    [House Hearing, 116 Congress]
    [From the U.S. Government Publishing Office]

        EXAMINING THE USE OF ``SNAP'' REMOVALS TO CIRCUMVENT THE FORUM
                                 DEFENDANT RULE

    =======================================================================

                                    HEARING

                                   before the

                             SUBCOMMITTEE ON COURTS
                         INTELLECTUAL PROPERTY, AND THE
                                    INTERNET

                                     of the

                           COMMITTEE ON THE JUDICIARY
                            HOUSE OF REPRESENTATIVES

                         ONE HUNDRED SIXTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                               NOVEMBER 14, 2019

                                   __________

                               Serial No. 116-65

                                   __________

             Printed for the use of the Committee on the Judiciary

     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Available via the World Wide Web: http://judiciary.house.gov

                               ______

                 U.S. GOVERNMENT PUBLISHING OFFICE
    42-422                WASHINGTON : 2021

                           COMMITTEE ON THE JUDICIARY

                       JERROLD NADLER, New York, Chairman
    ZOE LOFGREN, California              DOUG COLLINS, Georgia, Ranking
    SHEILA JACKSON LEE, Texas                Member
    STEVE COHEN, Tennessee               F. JAMES SENSENBRENNER, Jr.,
    HENRY C. ``HANK'' JOHNSON, Jr.,          Wisconsin
        Georgia                          STEVE CHABOT, Ohio
    THEODORE E. DEUTCH, Florida          LOUIE GOHMERT, Texas
    KAREN BASS, California               JIM JORDAN, Ohio
    CEDRIC L. RICHMOND, Louisiana        KEN BUCK, Colorado
    HAKEEM S. JEFFRIES, New York         JOHN RATCLIFFE, Texas
    DAVID N. CICILLINE, Rhode Island     MARTHA ROBY, Alabama
    ERIC SWALWELL, California            MATT GAETZ, Florida
    TED LIEU, California                 MIKE JOHNSON, Louisiana
    JAMIE RASKIN, Maryland               ANDY BIGGS, Arizona
    PRAMILA JAYAPAL, Washington          TOM McCLINTOCK, California
    VAL BUTLER DEMINGS, Florida          DEBBIE LESKO, Arizona
    J. LUIS CORREA, California           GUY RESCHENTHALER, Pennsylvania
    MARY GAY SCANLON, Pennsylvania,      BEN CLINE, Virginia
      Vice-Chair                         KELLY ARMSTRONG, North Dakota
    SYLVIA R. GARCIA, Texas              W. GREGORY STEUBE, Florida
    JOE NEGUSE, Colorado
    LUCY McBATH, Georgia
    GREG STANTON, Arizona
    MADELEINE DEAN, Pennsylvania
    DEBBIE MUCARSEL-POWELL, Florida
    VERONICA ESCOBAR, Texas
            Perry Apelbaum, Majority Staff Director & Chief Counsel
            Brendan Belair, Minority Staff Director & Chief Counsel
                                     ------

        SUBCOMMITTEE ON COURTS, INTELLECTUAL PROPERTY, AND THE INTERNET

                 HENRY C. ``HANK'' JOHNSON, Jr., Georgia, Chair
                       LOU CORREA, California, Vice-Chair
    THEODORE E. DEUTCH, Florida          MARTHA ROBY, Alabama, Ranking
    CEDRIC RICHMOND, Louisiana               Member
    HAKEEM JEFFRIES, New York            STEVE CHABOT, Ohio
    TED LIEU, California                 JIM JORDAN, Ohio
    GREG STANTON, Arizona                JOHN RADCLIFFE, Texas
    ZOE LOFGREN, California              MATT GAETZ, Florida
    STEVE COHEN, Tennessee               MIKE JOHNSON, Louisiana
    KAREN BASS, California               ANDY BIGGS, Arizona
    ERIC SWALWELL, California            GUY RESCHENTHALER, Pennsylvania
                                         BEN CLINE Virginia
                          Jamie Simpson, Chief Counsel
                      Thomas Stoll, Minority Chief Counsel

                                C O N T E N T S

                                  ----------

                               NOVEMBER 14, 2019
                               OPENING STATEMENTS

                                                                       Page
    The Honorable Henry C. ``Hank'' Johnson, Jr., a Representative in
      the Congress from the State of Georgia, Chairman, Subcommittee
      on Courts, Intellectual Property, and the Internet.............     1
    The Honorable Martha Roby, a Representative in the Congress from
      the State of Alabama, Ranking Member, Subcommittee on Courts,
      Intellectual Property, and the Internet........................     2
    The Honorable Jerrold Nadler, a Representative in the Congress
      from the State of New York, Chairman, Committee on the
      Judiciary......................................................     3

                                   WITNESSES

    Ms. Ellen Relkin, Defective Drugs and Devices Practice Group Co-
      Chair, Weitz & Luxenberg, P.C..................................     6
        Oral Testimony...............................................     6
        Prepared Statement...........................................     8
    Mr. Kaspar Stoffelmayr, Partner, Barlit Beck LLP.................    33
        Oral Testimony...............................................    33
        Prepared Statement...........................................    35
    Mr. Arthur D. Hellman, Professor of Law Emeritus, University of
      Pittsburgh School of Law.......................................    46
        Oral Testimony...............................................    46
        Prepared Statement...........................................    48
    Mr. James E. Pfander, Owen L. Coon Professor of Law, Northwestern
      University Pritzker School of Law..............................    73
        Oral Testimony...............................................    73
        Prepared Statement...........................................    75

              LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

    A letter for the record from the Federation of Defense &
      Corporate Counsel..............................................    96

                                    APPENDIX

                   MATERIAL SUBMITTED FOR THE HEARING RECORD

    Questions to witnesses for the record from the Honorable Henry C.
      ``Hank'' Johnson, Jr., A Representative in the Congress from
      the State of Georgia, Chairman, Subcommittee on Courts,
      Intellectual Property, and the Internet........................    99
    A response for the record from Ms. Ellen Relkin, Defective Drugs
      and Devices Practice Group Co-Chair, Weitz & Luxenberg, P.C....   100
    No additional comments for the record from Mr. Kaspar
      Stoffelmayer, Partner, Barlit, Beck, LLP
    A response for the record from Mr. Arthur Hellman, Professor of
      Law Emeritus, University of Pittsburgh School of Law...........   102
    A response for the record from Mr. James E. Pfander, Owens L.
      Coon Professor of Law, Northwestern University Pritzker School
      of Law.........................................................   129

        EXAMINING THE USE OF ``SNAP'' REMOVALS TO CIRCUMVENT THE FORUM
                                 DEFENDANT RULE

                                  ----------

                          THURSDAY, NOVEMBER 14, 2019

                            House of Representatives

                     Subcommittee on Courts, Intellectual
                           Property, and the Internet

                           Committee on the Judiciary

                                Washington, DC.

