On June 27, 2013, the US Court of Appeals for the Ninth Circuit issued an opinion in Roth v. CHA Hollywood Medical Center stating that a defendant who has not lost the right to remove because of a failure to timely file a notice of removal under the federal removal statutes may still remove a case from state to federal court when, based on its own investigation, it discovers that a case is removable.

The plaintiffs in this action filed a wage and hour class-action lawsuit under state law in California state court. On May 24, 2012, the plaintiffs filed an amended complaint naming an additional defendant, CHA Hollywood Medical Center. There were no allegations in the plaintiff's amended complaint that indicated the matter was removable to federal district court. After conducting its own investigation, CHA discovered that one would-be class member was a resident of Nevada, thereby creating diversity jurisdiction in the action. On September 4, 2012, CHA filed a notice of removal in the US District Court for the Central District of California alleging diversity jurisdiction under CAFA.

The plaintiffs filed a motion to remand the case back to state court, which the district court granted. The court noted that 28 U.S.C. §§ 1446(b)(1) and (b)(3) provide a 30-day period in which a defendant may remove the case that is triggered when a defendant receives sufficient indication from a document provided by the plaintiff that the matter is removable. Since CHA removed this matter based on information that it obtained itself, the district court found that removal was improper. The defendants appealed this decision.

The Ninth Circuit reversed and remanded the decision for further consideration by the district court. The court concluded that the federal removal statutes, specifically 28 U.S.C. § 1441, which provides for removal generally, and 28 U.S.C. §§ 1446(b)(1) and (b)(3), when read together permit a defendant to remove a case based on its own findings as long as neither 30-day deadline has expired. The court noted that a plaintiff should not be able to prevent or delay removal of an action to a federal court by withholding information showing removability and then objecting to removal when the defendant has discovered this information on its own.

The court also discussed one practical objection to its ruling, namely, the strategic use of removing an action based on information discovered by a defendant concerning a matter's removability, and later delaying filing a notice of removal until it is advantageous to the defendant to do so. The court dismissed this concern for general diversity actions, reminding practitioners that under 28 U.S.C. § 1446(c)(1), removal is permitted only within one year of the matter's initiation. However, this limitation does not exist in CAFA cases. Here, the court advised plaintiffs who believe that their actions could be removable to file a document from which removability may be ascertained, therefore triggering the 30-day removal period.

The court's holding permits defendants in the Ninth Circuit to remove a case based on their own findings, as long as no document from which the defendant could otherwise ascertain diversity was filed by the plaintiff outside of the 30-day window provided in § 1446(b)(1) and (b)(3). For more information on removal, see Practice Note, Removal: How to Remove a Case to Federal Court.