State Farm Fire & Casualty Co. v. Valspar Corp. (824 F. Supp. 2d 923, 2010)

ORDER

JEFFREY L. VIKEN, District Judge.

INTRODUCTION

This matter is before the court pursuant to a motion for remand filed by plaintiff State Farm Fire and Casualty Company (hereinafter “State Farm”) on July 15, 2009. (Docket 9). State Farm moves to remand the action to the state circuit court after defendant removed it to federal court. Id. Defendant Valspar Corporation, Inc. (hereinafter “Valspar”) resists State Farm’s motion to remand. (Docket 11). State Farm’s motion was referred to the magistrate judge for a report and recommendation. (Docket 15). On November 6, 2009, the magistrate judge issued a report recommending remand. (Docket 16). Valspar filed objections to the report and recommendation and moved the court to consider additional evidence in the form of an e-mail exchange between Valspar’s counsel and counsel for Bonnie Estes. (Docket 17). The court again referred this matter to the magistrate judge to consider this new evidence and to issue a second report and recommendation. (Docket 19). After considering the additional evidence, the magistrate judge again recommended remand. (Docket 22). Valspar filed objections to this second report and recommendation. (Docket 23). This matter is now ripe for adjudication.

DISCUSSION

Neither party disputes the factual and procedural history recited in both of the reports and recommendations issued by the magistrate judge. See Dockets 16 & 22. The court incorporates by reference these thorough recitations.

The court considers de novo the magistrate judge’s reports and recommendations and the record in this case. 28 U.S.C. § 636(b)(1) (“A judge of the court shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made.”); Thompson v. Nix, 897 F.2d 356, 357-58 (8th Cir.1990) (“[OJbjections must be timely and specific to trigger de novo review by the District Court of any portion of the magistrate judge’s report and recommendation.”). Neither party objected to the magistrate judge’s first report and recommendation. Upon de novo review, the court adopts in full the first report and recommendation (Docket 16), as supplemented by the following discussion.

Valspar raises two objections to the magistrate judge’s second report and recommendation. (Docket 23). Valspar objects to the finding that the e-mail submitted as an “other paper” under the removal statute, 28 U.S.C. § 1446(b), was too vague to have allowed Valspar to ascertain the action had become removable. Id. Valspar also objects to the finding that § 1446(b) requires a written document, rather than any type of communication, to provide sufficient notice of removability. Id. Conversely, State Farm urges the court to adopt the magistrate judge’s reports and recommendations and grant its motion for remand to the state circuit court. (Docket 24).

A. Whether the E-mail Satisfies § 1446(b)

Section 1446 of Title 28 of the United States Code sets forth the procedure for the removal of a civil action (or criminal prosecution) from state to federal court. See 28 U.S.C. § 1446. Subsection (b), which governs the time for removal, provides as follows:

The notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within thirty days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter.

If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable, except that a case may not be removed on the basis of jurisdiction conferred by section 1332 of this title more than 1 year after commencement of the action.

28 U.S.C. § 1446(b).

It is undisputed the present action was not removable on or about June 27, 2008, when Valspar and Ms. Estes received a copy of State Farm’s summons and complaint. (Docket 1, Exhibit A). Therefore, the second triggering event identified in § 1446(b) applies. This provision required Valspar to remove the action to federal court within thirty days of receiving notice, by means of a copy of an amended pleading, motion, order, or other paper, that the action had become removable. Valspar argues the e-mail sent by counsel for Ms. Estes was sufficient to put Valspar on notice of Ms. Estes’ settlement, thereby making removal of the action to federal court proper on the basis of diversity jurisdiction. (Docket 23 at pp. 2-6). The magistrate judge found the e-mail too vague to satisfy the notice requirement of § 1446(b). (Docket 22 at pp. 21-27).

Valspar argues the magistrate judge unreasonably failed to factor in the context of the e-mail and the adversarial realities of the case. (Docket 23 at pp. 3-6). Valspar argues the e-mail must be read with the understanding that Valspar knew, at the time of the e-mail exchange, that Ms. Estes would likely settle with State Farm. Id. at pp. 3-4. Valspar asserts the removability of the action was readily apparent from the e-mail if the court considers Valspar’s knowledge of Ms. Estes’ likely settlement. Id.

The court reviewed de novo the magistrate judge’s analysis of this issue (Docket 22 at pp. 21-27) and finds it to be thorough and well-reasoned. The court incorporates by reference this analysis. Further, the court conducted an independent review of inter-circuit case law and finds it does not support Valspar’s position.

As noted by the Court of Appeals for the Fourth Circuit, a district court need not inquire into the subjective knowledge of the defendant when determining when the defendant first ascertained the action had become removable:

[W]e will not require courts to inquire into the subjective knowledge of the defendant, an inquiry that could degenerate into a mini-trial regarding who knew what and when. Rathei*, we will allow the court to rely on the face of the initial pleading and on the documents exchanged in the case by the parties to determine when the defendant had notice of the grounds for removal, requiring that those grounds be apparent within the four comers of the initial pleading or subsequent paper.

Lovern, 121 F.3d at 162 (emphasis added); see also Weiderspahn v. Wing Enterprises, Inc., No. 09-2441 (JEI/AMD), 2009 WL 2070353 at *3 (D.N.J. July 10, 2009) (“Defendant’s knowledge is irrelevant in determining when the time for removal begins to run.”); Tolley v. Monsanto Co., 591 F.Supp.2d 837, 845 (S.D.W.Va.2008) (“In determining whether grounds for removal were ascertainable from a motion, order or other paper, a court must not inquire into the subjective knowledge of the defendant.”); Harris v. Bankers Life & Cas. Co., 425 F.3d 689, 694 (9th Cir.2005) (“We now conclude that notice of removability under § 1446(b) is determined through examination of the four corners of the applicable pleadings, not through subjective knowledge or a duty to make further inquiry. Thus, the first thirty-day requirement is triggered by defendant’s receipt of an ‘initial pleading’ that reveals a basis for removal. If no ground for removal is evident in that pleading, the case is ‘not removable’ at that stage. In such case, the notice of removal may be filed within thirty days after the defendant receives ‘an amended pleading, motion, order or other paper’ from which it can be ascertained from the face of the document that removal is proper.”) (emphasis added); Bosky v. Kroger Texas, LP, 288 F.3d 208, 211 (5th Cir.2002) (noting “ascertain” means “to make certain, exact, or precise” or “to find out or learn with certainty” and holding “the information supporting removal in a copy of an amended pleading, motion, order or other paper must be ‘unequivocally clear and certain’ to start the time limit running for a notice of removal under the second paragraph of section 1446(b)”).

