 How about a bad faith law, the Metropolitan case? You have a law that says people who act in bad faith when, you know, applying their contractual remedies or interactions, that that is actionable, bad faith. Well, that's a law of general applicability. That applies to all makers of contracts, not just insurance companies. Therefore, the savings clause doesn't kick in. So it's not going to kick in only with laws of specific direction. Now, the last step, yes, Jim? In terms of the bad faith laws, there are some courts that have held that, you know, that they are safe and depending on the origin of the bad faith law, whether specifically directed at the insurance industry or had a law of general applicability. Yes, I agree with you, Judge. The question is, what if the bad faith law is a law of narrow applicability only to the insurance industry? Well, then you're right. I meant to be saying bad faith laws of general applicability. There's very few states that have bad faith laws of narrow applicability, but there are four or five of them. And I agree with you. So if you've got a bad faith law that's only aimed at insurance companies to regulate the industry, then you might have the savings clause. However, let's take that example. I've been correctly narrowed down. Now we've got that bad faith law of narrow applicability. All right? So it would seem to be saved. State law can go forward. However, you must then lastly consider the demer clause. Take an aspirin. Stay with me. All right. It's hard. Take this step with me. Now remember what we've got. We've got a law that seems to be saved. No Orissa. The demer clause, I'm going to say this and then I'm going to explain it. The demer clause says, no employee benefit plan itself shall be deemed to be an insurance company. In other words, uninsured, this is the English version. Uninsured or self-insured plans are not subject to the savings clause. So we've got that example. They seem to be saved. State law goes forward. However, if it's a self-insured or uninsured plan, meaning there's no insurance company anywhere else, forget the savings clause, it's deemed under the demer clause, Orissa still preempts. So what do we got the savings? What's left of the savings clause, as the law professors say? What's left is, you have a law that is aimed at the insurance industry and the plan is insured. Now, if you want to read the long version of what I just said, read FMC versus Holiday because that's the case that renders this decision. Supreme Court decision, FMC versus Holiday is a three-sitting reading case. You cannot read the case in one sitting because halfway through, you have a terrible attack of anxiety and other ills. And have you ever read the case in one sitting? You have a terrible attack of anxiety and other ills. And have you ever tried to read Holiday? You know exactly what I'm talking about. You've got to read it three separate times, preferably in different locations. Once you read it, however, you'll be no further along except understanding than what I've just told you, which is the savings clause only saves laws directed at insurance coming specifically because the plan that's involved in the case is insured. All right. Now, that is the latest and not the last word on a risk of preemption. So keep your eyes open because this is a fast-changing field, but that gets us sort of to where we need to be. Now, let's get to something that matters every day and will lead to our three cases. Let's go now to procedure. This is how can you send the case back even if there is jurisdiction? The back door is squeaky. Let's take a look at some of these. These are on your jurisdictional checklist, many of them. Let's take a look at them. Well, let's take rule number one. Rule number one is that the case must be removed within 30 days, generally speaking, of receipt by the first defendant. Now, I've got some loaded terms in here. I'm entitled to certain limited opinions. First of all, not within 30 days. Well, 30 days assuming that the original complaint is removable. If the original complaint is removable, meaning there's diversity, remove the thing or don't, but do it. If it's federal question, remove it or don't, but do it. If there is a basis for removal, it must be removed within 30 days. All right, that's easy enough. We'll get to a moment about the case that changes and becomes removable. That's far more interesting. Receipt. Oh, I'm really saucing the goose here, but I'll give you my opinion. And there's lots of case law to support it. The statute says within 30 days by service or otherwise. I don't know what the word or otherwise means, unless it means as at least 60% of the cases hold, that when the defendant receives it, even if not by formal or proper service, either situation. The case is courtesy copy. The plaintiff's lawyers who know removal learn this, or they take my seminars in California and the West, they learn it. Give a courtesy copy to the defendant. The 30-day clock starts ticking under the laws of many May states, and in your materials, I've given you some cases that stand for that proposition. District court cases primarily. And I think the Fifth Circuit would stand for that proposition as well, frankly, under Doe versus Kerwood. In any event, no real strong circuit authority one way or the other, some district court say, no, no, no, it's got to be proper