        The subcommittee met, pursuant to call, at 2:18 p.m., in
    Room 2141, Rayburn House Office Building, Hon. Henry C.
    ``Hank'' Johnson, Jr. [chairman of the subcommittee] presiding.
        Present: Representatives Johnson of Georgia, Nadler,
    Correa, Roby, Jordan, and Cline.
        Staff Present: Jamie Simpson, Chief Counsel, Subcommittee
    on Courts, Intellectual Property, and the Internet; Matthew
    Robinson, Counsel, Subcommittee on Courts, Intellectual
    Property, and the Internet; Danielle Johnson, Counsel,
    Subcommittee on Courts, Intellectual Property, and the
    Internet; David Greengrass, Senior Counsel; Madeline Strasser,
    Chief Clerk; Moh Sharma, Member Services and Outreach Adviser;
    Rosalind Jackson, Professional Staff Member, Subcommittee on
    Courts, Intellectual Property, and the Internet; Dan Ashworth,
    Minority Counsel; and Andrea Woodard, Minority Professional
    Staff Member.
        Mr. Johnson of Georgia. The subcommittee will come to
    order.
        Without objection, the Chair is authorized to declare
    recesses of the subcommittee at any time.
        Welcome to this afternoon's hearing on Examining the Use of
    ``Snap'' Removals to Circumvent the Forum Defendant Rule.
        I will now recognize myself for an opening statement.
        Today's hearing examines the growing problem of snap
    removals to Federal court. A new tactic has emerged in the
    often high-stakes fight to move litigation from State court to
    Federal court. When a lawsuit is filed in State court, a
    defendant may try to remove the case to Federal court by
    invoking the court's diversity jurisdiction.
        But 28 U.S.C. Section 1441 prohibits removal if any
    defendant is a citizen of the State where the case was filed.
    This requirement is called the ``forum defendant rule.'' It was
    most recently codified in 1948, but it has been Federal law
    since 1789. But some well-resourced defendants have found a way
    to circumvent the forum defendant rule. Some courts have read
    Section 1441 to prevent removal only after a forum defendant
    has been served, and defendants are taking advantage of that
    fact through sophisticated docket monitoring technology.
        As State court systems have gone digital, defendants are
    now able to monitor State court dockets across the country in
    real time. They are thus able to remove a case almost as soon
    as it is filed and well before a plaintiff can effect service.
        This is not an exaggeration. In some instances, defendants
    have been removed--defendants have removed a case less than 10
    minutes after the plaintiff filed it in State court. Many
    courts have deplored this tactic, which is often called ``Snap
    Removal,'' and for good reason.
        Courts have called snap removals ``preservice
    machinations''' or ``bizarre'' or ``clear gamesmanship'' or
    ``tell-tale forum manipulation,'' and they have referred to it
    as ``an ironic absurdity'' and ``an absurd loophole'' at clear
    odds with congressional intent and ``an abuse that serves no
    conceivable public policy goal'' and ``eviscerates the forum
    defendant rule.''
        Snap removals violate the basic tenets of Federal
    jurisdiction and procedure. This tactic offends the
    foundational principle that State courts are the best places to
    resolve questions of State law. This tactic also undermines the
    centuries-old rule that the plaintiff decides where to file
    suit. Snap removals also invite wasteful gamesmanship and clog
    the Federal courts' dockets, which are already full.
        Although the Members of the 80th Congress could not have
    anticipated this kind of gamesmanship when they codified the
    forum defendant rule 70 years ago, I am confident that they did
    not intend to enable it. Federal practice is supposed to be
    just speedy--it is supposed to be just, speedy, and
    inexpensive. But Snap Removals caused needless expense,
    substantial delays, and are inherently unfair.
        Unfortunately, however, the courts are badly splintered on
    what to do about Snap Removals. Looking at the purpose of the
    forum defendant rule and the removal statutes, some courts have
    held that Section 1441 does not allow snap removals. Other
    courts have focused on the ``plain'' text of the statute to
    hold that Snap Removals are permitted. But even courts that
    allow snap removals have criticized them and have called on
    Congress to fix the problem.
        Today's hearing is the first step in that direction. Our
    witnesses represent a wide breadth of expertise and experience,
    and I look forward to hearing from them.
        And at this time, it is now my pleasure to recognize the
    Ranking Member of the Subcommittee, the gentlewoman from
    Alabama, Mrs. Roby, for her opening statement.
        Mrs. Roby. Thank you, Chairman Johnson.
        And thank you to the witnesses for being here today to
    share their experiences and perspectives on removal and
    diversity jurisdiction.
        Our panel today will cover the procedures pertaining to
    snap removal, joinder, and forum defendant rule. All of the
    issues being discussed today revolve around diversity
    jurisdiction and how litigants choose the venue in which a case
    will be heard. While some of these ideas are worth exploring
    further, I have concerns that some of the proposals will have a
    negative impact on fairness in litigation by giving one party a
    clear advantage over the other.
        Under current jurisdiction statutes in the Federal Rules of
    Civil Procedure, plaintiffs receive wide discretion to dictate
    the forum in which a case will be heard. Plaintiffs sometimes
    use their ability to join nondiverse parties to limit a
    defendant's ability to remove to Federal court. Often, these
    nondiverse parties are not necessary to the litigation, and at
    times, they are only included to keep a case in a State court
    that may be seen favorable to the plaintiff.
        Plaintiffs have been known to dismiss cases against these
    defendants after a case could no longer be removed to Federal
    court. In cases where a Federal court has already made a
    decision that goes against a plaintiff, they have been known to
    target individuals and businesses in their home State to
    prevent them from removing the case to Federal court. In doing
    so, plaintiffs are seeking to relitigate a case in another
    jurisdiction to avoid a negative decision.
        While I understand that there are concerns with a split
    between the circuits on how to rule on snap removals, they have
    served to return some balance in determining forum location.
    Diligent attorneys can remove a case to Federal court prior to
    receiving service from plaintiffs. In doing so, defendants can
    avoid possible plaintiff gamesmanship and protect Federal
    subject matter jurisdiction.
        I am a strong believer in the Federal court system and
    ensuring the public's access to justice. While we must always
    make sure that our courts are working fairly and efficiently, I
    have some concerns with these issues before us today. I hope to
    hear more in this hearing about possible abuses of the forum
    defendant rule and whether our witnesses believe that there are
    problems with fraudulent joinders.
        I want to again thank each of you for taking time out of
    your lives to join us here today and hearing more about snap
    removal generally, as well as the proposals for changing this
    procedure that we are discussing today.
        Thank you, Mr. Chairman. I yield back.
