327 F.3d 423

Jeretta Kay TEDFORD, Plaintiff-Appellant, v. WARNER-LAMBERT CO.; Parke-Davis Division of Warner-Lambert Co.; Parke-Davis Pharmaceuticals, Ltd.; Sankyo Parke-Davis; Pfizer, Inc., Defendants-Appellees.

No. 02-10582.

United States Court of Appeals, Fifth Circuit.

April 7, 2003.

*424Sharon S. McCally (argued), Storey, Moore & McCally, Houston, TX, for Plaintiff-Appellant.

Jack E. Urquhart, Jeffery Taylor Nobles (argued), Beirne, Maynard & Parsons, Houston, TX, David Wesley Klingsberg, Kaye, Scholer, Fierman, Hays & Handler, New York City, Sawnie A. McEntire, Beirne, Maynard & Parsons, Dallas, TX, for Defendants-Appellees.

Before REAVLEY, JOLLY and JONES, Circuit Judges.

REAVLEY, Circuit Judge:

Jeretta Kay Tedford sued Warner-Lambert Co., the maker of the pharmaceutical Rezulin, in a Texas court. Tedford took Rezulin to treat her Type-2 diabetes and alleges that the drug caused her liver to fail. One year and ten days after Tedford filed suit, Warner-Lambert removed the action to federal court. Convinced that Tedford had engaged in forum manipulation, the district court denied Tedford’s motion to remand despite the removal statute’s requirement that all cases not initially removable be removed within a year of commencement of the action. See 28 U.S.C. § 1446(b) (2003). The district court certified this interlocutory appeal so that we may determine whether equitable exception to the one-year limit on removal is allowed, and, if so, whether an exception should be applied in this case.

We conclude that the statute’s one-year limit on removal is subject to equitable exception, and . that the district court’s application of such an exception was appropriate.

Background

Tedford, a resident of Eastland County, Texas, filed suit with Maria Castro, a resident of Johnson County, Texas, against Warner-Lambert and others. The original petition, filed in Johnson County, named only one nondiverse defendant, Dr. Stan Johnson.

In Texas, venue lies in the county in which all or substantially all of the events giving rise to the action occurred or in the defendant’s home county.1 The original petition did not state whom Dr. Johnson treated, but was drafted to suggest that he treated both plaintiffs in Johnson County. Through venue-related discovery,’ Warner-Lambert learned that *425Dr. Johnson treated Castro (who had yet to suffer any injury from Rezulin) but not Tedford. In fact, Tedford’s claims have no connection to Dr. Johnson or Johnson County. Upon Warner-Lambert’s motion, the state court severed Tedford’s claims and transferred her suit to Eastland County.

Prior to entry of the state court’s order, Warner-Lambert informed Tedford of its intent to remove the suit to federal court on the ground of diversity of citizenship because Dr. Johnson was not a proper defendant. A mere three hours later, Tedford amended her petition to name her treating physician, Dr. Robert DeLu-ca, a resident of Eastland County, as a defendant. Warner-Lambert removed the action, asserting that both Johnson and DeLuca were fraudulently joined. The district court granted Tedford’s motion to remand to state court.

The parties then entered into an agreement pursuant to Rule 11 of the Texas Rules of Civil Procedure to try the case in Eastland County state court and to a preferential trial setting. DeLuca filed a motion to abate the proceedings for sixty days because of Tedford’s failure to give proper notice under Texas Medical Liability and Insurance Improvement Act.2 Without taking any discovery from DeLu-ca, Tedford signed and post-dated a Notice of Nonsuit before the one-year anniversary of the commencement of her action, but did not notify Warner-Lambert of the De-Luca nonsuit until after the expiration of the anniversary.

Soon after learning of the DeLuca non-suit and ten days after the expiration of the one-year limit on removal on the basis of diversity of citizenship, Warner-Lambert once again removed the suit to federal court. Tedford moved to remand, claiming the one-year limit barred the removal. Warner-Lambert argued that Tedford’s pattern of forum manipulation — particularly her eleventh-hour joinder and then non-suit of Dr. DeLuca — justified application of an equitable exception to the one-year limit on removal. The district judge agreed, denied Tedford’s motion to remand, and certified the issue for interlocutory appeal.

Discussion

Section 1446(b) of Title 28 provides:

The notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within thirty days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter.
If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable, except that a case may not be removed on the basis of jurisdiction conferred by section 1382 of this title more than 1 year after commencement of the action.

