Facts
- Pennsylvania Manufacturers’ Association Insurance Company (PMAIC) filed an Illinois state-court declaratory-judgment action seeking a ruling that it owed no duty to defend or indemnify its insured, Fidelitone, Inc., in an underlying Illinois Biometric Information Privacy Act (BIPA) class action.
- PMAIC is a Pennsylvania citizen.
- Fidelitone is incorporated in Delaware and has its principal place of business in Illinois; for diversity purposes, it is a citizen of Illinois.
- PMAIC also named Jasmine Locke (the claimant/plaintiff in the underlying BIPA case) as a defendant in the coverage action.
- PMAIC filed the coverage action on December 14, 2023, in the Circuit Court of Cook County, Illinois.
- On December 19, 2023—before Fidelitone was formally served—Fidelitone filed a notice of removal to the Northern District of Illinois based on diversity jurisdiction under 28 U.S.C. § 1332.
- Fidelitone argued that removal was permitted because the forum-defendant rule, 28 U.S.C. § 1441(b)(2), bars removal only when a forum defendant has been “properly joined and served,” and it had not yet been served.
- PMAIC moved to remand, contending that a forum defendant may not remove a diversity case before service to avoid § 1441(b)(2).
Issues
- Whether 28 U.S.C. § 1441(b)(2) permits an in-forum defendant to remove a diversity case before it is served (“snap removal”).
- Whether the “properly joined and served” language in § 1441(b)(2) should be read to allow pre-service removal by a forum defendant, or instead to prevent plaintiffs from blocking removal through joinder-and-nonservice tactics.
Decision
- The court granted PMAIC’s motion to remand.
- The court held that Fidelitone’s pre-service removal was improper under the forum-defendant rule.
- The court directed the clerk to remand the case to the Circuit Court of Cook County, Illinois, and struck the federal status hearing.
Legal Principles
- In diversity-only cases, § 1441(b)(2) generally bars removal if any properly joined and served defendant is a citizen of the forum state.
- The forum-defendant rule reflects that diversity jurisdiction’s local-bias rationale is at its weakest when the defendant is sued in its home state.
- Removal statutes are construed narrowly, and doubts about removability are resolved in favor of remand.
- The “properly joined and served” clause is commonly understood as addressing plaintiff-side gamesmanship (joining a forum defendant and then not serving it to prevent removal), not as creating a timing loophole that permits a home-state defendant to remove before service.
- A reading that makes removability turn on a race between service and a defendant’s rapid filing—often based on monitoring electronic state-court dockets—conflicts with the function of the forum-defendant rule and can justify remand where no controlling appellate authority requires the contrary result.
Conclusion
The Northern District of Illinois remanded PMAIC’s insurance-coverage declaratory-judgment action after concluding that Fidelitone—an Illinois citizen sued in Illinois state court—could not remove the case before service to bypass the forum-defendant rule, and that § 1441(b)(2)’s “properly joined and served” language did not authorize that tactic.