Here's a totally straightforward opinion by Judge McKeown. Short -- relatively, at least -- to the point, and completely coherent.
And yet I think she's wrong.
The question is a simple one: When you serve a corporation, when does the 30-day removal clock start ticking?
The issue arises because corporations are fictions. You serve a corporation by serving one of its agents. So does the 30-day clock start ticking when the agent gets notice, or only when the entity "itself" receives notice? With the caveat that the entity "itself" is a piece of paper, and can't read.
Judge McKeown decides that it makes sense to have a bright-line rule that says that it's only when the corporation "itself" actually receives the complaint that the clock starts ticking. And she so holds in a factual context that perhaps lends itself to such a conclusion. The Washington statute here says that in order to serve a foreign (i.e., out-of-state) insurance company, you're required to serve not the insurer directly, but rather, you've got to serve Washington's Insurance Commissioner. Who in turn forwards the complaint to the insurer.
Judge McKeown says that in such circumstances, it makes sense to say that the clock starts only when the company itself receives the papers. Otherwise the 30 days might potentially run out even before the company knew about the complaint (if, say, the Commissioner didn't properly forward it). And, in any event -- and this is her central point -- we don't want the federal 30-day rule to vary in application depending on the vagaries of particular state rules about service of process; e.g., who "counts" as the agent for the company.
So we're going to have a simple rule. It starts when the company gets the papers. Not a designated agent.
Makes sense, right?
Yeah. That's what I sort of thought at first too. A nice, simple, bright-line rule. One that also has the advantage of following the only other circuit (the Fourth) that's decided the issue.
But then I thought about it more.
And decided that I came out the other way.
'Cause the truth is, all the problems that Judge McKeown talks about already exist with the removal statute anyway. And her "solution" to the problem in the particular insurer context here will only create additional difficulties in deciding when today's "usual" Ninth Circuit rule applies and when it doesn't; e.g., which agents count for today's rule and which don't.
The thing that changed my mind was realizing just how many different forms "agents for service of process" take. Judge McKeown focuses -- understandably -- on the one at issue here: when a state forces a company to use a state officer as its agent. In such settings, yeah, you have the problem of maybe the agent not being competent, or faithful, or timely, or whatever, and it makes facial sense to say that the clock starts ticking only when the "company itself" actually sees the papers.
But let's take a different agent. For example, both the Fourth and the Ninth Circuits decided as they did with state-mandated agents that were state officers, but let's instead look at California's law. That statute says that out-of-state insurers have to appoint an agent, but doesn't say who they have to appoint. Maybe they decide to appoint their own Treasurer. Maybe they decide to appoint the state Insurance Commissioner. Maybe they decide to appoint Shaun Martin.
What rule applies then? If they appoint the state Insurance Commissioner, does today's rule still apply, since the Insurance Commissioner might not forward the thing properly, we don't want state law to dictate the federal 30-day clock, etc. etc.? Or does the fact the company "chose" that person mean that she's effectively the Company itself? Ditto for if they choose Shaun Martin. Does it start when I receive the summons and complaint, or only when the Company itself receives it (and what if I deliberately delay in order to give the Company more time to remove)?
And ditto for when the Company appoints its own Treasurer -- or a secretary to the CEO, or the company janitor, or the CEO himself, or whomever. Are we supposed to similarly say that these are not the "Company itself" so the clock starts ticking only later? Yet that sounds absurd, no? In turn, what about someone who's full-time job is to receive service of process? Does whether the 30-day clock starts depend on whether they're an employee vs. independent contractor? On whether they only receive process for one Company, or more than one? Where's the line here between what agents "really" stand in the shoes of the Company for purposes of the removal clock and which ones don't?!
Judge McKeown has a simple answer to that question at the very end of her opinion, in footnote 5. She says: "We're not deciding that. That's a different case."
Well then it's not a very bright-line rule now, is it? Sure, we know how this case gets resolved; one that involves out-of-state insurers who have state-designated officers as exclusive agents. But there are a thousand cases that we now don't know the rules for, right? Because we're not sure whether today's rule applies to them or whether a different rule -- the one posited in footnote 5 -- applies.
