The Process of REMOVING and GOVERNING LAW

Question 1

How does removal happen?

Answer 1

• D’s sued in state court can remove the case to federal court by filing notice of removal in federal court, stating grounds of removal, signed under FRCP Rule 11, attaching all documents served on D in the state action, and sending copies to all adverse parties. D must then file a copy of notice in state court.
• Removal must be w/in 30 days after SERVICE of the first paper that makes the case removable
• All Ds served w/ process must join to remove
• the 30 days starts over when each D is subsequently served
• If removal was procedurally improper, P moves to remand to state court w/in 30 days of removal
• If removal was jurisdictionally improper (aka no federal SMJ) P can move to remand at any time

Question 2

Exceptions to D’s right to remove

Answer 2

ONLY IN DIVERSITY CASES:
1- no removal if ANY D is a citizen of the forum; AND
2- no removal more than 1 year after the case was filed in state court [unless the federal judge finds that P acted in bad faith to prevent removal]

Question 3

Where does the case get removed to?

Answer 3

The federal district embracing the state court where it was filed.

Question 4

Counterclaims & their effect on removal

Answer 4

D who files a permissive counterclaim in state court probably waives right to remove. Filing a compulsory counterclaim in state court probably does not waive the right to remove.

BUT NOTE: In NY state court, all counterclaims are considered permissive. So analyze whether a fed court would consider then permissive or compulsory under the fed defs.

Question 5

A federal court in a DIVERSITY case must decide an issue. In deciding that issue, does it have to follow state law, or can it ignore state law?

Answer 5

Erie Doctrine– in diversity cases, the federal court must apply state SUBSTANTIVE law.

Question 6

Test for determining whether to apply federal or state law: (Three main steps)

Answer 6

(1) Ask: is there a federal law (constitution, statute, FRCP, FRE) on point that DIRECTLY CONFLICTS w/ the state law?
- yes –> b/c of supremacy clause you apply the federal law as long as it is valid, which it will always be b/c it is “arguably procedural”
- no –> move to (2)

(2) If there is NO FEDERAL LAW ON POINT, ask: Does this issue involve (i) elements of a claim or defense; (ii) SoL **; (iii) rules for tolling SoL; and (iv) conflict of law rules?
- yes –> considered substantive & you must follow state law
- no –> move to (3)

(3) If there is NO FEDERAL LAW and the issue isn’t one of the 4 listed in (2), you analyze the issue under 3 mini tests and come to a reasonable conclusion:
- outcome determinative test: would applying/ignoring state rule affect the outcome of the case? If so, probably substantive so use state law
- balance of interests test: does either fed or state system have strong interest in having its rule applied?
- avoid forum shopping test: if the fed ct ignores state law on this issue, will it cause parties to flock to fed ct? If so, probably should apply state law.