection

in 1988 to prohibit a defendant from removing

diversity cases “more than 1- year after

commencement of the action.” Jd.

Maremont fully complied with both of these

statutory provisions — it filed its notice of removal the

same day it learned the case had become removable

(with 29 days and 18 hours to spare), and it filed

within one year of the original commencement of the

action. Under the Third Circuit’s waiver standard,

however, Maremont lost its “absolute” removal rights

notwithstanding the fact that it immediately and

hurriedly prepared the necessary removal papers

over the course of a few hours. This result simply

cannot be reconciled with Congress’s more generous

allotments of 30 days and one year. Moreover, given

Congress’s decision to address the issue of diversity

jurisdiction arising after substantial proceedings

have occurred in state court through a bright-line,

one-year cutoff rule, a draconian waiver standard for

cases that are within the one-year period — as the

Third Circuit adopted here is fundamentally

misplaced.®

Thus, Maremont’s actions here cannot be deemed a

waiver of its right to removal under a reasonable

interpretation of the statute. As other federal courts

have correctly held, a defendant cannot be faulted

6 Indeed, some courts and authorities have questioned

whether the judge-made rule that a defendent can waive its

right to removal in litigation even survived Congress’s 1948

enactment of a specific time period for filing a notice of removal!

when a case becomes removable in mid-course. See, ¢.g.,

Rothner, 879 F.2d at 1415 (quoting 1A Moore's Federal Practice

4, 0.157[9], at 151 (2d ed. 1987))

16

merely for participating briefly and defensively in the

state court proceeding while it explores the possibility

of removal. See Grubb, 935 F.2d at 58-59: Rothner.

879 F.2d at 1403-04, 1408, 1418-19; Heniford, 471 F.

Supp. at 335; Johnson, 701 F. Supp. at 556. To be

sure, as this Court noted in 1893 (long before § 1446's

30-day rule), “the spirit of the removal acts ... dofes]

not contemplate that a [plaintiff] may experiment on

his case in the state court, and, upon an adverse

decision, then transfer it to the Federal court.”

Rosenthal v. Coates, 148 U.S. 142, 147 (1893). But as

the other federal courts have recognized, the sort of

brief participation in state proceedings that took

place here does not present such concerns. Jury

selection was far from over when Maremont removed,

and all of Maremont’s actions here leave no doubt

that its intention at all times was to remove the case

as expeditiously as possible

Moreover, a waiver standard that required a party

to give the plaintiff and the court instantaneous

advance notice that it intended to pursue removal

would not further any valid purpose under the

removal statute. In fact, it would undermine the

important interests protected by removal because it

would require all defendants to broadcast their

litigation strategies to their opponents in order to

retain their federal rights. The Tedford case

illustrates the pitfalls of this approach. The

defendant in Tedford gave advance notice of its

intention to remove as a “professional courtesy,” and

the plaintiff responded by “quickly act[ing] to thwart”

removal by adding a new non-diverse (and ultimately

dismissed) defendant. Tedford, 327 F.3d at 428

ven if Maremont sought to gain a_ strategic

advantage by removing the case to federal court, such

a tactic is not a ground for finding waiver. As the

17

Seventh Circuit has held, a “defendant’s motive for

removing is not a proper consideration for remand,”

because “/e/very defendant who removes considers the

prospect of a favorable result in the federal forum.”

Rothner, 879 F.2d at 1408 (emphasis added). Indeed,

the whole purpose of removal in diversity cases 1s

now, as it has been for more than 200 years, to avoid

the risk of an unfavorable forum in a state court and

that risk obviously increases dramatically when the

last defendant with any links to the state has been

released from the litigation.

Finally, the flawed nature of the Third Circuit’s

waiver standard is further demonstrated by the fact

that it bears no resemblance to the standard used to

determine waiver of the right to arbitration under the

Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. Federal

courts repeatedly have held that the right to arbitrate

cannot be waived merely by a failure to assert the

right at the earliest possible moment. E.g., Nicholas

v. KBR, Inc., 565 F.3d 904, 907 (5th Cir. 2009)

(‘waiver of arbitration is a disfavored finding”);

Ehleiter v. Grapetree Shores, Inc., 482 F.3d 207, 223

(3d Cir. 2007) (“waiver ‘is not be to lightly inferred”).

Thus, “[a] presumption against waiver exists such

that the party asserting waiver ‘bears a heavy burden

of proof in its quest to show’ waiver.” Petroleum Pipe

Ams. Corp. v. Jindal Saw, Ltd., 575 F.3d 476, 480

(5th Cir. 2009). Delay in asserting the right to

arbitrate, and participation in litigation, will not by

themselves constitute waiver, absent a showing that

the other party was prejudiced. Forrester v. Penn

Lyon Homes, Inc., 553 F.3d. 340, 343 (4th Cir. 2009);

Ehleiter, 482 F.3d at 223; Mercury Constr. Corp. v

Moses H. Cone Mem'l Hosp. (In re Mercury Constr.

18

Corp.), 656 F.2d 933, 939 (4th Cir. 1981) (en banc),

aff'd on other grounds, 460 U.S. 1, 24-25 (1983).?

Given the robust showing that must be made in

order to demonstrate that a party has waived its

right to arbitration, even where the party did not

immediately assert the right, the Third Circuit’s

holding that the right to removal — which if anything

is even more important to most litigants — can be

waived through prompt and diligent efforts to pursue

that right is completely misguided. It is a trap for

the unwary and vindicates no purpose of the removal

statute. For all of these reasons, the Third Circuit’s

holding warrants this Court’s review.

