In Casola v. Dexcom, Inc., No. 23-55403 (9th Cir. Apr. 10, 2024), the Ninth Circuit rejects a California corporation’s attempt to avoid the forum-defendant rule by filing removal petitions in federal court under 28 U.S.C. § 1441(a) even before the cases were docketed in California state court.

The forum-defendant rule is an exception to removal jurisdiction, which prohibits removal based on diversity jurisdiction “if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.” 28 U.S.C. § 1441(b)(2).

Quick-thinking, in-state defendants have avoided the operation of this rule by learning of a lawsuit before they are served and filing the removal petitions first, the so-called “snap removal.” Several circuits have endorsed this tactic. See Tex. Brine Co. v. Am. Arb. Ass’n, 955 F.3d 482, 486–87 (5th Cir. 2020); Gibbons v. Bristol-Myers Squibb Co., 919 F.3d 699, 705–07 (2d Cir. 2019); Encompass Ins. Co. v. Stone Mansion Rest. Inc., 902 F.3d 147, 152–54 (3d Cir. 2018).

California-based Dexcom tried to do “snap removal” one better. After learning that three cases had been filed against them in California state court via Courthouse News Service, and even “before the Superior Court had officially filed the complaint or issued a summons,” Dexcom filed notices of removal in the United States District Court for the Southern District of California.

Plaintiffs moved to remand based on the forum-defendant rule. The district court granted the motions, holding that the actions “must be remanded to state court because as a citizen of California [and therefore a forum defendant], Defendant cannot remove . . . on the grounds of diversity jurisdiction.” Moreover, it held that “[a] proper removal requires a complaint to have first been filed.”

The Ninth Circuit affirms. (Because application of the forum-defendant rule is deemed a “nonjurisdictional defect,” defendant was permitted to appeal the remand notwithstanding the limit on appellate review under 28 U.S.C. § 1447(d).) The case turns on when, under California procedural law, a case is “pending” for purposes of 28 U.S.C. § 1441(a). “State law determines when a state court dispute becomes a cognizable legal action eligible for removal.”

Dexcom pointed to section 1010.6(e)(3) of the California Code of Civil Procedure, which governs electronic filing and electronic service, and states that a complaint “shall be deemed filed” on the day that the complaint is uploaded. But same section provides for “processing and review of the document and its entry into the court’s records, which are necessary for a document to be officially filed.” Thus, while a complaint may be assigned the date that it is transmitted to the electronic filing system, the actual filing is conditional on clerk review of the documents for compliance with the rules and the payment of filing fees. “[J]ust because a document is ‘submitted for electronic filing’ . . .  does not mean that it is, or will be, filed. [The rule] reflects a legislative understanding that some time will pass between a document’s submission and its review for filing . . . .”

California Rule of Court 2.253 further specifies that in local rules instituting mandatory electronic filing, “[t]he effective date of filing any document received electronically is prescribed by Code of Civil Procedure section 1010.6. This provision concerns only the effective date of filing. Any document that is received electronically must be processed and satisfy all other legal filing requirements to be filed as an official court record.”

“Thus, contrary to Dexcom’s contentions, section 1010.6(e)(3) does not dictate when an electronically submitted complaint is actually filed.”

“Accordingly, we hold that, for purposes of removability, an electronically submitted complaint is not ‘filed’ in California state court until it is processed and endorsed or otherwise acknowledged as officially filed by the clerk of the court. See Cal. Gov’t Code § 69846.5. A case will normally become removable as of the filing date shown on the endorsement stamped on the complaint when it is entered into the court’s records; nonetheless, a removing party might submit other evidence to establish an earlier filing date where the file-stamped date is missing, illegible, or demonstrably incorrect.”

The panel specifically reserves the issue of whether the circuit ought to recognize snap removals. Nevertheless, “[w]hile the final chapter on snap removals in the Ninth Circuit remains to be written, today we close the book on California defendants’ attempts at ever-snappier snap removals. Those being sued in state court must wait at least until the case against them becomes a ‘pending’ ‘civil action,’ 28 U.S.C. § 1441(a), before removing the matter to federal court. In California, this means waiting until the complaint has been officially filed in the superior court.”