Bowman v. PHH Mortg. Corp., Civil Action Number 2:19-cv-00831-AKK

• Decision Date: 10 October 2019
• Docket Number: Civil Action Number 2:19-cv-00831-AKK
• Citation: 423 F.Supp.3d 1286
• Parties: Lisa BOWMAN, Keith Bowman, Plaintiffs, v. PHH MORTGAGE CORPORATION, et al., Defendants.
• Court: U.S. District Court — Northern District of Alabama

423 F.Supp.3d 1286

Lisa BOWMAN, Keith Bowman, Plaintiffs,

v.PHH MORTGAGE CORPORATION, et al., Defendants.

Civil Action Number 2:19-cv-00831-AKK

United States District Court, N.D. Alabama, Southern Division.

Signed October 10, 2019

John W. Clark, IV, Clark Law Firm PC, Birmingham, AL, for Plaintiffs.

T. Dylan Reeves, Lacy Michele Triplett, McGlinchey Stafford, Eris Bryan Paul, Clark May Price Lawley Duncan & Paul, LLC, Birmingham, AL, for Defendants.

MEMORANDUM OPINION AND ORDER

ABDUL K. KALLON, UNITED STATES DISTRICT JUDGE

Before the court is Plaintiffs' motion to remand. Doc. 13. For the reasons explained below, the court grants the motion to remand.

I. FACTS AND PROCEDURAL HISTORY

On May 14, 2019, Lisa and Keith Bowman filed a complaint in Alabama state court against the following defendants: PHH Mortgage Corporation ("PHH"), Ocwen Loan Servicing, LLC ("Ocwen"), Altisource Solutions, Inc. ("Altisource"), Mimsco, Inc. ("Mimsco"), and Scott Mims ("Mims"). Doc. 1-1 at 10. The Bowmans are both residents of Louisiana. Id. None of the defendants is a citizen of Louisiana, but both Mimsco and Mims are citizens of Alabama. Doc. 10; see also doc. 1-1 at 11. The same day the Bowmans filed their complaint, they sent formal process by certified mail to each of the defendants. Doc. 1-1 at 8.

PHH and Ocwen ("the removing defendants") timely filed a notice of removal.¹ Doc. 1. They claimed that this court has jurisdiction over the case pursuant to 28 U.S.C. § 1332, as the parties are completely diverse and the amount in controversy exceeds $75,000. Id. at 2. The Bowmans timely moved to remand. Doc. 13.

II. ANALYSIS

A defendant may remove a case from state court to federal district court if the district court would have had original jurisdiction. 28 U.S.C. § 1441(a). Original jurisdiction includes diversity of citizenship. PTA-FLA, Inc. v. ZTE USA, Inc. , 844 F.3d 1299, 1305 (11th Cir. 2016). Diversity jurisdiction exists if no plaintiff is a citizen of the same state as any defendant—i.e., complete diversity—and the amount in controversy exceeds $75,000. 28 U.S.C. § 1332(a). In this case, there is no question that the parties are completely diverse, and that the amount-in-controversy requirement is satisfied. Thus, the court has original jurisdiction.²

But original jurisdiction is not always enough. There are additional hurdles to removal, two of which are relevant here. First, when removing solely on the basis of diversity jurisdiction, a defendant may not remove "if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought." 28 U.S.C. § 1441(b)(2). Second, "all defendants who have been properly joined and served must join in or consent to the removal of the action." 28 U.S.C. § 1446(b)(2)(A). These two hurdles are respectively known as the forum defendant rule and the rule of unanimity.

The Bowmans argue that the removing defendants violated these rules. In brief, two of the defendants named and joined in the complaint, Mimsco and Mims, are citizens of Alabama and the forum defendant rule would ordinarily preclude removal based on diversity when there are in-state defendants. Doc. 13 at 3–4. Likewise, PHH and Ocwen, the removing defendants, did not obtain consent to remove from Mimsco, Mims, and Altisource, which seems to contradict the rule of unanimity. Id. at 5. The removing defendants respond that these two rules do not apply because none of the defendants was properly served. Doc. 1 at 3–5.

But even agreeing with the removing defendants that the plaintiffs failed to properly serve any of the defendants, and that consequently the rule of unanimity does not apply, the removal is still improper. The issue before the court relates to an increasingly common litigation tactic known as "snap removal," through which defendants bypass the forum defendant rule found in § 1441(b)(2) by removing a case before service. Delaughder v. Colonial Pipeline Co. , 360 F. Supp. 3d 1372, 1377 (N.D. Ga. 2018). The precise question is whether it violates the forum defendant rule for out-of-state defendants to remove a case for diversity jurisdiction, even though there are two in-state defendants, if none of the defendants has been properly served.

Before beginning its analysis, the court notes that it must construe removal statutes narrowly. Scimone v. Carnival Corp. , 720 F.3d 876, 882 (11th Cir. 2013). There is a "presumption against the exercise of federal jurisdiction," and uncertainties as to removal are resolved in favor of remand. Id. Defendants bear the burden of showing removal is appropriate. Id.

