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Practice pointer for plaintiff's attorneys -- Federal removal jurisdiction, 28 U.S.C. § 1441.

Photograph: Beautiful old courthouse doors and steps bathed in late afternoon sunlight.

You’re a plaintiff’’s personal injury attorney in New York State, and you mostly practice in New York State court.  However, occasionally you end up in Federal court, likely removed from state court on the grounds of diversity jurisdiction, 28 U.S.C. § 1441.  Or, you might consider just commencing that multi-state motor vehicle collision claim in Federal court, based upon the belief you will be removed to Federal court by the defendants on diversity grounds anyway.

Two important cautions are in order for New York State plaintiff’s practitioners who become involved in diversity jurisdiction in Federal court:

Point 1.  As you of course know, New York State is a "commencement-by-filing" state.  So once the Summons and Complaint are timely filed with the appropriate clerk's office in New York State, the applicable New York State statute of limitations is satisfied and extinguished.  You're in!  

However, if an action in New York is commenced by filing the Summons and Complaint in Federal court (which is also "commencement-by-filing"), while the New York State statute of limitations is satisfied, it is only satisfied so long as the case is properly within the subject matter jurisdiction (“SMJD”) of Federal court.  If the case is dismissed for lack of Federal jurisdictional grounds for whatever reason, it is usually dismissed without prejudice -- meaning it can be re-commenced in New York State court.  

But: what if upon the Federal dismissal the statute of limitations has then run for filing in New York State court?  It is too late to commence in state court, and the lawyer (and client) is out of luck.  Bad.  Very bad.  This is the ultimate trap for inexperienced state practitioners who blunder into Federal court practice -- thinking they've satisfied the statute of limitations in a diversity case by filing first in Federal court instead of New York State court.  They may have initially satisfied the statute of limitations, but if diversity is "destroyed" or found to be lacking, every Federal court I've been in is delighted to kick it out of the Federal courthouse for lack of subject matter jurisdiction.  Then the lawyer goes back to New York State court to re-commence, praying the statute of limitations is still alive -- and it may not be.

Remedy:  if you know there is, in the alternative to a state action, Federal diversity jurisdiction applicable to your case, and you may be removed by the defendant(s) to Federal court on diversity grounds (and you will know if you sue a major Fortune 500 corporation, or sophisticated out-of-state defendant), as plaintiff you always commence your action by filing in New York State court first.  Then let the defendants remove you -- you've satisfied the New York statute of limitations by filing in state court, and if diversity should come apart at the Federal court level, and you're kicked out by the Federal court sua sponte for lack of Federal SMJD, you're safe.  You're back in New York State court where you started, where you originally filed, and the statute of limitations is satisfied.  Whew! 

Point 2:  New York State law does not require that a demand for jury trial be pled in a state Complaint.  Federal courts generally do, or defer to whatever Federal case law in that particular Circuit says about choice of law rules with regard to pleading jury demands.  You don't want to get into that scenario if you're removed on diversity grounds.  So I always include a separate jury demand paragraph in all of my New York State Complaints that I know or suspect will be removed to Federal court from my initial state court filing.  Issue solved with one simple paragraph.  Defendants in Federal court hate that, because they're always trying to take rude advantage of state practitioners whenever possible who blunder into Federal court in removal actions.

 

James Snyder