If a literal reading of 28
U.S.C. 1441 (the forum defendant rule) would lead to an absurd result, then
it should not be interpreted that way, according to a recent decision of Judge Morgan of the Norfolk Division of
the Eastern District of Virginia.
Eddie Campbell sued his former
employer, Hampton Roads Bankshares, Inc., and related entities in the Circuit
Court for the City of Norfolk for breach of contract.
Mr. Campbell is a citizen of North Carolina. The bank defendants, who are
citizens of Virginia, removed the action to federal court prior to being served
with process. Mr. Campbell moved to remand the case back to Norfolk state
court, and the court granted the motion.
Federal law permits a defendant
to remove a state court action to federal court only if the plaintiff could
have originally filed that action in federal court. The defendants claimed
federal jurisdiction was proper because the case raised a federal question
under 18 U.S.C. § 1331 and claimed diversity jurisdiction under 18 U.S.C. §
Federal question jurisdiction applies to "all civil
actions arising under the Constitution, laws, or treaties of the United
States." Courts look to the well pleaded complaint to see if it presents a
federal question. Even where a federal cause of action isn't expressly pled, a
federal question exists if federal law creates the cause of action or the
plaintiff's right to relief depends on the resolution of a substantial question
of federal law.
The defendants argued that federal "golden parachute rules"
prohibited paying Campbell the severance package at the heart of Campbell's
claim. But Campbell had pled a state law breach of contract claim. The
defendants' argument centered on a defense they would assert. A defense cannot
be a basis for removal.
the rest of the article at the Virginia
Business Litigation Lawyer blog
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