On August 8, 2014, the US District Court for the Northern District of California held in Hanson v. Equilon Enterprises LLC that a defendant's notice of removal was untimely because it was filed months after the case became removable due to the plaintiff's voluntary dismissal of a non-diverse defendant (No. 14-02674, (N.D. Cal. Aug. 8, 2014)).

On June 21, 2013, Plaintiff Daniel Hanson (Hanson) sued Equilon Enterprises LLC (Equilon) and another defendant, Pacific Gas and Electric Company (PG & E), in California state court. Hanson asserted negligence claims after a fall from an electrical pole on which he was working left him seriously injured. The complaint alleged that:

In response to Equilon's interrogatories, Hanson stated that he had lived in California from June 2011 to September 2013 and in Wisconsin from September 2013 to the present. In February 2014, the court voluntarily dismissed PG & E from the case at Hanson's request, and Equilon was served with notice that PG & E was dismissed. Almost four months later, on June 10, 2014, Equilon removed the case on the basis of diversity jurisdiction. Hanson moved to remand on July 3, 2014. He argued in part that Equilon’s notice of removal was untimely under 28 U.S.C. § 1446(b)(3), which requires removal within 30 days if a defendant is served with a paper from which it is clear that the case is or has become removable, and where no basis for removal existed previously. Hanson argued that this 30-day period for removal was triggered when Equilon was served with his interrogatory responses, or in the alternative, when Equilon was served with notice that PG & E had been dismissed from the case.

In its opinion, the district court noted that diversity of citizenship generally must exist when a case is filed; however, diversity may be assessed at the time of removal if a plaintiff voluntarily dismisses all non-diverse defendants before the notice of removal is filed. The district court found that diversity jurisdiction existed when Equilon removed because:

The district court then noted that, under 28 USC 1446(c)(1), a defendant generally has one year from the date of filing to remove a case if it discovers a basis for removal on its own investigation. However, it also found that the voluntary dismissal of PG & E, the non-diverse defendant, provided notice to Equilon that the case was removable, triggering the 30-day period under 28 U.S.C. § 1446(b)(3). Because Equilon had been served with notice of the voluntary dismissal of PG & E in February 2014, Equilon's removal in June 2014 was untimely. The district court therefore granted Hanson's motion for remand.

To ensure timely removal, defense counsel should not depend solely on the one-year removal period under 28 U.S.C. 1446(c)(1). Defense counsel must carefully review an adverse party's amended pleadings, discovery responses and notices soon after they are served to determine whether any basis for removal arises that could trigger the 30-day period under 28 U.S.C. 1446(b)(3).