The benefit of enforcing a bright-line rule is substantial:

This [“unequivocally clear and certain”] threshold promotes judicial economy. It should reduce “protective” removals by defendants faced with an equivocal record. It should also discourage removals before their factual basis can be proven by a preponderance of the evidence through a simple and short statement of the facts. In short, a bright-line rule should create a fairer environment for plaintiffs and defendants.

Bosky, 288 F.3d at 211. In Gottlieb v. Firestone Steel Products Co., the court expressed similar policy considerations in support of its position that the “other paper” must provide clear notice of removability:

The removal statute is designed to provide a “uniform and definite time for a defendant to remove an action.” Defendants should not be required to “guess” when a case becomes removable. To hold otherwise would require defendants to resolve questions as to removability in favor of early, and perhaps unwarranted, removal. Such a situation would create havoc on the dockets of both state and federal courts....

524 F.Supp. 1137, 1140 (E.D.Pa.1981) (internal citation omitted).

When considered on its face without consideration of the subjective knowledge of Valspar, the e-mail sent by Ms. Estes’ counsel simply is too vague to have provided clear notice the action had become removable. “If the statute is going to run, the notice ought to be unequivocal. It should not be one which may have a double design.” DeBry v. Transamerica Corp., 601 F.2d 480, 489 (10th Cir.1979). The notice “should not be an ambiguous statement that requires an extensive investigation to determine the truth.” Id. at 490; see also Farmland National Beef Packing Co., L.P. v. Stone Container Corp., 98 Fed.Appx. 752, 755 (10th Cir.2004) (“[F]or a paper to fall within the removal statutes, it must be unambiguous.”); Akin v. Ashland Chemical Co., 156 F.3d 1030, 1036 (10th Cir.1998) (requiring a “clear and unequivocal notice from the pleading itself, or a subsequent ‘other paper’ ” that the action had become removable). Thus, the key is whether the e-mail itself clearly and unequivocally provides the requisite notice of removability. The context surrounding the e-mail, that is, Valspar’s subjective knowledge of Ms. Estes’ likely settlement, is irrelevant to this determination. Valspar acknowledges the e-mail “confirmed,.impliedly, the fact that no one has ever disputed — that ... [Ms. Estes] had indeed settled.... ” (Docket 17 at p. 4) (emphasis added). To satisfy the notice requirement of § 1446(b), the e-mail must confirm unequivocally, rather than merely impliedly, the settlement of Ms. Estes.

Valspar also argues the magistrate judge “ignore[d] the adversarial realities of the case” by suggesting ways in which Valspar could have obtained more concrete documentation of the settlement agreement between State Farm and Ms. Estes. (Docket 23 at p. 6). This court disagrees and is mindful of the fact that Valspar, as the removing defendant, bears the burden of proving removal is proper and all prerequisites to federal jurisdiction are satisfied. See In re Business Men’s Assurance Co. of America, 992 F.2d 181, 183 (8th Cir.1993) (per curiam) (citing Bor-Son Bldg. Corp. v. Heller, 572 F.2d 174, 182 n. 13 (8th Cir.1978)); McShares, Inc. v. Barry, 979 F.Supp. 1338, 1342 (D.Kan.1997) (“The removing party has the burden to show that removal was properly accomplished.”). Further, “[a]ll doubts [about] whether the statute’s requirements have been met are resolved against removal.” Roybal v. City of Albuquerque, No. 08-181, 2008 WL 5991063 at *2 (D.N.M. Sept. 24, 2008); see also Harris, 425 F.3d at 698 (“[R]emoval statutes should be construed narrowly in favor of remand to protect the jurisdiction of state courts.”) (citing Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09, 61 S.Ct. 868, 85 L.Ed. 1214 (1941)); Entrekin v. Fisher Scientific Inc., 146 F.Supp.2d 594, 604 (D.N.J.2001) (Courts must “strictly construe the removal statutes against removal and resolve any doubts in favor of remand.”).

Upon review of the applicable case law, the court agrees with the magistrate judge that the e-mail is too ambiguous to prove the parties were completely diverse in citizenship at the time of removal. The email cannot satisfy the notice requirement of § 1446(b).

B. Whether an Oral Communication Satisfies § 1446(b)

In the alternative, Valspar argues the conversation between counsel for Valspar and counsel for State Farm, during which counsel for State Farm indicated Ms. Estes had settled, satisfies the notice requirement of § 1446(b). (Docket 23 at pp. 6-9). The magistrate judge found § 1446(b) required a written document evidencing the right to remove. (Docket 16 at pp. 16-25; Docket 22 at pp. 11-21). The court reviewed de novo the magistrate judge’s thorough and well-reasoned analysis on this issue and incorporates it by reference herein. The court also conducted an independent review of inter-circuit case law.

The Court of Appeals for the Eighth Circuit has not provided guidance on this precise issue, and courts in other circuits are divided. Indeed, as discussed below, the second paragraph of § 1446(b) has generated a veritable cornucopia of conflicting decisions and rules. This quagmire is due, in large part, to the fact § 1446(b) does not define “other paper” in its terms or in its legislative history. Broderick v. Dellasandro, 859 F.Supp. 176, 178 (E.D.Pa.1994); Sunburst Bank v. Summit Acceptance Corp., 878 F.Supp. 77, 81 (S.D.Miss.1995).

The clear purpose of § 1446(b) is “to commence the running of a new 30-day period once the defendant has received actual notice, through one of the documents described in Section 1446(b), that a previously unremovable case has become removable.” 14C Charles A. Wright, Arthur R. Miller, Edward H. Cooper, & Joan E. Steinman, Federal Practice and Procedure § 3731 at p. 519 (4th ed. 2009) (footnote omitted). “[F]ederal courts have given the reference to ‘other paper’ an expansive construction and have included a wide array of documents within its scope.” Id. at p. 524 (footnote omitted); see also Bowyer v. Countrywide Home Loans Servicing LP, No. 5:09-cv-00402, 2009 WL 2599307 at *3 (S.D.W.Va. Aug. 21, 2009) (noting courts take “a rather expansive view of the term ‘other paper’ ” and “nearly any written document generated in the course of litigation and received by the defendant can supply grounds for removal”). Courts differ as to how formal or informal the notice must be in order to satisfy § 1446(b). Smith v. Bally’s Holiday, 843 F.Supp. 1451, 1454 (N.D.Ga.1994). For example, courts have held, in cases involving the settlement of non-diverse defendants, “formal dismissal is not a prerequisite for removability” or for adequate notice under § 1446(b). Hessler v. Armstrong World Industries, Inc., 684 F.Supp. 393, 395 (D.Del.1988); see also Lesher by Lesher, 647 F.Supp. at 922 (finding a formal order dismissing a non-diverse defendant was not a prerequisite to removal). Additionally, notice of removability under § 1446(b) may be provided by answers to discovery requests. Tolley, 591 F.Supp.2d at 845 (construing “other paper” to include requests for admissions, deposition testimony, answers to interrogatories, settlement offers, briefs, and documents provided in discovery); Roberts v. Anchor Packing Co., No. 2:05-CV-320, 2005 WL 1201212 at *1 (S.D.W.Va. May 19, 2005) (same); JHohman, LLC v. U.S. Sec. Associates, Inc., 513 F.Supp.2d 913, 916 (E.D.Mich.2007) (collecting cases); Cabibbo v. Einstein/Noah Bagel Partners, L.P., 181 F.Supp.2d 428, 431-33 (E.D.Pa.2002) (collecting cases).

Courts also have allowed less formal writings, such as correspondence between counsel, to qualify as “other paper.” JHohman, 513 F.Supp.2d at 916 (collecting cases); Sunburst Bank, 878 F.Supp. at 81-82 (holding § 1446(b) was not restricted solely to papers formally filed in the case and finding plaintiffs demand letter satisfied the “other paper” requirement); Hessler, 684 F.Supp. at 395 (finding the removal clock began to run when defendants received a letter from plaintiff stating that a settlement had been reached with the non-diverse defendants, not when notice of the settlement was provided to the court or when the non-diverse defendants were formally dismissed); but see Textile Chemical Co. v. Aetna Cas. and Sur. Co., No. Civ.A. 97-2142, 1997 WL 537408 at *2 (E.D.Pa. Aug. 5, 1997) (holding plaintiffs letter did not constitute an “other paper” because that category included only court-filed documents); Bonnell v. Seaboard Air Line R.R., 202 F.Supp. 53, 55 (N.D.Fla.1962) (stating that “mere correspondence” between counsel did not fall within the definition of “other paper”).

“Although the requisite notice of removability may be communicated to defendants in either a formal or informal manner, the communication should be in writing.” Wright, Miller, Cooper, & Steinman, supra, § 3731 at pp. 552-53. A majority of courts have strictly construed the language of § 1446(b) to require a written document. See, e.g., Quintana v. Werner Enterprises, Inc., No. 09 Civ. 7771(PKC), 2009 WL 3756334 at *1 (S.D.N.Y. Nov. 2, 2009) (noting an oral assertion was insufficient to trigger the thirty-day removal clock because the plain text of § 1446(b) refers only to a pleading, motion, order or “other paper”); Bowyer, 2009 WL 2599307 at *3 (“The ‘receipt’ of information in writing, whether formally or informally, from the plaintiff is a necessary event that commences the thirty-day window to remove. The defendant’s subjective knowledge of grounds for removal is irrelevant and cannot independently create a right to remove the case.”) (internal citation omitted); CMS Security, Inc. v. Burlington Ins. Co., No. C-09-2217 MMC, 2009 WL 2252106 at *1 (N.D.Cal. July 28, 2009) (finding an oral communication between counsel insufficient to constitute an “other paper”); Weiderspahn, 2009 WL 2070353 at *3 (noting defendant’s knowledge was irrelevant in determining when the removal clock began to run and the Court of Appeals for the Third Circuit had interpreted the “other paper” requirement narrowly to exclude facts a defendant knew from oral communications); Mendoza v. OM Financial Life Ins. Co., No. C 09-01211 JW, 2009 WL 1813964 at *5 (N.D.Cal. June 25, 2009) (noting oral communications between the parties did not constitute “other paper”); JHohman, 513 F.Supp.2d at 919 (“This Court agrees with the decisions holding that the statutory requirement of ‘receipt’ of a ‘paper’ mandates some sort of written notice that a case has become removable, as opposed to a defendant’s mere acquisition of such knowledge through other means.”); Brooks v. Boise Cascade L.L.C., No. 08-CV-200-GFK-SAJ, 2008 WL 2673357 at **3-4 (N.D.Okla. June 26, 2008) (finding a phone message from plaintiffs counsel was not an “other paper” given the plain language of § 1446(b) required a written communication to trigger removal); Garcia v. Shelter Gen. Ins. Co., No. 07-CV-0156-CVE-SAJ, 2007 WL 1302599 at **1-2 (N.D.Okla. May 2, 2007) (finding a telephone communication between counsel insufficient to satisfy the notice requirement of § 1446(b) given the plain language of the statute and the presumption against removal); Mariners Hosp. v. Neighborhood Health Partnership, Inc., No. 03-21543-CIV-LENARD, 03-21543-CV-SIMONTON, 2004 WL 3201003 at *2 (S.D.Fla. March 31, 2004) (holding oral conversations between the parties did not satisfy § 1446(b) because the statute allowed only for written notice); Polk v. Sentry Insurance, 129 F.Supp.2d 975, 979 (S.D.Miss.2000) (“[T]his court notes that the statute clearly prescribes that the time for removal begins to run when the defendant receives the requisite written notice of facts, as opposed to oral and implied notifications, which make the case removable. The actual knowledge of the defendant prior to the receipt of the writing is irrelevant to the determination of when a case became removable under § 1446(b).”) (internal citations omitted) (emphasis in original); Broderick, 859 F.Supp. at 178 (finding § 1446(b) clearly required “written notice of facts which make the case removable”); Jong v. Gen. Motors Corp., 359 F.Supp. 223, 226 (N.D.Cal.1973) (“[T]he time period to remove an action cannot depend on the defendant’s actual knowledge, because the statute expressly allows the defendant to rely on papers presented to it.”).

Sound policy considerations justify the majority view that § 1446(b) requires a written document. The writing requirement “reduces disputes over knowledge of diversity or the amount in controversy and helps avoid later battles of credibility between opposing parties and lawyers.” Broderick, 859 F.Supp. 176 at 178; accord Thomas v. Ritter, No. 3:98CV530-H, 1999 WL 1940047 at *2 (W.D.N.C. Feb. 11, 1999) (noting, within the context of establishing the amount in controversy, oral communications “would present enormous proof problems, and potentially require an evidentiary hearing on every notice of removal and motion for remand”). Further, requiring written notification avoids time-consuming collateral litigation over the defendant’s subjective knowledge — litigation which wastes judicial resources. Molina v. Lexmark Int’l, Inc., No. CV 08-04796 MMM (FMx), 2008 WL 4447678 at *17 (C.D.Cal. Sept. 30, 2008); see also Local Union No. 172 v. P.J. Dick Inc., 253 F.Supp.2d 1022, 1025 (S.D.Ohio 2003) (advising courts, when determining the appropriateness of removal, to adhere to “clear and intelligible rules” so as to avoid “needless and time-consuming collateral litigation”).