        Mr. Johnson of Georgia. Thank you. And I am now pleased to
    recognize the Chairman of the Full Committee, the gentleman
    from New York, Mr. Nadler.
        Chairman Nadler. Thank you, Mr. Chairman.
        Corporate defendants have long sought to remove cases based
    on State law to Federal court, believing that the expense and
    complexity of Federal court offers those businesses advantages
    over less sophisticated plaintiffs with fewer resources. Snap
    Removals, in which defendants exploit modern technology and a
    supposed statutory loophole to remove cases that should
    properly be heard in State court, represent the latest effort
    to game the system in favor of the wealthy and the powerful at
    the expense of the average citizen and our overloaded Federal
    court system.
        Under well-established law known as ``diversity
    jurisdiction,'' when a plaintiff sues a defendant who is a
    resident of another State in State court, that defendant may
    remove the case to a Federal court. This provision is intended
    to protect against possible bias that may occur against an out-
    of-State defendant in a State court.
        When the defendant is sued in his or her own State,
    however, removal is not permitted because the concern for bias
    no longer exists. This is referred to as the forum defendant
    rule. Unfortunately, a combination of modern technology, a
    desire by some corporations to avoid State courts, seemingly at
    any cost, and a supposed loophole in the removal statute has
    engendered a new tactic.
        Some courts have read the forum defendant rule, which
    requires that a defendant be a citizen of the State where the
    case is filed and that it be properly served, to mean that
    removal to Federal court may occur before service of process is
    completed. Many companies, therefore, now use computer programs
    to monitor court filings in real time and to remove any case
    against them in their own State by an out-of-State plaintiff
    before the plaintiff has time to effect service, sometimes in a
    matter of mere minutes, in an attempt to thwart the forum
    defendant rule.
        Although this sort of gamesmanship is clearly contrary to
    the spirit and the intent of the Federal removal statute, some
    courts have ruled that such snap removals are permitted by a
    plain reading of the text. It is important, therefore, that
    Congress clarify the statute to put an end to this dubious
    maneuver.
        Not only do snap removals tilt the legal playing field in
    favor of large corporations, they also drain judicial
    resources, impose needless costs on the parties, and delay
    justice for plaintiffs seeking to hold wrongdoers accountable
    for the injuries they cause.
        This evasion of the well-established forum defendant rule
    also threatens State sovereignty and violates federalism
    principles by denying State courts the ability to shape State
    law. State courts should be the final arbiters of State law,
    but snap removals are increasingly putting new State law
    questions into Federal court.
        Snap removals also increase the complexity, duration, and
    cost of civil litigation, placing further burdens on plaintiffs
    who tend to have fewer resources than comparatively well-funded
    corporate defendants. This issue may seem obscure, but it is a
    growing problem, and it has a very real impact on the lives of
    people seeking redress in their State courts.
        In an era where the courthouse doors are increasingly
    closed to ordinary Americans, snap removal can seem like just
    another turn of the deadbolt. I look forward to the witnesses'
    testimony and particularly their thoughts on how Congress can
    fix this important and growing problem.
        I yield back the balance of my time.
        Mr. Johnson of Georgia. Thank you, and I will now introduce
    the witnesses for today's hearing.
        First, Ms. Ellen Relkin. She is the Drugs and Medical
    devices litigation Practice Group Co-chair at Weitz &
    Luxemberg. She has represented thousands of plaintiffs injured
    by defective medical products. Ms. Relkin is an elected member
    of the American Law Institute, serves on the Board of Governors
    of the New Jersey Association for Justice, and is a frequent
    lecturer at continuing legal education programs nationwide.
        Ms. Relkin served as a law clerk to the Honorable Sylvia
    Pressler, then presiding Judge of the New Jersey Superior Court
    Appellate Division. Ms. Relkin holds a J.D. from Rutgers
    University Law School and a Bachelor of Arts degree in history
    from Cornell University.
        Welcome.
        Next I will introduce Mr. Kaspar Stoffelmayr. Mr.
    Stoffelmayr is a partner--and that is correct, ``Stoffel-
    mayor'' or ``meyer''?
        Mr. Stoffelmayr. ``Stoffel-meyer.''
        Mr. Johnson of Georgia. I am sorry. Mr. Stoffelmayr is a
    Partner at Bartlit Beck, where his practice focuses on mass
    tort product liability and class action defense. His experience
    includes efficient management of large teams in mass
    litigations. From 2011 to 2014, Mr. Stoffelmayr served as vice
    president and associate general counsel at the Bayer
    Corporation.
        In that capacity--and that is Bayer, not ``Buyer''
    [Laughter.]
        In that capacity, he was responsible for developing and
    implementing the company's defense strategies for a large
    docket of product liability and mass tort cases. Mr.
    Stoffelmayr also served as a law clerk for the Honorable A.
    Raymond Randolph of the U.S. Court of Appeals for the D.C.
    Circuit. He is a graduate of the University of Chicago School
    of Law, Grinnell College, and the University of Washington.
        Welcome, sir.
        We also have with us today Professor Arthur Hellman, who is
    a professor Emeritus at the University of Pittsburgh School of
    Law. Professor Hellman enjoys a national reputation as a
    scholar of the Federal courts, and his research and writings
    span a wide range of topics related to the Federal court
    system. He is a graduate of Yale Law School and holds an
    undergraduate degree from Harvard University.
        Welcome, Professor.
        And last, but not least, we have Mr. James Pfander, who is
    the Owen L. Coon Professor of Law at Northwestern's Pritzker
    School of Law. His teaching and research focus on the role of
    the Federal judiciary under Article III of the Constitution. He
    has served as Chair of both the Federal Courts and Civil
    Procedure Sections of the Association of American Law Schools.
        Professor Pfander was a Fulbright Senior Scholar at the
    University of Bucharest. He holds degrees from the University
    of Missouri and the University of Virginia School of Law.
        Welcome, sir.
        Before proceeding with testimony, I hereby remind the
    witnesses that all of your written and oral statements made to
    the Subcommittee in connection with this hearing are subject to
    penalties of perjury, pursuant to 18 U.S.C. Section 1001, which
    may result in the imposition of a fine or imprisonment of up to
    5 years or both, should one suffer a conviction.
        Please note that your written statements will be entered
    into the record in its entirety. Accordingly, I ask that you
    summarize your testimony in 5 minutes. To help stay within that
    time, there is a timing light on your table. When the light
    switches from green to yellow, you have 1 minute to conclude
    your testimony. When the light turns red, it signals your 5
    minutes have expired.
        And so, Ms. Relkin, you may begin.