service, because or otherwise meant to refer a couple of those weirdo states that had different rules for service. I don't buy it, particularly since removal jurisdiction is strictly construed. But you may have your own opinion. What does receipt mean? Receipt means they get a copy of a filed complaint. Giving them a courtesy copy of a draft is not enough, in my opinion. You don't have to have a file stamp on it, but it has to be something that is now in stone. Once it's in stone and the defendant has received it, then the 30-day clock starts running. And or they are served, but they're served improperly. That's also receipt. So improper service, I think the 30 days run from that moment. All right, one other last one. This one I don't think is sauced in the goose. I think it's the law, for sure. The 30-day clock starts running from service on the first defendant. That's when the clock starts running. So if the service is on May 1st, the receipt is May 1st, that's better. The clock starts running, and even if defendant number two, who gets served on June 2nd, more than 30 days later, says, wait a minute, let's remove, and convinces dumb defendant number one to join the removal, it's too late. The clock starts ticking with the first defendant who receives or in some circumstance is served. But let me tell you something. This is important. The reason why I gave you a proposed order that follows this list, by and large, an order shall cause is because now two circuits have held, the third circuit and the ninth circuit, and no other circuit is contrary to this, that you know the rule, a motion to remand for procedural defects if made by the plaintiff must be made within 30 days of the removal. Or the plaintiff waves their right to remand. So there's a, by the way, for subject matter jurisdiction defects, that can be remanded at any time. You know, even on appeal. I was told to break the seventh circuit apparently has a new decision which says that they are examining jurisdiction even at the appellate level, even after trials. Well, great. I mean, they're following these principles. But my point is that remand for lack of jurisdiction at any time, subject matter jurisdiction. But now we're talking procedural defect. The air service versus folium case out of the third circuit, and I forget the name out of the ninth circuit, the ninth circuit also holds that the 30-day time limit also, and the fifth circuit, the 30, the fifth circuit included, the 30-day time limit also applies to you judges. You can, these courts hold, suisponte remand by scanning the removals and seeing problems. I mean, you could come up with an argument against that, but I've ceased making it because it's now three circuits to none. So I'm now saying that you can suisponte remand by scanning the removal. Because for procedural defect, you've got the same 30-day time limit as the parties do. And therefore, if you let that case languish for more than 30 days and don't scan the procedural defects or issue this kind of order, you're possibly having a case in federal court that was removed improperly, and it stays there as long as there's jurisdiction. All right? Resident defendant removal, diversity. A lot of people forget this. Removal on diversity grounds is available. But not if one of the removing defendants who's been served is a resident of the state in which the action's pending, a local defendant. The theory, of course, is local defendants don't need the benefit of federal court to protect them from local prejudice. Why that same rule doesn't apply to local plaintiffs when they bring the action originally beyond me. But talk to Congress about that one. Local plaintiffs should not be able to sue out-of-state defendants originally in federal court because there's no reason for diversity. But put that aside. On removal, if the local defendant has been served and their joint is required, of course, then, if they're local, there's no diversity removal. It's often overlooked. That, I believe, is a procedural defect. If you don't bring it up within 30 days, it's waved. Wagstaff of a California sues Kelly of Nevada in Nevada. Or sues Kelly of Nevada and Rosenthal of another state, but not my state. There's complete diversity, but you've got a local defendant who's been served no removal. Remain is required and is appropriate if the motion is made or if you do it. Here we go. Now we're in the context of the original case is not removable. That's important. The original complaint, there was incomplete diversity. Our algebra failed. You know, Wagstaff of California versus Kelly of Virginia and Rosenthal of California. But into the case, I realize for whatever reasons that I don't want to be suing Rosenthal of California. So I settle. It requires a voluntary act. If there's a motion that gets her out of there, an involuntary act, no removal, the clock doesn't start again. But it's a voluntary act. I settle with her. She's out by my voluntary act. Once that settlement is done, and some people say even the motion to make the settlement, but the 30-day clock starts ticking, now Kelly, who is diverse and now there is diversity arising, can remove. Except number three. If that event takes place more than a year after commencement and the basis for removal is diversity, there's a one year outside clock. Under 1446 B. Fair enough? Now you might ask, well, wait a minute. What if the plaintiff is not in some sort of fast track state and so much doesn't want to be in your court? Who knows what reasons? Deliberately does not serve the defendant until a year and a day. Does this rule apply? Well, there's a split of authority. One line of authority represented by Judge Wilson in Zogby says no. And in fact, represented by the Northern District of Alabama in a career versus skill craft holds no. And if they deliberately didn't serve you for a year to avoid federal court, that's the Alabama rule. Or in Judge Wilson's case, if it wasn't a new event, the complaint was always removable, the 30-day clock starts whenever they're served. That's one version. With due respect to those very good judges who have rendered that version, I disagree with it because I believe that one year means one year and that the removal jurisdiction is strictly construed. Other cases, including some cases set forth here as well, both of them are set forth, say, even if it was fair to serve in a year, a year is a year, if it's the removals based on diversity, there is no removal. I think that is a more satisfactory rule in interpreting the statute. But read Judge Wilson's opinion in Zogby. It's a very clever reading of 1446B. If that's the way you want to go, I don't know why. All right. A mild editorial comment. Failure of all served defendants to join. This happens a lot and you don't even know about it because it doesn't get brought to your attention. There's removal. You may not have any in writing, or they say it. If all the defendants who have been joined and served do not join in the removal, that's an improper removal. And that means everybody. I told you about Doe v. Curl, it said, even the defendants to the non-removable claims to join. The exceptions to this rule are as follows. If you have federal officer removal, only the federal officer needs to join in that one. They've got their own unilateral exclusive right to remove. If you've got what used to be a 1441C removal, a separate and independent claim, where the federal claim is completely distinct from the state law claims, not related, no problem there, no jointer required. But generally speaking, you have to have jointer of all the defendants who have been served in this order would basically cold that out of the parties. Waver, I talked about, look, if there is a contract in the case, look to see if there's a forum selection clause. There's an enormous amount of authority described in Chapter 2D on forum selection clauses. It may well be that the language of the forum selection clause prevents removal by agreement. Now you may say, can that be raised to a sponti? I think so. If the other waverable defects can be raised to a sponti, so can this one. You can look at the contract and you ask yourself, has there been a waiver? Is there something in the contract that says this case will be initiated in state court? And that waiver has been found by many circuit decisions in your materials to be something, doesn't have to say and not federal court or no removal. Some interpret shall be initiated in the superior court of state X as being a requirement only in state court X. So take a look at a waiver clause. I think you're going to have it more often than you imagine. Now, there may be destruction of removal jurisdiction after removal. Wagstaff, Seuss, Kelly, California and Virginia, we've got removal jurisdiction. Later on I want to add Rosenthal of California, which would destroy removal jurisdiction, destroy diversity. Question, what do you do? Here's what you do. If you get a post-removal jointer that would defeat diversity, you are not limited by Rule 19, which is the indispensable party rule. You know Rule 19 which says you can only allow a jointer of a party who defeats diversity if they're indispensable at which point you dismiss. If they're only necessary or less, you just don't join them. Fair enough. The standard on post-removal under 1447 is more liberal. You ask yourself this question. Basically, would it be appropriate to add this party? Is this being done just to get out of federal court or is there a real reason to add this party? If the answer to those questions are yes, then I suggest what you do is you grant the motion to amend adding the party and now you remand, I don't think you should dismiss really very often, you remand to state court from where the action came. And by the way, please grant the motion to amend first. I had this situation recently where the motion to amend was, you know, I want to get back to state court. The motion to amend was made. The judge remanded, followed it beautifully. However, did not amend to add the party. I get back to state court and they won't allow the party to be added. You know what happened? The defendant removed again, which I thought was not great. But in any event, it created a terrible waste of time and energy. Grant the motion to amend, adding the party, then remand. You're not stuck with a high standard of Rule 19. You have a more pragmatic standard of whether it ought to take place. Okay? Last, our last form of jurisdiction, which we're going to just give you the basics. Here they are. This is supplemental jurisdiction. The side door. This is easy algebra. The basic rule is that supplemental jurisdiction is governed by section 1367. 