Removal is the process by which a defendant in a state-court action moves the lawsuit from state court to federal court. Although lawyers are familiar with the concept of removal, it may not be an issue that arises often in their practice. Further, the rules governing removal can be quite complicated. As one recent case demonstrates, improperly removing a case can lead to embarrassing consequences.

According to the relevant removal rules, a defendant may remove a case filed in state court to federal court in several circumstances, including where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between citizens of different states, so long as none of the defendants is a citizen of the state in which the action was brought (the defendant-forum rule) (28 U.S.C. §§ 1332(a) and 1441(b)(2)).

In Rivas v. Bowling Green Associates, L.P., the United States District Court for the Southern District of New York (SDNY) imposed sanctions against a defense attorney and his firm for violating this rule (No. 13-cv-7812, , at *4-5 (S.D.N.Y. July 24, 2014)). There, the defendant (a New York corporation) removed the case from New York state court to the SDNY. Although this was in violation of 28 U.S.C. § 1441(b)(2), the plaintiff failed to make a timely motion to remand the case. Nevertheless, the SDNY ordered defendant's counsel and his law firm to show cause why they should not be sanctioned for improperly removing the case and for signing the notice of removal, which represented to the court that the action "may be removed pursuant to 28 U.S.C. § 1441." (, at * 1.)

Defense counsel argued that, despite the fact that the case was improperly removed, the district court nonetheless had subject matter jurisdiction over the action and the plaintiff could no longer seek to remand the case since the time to do so lapsed. The court held that, although these arguments were technically correct, counsel had violated Federal Rule of Civil Procedure (FRCP) 11 by:

(, at *2, 4.)

As a result of its findings, the court issued a warning to the removing defense attorney and ordered his law firm to require each partner or member to attend a continuing legal education course on federal subject matter jurisdiction based on diversity of citizenship, FRCP 11 and removal (, at *5).

To avoid such embarrassing consequences when removing a case, counsel should familiarize themselves with and adhere to all relevant rules and procedures. The following Practical Law resources provide a comprehensive analysis on how and when to remove or remand a case as well as what to do post-removal and post-remand: