Notice of Removal Lacking Diversity Citizenship Allegation is Reviewable Procedural Defect: Fourth Circuit | Practical Law

Notice of Removal Lacking Diversity Citizenship Allegation is Reviewable Procedural Defect: Fourth Circuit | Practical Law

In Doe v. Blair, the US Court of Appeals for the Fourth Circuit held that the defendant's failure to indicate its principal place of business in a notice of removal was a procedural rather than jurisdictional defect, and joined the Fifth, Seventh, and Eleventh Circuits in holding that such defects allowed for appellate review of the district court's remand order.

Notice of Removal Lacking Diversity Citizenship Allegation is Reviewable Procedural Defect: Fourth Circuit

by Practical Law Litigation
Published on 22 Mar 2016 • USA (National/Federal)
In Doe v. Blair, the US Court of Appeals for the Fourth Circuit held that the defendant's failure to indicate its principal place of business in a notice of removal was a procedural rather than jurisdictional defect, and joined the Fifth, Seventh, and Eleventh Circuits in holding that such defects allowed for appellate review of the district court's remand order.
On March 21, 2016, in Doe v. Blair, the US Court of Appeals for the Fourth Circuit held that the district court's sua sponte remand order was based on the notice of removal's procedural insufficiency, rather than its determination that it lacked subject matter jurisdiction. The notice of removal failed to establish the primary place of business of one of the defendants, which was necessary to determine whether the court had diversity jurisdiction. Because the order was based on a procedural defect, the Fourth Circuit joined the Fifth, Seventh, and Eleventh Circuits in determining that it had jurisdiction to review the order. ( (4th Cir. Mar. 21, 2016).)
Jane Doe #1 sued the defendants Matt Blair and Res-Care, Inc. in West Virginia state court. The defendants removed the case to federal court, asserting subject matter jurisdiction based on diversity of citizenship. However, the notice of removal failed to indicate Res-Care's principal place of business. The district court sua sponte remanded the case to state court, asserting that diversity jurisdiction could not be established without an assertion of Res-Care's principal place of business by one of the parties. The defendants filed a motion to amend under Federal Rule of Civil Procedure (FRCP) 59(e) and to reconsider under FRCP 60, which the plaintiff did not oppose. The district court denied the motion, and the defendants appealed.
Under U.S.C. 28 § 1447(c), a district court can remand a case sua sponte for lack of subject matter jurisdiction, and that order is not reviewable by a court of appeals. However, remand based on anything other than subject matter jurisdiction is reviewable. While the district court's order recited the principles of subject matter jurisdiction and determined that diversity jurisdiction was lacking because there was no allegation as to ResCare's principal place of business, the Fourth Circuit looked to the substantive reasoning underlying the order. Because the district court based its decision on the failure of the removal notice to present a factual basis to determine whether subject matter jurisdiction existed, the Fourth Circuit held that remand was based on a procedural deficiency rather than an actual lack of subject- matter jurisdiction and found that appellate review was not barred.
The Fourth Circuit concluded that the district court exceeded its authority by remanding the case sua sponte, reversed the remand order and remanded the case to the district court for further proceedings.