Magallan v. Zurich American Insurance Co.
228 F. Supp. 3d 1257
N.D. Okla.2017Background
- Suit filed Oct 3, 2016 in Delaware County, Oklahoma by decedent's spouse against driver John Crelia (state-law negligence/wrongful death) and insurer Zurich (breach, bad faith, declaratory relief) for >$75,000.
- Complaint alleged plaintiff Texas citizen, Zurich Illinois (principal place), and Crelia Oklahoma resident.
- Zurich was served Oct 21, 2016 and removed to federal court Nov 2, 2016 asserting complete diversity; Crelia was not served until Nov 23, 2016.
- Evidence shows Crelia temporarily stayed in Arkansas around filing date but maintained Oklahoma ties (Oklahoma driver’s license, rental house, mail); Crelia later clarified he was living in Oklahoma before/after brief Arkansas stay.
- Plaintiff moved to remand arguing the forum-defendant rule, 28 U.S.C. § 1441(b)(2), bars removal because Crelia is an Oklahoma citizen; Zurich argued Crelia was not a forum citizen at removal and, alternatively, removal preceded Crelia’s service so § 1441(b) does not apply.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 1441(b)(2) (forum-defendant rule) bars removal | Crelia is an Oklahoma citizen so removal is prohibited | Crelia was not a forum citizen at filing/removal and/or was not "properly joined and served" when Zurich removed | Court refused to apply forum-defendant rule to Crelia because he had not been "properly joined and served" at time of removal; remand denied |
| Meaning of "properly joined and served" in § 1441(b) | Plain reading should prevent removal if a forum defendant exists, regardless of service timing | "Joined and served" means the rule applies only to defendants who have been properly served; pre-service removal is permissible | Court adopted the plain meaning: the phrase requires service, so the rule did not bar Zurich’s pre-service removal |
| Whether courts should depart from plain text to avoid gamesmanship | Plaintiff urged courts avoid incentivizing defendants to race to remove | Zurich argued plain text controls and Congress retained the language in later amendments | Court declined to rewrite statute to curb perceived gamesmanship—legislative silence and retention counseled for text-based interpretation |
| Application of absurdity doctrine to allow remand despite plain text | Plaintiff argued pre-service removal can produce unfair/absurd results and courts should avoid that outcome | Zurich argued no absurdity here because plaintiff had reasonable time to serve forum defendant before removal | Court found no absurdity: plaintiffs had about a month to serve Crelia before removal, so literal application was not absurd |
Key Cases Cited
- Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (federal courts have limited jurisdiction)
- United States v. Ron Pair Enters., Inc., 489 U.S. 235 (plain meaning of statutes controls except in rare absurdity cases)
- Griffin v. Oceanic Contractors, Inc., 458 U.S. 564 (absurdity doctrine permits deviation from plain text in exceptional cases)
- Merida Delgado v. Gonzales, 428 F.3d 916 (10th Cir.) (party invoking federal jurisdiction bears burden; presumption against jurisdiction)
- McPhail v. Deere & Co., 529 F.3d 947 (10th Cir.) (removing party must prove jurisdictional facts by preponderance)
- In re McGough, 737 F.3d 1268 (10th Cir.) (discussing absurdity doctrine and statutory interpretation)
- Hain v. Mullin, 436 F.3d 1168 (10th Cir.) (every clause of a statute should be given effect)
- Wilson v. Republic Iron & Steel Co., 257 U.S. 92 (fraudulent joinder cannot defeat removal)
- Sullivan v. Novartis Pharm. Corp., 575 F. Supp. 2d 640 (D.N.J.) (court remanded despite pre-service removal to avoid absurd/result and gamesmanship)