## Facts

- Brian Viviani attended an event at Stone Mansion Restaurant in Pittsburgh and was allegedly served alcohol while visibly intoxicated.
- After leaving, Viviani drove with passenger Helen Hoey; the vehicle hit a guardrail and rolled over, killing Viviani and seriously injuring Hoey.
- Hoey sued Viviani’s estate in Pennsylvania state court; Encompass Insurance Company, Viviani’s auto liability insurer, defended the estate.
- Encompass settled Hoey’s claims for $600,000 in exchange for a release of her claims against all potential defendants, including Stone Mansion.
- Encompass then sued Stone Mansion in Pennsylvania state court, alleging Stone Mansion’s service of alcohol violated Pennsylvania’s Dram Shop law and seeking contribution under Pennsylvania’s Uniform Contribution Among Tortfeasors Act (UCATA).
- Before formal service occurred, Stone Mansion’s counsel communicated about accepting service but did not return an acceptance-of-service form; Stone Mansion removed the case to federal court on diversity grounds.
- Encompass moved to remand under the forum defendant rule, and Stone Mansion moved to dismiss for failure to state a claim.

## Issues

1. Whether 28 U.S.C. § 1441(b)(2) bars removal by a forum-state defendant when removal occurs before the defendant is “properly joined and served.”
2. Whether Pennsylvania law permits a settling insurer to seek UCATA contribution from a liquor licensee allegedly liable under Dram Shop principles for injuries to a third party.

## Decision

- The Third Circuit affirmed the denial of remand.
- The court held § 1441(b)(2) bars removal only when a forum defendant has been “properly joined and served”; removal before service was permitted.
- The court rejected arguments that the forum defendant rule should apply based on perceived statutory purpose or the defendant’s service-related conduct.
- The Third Circuit reversed the Rule 12(b)(6) dismissal.
- The court held Encompass plausibly stated a UCATA contribution claim and that Pennsylvania Dram Shop law did not foreclose contribution in this posture.
- The case was remanded for further proceedings.

## Legal Principles

- Under 28 U.S.C. § 1441(b)(2), the forum defendant rule applies only if a forum-state defendant is “properly joined and served”; pre-service “snap removal” is not barred by the statute’s text.
- Courts applying § 1441(b)(2) may not disregard the “properly joined and served” language based on policy concerns about tactical removal; revisions are for Congress.
- Pennsylvania’s Dram Shop provision (47 P.S. § 4-497) establishes liability to injured third persons but does not, by its terms, prohibit contribution among tortfeasors.
- A UCATA contribution claim is distinct from a direct tort claim; contribution turns on shared liability to the injured party and may be pursued by a settling party that paid more than its fair share.
- An insurer that settles an injured third party’s claims on behalf of its insured may seek UCATA contribution from another alleged joint tortfeasor, including a liquor licensee accused of serving a visibly intoxicated patron.

## Conclusion

The Third Circuit held that a Pennsylvania defendant may remove a diversity case before being served because § 1441(b)(2) applies only to defendants “properly joined and served,” and it also held that Pennsylvania Dram Shop law does not bar an insurer’s UCATA contribution claim against an alleged overserving licensee after the insurer settles with an injured third party.


Encompass Ins. Co. v. Stone Mansion Rest. Inc., 902 F.3d 147 (3d Cir. 2018)