A minority of courts have allowed oral statements to satisfy the notice requirement of § 1446(b) when such statements were made during a court proceeding or a deposition. See, e.g., King v. Kayak Mfg. Corp., 688 F.Supp. 227 (N.D.W.Va.1988) (case became removable when the court stated from the bench that non-diverse defendant was no longer a party); Mike Silverman & Associates v. Drai, 659 F.Supp. 741, 745 (C.D.Cal.1987) (case became removable once the time for service of the John Doe defendants elapsed and defendants learned, in a hearing before the state court, that plaintiff previously dismissed the remaining non-diverse defendant); Heniford v. American Motors Sales Corp., 471 F.Supp. 828, 334-35 (D.S.C.1979) (case became removable when plaintiffs counsel, in closing argument, admonished the jury not to enter a verdict against the sole remaining non-diverse defendant); First National Bank in Little Rock v. Johnson & Johnson, 455 F.Supp. 361, 362 (E.D.Ark.1978) (case became removable when the court granted, on the record, plaintiffs oral motion to dismiss the non-diverse defendant); Fuqua v. Gulf, Colorado and Santa Fe Railway Co., 206 F.Supp. 814, 815-16 (E.D.OkIa.1962) (case became removable when plaintiff revealed during his deposition that the non-diverse defendant was not a proper party); see also footnote 8, supra. These decisions rest on the proposition that the purpose of the rule is to trigger the removal clock when the defendant is able to ascertain intelligently the action has become removable. See Mike Silverman, 659 F.Supp. at 746 n. 9 (relying on First National Bank, 455 F.Supp. at 362 n. 1, and Heniford, 471 F.Supp. at 335).

The court considers this minority of cases to be limited to their unique circumstances. The cases “have one key distinguishing feature in common: the oral notices were given in court proceedings and/or in the presence of the presiding judge, thereby removing any proof problems regarding who said what at what time.” Thomas, 1999 WL 1940047 at *2 n. 2. It is highly likely the oral statements, made in court or during a deposition, were reduced to writing simultaneously by a court reporter, who is a neutral recorder of the statements. Smith, 843 F.Supp. at 1454 (finding an oral communication between counsel, “not reduced to writing (or not capable of immediate reduction to writing)” did not satisfy the notice requirement of § 1446(b)). The transcript would be “available for examination without necessitating any complex and potentially troublesome dispute over what was actually said.” Entrekin, 146 F.Supp.2d at 614; see also Smith, 843 F.Supp. at 1455 (“There is little danger that oral statements in open court or in a deposition will be mistranscribed, and any mistake therein is likely to be immediately addressed.”). “Even if the statement is not transcribed, the formal setting of the statement, including the possible presence of a judge, certainly ameliorates further conflicts over the content of the statement.” Entrekin, 146 F.Supp.2d at 614. Further, the oral statements were made under oath in a formal, legal setting, which seemed to have been of significance to some courts when deciding whether the statements satisfied § 1446(b). See, e.g., Fuqua, 206 F.Supp. at 816 (finding plaintiffs deposition testimony was an “other paper” because it was taken pursuant to the laws of the state).

To the extent these cases hold § 1446(b) simply does not require written notice, the court respectfully disagrees. Upon careful review of the extensive and often contradictory body of research on this issue, the court finds the plain language of the statute clearly requires some written document by the plaintiff evidencing the dismissal of the non-diverse defendant. Although the Eighth Circuit has not provided guidance on this precise issue, the court finds instructive the analysis in Dahl v. R.J. Reynolds Tobacco Co., 478 F.3d 965 (8th Cir.2007). In Dahl, defendant attempted to remove the action to federal court based on diversity jurisdiction. Id. at 966. Plaintiffs filed a motion to remand, which the district court granted. Id. In state court, defendant moved to dismiss the case, arguing the claims were preempted by federal law. Id. The state court granted defendant’s motion to dismiss, and plaintiff appealed. While the appeal was pending, the Eighth Circuit decided a factually-similar case, in which it held the case could be removed on the basis of federal officer jurisdiction. Id. at 967.

Based on this decision in the other case, defendant again attempted to remove to federal court, asserting federal officer jurisdiction. Id. Plaintiffs moved to remand, arguing in relevant part the notice of removal was not timely under § 1446(b). Id. Plaintiff argued the Eighth Circuit decision that triggered defendant’s removal did not qualify as an “other paper” under § 1446(b). Id.

The Eighth Circuit noted that “[fjederal courts are to ‘resolve all doubts about federal jurisdiction in favor of remand’ and are strictly to construe legislation permitting removal.” Id. at 968 (emphasis added). The Eighth Circuit further noted, when interpreting the terms of any statute, including the removal statute, courts should begin with its plain language. Id. at 969. The Eighth Circuit’s analysis of § 1446(b) is helpful:

All of the document types listed in § 1446(b) are commonly produced in the course of litigating an individual case of any complexity, and each might introduce a new element into the case which could affect jurisdiction. For example, federal jurisdiction could be created by an amended pleading adding a federal cause of action or an order dismissing a non diverse party. The types of documents mentioned in § 1446(b) are listed in a logical sequence in the development of an individual case. In light of this context, in which the words “order or other paper” follow immediately after amended pleading and motion, it would be an unsupported stretch to interpret “order” to include a decision in a separate case with different parties.

If Congress had intended new developments in the law to trigger the recommencement of the thirty day time limit, it could have easily added language making it clear that § 1446(b) was not only addressing developments within a case. Our interpretation of § 1446(b) is consistent with the canon of statutory interpretation that when “several items in a list share an attribute,” courts are to construe “the other items as possessing that attribute as well.” Moreover, courts have interpreted the “other paper” term in § 1446(b) to apply to papers and documents involved in the case being removed.

Id. (internal citations omitted) (emphasis added). The Eighth Circuit concluded an order from an unrelated case with different parties did not qualify as an “other paper.” Id. at 970; see also Sunburst Bank, 878 F.Supp. 77 at 80 (listing cases construing “other paper” to refer only to papers generated within the course of litigation).

Given the emphasis in Dahl on the canons of statutory construction, the court believes the Eighth Circuit would favor the view that § 1446(b) requires written notice of removability. The court also is concerned with the thorny implications of allowing oral communications to satisfy the statute — such a policy would set the stage and establish precedence for future battles over the contents of a verbal conversation. To avoid this slippery slope, requiring written notice of removability is a better approach and will prevent wasteful collateral litigation that drains judicial resources and unnecessarily protracts a case.

