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Home Depot U.S.A., Inc. v. Jackson - 139 S. Ct. 1743 (2019)

Rule:

In addition to granting federal courts jurisdiction over certain types of cases, Congress has enacted provisions that permit parties to remove cases originally filed in state court to federal court. 28 U.S.C.S. § 1441(a), the general removal statute, permits the defendant or the defendants in a state-court action over which the federal courts would have original jurisdiction to remove that action to federal court. To remove under this provision, a party must meet the requirements for removal detailed in other provisions. For one, a defendant cannot remove unilaterally. Instead, all defendants who have been properly joined and served must join in or consent to the removal of the action. 28 U.S.C.S. § 1446(b)(2)(A). Moreover, when federal jurisdiction is based on diversity jurisdiction, the case generally must be removed within 1 year after commencement of the action, § 1446(c)(1), and the case may not be removed if any defendant is a citizen of the State in which such action is brought, § 1441(b)(2).

Facts:

Citibank, N. A., filed a debt-collection action in state court, alleging that respondent Jackson was liable for charges incurred on a Home Depot credit card. Thereafter, Jackson responded by filing third-party class-action claims against petitioner Home Deport U. S. A., Inc., and Carolina Water Systems, Inc., alleging that they had engaged in unlawful referral sales and deceptive and unfair trade practices under state law. Home Depot filed a notice to remove the case from state to federal court, but Jackson moved to remand, arguing that controlling precedent barred removal by a third-party counterclaim defendant. The District Court granted Jackson's motion, which the Court of Appeals for the Fourth Circuit affirmed, holding that neither the general removal provision, 28 U. S. C. §1441(a), nor the removal provision in the Class Action Fairness Act of 2005, §1453(b), allowed Home Depot to remove the class-action claims filed against it. Home Depot petitioned for certiorari review, arguing that it was a “defendant” to a “claim.”

Issue:

  1. Did 28 U. S. C. §1441(a) allow Home Depot to remove the class-action claims filed against it?
  2. Did the Class Action Fairness Act of 2005, §1453(b) allow Home Depot to remove the class-action claims filed against it?

Answer:

1) No. 2) No.

Conclusion:

The Court held that Section 1441(a) did not permit removal by a third-party counterclaim defendant. According to the Court, a third- party retailer that was named as a defendant in a class-action counterclaim could not remove the counterclaim under 28 U.S.C.S. § 1441(a) because the term "the defendant or the defendants" who may remove a civil action referred only to the party sued by the original plaintiff, not a party named in a counterclaim. Moreover, the Court held that Home Depot could not remove under the Class Action Fairness Act of 2005 because the term "any defendant" in 28 U.S.C.S. § 1453(b) simply clarified that certain limitations on removal that might otherwise apply did not limit removal under § 1453(b). The Court averred that Congress did not expand the types of parties eligible to remove a class action under § 1453(b) beyond § 1441(a)’s limits, so § 1453(b) did not permit a third-party counterclaim defendant to remove.

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