Premises Liability Updates


The U.S. Congress recently amended an important statute governing federal courts. Specifically, the Federal Courts Jurisdiction and Venue Clarification Act of 2011 changed the conditions under which a Defendant, sued in state court, can “remove,” or transfer, a lawsuit from state court to federal court. A Defendant can seek removal if: (1) the Defendants are all “diverse,” or citizens of a state other than where the Plaintiff resides and where the Plaintiff filed the lawsuit; and (2) the “amount in controversy” is more than $75,000.

30-Day Deadline, with One-Year Moratorium, to Seek Removal

The most important change that Congress made involves the deadline for removal when the case was filed against two or more Defendants. A Notice of Removal must be filed within 30 days of service of the Complaint, with one exception discussed below. If the lawsuit is brought against more than one Defendant, each Defendant has its own 30-day deadline to seek removal, calculated from the date that Defendant was served with the initial pleading. All defendants must join in or consent to the Notice of Removal, known as the “rule of unanimity.” Because each Defendant’s 30-day deadline depends upon when it was served with the Complaint, a Defendant served later can file a Notice of Removal even after another Defendant’s removal deadline has expired. The earlier-served Defendant can still consent to the later-served Defendant’s Notice of Removal.

A case must be valued in excess of $75,000 for the Defendant to have a right of removal. If the Plaintiff’s Complaint does not plead a specific damages amount in excess of $75,000, the Defendant must make a good-faith estimate of the value of the Plaintiff’s claims. The Defendant’s Notice of Removal must set forth the facts to support an argument that the $75,000 amount in controversy threshold has been fulfilled. Another change adopted by Congress allows the Defendant to engage in discovery to explore whether the Plaintiff’s claim exceeds $75,000, and if so the Defendant then has 30 days to seek removal from this discovery date. However, a Defendant cannot sleep on its rights. Any Notice of Removal must be filed within one year after the Complaint was filed. If the Defendant cannot prove the $75,000 component within one year, then removal is no longer available. Congress’s other important change allows a Defendant to argue that this one-year moratorium should not apply, if the Plaintiff has acted in bad faith to prevent removal, for example, by concealing the true amount in controversy. The Plaintiff can also “defeat” diversity or trigger a “remand” by alleging (in good faith) that her claim is valued less than $75,000, which value ceiling will be binding upon the Plaintiff going forward.

All Defendants Must Be Diverse

For removal, each Defendant must be diverse not just from the Plaintiff but from the state where the Plaintiff filed suit. In other words, a Defendant cannot seek removal if an out-of-state Plaintiff came to the Defendant’s state to file the lawsuit. A corporate Defendant is a citizen of the state where the Defendant is incorporated and the state where the Defendant’s “principal place of business” is located. Another complexity arises where the Defendant is a limited partnership. A limited partnership is not considered to be a “citizen” in its own right, but instead takes the citizenship of the state where each of its partners is a citizen – including general and limited partners, and including human and corporate partners. If any of the partners is also a corporation, then the limited partnership Defendant adopts the citizenship of its corporate partners. This complexity can continue up the corporate “family tree.” The citizenship of every corporate parent, up to the top of the corporate family tree, should be set forth in an affidavit filed with the Notice of Removal. If a corporate parent, grandparent, etc. of the Defendant limited partnership is a citizen of the state where the lawsuit was filed, then diversity jurisdiction does not exist and the case will be “remanded” back to the state court where the Plaintiff initially filed it.


Removal to federal court based upon diversity jurisdiction is a highly complex, hyper-technical procedural device that must be handled promptly and carefully. An eligible Defendant must consider these issues quickly, reaching a decision whether to seek removal by weighing the substantive, procedural, and tactical advantages of the Plaintiff’s selected state court forum versus the alternative federal court forum. To speak to an attorney about our defense litigation practice, contact us to schedule a consultation.

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