## Facts

- William S. Burroughs, Jr., a Virginia attorney, sued former client P. M. Palumbo, Jr. to recover unpaid legal fees.
- Burroughs filed the action in Virginia state court, and Palumbo (a Florida citizen) was served under Virginia’s long-arm procedures; service became effective on September 1, 1994.
- Virginia procedure required Palumbo to answer within 21 days of effective service; he did not answer within that period.
- On September 29, 1994, Palumbo filed a notice of removal in the U.S. District Court for the Eastern District of Virginia within the federal 30-day removal period.
- On September 30, 1994, the state court entered a default judgment against Palumbo for failure to timely respond.
- Later on September 30, 1994, Palumbo filed the notice of removal in the state court clerk’s office.
- In federal court, Palumbo moved to set aside the state-court default judgment, arguing the state court lacked jurisdiction to enter default after he filed the notice of removal in federal court.

## Issues

1. Whether filing a notice of removal in federal court, before filing it in state court and giving notice, immediately divests the state court of jurisdiction to enter further orders.
2. Whether a state-court default judgment entered after the federal filing but before state-court filing/notice is void for lack of jurisdiction and must be set aside.

## Decision

- The court denied the motion to set aside the state-court default judgment.
- The court held that jurisdiction was concurrent between the state and federal courts during the interval between federal filing of the notice of removal and filing/notice in state court.
- The court concluded the state court validly entered the default judgment before it was notified of removal.
- The case remained properly removed to federal court with the default judgment intact.

## Legal Principles

- Removal under 28 U.S.C. § 1446 is completed by a two-step process: (1) filing the notice of removal in federal court and (2) filing a copy in state court and providing written notice to adverse parties; the state court is directed to proceed no further only after the second step.
- During the gap between federal filing and state-court filing/notice under § 1446(d), state and federal courts may have concurrent jurisdiction, permitting the state court to act until notified.
- Removal transfers the case to federal court in the posture it had in state court; valid state-court orders entered before state-court notice of removal are not automatically nullified by the earlier federal filing.
- Timely removal under federal law does not excuse noncompliance with state procedural deadlines or retroactively invalidate state-court defaults entered before the state court is notified of removal.

## Conclusion

The court held that removal does not halt state-court proceedings until the removing defendant files the notice in state court and provides notice to the opposing party; therefore, a default judgment entered by the state court before it received notice of removal remains effective after removal.


Burroughs v. Palumbo, 871 F. Supp. 870 (E.D. Va. 1994)