So far from being an easily applied principle, today's decision seems to create much more confusion than it settles. As well as creates an artificial line the contours of which are unclear.
To be fair to Judge McKeown, she has an answer for that as well. And essentially says, earlier in the opinion, that things seemed "just fine" under the Fourth Circuit's rule, and there didn't seem to be a ton of confusion in the lower courts after that particular result, so presumably there won't be any here as well.
Okay, sure, maybe. But there wasn't much confusion before those decisions either. Since apparently there are only two cases in history that ever presented this precise issue. So maybe everyone before just made sure to remove cases within the 30 days from when ANY agent got served. Which, to be honest, makes total sense. Why not play it safe?
So, yeah, people may still be doing that, even after today's (and the Fourth Circuit's) decision. But that doesn't justify a rule that's nonetheless seemingly arbitrary -- service on Treasurers (or janitors, or Shaun Martin -- or maybe not) counts, but not on an Insurance Commissioner -- and that necessarily requires us to create lines between certain agents that start the 30-day clock and other agents that do not.
And the more I thought about Rule 4, the more I became convinced that today's Ninth Circuit rule creates far more problems than it solves.
Because there are TONS of agent rules therein.
(1) We already rely on state law. Way, way. So I'm not sure that the "What a pain it would be to rely on state law to decide whether the 30-day clock is ticking" argument is all that great. We rely on state law to decide whether to take someone's default (since Rule 4(e)(1) borrows state law). We also rely on state law to decide what agents are appointed "by law" under Rule 4(e)(2)(C). Other stuff too. So while I thought today's opinion was persuasive on the whole "Congress wanted uniformity not state-law specific stuff re: removal," upon reflection, I've changed my mind.
(2) We're going to have a hell of a time figuring out how far today's opinion goes. Indeed, the only thing that'll stop a ton of cases from coming up in the future is a lack of creativity on the part of those lawyers who wait until the last minute to remove. For example, not only do we have the "which corporate agents count as 'real' agents" problem discussed above, but what about Rule 4(f)(2)? Does service in a foreign country, pursuant to its rules, start the clock ticking? What if that foreign agent doesn't promptly (or ever?) relay the notice? Is it really the rule that you can validly take someone's default under Rule 4(f) and yet the removal clock never started ticking under analogous situations?
And today's opinion is even a problem for individuals. Normally, you'd think: well, obviously, the removal clock starts ticking when they get handed a copy of the complaint. But remember: that's not the only way to serve 'em. What about Rule 4(e)(2)(B)? Say I leave a copy of the summons and complaint with the guy's wife, or roommate, or 21-year old child living in the home, and state law says that's valid. Does the 30-day clock start ticking?! After all, he never chose them -- just like the company in today's opinion didn't choose the Insurance Commissioner. They were chosen by law. And maybe the roommate delays in giving the complaint to the guy. (Or maybe the defendant lies and says the roommate didn't hand it over until 20 days later.) Until today's opinion, I'd have thought it obvious that the 30-day clock started when you handed it to the roommate or wife. But under the Ninth Circuit's reasoning, the same "don't mess with state law, bright line rule, gotta be given to the defendant itself" arguments apply there as well. Or, alternatively, yet another line we have to draw.
In the end, I'm persuaded of a different bright line rule. One that's actually a bright line, and easy to apply -- or at least no harder than the one we apply already. It's this: If service on your agent is enough to allow your default to be taken, then it's enough to start the 30 day clock. If serving your agent is "good enough" to count as service on "you" sufficient to take all your worldly possessions away from you, then it's good enough to count as service on "you" sufficient to start your 30-day clock to remove.
And if, as here, you wait until the last day, that's on you. You've got 30 days to remove from the date of valid service on your agent. Just like you've got 30 days (in many state courts) to avoid a default from the date of valid service on that same agent.
Same clock.
So did the Ninth Circuit write an understandable opinion? Definitely. And I totally get where it's coming from.
But I still think it's wrong. Even more so than when I first started having my doubts.