1367 specifically holds that if there is a federal, a single federal claim, a single federal claim arising under federal law, or front door claim, the district court may adjudicate related state law claims to the federal claim. In other words, we have a single federal claim, no related state law claim can be adjudicated in the same court at its federal court, the side door, the pet door. In addition, that's true even if there's a supplemental party who's only a party of the state law claim. Okay? Let's take a look at transparency. Number one, this is easy. These are quick and down and dirty. This is your traditional supplemental claim jurisdiction. Plainiff versus defendant. Single plaintiff, single defendant. Federal securities act claim. Related state law securities act claim. Piece of cake. Related claims, the whole constitutional case. You're free to entertain the whole case as we'll look at it in a moment you don't have to. That's easy. Now look, let's look at transparency number two. Transparency number two is that we have a, now we have a situation where we have more than one party. Plainiff versus D1 on the federal claim and D2 on the state law claim. If those two claims are related, that is the federal claim and the state law claim, you have supplemental jurisdiction. The case can be removed by the two Ds. Have to join together by the way. Some people think that the supplemental party doesn't need to join. That's wrong. They both have to join if they've been served. And we have, that case can be originated in federal court. We have supplemental party jurisdiction under 1367. Those are the facts of Finley versus the United States. Finley versus the United States is the case where the Supreme Court held that there was no pendant party jurisdiction. Congress immediately, and the chagrin of anyone who was writing an update at the time to a book, found out that Congress overruled it in 1367 and said there is jurisdiction over D2, even though it's only party. It satisfies our rule. We have a single federal claim and a related state law claim even though it adds new party. We've got supplemental jurisdiction right there. All right? That one's not so bad. Now, let's go to another one. I said a federal question claim. Let's make sure we know that. This is our third transparency. Plaintiff of California versus Defendant 1 of Nevada and Defendant 2 of California. You know what they do? Defendant 1 says this is a complete diversity claim and this is a supplemental claim. Wrong. Alice Trebek throws out the question because this is simply trying to end round the complete diversity rule. It does not work. This rule for purposes of the plaintiff bringing the suit only applies if there's a federal question claim in order to join a party who's otherwise not subject to that claim. So you can't put it in English. You can't get around the complete diversity rule by the supplemental party rule, at least as to defendants. Oh, just as I said that, I let you down because now we come to another situation, what used to be called ancillary jurisdiction. Now, we don't need those terms anymore. For many years, I taught pendant jurisdiction are claims initiated by the plaintiff. Ancillary jurisdiction is anything else that happens in the case where a part of your claim is brought in. It's elegant and it's wrong now. It's all supplemental jurisdiction. I don't know what to do with that. Plaintiff of California. So who's defendant of Nevada? We've got complete diversity. Third party defendant of California. What do we got? We've got federal jurisdiction that what used to be ancillary jurisdiction is now clearly supplemental jurisdiction because this is not a question of the plaintiff in the end round. This is a question of the defendant seeking third party indemnity against Calvin. We also happen to have complete diversity here. So it works both ways. But what if he was a third party defendant who was in Nevada? Does that change it? Everybody? No. There's jurisdiction there too. You don't need an independent basis of jurisdiction for a party who's added by someone other than the plaintiff. Fair enough. Now you say, well what if third party defendant wants to sue the plaintiff? If he's brought in the case, I'm going to get the guy too on a cross claim. Okay, counterpaint. Well, is there jurisdiction? Yes. Okay. Symbiosis. How about this? Is there jurisdiction? No. I'm sorry. It's late. No one has to get them right from now on. The answer is that Supreme Court said in Owen Equipment v. Kroger, this would be doing an improper end round the complete diversity rule. Do you know what every plaintiff would do? They'd sue defendant one, wait for the third party defendant, and then do the cross claims back against each other. Supreme Court said it can go this way. That is third party defendant who's involuntarily there. But it can't go this way. Now I have a question for you. What if it goes this way? Don't get ahead of you. And there's a compulsory counterclaim against the third party defendant. Is that an exception to Owen Equipment v. Kroger? I don't think so. But you could probably come up with a rationale. You know what the better answer is there? The better answer is that there's a compulsory counterclaim by the plaintiff against the defendant. Don't exercise supplemental jurisdiction over the third party defendant claim. That's the better answer. That's my own opinion, because Owen Equipment v. Kroger is an edifice according to some lower court decisions to which we cannot brook. Okay, now, well let's stick with this for a second. What if, instead of coming in as a third party defendant, it's through intervention or jointer. If they come in through intervention or jointer as a defendant, same rule. No independent jurisdiction required. This is something you're not doing that much now and you've got to start thinking this way. Normally when a motion intervening comes, you don't really much care whether they're a plaintiff or a defendant. Just get them in the case. Or join them, get them in the case. This third party defendant is really coming in on the side of the plaintiff, the complete diversity rule stands. So if this is an intervener from Nevada and he's going to come in on this side, you can't let him in. You can't let him in because it would destroy complete diversity. So in that circumstance, you have no supplemental jurisdiction. Ha! One final thing. What about class actions? I knew you were thinking that. You're with me every step of the way. Particularly at this hour. Class actions only require diversity between the named representatives and the defendants. And if it's a defendant class, the named defendants. So all this stuff doesn't apply in the class action context in the sense of all parties must be considered and all this sort of stuff. Class actions, named representatives, citizenship only. All right. So as Nancy Reagan said, just say no to supplemental jurisdiction. Yes. This is our last visual aid. I'm telling you again, don't look so happy. Can you say no? Yes, you can. Under 1367, the statute specifically provides four, and I think exclusive areas where you can say no. Is the state law claim novel or complex? It doesn't mean hard. It doesn't mean novel or complex. If it is, you can say, I choose to say no to that supplemental claim or dismiss it if it's brought originally, remand it if it's brought by removal. That's easy enough. That was always with us. State law claims substantially predominates. The state law claim is the dog and the federal claim is the tail of $500 risk of claim and a $2 million wrongful discharge claim. Remand to the federal claim? This is the last bad story of a graduate. Graduate last year, not only the state law claim, but remanded the federal risk of claim wrong. You can't do it. You have to exercise that jurisdiction. You can't remand the whole case. You can dismiss the state law claim and then say to the plaintiff, hey, you know what? You don't want to be in here in that claim, do you? I'll let you voluntarily dismiss it which preserves the statute of limitations under a federal equitable tolling for at least 30 days, whatever the state court allows, go to state court. And you know what? If the defendant, upon the refinement of that claim in state court, if it removes again, I think that's sanctionable. Once the judge has said, I want this whole case in state court, it stays in state court. Federal claims are dismissed. This happens a lot. If at any time before trial, except in extraordinary circumstances, like you've invested a lot of time or you're about to dump the federal claim as well within a week or a month or soon, you cannot keep the federal claim. Some courts even reverse that as abuse of discretion if they're keeping it too far in advance of trial. I say, apply your good common sense. If you have invested an enormous amount of time and energy in that case, and it would be an unfair burden to the state court judge when you get rid of the federal claim, then do so. And you might say, what about the RTC? We already talked about that. Unfortunately, that's probably all the federal claim. So I don't think this backdoor, a trapdoor applies. Lastly, this is the last example. Compelling reasons to decline jurisdiction. And it means that under extraordinary circumstances I've left out was in the statute. I believe, as much as I am in favor of reducing the size of your cases, that the new statute does place restrictions on when you can just dump it. I think it's got to satisfy one of these four. What might be a compelling reason? The one we just looked at. The third party defendant, counterclaim, can't be brought. You shouldn't keep that case. You know what I'm saying? That might be a compelling reason. I'll give you another reason that some judges apply. Title VII doesn't, you know, used to not allow certain kind of damages. It still has restricted damages. Orisa is joined with other claims which might confuse a jury. Maybe you say, let's get rid of the state law claims to avoid jury confusion. That, I think, might satisfy number four. But it would have to be an extraordinary case, not just your run-of-the-mill, Title VII or Orisa claim, in my opinion. All right. Front door, federal question. The visitor's door of diversity. The back door of removal. And the side door we've just been looking at. The pet door of supplemental jurisdiction. Now, we've been going for a couple hours. And I'll say this to you. As I say at most of the NMI speeches, which is that, you know, as Hamlet said, although you live in a nutshell, you are king of your space. There is no question in my mind that federal jurisdiction is a nutshell. As Judge Schwerzer says, the trick is to keep it in a nutshell. So I'll be around to answer questions. They won't be on the videotape. You're free to go. Thank you very much.