        STATEMENTS OF ELLEN RELKIN, DEFECTIVE DRUGS AND DEVICES
       PRACTICES GROUP CO CHAIR, WEITZ & LUXEMBERG, P.C.; KASPAR
      STOFFELMAYR, PARTNER, BARTLIT BECK, LLP; ARTHUR D. HELLMAN,
     PROFESSOR OF LAW EMERITUS, UNIVERSITY OF PITTSBURGH SCHOOL OF
       LAW; AND JAMES E. PFANDER, OWEN L. COON PROFESSOR OF LAW,
             NORTHWESTERN UNIVERSITY PRITZKER SCHOOL OF LAW

                       STATEMENT OF ELLEN RELKIN

        Ms. Relkin. Thank you, Chairman Johnson, Ranking Member
    Roby, and Members of the Subcommittee. I appreciate the
    invitation and opportunity to discuss this critical issue of
    snap removal.
        My name is Ellen Relkin, and I am counsel at the law firm
    Weitz & Luxemberg, practicing primarily in New York and New
    Jersey. For the past 35 years, I have represented thousands of
    clients injured by environmental pollution, medical devices,
    and pharmaceutical products.
        I have not seen a procedural rule so dramatically alter the
    landscape of civil litigation which limits the rights of
    persons injured by dangerous products. Snap removals are
    surging and depriving plaintiffs of State court jurisdiction.
    There are 1,682 Westlaw decisions involving forum defendant
    removal in the last 10 years. In the 10 years before that, only
    321.
        Why the surge of snap removals? There has been a perfect
    storm of two factors, especially in the past 2 years. First,
    sweeping advances across the country in mandatory State court
    filing procedures, also known as e-filing. And two, recent
    appellate decisions by the Third Circuit last year in the
    Encompass v. Stone Mansion case and by the Second Circuit this
    year in Gibbons v. Bristol-Myers.
        Prior to these appellate cases, judges within the district
    courts in those circuits frequently remanded, finding snap
    removal improper. We think those circuit courts fail to
    properly consider that when Congress last visited the text of
    the rule in 2011, no States had e-filing, according to the
    National Center for State Courts, who we consulted with prior
    to presenting the testimony. Not one.
        That means that the capability that has given rise to the
    problem of snap removals' sudden ubiquity and speed did not
    even exist when Congress last considered the statute.
        After the Encompass decision was issued, Johnson & Johnson
    and its subsidiary Ethicon began snap removing cases filed
    against it in New Jersey. Many of these cases were snap removed
    within 2 hours of filing. Within a month, serving 45 minutes
    after filing was already too late. Now removals are literally
    being effected in less than 10minutes.
        Another New Jersey corporation, Stryker Orthopedics,
    retained the same counsel as J&J and began practicing the same
    tactics. Plaintiffs had to send--including my firm, we had to
    send process servers to wait in the parking lot of corporate
    headquarters with mobile printers in the car.
        Counsel would file the complaint while on the phone with
    the process server and quickly email the file pleading to the
    server, who would print it and run inside. Once plaintiffs were
    able to beat defendants by a minute or two, literally, at
    extensive cost to the clients, defendants began instituting
    contrived barriers to service at headquarters, turning
    corporate service into literally a game of hide and seek.
        Now security guards assure our process servers that the
    authorized individuals for service are on their way down while,
    instead, literally hours pass. Then, just minutes after the
    snap removal is filed, like clockwork, authorized individuals
    suddenly appear to accept service. Our process servers have
    brought printers inside to print the complaint as soon as the
    individual appears, but in one case, when the corporate
    representative saw the printer, she fled and refused to return
    until after removal. Remarkably, Stryker's counsel boasts,
    ``Defendant's service evading conduct here, if true, as
    alleged, was appropriate.''
        We began serving Stryker via its registered agent because
    under the rules, you can either serve at the corporate
    headquarters or their designated registered agent, who they
    choose. But Stryker responded to that by just removing anyway
    after service, asserting in a dozen actions that service on
    their own registered agent somehow did not constitute proper
    service under the forum defendant rule, even though it is
    unquestionably good service under State law.
        Each snap removal drains the resources of an already
    stretched Federal court system and causes delay in the
    administration of justice. These cases remain in Federal court
    more than 5 months on average, with recent J&J remand motions
    taking almost a year to resolve. There is no Federal law that
    requires courts timely resolve motions to remand. This harms
    real people with serious injuries because it delays them
    getting actual relief.
        The problem is especially acute in New Jersey, home to many
    drug companies, because it is in a state of judicial emergency,
    according to the Federal Administrative Office of the Courts,
    with the second-highest rate of filings per Federal judge in
    the Nation.
        The removal pace has been so quick and robotic that
    defendants have removed cases where there wasn't even diversity
    and, thus, no Federal jurisdiction. Similarly, defendants have
    removed despite already being served directly at corporate
    headquarters, thus revealing there is no compliance with Rule
    11 to recently investigate whether service has been effected.
        One other point. Far from forum shopping, suing a company
    in its home State is the only State court option for out-of-
    State plaintiffs after the Supreme Court's 2017 decision in
    Bristol-Myers, but now that the last State venue is foreclosed
    by the epidemic of snap removal.
        Thank you, and I would be happy to answer any questions.
        [The statement of Ms. Relkin follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Johnson of Georgia. Thank you.
        We will now turn to Mr. Stoffelmayr. Five minutes, sir.

                    STATEMENT OF KASPAR STOFFELMAYR

        Mr. Stoffelmayr. Thank you very much, Chairman Johnson,
    Ranking Member Roby, and members of the subcommittee. Thank you
    for the invitation to testify today.
        Again, my name is Kaspar Stoffelmayr. I am a partner at the
    law firm of Bartlit Beck in Chicago, and I am also speaking
    today on behalf of Lawyers for Civil Justice.
        I would like to use my time to speak a little bit about
    what the forum defendant rule means in practice and in the much
    more common case, I think, than some of the examples we just
    heard about. And here is how it most often comes up.
        You have a plaintiff from one State, say a plaintiff from
    Illinois, who wants to sue a defendant from another State, let
    us say a pharmaceutical company from New Jersey, and they
    choose to file in a third State. For example, it could be
    Missouri, in our example, say, California. They have chosen to
    file in a California State court obviously because they hope
    that they will enjoy some sort of special benefits by suing in
    a California State court rather than at home in Illinois or in
    New Jersey.
        And then what they will frequently do is add a California
    company as a second defendant, very often a distributor. One
    major pharmaceutical distributor happens to be headquartered in
    California.
        Now there is no question in this case that there is proper
    Federal diversity jurisdiction. Jurisdiction is not in
    question. The plaintiff could have filed that case in the
    Federal courts without any problem.
        But what the forum defendant rule means is that the
    defendant cannot remove that case to a local California Federal
    court. And again, this happens all the time. And then as the
    case moves forward, nobody takes one step toward litigating
    against that local California distributor. They are in the
    case. They are never heard from again.
        So, as you can imagine from the perspective of the New
    Jersey defendant, the case is exactly the same with or without
    that California distributor in the case. The only thing that
    has changed is that they don't have access to the Federal
    courts but are required to litigate the case in State court.
        Now there is an important limit, and that is what brings us
    here today on this forum defendant rule. And the limit is that
    it only applies when that local defendant, the California
    company, has been properly joined and served. If the California
    company doesn't get served, they are not in the case. There is
    no relevant forum defendant.
        And I wouldn't describe that as circumventing the forum
    defendant rule. That is just the rule in its application. That
    is how the rule works. But the suggestion today is that the
    forum defendant rule ought to be amended to take away that
    limit, in effect to broaden the forum defendant rule so it
    extends to that group of cases as well.
        And I think the most important question before making
    changes to the jurisdictional statutes, which inevitably, you
    know, raises the possibility of unintended consequences and
    just further gamesmanship of a different kind, is what is the
    problem we are trying to solve here? You know, that California
    distributor has not been served. They are not part of the case.
    There is no reason to prevent the New Jersey defendant from
    removing.
        And if the California distributor really belongs in the
    case, if there is a live, actual claim, it is the easiest thing
    in the world to serve a corporate defendant through a
    registered agent. It takes literally minutes.
        What we heard about, and I have seen it in the written
    testimony, are some cases where there is an unexpected result.
    You might say, well, what I have just described is the typical
    case, the normal case that you would expect. There are these
    other cases where there are unexpected results.
        The data we have, the real empirical data is that this sort
    of removal before service called snap removal, or simply
    removal before service, happens infrequently. There is a paper
    that has been cited numerous times in the written testimony. It
    suggests it happens about 50 times a year. Based on what Ms.
    Relkin just said, that number may be somewhat higher today, but
    it is not a huge number of cases.
        We have to assume in most instances, the forum defendant
    rule works as intended. There may, of course, be a handful of
    cases where there is an unexpected result, but what I think it
    is important to remember about that handful of cases is that we
    are not ever in these cases talking about a plaintiff who wants
    to sue in their local home court.
        This has nothing to do with somebody saying I should be
    able to sue right here at home. These are always plaintiffs who
    have gone elsewhere to file a lawsuit. These are all cases
    where diversity jurisdiction is uncontroversial in the Federal
    courts, and the Federal court will always apply exactly the
    same law as a State court would. No one's law is being changed
    on them as a result of this removal.
        So on that basis, even in these odd cases, I don't think
    there is anything that the plaintiff has to complain about. And
    with that, I would be happy to answer any questions.
        Thank you.
        [The statement of Mr. Stoffelmayr follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Johnson of Georgia. Thank you.
        Next, Professor Hellman. Five minutes, sir.

