[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
         
         
         
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      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:]
    
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    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:]
    
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    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:]
    
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    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

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