The court addresses one final argument submitted by Valspar. Valspar argues, because the parties do not dispute State Farm resolved its claims against Ms. Estes on June 9, 2009, “[t]he ‘other paper’ requirement here is irrelevant and should not bar removal.” (Docket 23 at p. 8). Valspar relies primarily on those minority of cases, cited above, that allow oral communications to satisfy the notice requirement of § 1446(b). (Dockets 17 & 23). The court declines to extend the limited holdings in those cases to the case at bar for to do so would undermine sound judicial policy. The court disagrees with the position that the “other paper” requirement is incidental. The court acknowledges the time limits prescribed by § 1446(b) are procedural, rather than jurisdictional. Williams v. Safeco Ins. Co. of America, 74 F.Supp.2d 925, 928 (W.D.Mo.1999). However, those limits “are mandatory, and are to be construed against conferring federal jurisdiction.” Smith, 843 F.Supp. at 1456 n. 6. Further, “[a]ny technical defect in the removal procedure requires a remand unless the plaintiff fails to move for a remand within thirty days of removal.” Williams, 74 F.Supp.2d at 928; see also Link Telecomms., Inc. v. Sapper-stein, 119 F.Supp.2d 536, 542 (D.Md.2000) (“Untimely removal constitutes a defect in removal procedure. A defect in removal procedure renders a case improperly removed.”) (internal citation omitted). Indeed, the removal statutes contemplate remands based on procedural defects. See 28 U.S.C. § 1447(c) (“A motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction must be made within 30 days after the filing of the notice of removal under section 1446(a).”).

The court agrees with the magistrate judge that remand is appropriate in this case. Upon de novo review, the court adopts in full the magistrate judge’s second report and recommendation (Docket 20), as supplemented by the above discussion.

CONCLUSION

In accord with the above discussion, it is hereby

ORDERED that plaintiffs motion to remand (Docket 9) is granted in part and denied in part. The action is remanded to the Seventh Judicial Circuit Court, Pennington County, South Dakota. The court denies State Farm’s motion for costs and expenses incurred in filing its motion to remand as Valspsar’s position was reasonable given the split in authority discussed above.

IT IS FURTHER ORDERED that the magistrate judge’s reports and recommendations (Dockets 16 & 22) are adopted in full as supplemented by the analysis in this order.

IT IS FURTHER ORDERED that Valspar’s objections (Dockets 17 & 23) to the reports and recommendations are denied.

REPORT AND RECOMMENDATION ON PLAINTIFF’S MOTION TO REMAND [DOCKET 9]

VERONICA L. DUFFY, United States Magistrate Judge.

INTRODUCTION

This matter is before the court on the Notice of Removal filed by defendant the Valspar Corporation, Inc. (hereinafter “Valspar”). Pending before the court is a motion to remand this matter back to state court [Docket No. 9] filed by plaintiff State Farm Fire and Casualty Company (hereinafter “State Farm”). The district court, the Honorable Jeffrey L. Viken, referred State Farm’s motion to this magistrate judge for a report and recommendation pursuant to 28 U.S.C. § 636(b)(1)(B). See Docket No. 15.

FACTS

A. Proceedings in State Court

On June 28, 2005, Bonnie Estes, a resident of Rapid City, South Dakota, was helping her neighbor, Ramona Policky, stain the deck attached to Ms. Policky’s home, using a product manufactured by Valspar. Ms. Estes allegedly left some rags and/or brushes contaminated with the Valspar product sealed in plastic bags on Ms. Policky’s deck. The bag ignited, starting a fire which caused “hundreds of thousands of dollars” in damage to Ms. Policky’s real and personal property, which was insured by State Farm.

State Farm paid Ms. Policky’s claim under her policy with it, and then brought this subrogation action against Ms. Estes and Valspar in South Dakota state court for the Seventh Judicial Circuit on June 26, 2008. State Farm alleged a single claim of negligence against Ms. Estes. Against Valspar, State Farm asserted claims of negligence in failing to warn, breach of the warranties of merchantability and fitness for a particular purpose, and strict liability for failure to warn.

In Valspar’s notice of removal, State Farm is alleged to be a citizen of the state of Illinois, the state of its incorporation, and is alleged to have its principal place of business in Illinois as well. See Docket No. 1. Valspar alleges it is a citizen of Delaware, the state of its incorporation, and also of Minnesota, the place of its principal place of business. Id. In opposing removal, State Farm does not deny these allegations as to citizenship, so the court takes them to be true for purposes of resolving State Farm’s motion to remand.

Ms. Estes answered State Farm’s complaint in state court, denying liability and asserting a cross claim against Valspar. Valspar answered State Farm’s complaint, also denying liability and also asserting a cross claim against Ms. Estes.

The parties thereafter engaged in various discovery, including the taking of Ms. Estes’ deposition, the admission of various attorneys pro hac vice, and the securing of a protection order from the state court for various matters asserted by Valspar to be proprietary and confidential.

On June 1, 2009, Valspar moved for summary judgment against State Farm in the state court. One of the grounds asserted by Valspar in favor of summary judgment against State Farm is that State Farm’s state law claims against Valspar are preempted by federal law. No ruling by the state court appears of record in these proceedings.

B. The Settlement Between State Farm and Bonnie Estes

On June 9, 2009, a mediation between all three parties was had. Neither Valspar nor Bonnie Estes settled their cross-claims against one another. State Farm did not settle its claim against Valspar. However, State Farm did enter into a Pierringer release with Ms. Estes. As a result of the release between State Farm and Ms. Estes, Ms. Estes was never dismissed from the state court action. Indeed, under existing South Dakota law, it is doubtful that plaintiff and Ms. Estes could have obtained an order of the state court dismissing Ms. Estes from the lawsuit due to the existing cross claims between Ms. Estes and Valspar. See Shaull v. Hart, 327 N.W.2d 50, 54 (S.D.1982) (holding that the trial court did not err in refusing to dismiss defendant with whom plaintiff had settled because the remaining defendant had asserted a cross-claim and dismissal could have deprived the remaining defendant of the opportunity to have the jury apportion fault between itself and the settling defendant); Schoniger v. Logan, 40 S.D. 30, 166 N.W. 226 (1918) (plaintiff has no right to voluntary dismissal where defendant has asserted a counterclaim or other valid claim to affirmative relief).