Though there is no binding precedent from the Supreme Court or the Eleventh Circuit, this court is far from the first to grapple with this issue. See, e.g. , Gentile v. Biogen Idec, Inc. , 934 F. Supp. 2d 313, 317 (D. Mass. 2013) (collecting cases). Most courts have agreed that the meaning of the text in § 1441(b)(2) is clear and unambiguous. See id. However, these courts have divided over whether to follow the plain meaning of the text, with many courts declining to do so, because, in their view, it produces truly absurd results that Congress could not possibly have intended. See id.

This court adopts a different approach. An alternative interpretation of the text suggests that the statute is more ambiguous than other courts have supposed. So rather than decide whether to follow the plain meaning, the court asks which of two permissible constructions of the text best effectuates Congress' intent. See Tenn. Valley Auth. v. Hill , 437 U.S. 153, 207, 98 S.Ct. 2279, 57 L.Ed.2d 117 (1978) ("The Court recognizes that the first purpose of statutory construction is to ascertain the intent of the legislature."). When considered in light of the whole statute, including its history and purpose, the second reading—i.e., requiring at least one defendant to have been properly joined and served before removal when an in-state defendant is involved—emerges as the better interpretation.

In reaching this determination, the court begins, as it must, with the text. Ross v. Blake , ––– U.S. ––––, 136 S. Ct. 1850, 1856, 195 L.Ed.2d 117 (2016). Section 1441(b)(2) reads as follows:

A civil action otherwise removable solely on the basis of the jurisdiction under section 1332(a) of this title may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.

Zeroing in on the "properly joined and served" language, the removing defendants argue that the text is unambiguous: "Its plain meaning precludes removal on the basis of in-state citizenship only when the defendant has been properly joined and served." Encompass Ins. Co. v. Stone Mansion Rest. Inc. , 902 F.3d 147, 152 (3d Cir. 2018). By this reasoning, so long as an in-state defendant has not been served, the forum defendant rule does not apply. Most courts have accepted this interpretation as the plain meaning without further analysis.

More recently, a second interpretation of the text has emerged. See Gentile , 934 F. Supp. 2d at 318 ; Hawkins v. Cottrell, Inc. , 785 F. Supp. 2d 1361, 1369 (N.D. Ga. 2011).³ These courts note that the text tells courts to look to see if "any of the parties in interest properly joined and served as defendants is a citizen of the" forum state. § 1441(b)(2). But what if there are no parties properly joined and served as defendants? The word "any," as used in the text, is a pronoun; as such, it means "one or more indiscriminately from all those of a kind." Webster's Third New International Dictionary 97 (3d ed. 1986). "Inherent in the definition is some number of the kind from which the one or more can be drawn." Gentile , 934 F. Supp. 2d at 318. In other words, as these courts have found, the text assumes the kind exists—that at least one party in interest has been properly joined and served. Thus, under this interpretation of the statute, when there is an in-state defendant, at least one defendant must have been properly joined and served before removing for diversity.⁴ The court finds this interpretation to be plausible, if not persuasive.

In finding this interpretation plausible, the court notes that courts do not interpret statutory text "in a vacuum." Gundy v. United States , ––– U.S. ––––, 139 S. Ct. 2116, 2126, 204 L.Ed.2d 522 (2019) (quotation omitted). Rather, statutory interpretation is a "holistic endeavor which determines meaning by looking not to isolated words, but to text in context, along with purpose and history." Id. (quotation omitted); see also McCreary Cty. v. Am. Civil Liberties Union of Ky. , 545 U.S. 844, 861, 125 S.Ct. 2722, 162 L.Ed.2d 729 (2005) ("Examination of purpose is a staple of statutory interpretation."). To be sure, a statute's purpose cannot be used to contradict the plain meaning of the text. Bellitto v. Snipes , 935 F.3d 1192, 1201 (11th Cir. 2019). For this reason, "[p]urpose sheds light only on deciding which of various textually permissible meanings should be adopted." A. Scalia & B. Garner, Reading Law: The Interpretation of Legal Texts 57 (2012). In short, courts "favor an interpretation that furthers the manifest purpose of a statute so long as the interpretation is textually permissible." United States v. Spoor Trustee , 838 F.3d 1197, 1204 (11th Cir. 2016) ; see also United States v. DuBose , 598 F.3d 726, 731 (11th Cir. 2010) (Courts "are not required to interpret a statute in such a narrow fashion as to defeat what [they] conceive to be its obvious and dominating general purpose." (quotation omitted)).

Thus, to decide between the two prevailing textually permissible interpretations, the court will consider the history and purpose of the statute. The forum defendant rule complements the rationale behind diversity jurisdiction. The purpose of diversity jurisdiction is to protect out-of-state litigants from potential bias in state courts against nonresidents by providing those...