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

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386017_1227%3A1

## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 2009

## Text

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

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386017_1227%3A1. Public record. Not legal advice.