The release between State Farm and Ms. Estes contained the following provisions. Ms. Estes and her insurer agreed to pay State Farm $250,000. See Docket No. 10-2. In return, State Farm agreed to release both Ms. Estes and her insurer from all liability to State Farm and Ms. Policky as a result of the June 28, 2005, fire. Id. In addition, State Farm agreed to indemnify Ms. Estes for any loss, damage, or expense occasioned by any claims asserted against Ms. Estes by Valspar or any third party as a result of the fire. Id. Finally, State Farm agreed that any damages it recovered against Valspar for the fire would be off-set by the $250,000 paid to State Farm by Ms. Estes, or by the sum the jury determined to be Ms. Estes’ pro rata share of the damages, whichever sum was larger. Id.

The written memorialization of this release between State Farm and Ms. Estes was not signed until July 1, 2009. Id. Prior to that date, Valspar was orally notified of the agreement reached by State Farm and Ms. Estes. See Docket No. 12. Based upon this oral notification of a still-oral agreement, Valspar removed the action from state court to this court, alleging that there was complete diversity of citizenship among the parties and that Ms. Estes’ citizenship was no longer of any moment because State Farm had settled with her. See Docket No. 1.

State Farm moved to remand this matter back to state court on July 15, 2008. Valspar resists the motion, arguing that removal was proper.

DISCUSSION

A. General Law Applicable to Removal of Actions from State Court

Resolution of State Farm’s motion requires the examination of several statutes. Under 28 U.S.C. § 1332, this court has original jurisdiction of civil matters where the parties have completely diverse citizenship and the amount in controversy is greater than $75,000. See 28 U.S.C. § 1332(a).

Federal district courts are also granted “removal jurisdiction.” See 28 U.S.C. § 1441. That is, lawsuits that are begun in state court may, under some circumstances, be “removed” to federal court if the prerequisites for federal court jurisdiction may be met, along with other requirements. Id.

“The right to remove a case from a state to a federal court is purely statutory and therefore its scope and the terms of its availability are entirely dependent on the will of Congress.” 14B Charles A. Wright, Arthur R. Miller, & Edward H. Cooper, Federal Practice & Procedure, § 3721, 285-86 (3d ed. 1998). The removal statutes are to be strictly construed because they are in derogation of state governments. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 109, 61 S.Ct. 868, 85 L.Ed. 1214 (1941). However, because an order remanding a case back to state court is not appealable, federal courts should be cautious about remanding so that they do not deprive a removing defendant of its statutory right to a federal forum. 14B Federal Practice & Procedure, § 3721, at 352.

This court’s original jurisdiction in diversity cases is broader than its removal jurisdiction in diversity cases. Compare 28 U.S.C. § 1332, with 28 U.S.C. § 1441. This court has removal jurisdiction over matters that it would have had diversity jurisdiction under § 1332 had the action been filed in federal court originally only if none of the defendants is a resident of the state in which the state court action is pending at the time removal is sought. See 28 U.S.C. § 1441(a) and (b). Thus, assuming complete diversity of citizenship as between all plaintiffs and all defendants, an action in which a South Dakota citizen is a defendant may be filed originally in federal district court for the District of South Dakota, but if it is first filed in South Dakota state court, it may not be removed to the District of South Dakota. Id.

When this matter was first filed in South Dakota state court, it was not removable because Bonnie Estes was a named defendant and she is a citizen of the state of South Dakota. Thus, under § 1441(b), removal on the basis of diversity of citizenship was not allowed. See 28 U.S.C. § 1441(b).

However, if a case presented by a plaintiffs “initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.... ” See 28 U.S.C. § 1446(b). In no case may a state court action be removed to federal court where more than one year has passed after commencement of the action. Id. Here, Valspar removed this matter to federal court within 30 days of learning of the oral settlement agreement between State Farm and Ms. Estes and prior to the one-year period following commencement of the action.

Once a case is removed to federal district court, any motion to remand the matter back to state court must be made within 30 days of the notice of removal. See 28 U.S.C. § 1447(c). Valspar filed its notice of removal on June 17, 2009, (see Docket No. 1), and State Farm moved to remand on July 15, 2009, (see Docket No. 9). Thus, State Farm’s motion to remand was timely under this statute as only 28 days had elapsed between removal and the motion to remand. The party opposing a motion to remand, that is, the party who removed the action, has the burden of establishing the existence of federal subject matter jurisdiction. Central Iowa Power Co-op. v. Midwest Independent Transmission System Operator, Inc., 561 F.3d 904, 912 (8th Cir.2009). All doubts as to the existence of federal jurisdiction are to be resolved in favor of remand. Id.; Bates v. Missouri & Northern Arkansas Railroad Co., 548 F.3d 634, 638 (8th Cir.2008).

The question presented by State Farm’s motion to remand is this: can an action that was not removable at its inception because of the presence of a defendant who is a citizen of the state in which the state court action is pending become removable upon the entering into of an oral settlement agreement with that defendant where, at the time removal is sought, (1) no written settlement agreement has yet been executed by the settling defendant, (2) no amended complaint or other pleading has been filed dismissing the settling defendant, and (3) no order by the state court has been issued concerning the presence or deletion of the settling defendant in the action.

State Farm argues that removal is not proper absent formal dismissal of Bonnie Estes from the lawsuit. State Farm also argues that Valspar’s notice of removal was not proper because Bonnie Estes did not join in the notice of removal.

Valspar argues that the fact of State Farm’s settlement with Bonnie Estes is sufficient to render removal of this action proper. As to the lack of any formality recognizing Ms. Estes’ departure from this lawsuit, Valspar makes two arguments: (1) it is not necessary for the settlement agreement to have been executed or for an order dismissing Ms. Estes from the lawsuit to have been issued; and (2) even if Ms. Estes’ presence in the lawsuit is not to be ignored, the court should “realign” her with State Farm and, thus, reach the conclusion that this court has jurisdiction in this matter.

B. Whether Ms. Estes is Still a Party to This Lawsuit

Whether the elements of removal jurisdiction have been satisfied is to be determined with reference to federal law. As the Supreme Court has stated:

The removal statute which is nationwide in its operation, was intended to be uniform in its application, unaffected by local law definition or characterization of the subject matter to which it is to be applied. Hence the Act of Congress must be construed as setting up its own criteria, irrespective of local law, for determining in what instances suits are to be removed from the state to the federal courts.

Shamrock Oil & Gas Corp., 313 U.S. at 104, 61 S.Ct. 868. The Supreme Court has stated that federal law, not state law, determines who is a plaintiff and who is a defendant for purposes of removal jurisdiction. Chicago, R.I. & P.R. Co. v. Stude, 346 U.S. 574, 580, 74 S.Ct. 290, 98 L.Ed. 317 (1954). A state court’s “procedural provisions cannot control the privilege o removal granted by the federal statute.” Id.

