On August 4, 2014, the US Court of Appeals for the Ninth Circuit, in Smith v. Myland, Inc., held that removal of a case based on diversity jurisdiction after the one-year time limit under 28 U.S.C. § 1446(c) expires is a procedural defect rather than a jurisdictional defect. Therefore, the court may not remand a case sua sponte unless a party first objects to that procedural defect. (No. 12-56028 (9th Cir. Aug. 4, 2014)).

In December 2010, the Smiths filed a wrongful death action in state court. In October 2011, the Smiths served Myland with an amended complaint. At that time there was no diversity jurisdiction because the parties were not completely diverse. In January 2012, the state court dismissed the last non-diverse defendant, and two weeks later, the remaining defendants removed the case to federal court based on diversity jurisdiction. The Smiths did not object to removal. Nonetheless, the district court sua sponte remanded the case back to state court for lack of subject matter jurisdiction. The district court found that the removal violated the one-year time limitation set out in § 1446(b) (now set out in § 1446(c)(1)). Myland appealed.

The Ninth Circuit vacated the lower court's decision, holding that the § 1446(c) one-year time limit is procedural, rather than jurisdictional, and thus can be waived. Therefore, a district court may remand based on violation of the one-year rule only upon a timely motion to remand. This was the first instance in which the Ninth Circuit considered this issue, but in previous decisions, the court held that the 30-day time limit to file a notice of removal under § 1446(b) after receipt of a complaint is procedural in nature. The court reasoned that the § 1446(c) time limit for removal should be treated no differently. The Ninth Circuit's conclusion is consistent with the holdings of the Third, Fifth, Sixth, and Eleventh Circuits.

Practitioners in the Ninth Circuit should be certain to make timely objections to procedural, non-jurisdictional defects, such as the late removal of a case to federal court. Without an objection, the defect is waived.