                     STATEMENT OF ARTHUR D. HELLMAN

        Mr. Hellman. Thank you, Mr. Chairman and Ranking Member
    Roby.
        As Chairman Nadler has said, this problem, this issue may
    seem narrow and technical, but in the cases where it has
    arisen, it is a serious problem. Congress decided that as a
    general matter, when a plaintiff sues in the State court of the
    defendant's home State, the defendant should not be able to
    remove the case to Federal court under diversity jurisdiction.
    In cases such as the ones Ms. Relkin has described, snap
    removal circumvents that congressional determination.
        The Third Circuit, in holding that snap removal is
    permissible under the current statutes as they are written,
    invited Congress to make a change in the law, and I applaud
    this subcommittee for taking up the court's invitation. I would
    like to start by addressing what the goals of the legislation
    should be and then say something about how those goals should
    be accomplished.
        The primary goal of the legislation should be to restore
    the symmetry that Congress intended in the operation of the
    forum defendant rule as revised in 1948. Plaintiffs should not
    be able to prevent removal of a diversity case by joining as a
    defendant an in-State party against whom they do not intend to
    proceed and whom they do not even serve. Defendants should not
    be able to evade the forum defendant rule by removing before
    the plaintiff has even had a chance to serve the in-State
    defendant.
        The change in the law should retain the service
    requirement, but configure it in a way that does not reward
    gamesmanship by either side or make removability depend on what
    one court has called the vagarities of State law service
    requirements.
        Finally, and very important, the statutory fix should be
    narrowly tailored to the problem Ms. Relkin has described
    without disrupting other aspects of the very complex law of
    removal. In other words, it should close this loophole without
    interfering with the removal rights of other defendants.
        What action should Congress take? Well, the problem has
    been created by the two words ``and served'' in 1441(b)(2), and
    one obvious possibility would be to delete those two words from
    the statute. But doing so would encourage and just bring back
    the gamesmanship that Congress intended to prevent when it
    added the words in 1948.
        More important, any attempt to change the law through what
    might be called ``text editing''--adding, deleting, or changing
    words in an existing text--runs a serious risk of inadvertently
    unsettling other doctrines of removal law. It is just not
    possible to anticipate all of the consequences of revising a
    statutory provision of broad applicability as the forum
    defendant rule is.
        Here, the language in question has been part of the statute
    for more than 70 years. Hundreds of decisions have interpreted
    it. The committee should leave that language as it is.
        The preferable approach is to write a standalone provision
    that first defines the situation that it covers and then tells
    the parties and courts what to do in that situation. That is
    the approach taken by the proposal offered by five law
    professors, including myself, first published in 2016.
        Our proposal would allow the plaintiff to counter snap
    removal by serving one or more in-State defendants after the
    case has been removed. If the plaintiff takes that step within
    the time for service allowed by the Federal rules or by State
    law, and a motion to remand is made within 30 days after that,
    the district court must, must send the case back to State
    court.
        Because this new subsection requires immediate remand once
    any in-State defendant has been served, we are calling it the
    ``snapback'' mechanism. My co-authors and I believe that if the
    snapback provision is enacted, the incidence of snap removals
    will diminish sharply because defendants will recognize that
    the stratagem will no longer enable them to circumvent the
    forum defendant rule.
        To the extent that defendants do remove before any in-State
    defendants have been served, the plaintiff can secure remand by
    promptly serving at least one such defendant. Our proposal
    would close this one loophole without opening others and
    without changing the law that applies in the vast majority of
    removal cases.
        Thank you, and I will be happy to answer questions about
    our proposal or about snap removal generally.
        [The statement of Mr. Hellman follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Johnson of Georgia. Thank you.
        And last, but not least, Professor Pfander. Thank you.

