Removal To Federal Court Can Be Exacting For Insurance Companies Also

When a Plaintiff sues an insurance company in State Court, the insurance company is usually going to do everything it can to have the case removed to Federal Court.  Plaintiffs normally lose this fight over which court the case will be litigated.

Here is a case where the Plaintiff won the fight and primarily because of mistakes the insurance company lawyers made.  The case is from the Southern District of Texas, Houston Division.  It is styled, Jade Freeman v. State Farm Mutual Automobile Insurance Company ….

Freeman filed the case in State Court on February 21, 2018, suing State Farm.  On October 9, 2018, plaintiff filed her first amended petition adding Progressive as an additional defendant.  The lawsuit arose out of an auto accident and State Farm and Progressive were sued for breach of contract and violations of the Texas Insurance Code.  On November 20, 2018, Progressive filed its Removal Petition in this Court.  Freeman timely filed its Motion to Remand.

A party may remove an action from state court to federal court if the action is one over which the federal court possesses subject matter jurisdiction and it is proved by the removing party.

Pursuant to 28 U.S.C., Section 1446(b), notice of removal “shall be filed within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading ….”  When removal is based on diversity jurisdiction all defendants that have been properly joined and served must consent to removal by timely filing a written indication of consent within thirty days prior to the expiration of the removal period.  Each defendant must formally file its own manifestation of consent — out of court agreements between the defendants are not sufficient.  The failure of all defendants to join in the removal petition within the statutory removal period renders the petition for removal procedurally defective.  If the plaintiff timely seeks remand in light of one or more of the defendants’ failure to file written consent to removal, the court shall remand the case to state court.  A motion for remand based on a defect in removal procedure is timely as long as it is filed within 30 days after the filing of the defendant’s notice of removal.

Freeman argues that State Farm failed to timely file a written consent to removal.  Progressive responds that it obtained State Farm’s consent in an email before the deadline passed.

The deadline for Progressive to file a timely removal was November 23, 2018, the deadline for both Progressive to file its notice and for State Farm to consent was November 23, 2018.  Progressive argues that an email exchange between attorneys for Progressive and State Farm before the expiration of the 30-day removal period is a sufficient manifestation of State Farm’s consent to removal.  The email, sent on November 7, 2018, states; “We are not opposed to the removal.”  The internet email does not comply with Section 1446(b).  Because Progressive and State Farm’s failed to formally file notice of State Farm’s consent to Progressive’s Removal Petition by the November 23, 2018, deadline, Progressive’s Removal Petition was procedurally defective.