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Federal Bar Update: 6-month update on changes to removal statutes

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Federal Bar UpdateAs readers will recall, the Federal Courts Jurisdiction and Venue Clarification Act of 2011 took effect Jan. 6. The act amended the removal statutes in many respects, including:

• if defendants are served at different times, and a later-served defendant files a notice of removal, any earlier-served defendant may consent to the removal even though he or she did not previously initiate or consent to removal;

• the act still has a one-year cap on diversity removals unless the District Court finds that the plaintiff acted in bad faith to prevent removal, and if the court finds that plaintiff failed to disclose the amount in controversy to avoid removal, that is bad faith; and

• the act speaks to how to treat amount in controversy on removal, including for jurisdictions (like Indiana) where in some types of cases, the amount of damages cannot be set forth in the state court complaint, the notice of removal can set forth the amount in controversy.

Since the act took effect, it has been cited by name in 13 reported decisions, most of which simply deal with the effective date of the act. For instance, in Hatfield v. Wilson, 2012 WL 1899653 (S.D. W. Va. May 24, 2012), the court noted that a defense brief cited to the amended language of 28 U.S.C. § 1446, but that the case was commenced in state court prior to Jan. 6 such that the amendments did not apply. Accord, Benson v. LVNV Funding, LLC, 2012 WL 699632 (S.D. Ill. March 1, 2012).

Practitioners thus need to be attentive to when the action was commenced and then be sure to apply the old removal statutes if the case pre-dates Jan. 6, and the amended statutes if the case was commenced in state court on or after Jan. 6. Federal courts have not been consistent and correct in determining if the act applies. Per the plain language of the act, the “amendments made by this title (1) shall take effect upon the expiration of the 30-day period beginning on the date of the enactment of this Act (which was Dec. 7, 2011); and (2) shall apply to (A) any action that is commenced in a United States district court on or after such effective date; and (B) any action that is removed from a State court to a United States district court and that had been commenced, within the meaning of State law, on or after such effective date.”

Despite this clear language, several decisions have applied the act – erroneously – to actions that were commenced in state court prior to Jan. 6 and later removed. See, e.g., Kahlo v. Bank of America, 2012 WL 1067237 (W.D. Wa. March 28, 2012), (mistakenly applying the act to an action filed in state court in December 2011, removed on Jan. 13, 2012, stating that the “relevant section [of the Act] took effect Jan. 6, 2012 and applies to this removal”).

Substantively, the only instructive opinion of note located that applies the act is Ramsey v. Kearns, 2012 WL 602812 (E.D. Ky. Feb. 23, 2012), which remanded a post-Jan. 6 state court action that was removed to federal court on diversity, with the court determining that the removing defendant had not met the burden to show more than $75,000 in controversy.

The court wrote, “Indeed, recent changes to the removal statute make it clear that defendants should pursue state-court discovery before removal. See Federal Courts Jurisdiction and Venue Clarification Act of 2011. On Jan. 6, 2012, an amended version of 28 U.S.C. § 1446 took effect. These amendments give defendants a new 30-day window to remove a case if they receive discovery from the plaintiff in state court showing that the jurisdictional minimum is met. 28 U.S.C. § 1446(c)(3)(A). And if a plaintiff intentionally fails to disclose the true amount in controversy to prevent removal, the statute exempts the defendant from the usual requirement to remove within one year of the start of the case. 28 U.S.C. § 1446(c)(3)(B). Kearns removed this case on Jan. 11, 2012, so the removal statute explicitly allowed him to establish the amount in controversy through state-court discovery. He chose not to do so.”

Protective order violations – In Tama Plastics Industry v. Pritchett Twine & Net Wrap, No. 1:11-CV-783 (S.D. Ind. May 29, 2012), Magistrate Judge Denise LaRue addressed a motion for sanctions for violations of a confidentiality protective order. In opposing a preliminary injunction motion, a defendant submitted an expert report that contained information that had been designated attorneys’ eyes only. The protective order in the case did not allow such information to be provided to experts without consent of the other party or court approval. Plaintiff moved for sanctions, including to exclude the expert.