                     STATEMENT OF JAMES E. PFANDER

        Mr. Pfander. Thank you, Mr. Chairman and Ranking Member
    Roby.
        It is true that I have been teaching civil procedure and
    Federal jurisdiction for some years at Northwestern, but I have
    only just begun to teach snap removal. It is a new thing on the
    Federal jurisdiction horizon, and there is a chance that a few
    of my first-year civil procedure students are going to be
    tuning in today for a little snap removal extra credit.
    [Laughter.]
        Mr. Pfander [continuing]. I have four points to make. The
    first one is that snap removal teaches us that forum shopping
    matters and that there is an element of inevitability in forum
    shopping. And my suggestion is that we not make moral judgments
    about the choices of the plaintiffs or the defendants, but try
    to fashion clear rules that allow the parties choices to be
    made within a clear framework so that we can concentrate our
    judge time and our litigant time on getting to the merits and
    resolving the case at hand.
        All the cases affected by snap removal turn on State law
    and can be brought in State court. It is a presumptively proper
    forum for adjudication. And snap removal can't solve all the
    problems associated with the arguments for consolidation of
    related claims because it is too arbitrary to do so.
        Second, snap removal strikes me as just the sort of thing
    the legislature should address. It doesn't have a policy
    justification. It is a waste of defense resources in monitoring
    dockets and a waste of plaintiffs' resources as plaintiffs
    attempt to try to work around the threat of snap removal.
        It is true that some courts have ruled in favor of snap
    removal. And that is because of the textual reference in the
    relevant provision of the removal code that refers to
    defendants that have been properly joined and served. That
    makes snap removal a hard question for courts, but it should be
    an easy question for Congress. If Congress chooses to preserve
    the forum defendant rule, it makes no sense to allow a snap
    removal exception to that rule to remain.
        Third, of the rule changes that have been proposed so far,
    I tend to prefer the ones that would prohibit or forbid snap
    removal rather than those that would allow it to happen and
    then try to address it after the case has already been removed.
    In other words, I think in this case, an ounce of prevention
    may be worth a pound of cure.
        And so there are a number of proposals, both in my written
    testimony and elsewhere, that seek to prevent snap removal
    rather than using the snapback approach that Professor Hellman
    has proposed. I have great respect for Professor Hellman and
    his work, but in this case, I think prevention may be the
    better approach.
        Finally, I suggest that the committee might want to
    consider the possibility that we will be reconvening here in a
    few months' time to address other similar problems. In just the
    past few years, the committee has addressed such things as
    innocent party protection, and fraudulent joinder. It may be
    that soon we will be dealing with the question of whether the
    parties have properly consented to removal. There is actually a
    division in the lower courts right now as to how parties go
    about the business of effectuating consent to removal when they
    agree to the removal initiated by one of their fellow
    defendants.
        One might address all these and similar recurring problems
    by empowering rulemakers, perhaps working within the Judicial
    Conference, to develop rules to submit to Congress for
    consideration. This might work in some ways like the evidence
    rulemaking process in which the Committee on Evidentiary Rules
    proposes drafts, vets them with experts in the field, and then
    offers them to Congress for adoption.
        It is a possibility that such a rulemaking process can
    address the details in the procedures and stay abreast of
    changes in the fast-moving forum shopping world more
    effectively than the legislature itself. Not to say that there
    is not a legislative role. I do believe the legislature should
    be drawing the boundary lines, and then we should try to create
    clear rules that enable the parties to work within those lines
    to get their disputes resolved on the merits instead of wasting
    resources shuffling the cases, back and forth between State and
    Federal courts.
        Again, happy to answer questions and delighted to be here.
        [The statement of Mr. Pfander follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Johnson of Georgia. Okay. I want to thank all of the
    witnesses for their testimony.
        At this time we will begin with questions, first from the
    Chair of the Full Committee, Chairman Nadler.
        Chairman Nadler. Thank you, Mr. Chairman.
        Professors Hellman and Pfander, are you aware of any
    scholars who have put forward a principled justification for
    snap removals?
        Mr. Hellman. No, not--not consistent with the forum
    defendant rule, no.
        Mr. Pfander. Nor am I.
        Chairman Nadler. And why do you think that is?
        Mr. Hellman. I think it is because the forum defendant rule
    rests on the assumption that as long as you have one defendant
    from the forum State, no defendant in the case needs protection
    from local bias. Snap removal interferes with that.
        Chairman Nadler. And Professor Hellman, are there ways that
    your snapback proposal could be vulnerable to gamesmanship from
    plaintiffs or defendants?
        Mr. Hellman. You know, we haven't seen them so far, but one
    of the great things about having a hearing like this--and I
    want to thank the committee really for taking up this issue--is
    that now this is out in the open. We published that article in
    a journal, which I have to say not a lot of people read, and
    now that this committee has turned attention to it, I hope that
    plaintiffs' lawyers organizations, defendants' lawyers
    organizations will look at it and really vet it very carefully.
        Chairman Nadler. Thank you.
        Do any of the other witnesses have anything to add to that
    on that question?
        Mr. Stoffelmayr. If I may, Congressman? I think the
    question about a scholarly justification for snap removal, I
    understand the question and the response. What concerns me is
    that the term ``snap removal'' doesn't have a clear definition.
    It is sort of whenever it is too fast, too quickly, we call it
    the snap removal. If it is not too quickly, we just call it the
    forum defendant rule in practice.
        And so the two points I would want to make is the forum
    defendant rule in practice, when we don't think it is too
    quick, does have plenty of good justifications, and many, many
    people have questioned the wisdom of a rule that says, I think
    as Professor Hellman just said, as long as one defendant comes
    from the forum State, no defendant has anything to be concerned
    about.
        In actual practice, if you represent a defendant from out
    of State in a local State court elsewhere, it may be very, very
    cold comfort that a small, local business or a local individual
    happens to be a co-defendant. That will not give you any sense
    of comfort that your interests will be protected and respected
    in the same way as they would be in Federal court.
        Chairman Nadler. Okay. And, Ms. Relkin, we have heard
    suggestions that Snap Removals are very rare. Is that your
    experience? And, I think you said that they have increased
    fivefold?
        Ms. Relkin. No, Congressman Nadler, it is not very rare. It
    is growing every minute. It is an epidemic right now. The data
    that my adversarial respective colleague refers to is more than
    5 to 7 years old, the study by Valerie Nannery. That was based
    on data from 2012 to 2014. That is another--that is a century
    ago in terms of what is happening with snap removal because of
    the change in the electronic--mandatory electronic filing.
        It is rampant, especially in the two circuits, the Second
    Circuit and the Third Circuit, where I happen to practice--
    lucky me--that have now given a somewhat green light to that
    practice.
        Chairman Nadler. Why shouldn't Congress simply wait for the
    Supreme Court to resolve this, the Snap Removal question?
        Ms. Relkin. Because this is purely congressional language.
    The reason the Second and Third Circuit allowed it was they are
    referring to the plain words, ``joined and served.'' So it is
    purely a congressional fix. It is really whether it is a
    district court or a court of appeals or the Supreme Court, it
    would still be the same dilemma. This really is, as the Third
    Circuit has said, something Congress needs to correct.
        Chairman Nadler. Okay. And, it seems like the Snap Removal
    problem comes in part from courts reading the words ``and
    served'' in isolation from the rest of the removal statutes and
    without due regard to the purpose of these laws and without
    accounting for changing technology.
        Congress shouldn't be playing whack-a-mole with problematic
    judicial instructions. Should we consider Professor Pfander's
    suggestion of either giving the courts the power to make rules
    governing removal or attempting a more comprehensive
    recodification of the removal statutes?
        Ms. Relkin. Well, yes, I am sitting with such learned
    professors. There are--it does require a lot of debate as to