However, state law does govern substantive rules of decision in a diversity suit, whether that suit is filed with a federal district court initially, or whether the suit is removed to federal court from state court. See Erie Railroad Co. v. Tomp kins, 304 U.S. 64, 77-80, 58 S.Ct. 817, 82 L.Ed. 1188 (1938); 14B Federal Practice & Procedure, § 3723, at 564.

It is a “cardinal rule” of removal jurisdiction that “only defendants may remove and all defendants must join in the notice of removal.” 14B Federal Practice & Procedure, § 3723, at 563. Removability is determined on the basis of the record before the court at the time the defendant files the notice of removal. Id. at 568-69; Salem Trust Co. v. Manufacturers’ Finance Co., 264 U.S. 182, 189-90, 44 S.Ct. 266, 68 L.Ed. 628 (1924).

In determining whether diversity of citizenship exists, the court may disregard dispensable parties. Id. at 190, 44 S.Ct. 266. Nominal or formal parties may be disregarded by the court for purposes of the rule that all defendants must join in the notice of removal. 14C Federal Practice & Procedure, § 3731, at 270 (3d ed. 1998).

The one-year statute of limitations in § 1446(b) is capable of manipulation by plaintiffs wishing to avoid federal jurisdiction, such as the case where a plaintiff settles with a diversity-destroying defendant only after one year from the commencement of the action in state court. 14C Federal Practice & Procedure, § 3732, at 344. The fact that the plaintiff may be manipulating the system does not enter into most courts’ strict application of the one-year deadline. Id.

“Although the requisite notice [under § 1446(b) ] may be communicated in either a formal or informal manner, the communication nevertheless should still be in writing, and oral statements often will not qualify as constituting notice that is provided by an ‘other paper’ that will trigger removability under the second paragraph of Section 1446(b).” 14C Federal Practice & Procedure, § 3732, at 310. “A limited exception to this principle is that a renewed period of removability can be triggered by oral statements made in the courtroom during the course of the action.” Id. at 310-11.

One question presented by the posture of this case is whether Bonnie Estes is to be considered as a party defendant in this matter at the time Valspar removed. “A party whose presence in the action would destroy diversity must be dropped formally as a matter of record to permit removal to federal court. It is insufficient, for example, that service of process simply has not been made on a nondiverse party; the case may not be removed until that party actually has been dismissed from the case.” 14B Federal Practice & Procedure, § 3723, at 585-87.

Valspar’s arguments that the court should disregard Ms. Estes as a party are unavailing. This court must determine its basis for removal jurisdiction on the basis of the state court record at the time of removal. 14B Federal Practice & Procedure, § 3723, at 568-69; Salem Trust Co., 264 U.S. at 189-90, 44 S.Ct. 266. At the time Valspar removed, and indeed, at the present, Ms. Estes has never been formally dismissed as a party from the lawsuit. It is clear, furthermore, that under South Dakota state law, even if State Farm had moved to voluntarily dismiss Ms. Estes prior to the time Valspar removed this case, the state court could not have granted State Farm’s motion. That is because Valspar had asserted a cross-claim against Ms. Estes and State Farm could not act unilaterally to extinguish Valspar’s claim. Shaull, 327 N.W.2d at 54; Schoniger, 40 S.D. at 35-36, 166 N.W. at 228. The fact that, under the Pierringer release State Farm agreed to indemnify Ms. Estes if the jury found against her on Valspar’s cross-claim does not obviate or extinguish that cross-claim. Thus, the court rejects Valspar’s invitation to ignore Ms. Estes altogether as a party in this case when examining the basis for removal jurisdiction.

This court’s conclusion is borne out by the Supreme Court’s decision in Caterpillar, Inc. v. Lewis, 519 U.S. 61, 117 S.Ct. 467, 136 L.Ed.2d 437 (1996). In that case, a Kentucky plaintiff initiated a personal injury lawsuit in Kentucky state court, alleging state law claims against both a Kentucky defendant and Caterpillar, Inc., a nonresident defendant, thus making the case nonremovable initially. Id. at 64-66, 117 S.Ct. 467. Thereafter, the plaintiffs workers’ compensation insurer intervened in the action and asserted a subrogation claim against both the nonresident defendant and the Kentucky defendant. Id. Thereafter, the plaintiff settled his claim against the Kentucky defendant and, with one day to spare under the one-year deadline of § 1446(b), Caterpillar removed the case to federal district court on the basis of diversity jurisdiction. Id.

The plaintiff moved to remand, acknowledging that he had settled his claim with the Kentucky defendant, but arguing that diversity jurisdiction did not exist because the Kentucky defendant had not been formally dismissed from the lawsuit and the worker’s compensation insurance company’s subrogation claim against the Kentucky defendant remained extant despite the plaintiffs settlement. Id. The issue before the Supreme Court was different from the issue presented to this court, but the Court noted that its analysis was premised on the “given” fact that the district court had erred in denying the plaintiffs motion for remand because, in fact, no basis for removal existed when Caterpillar removed the case. Id. at 70, 117 S.Ct. 467.

In this case, like the Caterpillar case, the settling, resident defendant whose presence destroys complete diversity has not been formally dismissed from this lawsuit. Also like Caterpillar, the resident defendant cannot be dismissed because there are claims asserted against it by persons other than the settling plaintiff— in Caterpillar it was the workers compensation insurance company, and here it is Valspar itself that has an independent claim. Thus, this court concludes that Bonnie Estes is still a bona fide party to this lawsuit and her presence cannot simply be overlooked for purposes of analyzing diversity removal jurisdiction. Cf. Stamm v. American Telephone & Telegraph Co., 129 F.Supp. 719, 720-21 (W.D.Mo.1955) (court would not ignore presence of resident defendant for purposes of diversity removal jurisdiction where resident defendant was named as a party, but had never been served with the summons and complaint). See also Universal Ins. Co. v. Hartford Fire Ins. Co., 556 F.Supp.2d 68, 69-71 (D.P.R.2008) (no removal allowed without formal dismissal of resident defendant); Hutton v. Temple University, 703 F.Supp. 391, 391-92 (E.D.Penn.1989) (same); Mertan v. E.R. Squibb & Sons, Inc., 581 F.Supp. 751, 752 (C.D.Cal.1980) (same).

C. If Bonnie Estes is Still a Party to This Lawsuit, May This Court Realign the Parties

“Before determining removability under Section 1441(b) on the basis of diversity of citizenship jurisdiction, the district court will realign the parties according to their true interests in the outcome of the litigation, as it would were the case brought in the federal court originally.” 14B Federal Practice & Procedure, § 3723, pages 606-608. “It will then consider the citizenship of all parties validly joined, and those who should be joined, whether they are described as indispensable, necessary, or proper parties.” Id. at 608.