In granting in part the motion, LaRue explained, “Protective orders encourage parties to disclose sensitive material, lead to better-informed litigation and decisions, and reduce the costs and delays of litigation. Parties and their counsel must respect and comply with protective orders or these advantages are lost in current litigation and threatened in future litigation. Therefore, courts have a duty to strictly enforce protective orders in the interests of the parties and the public. It is especially important that cavalier attitudes about the terms of protective orders, as exhibited in this instance, are discouraged. However, sanctions for violations of protective orders must be proportionate, practical, and compatible with other important interests such as deciding claims on their merits, achieving correct decisions, and maintaining the efficiency of litigation and judicial decision-making. On the present motion, the court’s goal is to determine a practical sanction that maintains and restores the parties and counsels respect for and compliance with the protective order but does not detract from the integrity of the preliminary injunction hearing and decision.”

Striking a balance, LaRue ordered the defendant to secure appropriate written undertakings from the expert and his staff to keep the information confidential, to provide an inventory of all persons who received the information, and to detail how the information would be protected. Additionally, defendant was ordered to pay plaintiff’s fees for bringing the motion for sanctions, with the court noting it would be up to the defendant and defense counsel to determine who paid between them.

The Tama Plastics order is a must-read opinion for anyone involved with protective orders. It obviously demonstrates the importance of adhering strictly to the terms of protective orders, and also counsels for fashioning a protective order that allows for sharing protected information with experts barring some unusual circumstance. The decision is available on ECF or from the undersigned upon request.

7th Circuit handbook – The 7th Circuit’s Practitioners Handbook for Appeals has recently been updated, and is available on the 7th Circuit’s website. This is an invaluable resource even for experienced federal appellate practitioners.

Judicial biographies – Biographies of Judges Cale Holder and James Noland are online at the Southern District of Indiana’s website and are an interesting read.•

__________

John Maley – jmaley@btlaw.com – is a partner with Barnes & Thornburg practicing federal and state litigation, employment matters, and appeals. The opinions expressed are those of the author.
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  1. OK, take notice. Those wondering just how corrupt the Indiana system is can see the picture in this post. Attorney Donald James did not criticize any judges, he merely, it would seem, caused some clients to file against him and then ignored his own defense. James thus disrespected the system via ignoring all and was also ordered to reimburse the commission $525.88 for the costs of prosecuting the first case against him. Yes, nearly $526 for all the costs, the state having proved it all. Ouch, right? Now consider whistleblower and constitutionalist and citizen journalist Paul Ogden who criticized a judge, defended himself in such a professional fashion as to have half the case against him thrown out by the ISC and was then handed a career ending $10,000 bill as "half the costs" of the state crucifying him. http://www.theindianalawyer.com/ogden-quitting-law-citing-high-disciplinary-fine/PARAMS/article/35323 THE TAKEAWAY MESSAGE for any who have ears to hear ... resist Star Chamber and pay with your career ... welcome to the Indiana system of (cough) justice.

  2. GMA Ranger, I, too, was warned against posting on how the Ind govt was attempting to destroy me professionally, and visit great costs and even destitution upon my family through their processing. No doubt the discussion in Indy today is likely how to ban me from this site (I expect I soon will be), just as they have banned me from emailing them at the BLE and Office of Bar Admission and ADA coordinator -- or, if that fails, whether they can file a complaint against my Kansas or SCOTUS law license for telling just how they operate and offering all of my files over the past decade to any of good will. The elitist insiders running the Hoosier social control mechanisms realize that knowledge and a unified response will be the end of their unjust reign. They fear exposure and accountability. I was banned for life from the Indiana bar for questioning government processing, that is, for being a whistleblower. Hoosier whistleblowers suffer much. I have no doubt, Gma Ranger, of what you report. They fear us, but realize as long as they keep us in fear of them, they can control us. Kinda like the kids' show Ants. Tyrannical governments the world over are being shaken by empowered citizens. Hoosiers dealing with The Capitol are often dealing with tyranny. Time to rise up: https://www.theguardian.com/technology/2017/jan/17/governments-struggling-to-retain-trust-of-citizens-global-survey-finds Back to the Founders! MAGA!