    what is the best surgical fix to this limited, but big problem
    and growing problem. So it is hard to--I don't want to just
    answer that off the cuff.
        I put in proposed suggestions that are kind of a morph, and
    I think any number of them could work. But it certainly needs a
    surgical correction.
        And just to respond to Mr. Stoffelmayr, this notion of this
    frequent problem of misjoinder where State court, State
    entities are begin served that are so-called fraudulent, it is
    happening less and less. I have never seen it personally, and
    in light of the Supreme Court's decision in Bristol-Myers
    Squibb in 2017, which basically says you don't have
    jurisdiction in many circumstances, it is going away.
        That, in and of itself, would take care of this alleged and
    really remote problem.
        Chairman Nadler. Thank you. My time has expired. I yield
    back.
        Mr. Johnson of Georgia. Thank you. Next we will hear
    questions from Ranking Member Roby.
        Mrs. Roby. Well, thank you again for your testimony today,
    and I, like your civil procedure students, am receiving a good
    lecture today. So I do appreciate all of you taking the time to
    come here and talk about this very specific issue.
        So, Mr. Stoffelmayr, I will start with you. As a
    practitioner, you have used snap removal in practice. Can you
    explain how it is used to protect defendants from plaintiffs
    seeking to forum shop?
        Mr. Stoffelmayr. Yes, absolutely. So the forum shopping
    plaintiff is somebody who has identified a State court
    jurisdiction that they will believe is going to be unusually
    favorable to that plaintiff. And it has changed over the years,
    but at any one time, there are probably 5 or 10 sort of State
    court hotspots that anyone will tell you are the most
    plaintiff-friendly State court jurisdictions.
        And so any plaintiff's lawyer who thinks they have the
    option would rationally prefer to file their case in that State
    court rather than anywhere else, and that would be true whether
    or not the plaintiff happens to come from that location,
    whether or not the defendant happens to come from that
    location.
        Under normal circumstances, let us say a plaintiff from
    Illinois, a defendant from New Jersey, file in California, it
    would be easily removable. No question about the Federal
    court's jurisdiction.
        The forum defendant rule creates a sort of asymmetric quirk
    that says if the plaintiff wants that case in Federal court,
    they have the option of filing in Federal court. But if the
    defendant wants the case in Federal court, that they don't have
    the ability to remove.
        And what preservice removal does, whether you want to call
    it snap removal because it was too quick or just preservice
    removal because you think happened at an appropriate time, it
    means that the out-of-State defendant has the ability to remove
    that case to Federal court before the local defendant is
    served, which will often be the case if the local defendant is
    a party that no one ever really had any interest in suing in
    the first place.
        Mrs. Roby. Okay. I appreciate that. And I think it is maybe
    best then to turn to you, Professor Relkin.
        Ms. Relkin. Thank you for the----
        Mrs. Roby. Ms. Relkin, sorry. Lots of smart people in this
    room.
        So just to build off of that explanation, in your
    testimony, you stated that snap removal results in a loss for
    our system of civil justice. So I would just ask you to address
    whether improper joinder to defeat diversity jurisdiction
    results in a similar loss for our system of civil justice?
        Ms. Relkin. First of all, thank you for the question and
    for the advancement. I would love to be a professor.
        Mrs. Roby. I am just a student today. [Laughter.]
        Ms. Relkin. First of all, I think it is very rare, and
    there is a remedy. It is called fraudulent joinder, and there
    is a motion that can be made. And if a defendant is improperly
    brought just for the purpose of getting State court
    jurisdiction, that is how it gets corrected.
        This loophole is just a different situation----
        Mrs. Roby. And how often does that actually happen? Just
    give me some context for that.
        Ms. Relkin. Very, very rarely. In my entire career, I
    personally have only had one such motion.
        Mrs. Roby. Okay.
        Ms. Relkin. And I should say all of the examples I regaled
    you with, what is going on in New Jersey, there was no out-of-
    State defendant. We served Stryker Orthopedics, a New Jersey
    corporation. They removed.
        The cases against Ethicon and J&J, they were the only--they
    were New Jersey defendants. So we don't have this remote
    problem of other defendants from elsewhere. It is typically the
    in-State defendant lately who is doing the removal because they
    would rather be in Federal court for reasons like they don't
    want--they want to have a unanimous jury, which is, you know,
    generally most States don't require unanimous juries. They
    would rather sow doubt and have one juror hang the jury, and
    then you have to have a retrial and waste a lot of resources on
    everyone's part.
        Mrs. Roby. So I would ask you, I would give you an
    opportunity to respond to her answer as well.
        Mr. Stoffelmayr. Thank you, Congresswoman. That is a very
    important issue you raised and Ms. Relkin addressed about
    fraudulent joinder and why doesn't that solve the problem.
        And the reason is the standard for fraudulent joinder is
    incredibly high. To say that a party has been misjoined in the
    sense that no one intends to pursue a real claim against them
    is one thing, to win a fraudulent joinder motion is something
    else entirely. You would have to show, the way it is usually
    phrased, is there is no possible colorable basis for any claim
    against this defendant. No State court could possibly find you
    have asserted a proper cause of action.
        That is extraordinarily difficult to show, which is why you
    may not see very many motions. No one wants to file losing
    motions. And it doesn't nearly capture the broad swath of cases
    where the defendant just shouldn't be there and won't be
    pursued, but you couldn't possibly hope to show fraudulent
    misjoinder.
        Mrs. Roby. Okay, got it. I appreciate my time has expired.
        Thank you.
        Mr. Johnson of Georgia. Thank you.
        Docket monitoring technology has made some Snap Removals a
    race against the clock that comes down to mere minutes. I would
    like to hear your thoughts on whether that is how--that was how
    the legislature intended this rule to be in effect. What are
    your thoughts on that, Mr. Stoffelmayr?
        Mr. Stoffelmayr. So I understand from the literature there
    is not----
        Mr. Johnson of Georgia. Is that the way that the rule is
    supposed to work?
        Mr. Stoffelmayr. Well, I am confident in 1948, nobody--you
    know, nobody had a computer. There was no such thing as an
    electronic docket. So surely nobody had that specific
    intention. That is not the same thing, though, as----
        Mr. Johnson of Georgia. And in fact, there was an
    assumption that you are going to have 2, 3, 4, 5 days after the
    case is filed to perfect service. That was the presumption?
        Mr. Stoffelmayr. I don't know. I mean, I can't say what was
    the presumption in 1948.
        Mr. Johnson of Georgia. But, it certainly wasn't Snap
    Removal?
        Mr. Stoffelmayr. There was certainly an assumption in 1948
    that it would be proper to remove before someone else has been
    served. Two things have changed since 1948, of course. It is
    easier to get information about new filings. It is also much,
    much easier and quicker to accomplish service. Both of these
    things happen much more quickly today than they did in 1948.
        But the other thing I would like to address for a second
    is--oh, sorry.
        Mr. Johnson of Georgia. Yes, I wish I could listen to what
    you have to say, but I need to move on because I am limiting
    myself to the 5 minutes others were limited to.
        But Professor Hellman, I want to thank you for your
    thoughtful proposed legislation. Professor Pfander challenges
    your proposal by invoking the adage that an ounce of prevention
    is worth a pound of cure. How do you respond to that?
        Mr. Hellman. Thank you, Mr. Chairman.
        First, I should say that Professor Pfander is a friend and
    colleague whom I greatly respect, but I have two responses to
    that comment.
        First, the adage about an ounce of prevention is certainly
    good advice in some circumstances, but not always. If the
    preventive medicine will have some side effects, and you don't
    know how many people will experience them or how bad they will
    be, it may be better to rely on the cure.
        Second, I think the snapback proposal will have substantial
    preventive effects. A defendant like Stryker, as Ms. Relkin has
    described, may be willing to direct its process receiver to
    hide from the process server for 2 or 3 hours. But 2 or 3 days,
    2 or 3 weeks, when, at the end of that time, the plaintiff will
    serve process, and under the snapback provision, the case must
    be remanded, that would not be rational behavior.
        So I think that if the snapback provision is in effect, it
    will prevent many, if not all, Snap Removals.
        Mr. Johnson of Georgia. Thank you.