We have not previously addressed whether the one-year limit of § 1446(b) is absolute or subject to equitable exception. No other circuit court has published an opinion *426on this issue,3 and district courts across the country have come to opposite conclusions.4

We are not, however, completely without guidance. “Time requirements in lawsuits between private litigants are customarily subject to ‘equitable tolling.’ ”5 Moreover, “the time limit for removal is not jurisdictional; it is merely modal and formal and may be waived.”6

We applied these principles in Barnes v. Westinghouse Electric Corp. and determined that § 1446(b)’s one-year limit is subject to waiver.7 In that case, the plaintiff, Mark Barnes, filed an amended petition naming completely diverse defendants, and Westinghouse removed the case to federal district court within 30 days after the amended petition but over a year after the action had been commenced. The district court denied Barnes’s motion to remand. Over a year later, Barnes filed a motion to reconsider and argued, for the first time, that Westinghouse did not remove the case within one year of the filing of the original complaint. On appeal, we held that Barnes’s failure to timely assert that the removal was procedurally defective under the one-year limit of § 1466(b) waived his opportunity to contest the removal.

Section 1446(b) is not inflexible, and the conduct of the parties may affect whether it is equitable to strictly apply the one-year limit.8 In the present case, Ted-*427ford timely moved to remand. Nevertheless, we are convinced that if Barnes’s sleeping on his rights justified application of an equitable exception in the form of waiver, Tedford’s forum manipulation justifies application of an equitable exception in the form of estoppel. In enacting § 1446(b), Congress intended to “redue[e] opportunity for removal after substantial progress has been made in state court.”9 Congress may have intended to limit diversity jurisdiction, but it did not intend to allow plaintiffs to circumvent it altogether. Strict application of the one-year limit would encourage plaintiffs to join nondi-verse defendants for 366 days simply to avoid federal court, thereby undermining the very purpose of diversity jurisdiction.10

The facts of this case demonstrate this point. Tedford, a resident of Eastland County, filed a complaint with Castro in Johnson County, despite the fact that neither plaintiff could state a cognizable claim under Texas law against the sole nondi-verse defendant.11 She amended her complaint to add her own physician hours after learning of Warner-Lambert’s intent to remove.12 Then, Tedford signed and postdated the Notice of Nonsuit of Dr. DeLuca prior to the expiration of the one-year period, but did not file the document with the court or notify Warner-Lambert until after the one-year anniversary of the filing *428of the complaint.13 Equity demands Ted-ford be estopped from seeking to remand the case on the basis of the one-year limit in § 1466(b).

Conversely, the defendants have vigilantly sought to try this case in federal court. Each time it became apparent that the right to remove existed, Warner-Lambert sought to exercise that right. In fact, the first time Warner-Lambert sought to remove the case it notified Tedford as a professional courtesy. Tedford, knowing that the motion would be successful if Johnson remained the sole nondiverse defendant, quickly acted to thwart Warner-Lambert’s efforts.

Tedford complains that Warner-Lambert’s active participation in state court proceedings by moving to transfer venue to Eastland County, by moving for entry of a confidentiality order, by moving to consolidate under Texas Rule of Civil Procedure 11, and by filing special exceptions waived its right to remove the cause. A waiver of the right to remove must be clear and unequivocal; the right to removal is not lost by participating in state court proceedings short of seeking an adjudication on the merits.14 Nothing Warner-Lambert did, including agreeing to a trial date in Eastland County before it learned of the DeLuca nonsuit, submitted the cause to adjudication on the merits. The authority cited by Tedford is not persuasive, for in each of those cases the defendant moved to dismiss the suit.15 Accordingly, we find that Warner-Lambert did not waive its right to remove.

Conclusion

Where a plaintiff has attempted to manipulate the statutory rules for determin*429ing federal removal jurisdiction, thereby preventing the defendant from exercising its rights, equity may require that the one-year limit in § 1446(b) be extended. The facts of this case present just such a circumstance. We affirm the district court’s denial of Tedford’s motion to remand to state court, and we remand the case to the district court for further proceedings.

AFFIRMED.

Tedford v. Warner-Lambert Co.
327 F.3d 423

Case Details

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Tedford v. Warner-Lambert Co.
Decision Date
Apr 7, 2003
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327 F.3d 423

Jurisdiction
United States

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