“Moreover, in determining whether diversity of citizenship exists for removal jurisdiction purposes, the district court will disregard — as it does in cases originated in a federal court — nominal or formal parties ...” 14B Federal Practice & Procedure, § 3723, page 612.

The court concludes that, upon State Farm and Ms. Estes entering into the Pierringer release, Ms. Estes became a de facto plaintiff in this matter. State Farm and Ms. Estes both have the same vested interest in now minimizing any liability of Ms. Estes and maximizing any liability of Valspar. State Farm’s potential offset as a result of the jury’s verdict and its potential liability to indemnify Ms. Estes both inspire State Farm to maximize Valspar’s role in the events leading to the fire at Ramona Policky’s home, and to minimize Ms. Estes’ role in those events. See Mancari v. AC & S Co., 683 F.Supp. 91, 93 (D.Del.1988) (when plaintiff settles with resident defendant and resident defendant remains in lawsuit only for purpose of determining cross-claims, these settling defendants should be realigned).

If Ms. Estes is realigned as a party plaintiff, the fact that Ms. Estes is a citizen of the state of South Dakota no longer presents an impediment to removal under 28 U.S.C. § 1441(b). Nor is her failure to join in the notice of removal an impediment to removal, for the judicially-made rule is that all defendants must join in removal. The rule does not extend to plaintiffs or to parties who are de facto plaintiffs such as Ms. Estes. However, realigning Ms. Estes as a party plaintiff does not finally answer the question as to whether this court should exercise removal jurisdiction over this case. There remains one issue to address.

D. Whether the Requirement Under § 1446(b) of the Receipt of a Paper Has Been Satisfied

Even realigning Ms. Estes as a plaintiff, the parties are in agreement that the complaint originally filed by State Farm was not removable because of her presence, and the fact that she was a bona fide defendant at the time and also a citizen of South Dakota. Therefore, under § 1441(b), neither Ms. Estes nor Valspar could have removed. Accordingly, since the case was not removable at its inception, whether it can now be removed is governed by 28 U.S.C. § 1446(b). Although quoted above, the governing language of this section deserves repeating here:

If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the ease is one which is or has become removable, except that a case may not be removed on the basis of jurisdiction conferred by section 1332 of this title [diversity jurisdiction] more than 1 year after commencement of the action.

See 28 U.S.C. § 1446(b).

State Farm argues that, because Valspar received no “amended pleading, motion, order or other paper” prior to filing its notice of removal, removal of this case is not proper under § 1446(b). Valspar urges the court to look at the reality of the settlement and disregard the “formality” of receiving an actual document commemorating the settlement.

Before embarking on the discussion of the merits of this issue, the court takes note of the realities of the situation faced by Valspar. The one-year deadline for removing this case from state court was set to run on June 26, 2009. The settlement between State Farm and Ms. Estes was reached on or shortly after June 9, 2009. Valspar had to act to remove this case prior to June 26, 2009, or be forever barred from removing. See 28 U.S.C. § 1446(b). Valspar did not have the luxury of waiting to receive a written copy of the agreement, which would have satisfied the requirement of § 1446(b) of the receipt of some kind of document, because that document might not materialize until after the June 26, 2009, removal deadline. As it turns out, the settlement agreement in fact was not executed until July 1, 2009.

Nor is State Farm’s motive in this sequence of events material or relevant. State Farm may have been motivated to delay the drafting and execution of the release with Ms. Estes so as to prevent removal. Then again, timing of the execution of the release may have been totally innocent and explainable without reference to the removal deadline. It is certainly not unusual for the final drafting and execution of a settlement agreement to take longer than a month following the reaching of an oral agreement. In either case, the reasons or motive behind the delay are irrelevant.

Because orders remanding a case back to state court are not appealable, there is a frustrating lack of authority from appellate courts addressing the interpretation of the document-received requirement in § 1446(b). At the outset, the court notes that two categories of cases must be distinguished on the facts from the facts of the present case.

First, as the Wright and Miller treatise on federal civil procedure points out, one exception to the document-received requirement has been carved out by courts to cover the situation where the plaintiff voluntarily dismisses claims against a resident defendant orally while the case is actually being tried in a state court. 14C Federal Practice & Procedure, § 3732, page 310-11. Thus, removal has been allowed on the basis of the plaintiffs oral relinquishment of claims when the case is in the midst of a trial. See e.g. Powers v. Chesapeake & Ohio Ry., Co., 169 U.S. 92, 98-102, 18 S.Ct. 264, 42 L.Ed. 673 (1898) (allowing removal on basis of diversity where plaintiff “discontinued” claims against resident defendants when his case was called for trial in state court); Mancari v. AC & S Co., Inc., 683 F.Supp. 91, 92-95 (D.Del.1988) (where plaintiff settled with resident defendants in the midst of trial, the court stated that “[i]t is not required that dismissal of the nondiverse defendants be in writing or be formalized.”); First Nat’l Bank v. Johnson & Johnson, 455 F.Supp. 361, 362 and 362 n. 1 (E.D.Ark.1978) (stating that, where plaintiff moved to dismiss claim against resident defendant immediately before submission of the case to the jury in state court, the oral motion of the plaintiff and the oral order of the state court granting the motion was sufficient to satisfy § 1446(b) although no document was created). Presumably, this exception to the document-received requirement was created due to the exigencies of trial: if strict compliance with the requirement of a document being received were enforced, defendants could never remove a case during trial because the case would often proceed to a verdict before the plaintiff or the court could excuse themselves from the trial long enough to create a document.

The second category of cases the court distinguishes are cases where the court allowed removal without discussing the document-received requirement of § 1446(b), but the court’s discussion of the facts demonstrates that there clearly was a document received by the defendant in the case. See e.g. Estate of Martineau v. ARCO Chemical Co., 203 F.3d 904, 909-10 (5th Cir.2000) (allowing removal where removing defendant received a document in the form of a letter settlement agreement and filed notice to remove thereafter); Ratcliff v. Fibreboard Corp., 819 F.Supp. 584, 585-87 (W.D.Tex.1992) (allowing removal where removing defendant received five letter agreements memorializing the settlements between plaintiffs and resident defendants). Cf. Central Iowa Agri-Systems v. Old Heritage Advertising and Publishers, Inc., 727 F.Supp. 1304, 1305 (S.D.Iowa 1989) (holding that plaintiffs demand letter establishing the amount in controversy was an “other paper” under § 1446(b) establishing defendant’s right to remove on the basis