        Professor Pfander, judging from recent history, even a
    minor change to the removal statutes can spark contentious,
    tangled disputes that take years for the courts to work out.
    Why shouldn't the risk of unintended consequences counsel us
    against adopting any of your preventive proposals?
        Mr. Pfander. Well, I wouldn't suggest that we adopt them
    without thinking them through very carefully. And so just as we
    would want to think through Professor Hellman's proposal and
    think about the consequences of snapback it, it would also, I
    think, make sense to consider what the potential consequences
    of a change to the ``and served'' language might be or a
    decision to add a requirement that the removal await until one
    of the defendants has actually been served with process.
        That approach is it does take us, to some extent, back to
    1948 because, in 1948, no one knew about the pendency of the
    litigation until someone was served. The plaintiff had a choice
    about which of the defendants to serve and service would notify
    the world about the existence of the litigation.
        And so we can rely to some extent on the traditional wisdom
    of that approach to managing the relationship between plaintiff
    and defendant, but again, I wouldn't suggest that we do it
    willy-nilly.
        Mr. Johnson of Georgia. Thank you.
        And lastly, we have talked about the issue of fraudulent
    joinder, but Ms. Relkin, I want to make sure we are all clear
    on why the legislation that is proposed in this hearing is
    needed. What will happen if Congress doesn't act to address
    Snap Removals?
        Ms. Relkin. State court jurisdiction and State court as a
    forum will go away. Many, many plaintiffs will be deprived of
    the ability to ever have a case in State court.
        State courts where the corporations are headquartered have
    a duty to regulate the conduct of their own corporate citizens
    and other citizens, and they will not be able to develop the
    law as they see fit because it is only going to be adjudicated
    by Federal courts.
        And when Federal courts are addressing an issue, they only
    are supposed to be applying State substantive law, Federal
    procedure. If they are looking at a State substantive law issue
    and the State courts haven't had an opportunity to rule on it,
    it is novel, they don't know what is their obligation. What
    Federal courts do is they then certify the question back to the
    State courts' highest court to answer it.
        So we are going to have the situation where new and
    evolving legal issues happen, particularly now with data breach
    and, you know, advancing technologies, without any evolution of
    State court law, with Federal judges guessing what the State
    judges would decide. And it is, you know, our system of
    federalism, it is the State courts that are supposed to be
    deciding this.
        So we are going to have a problem with knowing what the law
    is, and injured plaintiffs are not going to have the
    opportunity to have their court heard where the very defendant
    who committed the alleged tort or contract breach or whatever
    performed it.
        Mr. Johnson of Georgia. Well, I am sure that there would be
    those who don't want the highest State courts legislating from
    the bench when they get asked these questions about what State
    law should be or what it would be if there is such a statute or
    case law in place.
        So, I want to thank the witnesses for all being here today.
    This concludes----
        Mrs. Roby. We have Mr. Cline.
        Mr. Johnson of Georgia. Oh, I am sorry. Okay. Mr. Cline?
    [Laughter.]
        Mr. Johnson of Georgia. Mr. Cline. Okay. So next we will
    resort to 5 minutes of questioning from the gentleman from
    Arizona?
        Mr. Cline. Virginia.
        Mr. Johnson of Georgia. Virginia.
        Mr. Cline. Thank you, Mr. Chairman. [Laughter.]
        Mr. Johnson of Georgia. I get it wrong every time.
        Mr. Cline. No, I appreciate the opportunity----
        Mr. Johnson of Georgia. Thank you.
        Mr. Cline [continuing]. And I thank the witnesses for being
    here.
        I have been listening with interest, and Professor
    Hellman's proposal is an interesting one, and I would ask Ms.
    Relkin to respond to it. Do you think that this type of
    snapback proposal would address a lot of the problems that we
    face currently?
        Ms. Relkin. Yes, I do think it would be a legislative
    solution. Whether it is the best or whether different variants
    that have been discussed are better I think would require a lot
    of thought.
        But by having the snapback, it takes away this crazy
    incentive to have robots and paralegals, and not lawyers, who
    are certifying that it is a good faith removal just remove a
    case without any thought because they know that since
    plaintiffs would have the opportunity to then effect the
    service within normal human timeframe, that would happen.
        The whole idea of the removal before--removal provision
    under the forum defendant rule is to make sure that you don't
    have a case, as Mr. Stoffelmayr was talking about, where a
    defendant was named in a complaint but was not served because
    the plaintiff had no intention of actually prosecuting that
    action.
        So this fixes it because if they truly intended to have a
    legitimate claim against that defendant, they will have the
    time to name them. So it is an appropriate solution, but there
    are other ways to address this problem as well that I think the
    legislative drafters need to address, and we would be happy to
    consult as time goes on.
        Mr. Cline. And Professor Pfander's suggestion to move in
    the other direction, what do you see as potential harm or
    benefit of that?
        Ms. Relkin. I think both solutions would work. They are
    just different ways to address it. You know, prevention is
    worth an ounce of cure, but it is also true when you change
    other things, you never know what unintended consequences, just
    like the unintended consequence of the removal before service.
    Because in 1948, they certainly were not thinking about
    electronic service and instantaneous service.
        Mr. Cline. I believe that you--I will ask Mr. Stoffelmayr.
    Ms. Relkin mentioned that she didn't see the existence of use
    of local defendants or strawmen to exploit the forum defendant
    exception as a common problem. I will ask Ms. Relkin first. Did
    you say that?
        Ms. Relkin. Yes. In my experience, it is not. I have not
    personally done that, and I haven't seen it. There was a
    situation in--which I think has been changed by virtue of what
    the Missouri Supreme Court and legislature have done. There
    were some situations in Missouri where they had joinder with,
    you know, you could name like 99 plaintiffs and only 1 from the
    State of Missouri and 1 in-State defendant. And that has been
    changed.
        I mean, I think that is the example that Mr. Stoffelmayr is
    referring to, and that problem that the defendant saw there has
    been fixed.
        Mr. Cline. Mr. Stoffelmayr, do you agree or disagree with
    that?
        Mr. Stoffelmayr. No, I would respectfully disagree with
    that. The Missouri situation with the multiple plaintiffs, that
    actually--that turned on a different question having to do with
    the exercise of personal jurisdiction.
        What I was referring to would be cases in which literally
    thousands, you know, there are consolidated proceedings in the
    California State courts, and they involve 5,000 plaintiffs.
    Four thousand five hundred of those may be from out of State,
    and the way in which removal was avoided was by naming a local
    distributor. And that has happened in any number of cases and
    continues to happen.
        And Ms. Relkin, you know, referred to changes in the law of
    personal jurisdiction, which may, over time, make that less
    common. One would have thought that had already become
    uncommon, and unfortunately, that doesn't seem to be the case.
    Courts have approached that question more flexibly than maybe
    people had initially thought.
        Mr. Cline. Ms. Relkin, would you agree that----
        Ms. Relkin. The Supreme Court, in the Bristol-Myers Squibb
    decision in 2017, has addressed that. What happened there was
    there were plaintiffs from different States and some California
    plaintiffs who filed in California. The in-State defendant was
    the major distributor McKesson, and the Supreme Court--the U.S.
    Supreme Court has determined that there was not personal
    jurisdiction.
        Those plaintiffs didn't have jurisdiction against McKesson,
    and they were basically thrown out of State court. So the
    Bristol-Myers Squibb case has resolved the concern of the
    defense law there. So I don't think there is a problem anymore,
    except for Snap Removal.
        Mr. Cline. Thank you. Thank you, Mr. Chairman.
        Mr. Johnson of Georgia. Thank you.
        This concludes today's hearing. I want to thank the
    witnesses for your testimony today.
        And without objection, all Members will have 5 legislative
    days to submit additional written questions for the witnesses
    or additional materials for the record.
        And with that, the hearing is adjourned.
        [Whereupon, at 3:18 p.m., the subcommittee was adjourned.]

                               APPENDIX

    =======================================================================

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]