Il. THE COURT OF APPEALS’ WAIVER

RULING POSES AN ISSUE OF

FUNDAMENTAL IMPORTANCE.

The court of appeals’ waiver ruling, and the circuit

conflict that it implicates, also presents a recurring

and “important question” of federal law that

warrants this Court’s attention. See Sup. Ct. R.

10(c).

As a general matter, this Court historically has

taken a particular interest in ensuring that the

standards for removal to federal courts are applied

evenly across the country. This Court has granted

certiorari in a number of cases to resolve conflicts

about the legal standards governing removal; indeed,

this Court granted certiorari in such a case just last

month. See, e.g., Health Care Serv. Corp. v. Pollitt,

7 See also, e.g., Rush v. Oppenheimer & Co., 779 F.2d 885, 887

(2d Cir. 1985) (“defendants’ delay in seeking arbitration during

approximately eight months of pretrial proceedings is

insufficient by itself to constitute a waiver of the right to

arbitrate, for in addition, prejudice to [the plaintiff] must be

demonstrated”).

19

78 U.S.L.W. 3050 (U.S. Oct. 13, 2009) (No. 09-38)

(order granting certiorari); Carlsbad Tech. Inc., 129

S. Ct. 1862; Powerex Corp. v. Reliant Energy Seruvs.,

Inc., 551 U.S. 224 (2007); Murphy Bros. v. Michetti

Pipe Stringing, Inc., 526 U.S. 344, 347 (1999); Wis.

Dep't of Corr. v. Schacht, 524 U.S. 381, 392 (1998);

Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 709-

11 (1996); Things Remembered, Inc. v. Petrarca, 516

U.S. 124, 126 (1995). See also McNutt v. Gen. Motors

Acceptance Corp., 298 U.S. 178, 188 (1936) (“there

should be a consistent practice in dealing with

jurisdictional questions’).

In addition, the specific removal issue presented

here — whether the right to remove is waived by a

defendant’s litigation conduct in response to changed

circumstances that have rendered a case removable

for the first time — is one that frequently arises in

diversity cases and that has _ considerable

consequences for defendants’ right to litigate such

cases in federal court. As noted, the recurring nature

of this issue was recognized by Congress when it

amended the removal statute in 1988 to establish a

one-year time limit on the removal of diversity cases.

Congress recognized that many cases filed in state

court are not removable when initially filed, but then

become removable at a later stage of the proceedings

due to “a change of parties as an action progresses

toward trial in state court.” H.R. Rep. No. 100-889,

at 72. Indeed, Congress recognized the frequent

occurrence of precisely the circumstance that arose in

this case:

The elimination of parties may create for the

first time a party alignment that supports

diversity jurisdiction.... Settlement with a

diversity-destroying defendant on the eve of

trial, for example, may permit the remaining

20

defendants to remove.

Id.

The recurring nature of this scenario is further

increased by the widespread practice by plaintiffs of

fraudulently joining in-state defendants to defeat

diversity jurisdiction (although there is no indication

that any such conduct occurred in this case). See,

e.g., E. Farish Percy, Making A Federal Case Of It:

Removing Civil Cases To Federal Court Based On

Fraudulent Joinder, 91 Iowa L. Rev. 189, 191-92 (Oct.

2005) (noting that “plaintiffs have long attempted to

defeat removal to federal court by joining claims

against in-state defendants” and that “[r]Jecently,

fraudulent joinder’ litigation has _ increased

dramatically’). Although claims of fraudulent joinder

are “escalating throughout the country” in many

areas of litigation, the practice is_ particularly

notorious in complex tort litigation, including

products liability litigation. See id. at 192 (charges of

fraudulent joinder are “fast becoming a prominent

and time-consuming aspect of complex _ tort

litigation”). In cases that are in state court as a

result of fraudulent joinder, defendants can at any

time learn facts that permit the inappropriate joinder

to be eliminated.

Given this context where defendants in state court

commonly learn that cases are potentially removable

for the first time during pre-trial or trial proceedings

as a result of new developments or new information,

it is critically important that defendants’ statutory

and absolute right to remove cases to federal court be

protected. Under the Third Circuit’s waiver ruling,

however, defendants can forfeit this right if they

merely take the time to investigate and verify the

removability of the case — as they are required to do

21

under Fed. R. Civ. P. 118 — and in no way manifest a

knowing and voluntary relinquishment of their right

to a federal forum. While this loss of removal rights

through inadvertence is unacceptable in any context,

it 1s utterly offensive in circumstances where the

plaintiff deliberately avoided the federal forum

through fraudulent joinder and the defendant merely

sought to eliminate the fraud. If left standing,

however, the inevitable result of the Third Circuit’s

decision will be further inadvertent losses of removal

rights — a result that can only encourage fraudulent

joinder. Accordingly, the Third Circuit’s waiver

ruling poses a recurring question of fundamental

importance that warrants this Court’s review.

8 See 28 U.S.C. § 1446(a) (a notice of removal must be signed

pursuant to Rule 11).

22

CONCLUSION

For the foregoing reasons, the petition for a writ of

certiorar] should be granted.

Respectfully submitted,

JOHN C. CANONI CARTER G. PHILLIPS*

KASOWITZ, BENSON, JACQUELINE G. COOPER

TORRES & FRIEDMAN LLP JAMES P. YOUNG

1633 Broadway RICHARD E. YOUNG

New York, NY 10019 SIDLEY AUSTIN LLP

(212) 506-1700 1501 K Street, N.W.

Washington, D.C. 20005

(202) 736-8000

Counsel for Petitioner

November 6, 2009 * Counsel of Record