  3. Science is showing us the root of addiction is the lack of connection (with people). Criminalizing people who are lonely is a gross misinterpretation of what data is revealing and the approach we must take to combat mental health. Harsher crimes from drug dealers? where there is a demand there is a market, so make it legal and encourage these citizens to be functioning members of a society with competitive market opportunities. Legalize are "drugs" and quit wasting tax payer dollars on frivolous incarceration. The system is destroying lives and doing it in the name of privatized profits. To demonize loneliness and destroy lives in the land of opportunity is not freedom.

  4. Good luck, but as I have documented in three Hail Mary's to the SCOTUS, two applications (2007 & 2013),a civil rights suit and my own kicked-to-the-curb prayer for mandamus. all supported in detailed affidavits with full legal briefing (never considered), the ISC knows that the BLE operates "above the law" (i.e. unconstitutionally) and does not give a damn. In fact, that is how it was designed to control the lawyers. IU Law Prof. Patrick Baude blew the whistle while he was Ind Bar Examiner President back in 1993, even he was shut down. It is a masonic system that blackballs those whom the elite disdain. Here is the basic thrust:https://en.wikipedia.org/wiki/Blackballing When I asked why I was initially denied, the court's foremost jester wrote back that the ten examiners all voted, and I did not gain the needed votes for approval (whatever that is, probably ten) and thus I was not in .. nothing written, no explanation, just go away or appeal ... and if you appeal and disagree with their system .. proof positive you lack character and fitness. It is both arbitrary and capricious by its very design. The Hoosier legal elites are monarchical minded, and rejected me for life for ostensibly failing to sufficiently respect man's law (due to my stated regard for God's law -- which they questioned me on, after remanding me for a psych eval for holding such Higher Law beliefs) while breaking their own rules, breaking federal statutory law, and violating federal and state constitutions and ancient due process standards .. all well documented as they "processed me" over many years.... yes years ... they have few standards that they will not bulldoze to get to the end desired. And the ISC knows this, and they keep it in play. So sad, And the fed courts refuse to do anything, and so the blackballing show goes on ... it is the Indy way. My final experience here: https://www.scribd.com/document/299040062/Brown-ind-Bar-memo-Pet-cert I will open my files to anyone interested in seeing justice dawn over Indy. My cases are an open book, just ask.

  5. Looks like 2017 will be another notable year for these cases. I have a Grandson involved in a CHINS case that should never have been. He and the whole family are being held hostage by CPS and the 'current mood' of the CPS caseworker. If the parents disagree with a decision, they are penalized. I, along with other were posting on Jasper County Online News, but all were quickly warned to remove posts. I totally understand that some children need these services, but in this case, it was mistakes, covered by coorcement of father to sign papers, lies and cover-ups. The most astonishing thing was within 2 weeks of this child being placed with CPS, a private adoption agency was asking questions regarding child's family in the area. I believe a photo that was taken by CPS manager at the very onset during the CHINS co-ocerment and the intent was to make money. I have even been warned not to post or speak to anyone regarding this case. Parents have completed all requirements, met foster parents, get visitation 2 days a week, and still the next court date is all the way out till May 1, which gives them(CPS) plenty of to time make further demands (which I expect) No trust of these 'seasoned' case managers, as I have already learned too much about their dirty little tricks. If they discover that I have posted here, I expect they will not be happy and penalized parents again. Still a Hostage.

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