A recent federal court decision out of the Northern District of Ohio illustrates the importance of carefully evaluating when the 30-day deadline for filing a removal petition begins to run. In Tolloty et al. v. Republic Services, Inc. et al., plaintiffs sued defendants in Ohio state court seeking damages for illnesses allegedly caused by exposure to toxic chemicals from a landfill owned and operated by defendants. Of the four defendants sued, only one of the defendants was incorporated in Ohio.
During a deposition of one of the defendant's corporate witnesses, evidence came to light that the Ohio defendant-corporation had not been in existence at the time of plaintiffs' alleged injuries; rather, another corporation with the same name (but incorporated in Delaware) had owned and operated the landfill at that time. Following the deposition, defendants sent a letter to plaintiffs' counsel asking them to dismiss the Ohio corporation from the litigation; plaintiffs refused. Within 30 days of receipt of that letter, defendants removed the case to federal court, asserting that the federal court had diversity jurisdiction over the matter since none of the defendants were incorporated or domiciled in Ohio (with the exception of the Ohio defendant-corporation that defendants alleged was fraudulently joined to defeat diversity). Plaintiffs moved to remand the case back to state court on the basis that more than 30 days had passed since the date that defendants received the transcript of the deposition during which the testimony concerning the Delaware corporation had come to light. In response, defendants argued that the 30-day clock should not have commenced until such time as plaintiffs refused to dismiss the Ohio defendant-corporation from the litigation.
In considering plaintiffs' request to remand the case, the court noted that a "defendant seeking removal must strictly comply with the timing requirements of 28 U.S.C. §1446(b)." All ambiguity regarding the scope of §1446(b) should be resolved in favor of remand to the state courts. Here, defendants' removal petition was filed more than 90 days after defendants received the deposition transcript. Defendants could point to no operative facts or additional evidence relevant to the issue of fraudulent joinder that became known to them subsequent to the deposition at issue. The court rejected defendants' argument that until such time as the plaintiffs refused to dismiss the Ohio defendant-corporation, their removal petition was not ripe. Finally, in what was likely the final nail in defendants' removal coffin, the court noted that even before the deposition at issue, defendants should have been on notice of the underlying facts that they rely upon to make their fraudulent joinder argument. The court therefore granted plaintiffs' motion to remand the case back to state court. To see a copy of the opinion, please click here.