Third Circuit Adopts Later-Served Defendant Rule for Removal Petitions in Multi-Defendant Cases

On October 12, 2011, the Third Circuit weighed in on what it referred to as a “deep circuit split.” In Delalla v. Hanover Insurance, the Third Circuit joined a majority of the other circuit courts in adopting the “later-served defendant” rule for determining whether a removal petition is within the thirty-day limitation under 28 U.S.C. §1446(b).

Under the rule adopted by the Third Circuit, in a multi-defendant case where defendants are served on different dates, a notice of removal is timely if filed by the later-served defendant within thirty days of service on that defendant and the earlier served defendant(s) join in that notice of removal. As a result, even if an earlier-served defendant’s time for removal has expired, that defendant may consent to and join in a later-served defendant’s timely removal petition. The rule in the Third Circuit is now clear, and defendants in state court actions within the circuit need not be concerned that their removal rights could be compromised by the acts of an earlier-served defendant, unless that defendant refuses to join in the removal petition.

As noted by the Delalla court, however, the circuits are split on this issue. For example, the Fifth Circuit has adopted a first-served defendant rule, which requires that a timely removal notice be filed by all defendants within 30 days of service upon the first-served defendant. With yet another approach, the Fourth Circuit has fashioned a somewhat middle ground (the so-called McKinney intermediate rule), holding that each defendant has 30 days from service upon it to file, or to join in a previously-filed, notice of removal. Under this intermediate approach, if any defendant fails to file a notice within its 30-day window, all of the defendants (even those served thereafter) are foreclosed from removing the case.
As a result of the Third Circuit’s ruling in Delalla, the later-served defendant rule enjoys a significant majority. However, many courts, including the Second Circuit, have not yet addressed the issue. Accordingly, defendants named in multiple defendant state court litigations outside of those circuits that have ruled on the issue (the Third, Fourth, Fifth, Sixth, Eighth, Ninth and Eleventh Circuits) must still consider whether and what action may be required to ensure that the opportunity to remove a case to federal court is not foreclosed.