Case 2:23-cv-02175-JWB-ADM Document 28 Filed 07/21/23 Page 1 of 5
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF KANSAS
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`Plaintiff,
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`STEWART P. MCCRAY,
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`v.
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`MCCRAY LUMBER COMPANY;
`CHANDLER MCCRAY; and
`HARRY C. MCCRAY III,
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`Case No. 23-2175-JWB
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`Defendants.
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`MEMORANDUM AND ORDER
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` This matter is before the court on Plaintiff’s motion to remand the action to state court
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`(Doc. 13) and on Defendant’s motion to strike or to file a surreply (Doc. 25.1) The motion to
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`remand is fully briefed (Docs. 20, 24) and Plaintiff has responded to the motion to strike (Doc.
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`27.) For the reasons stated herein, Defendant’s motion to strike (Doc. 25) is DENIED, and
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`Plaintiff’s motion to remand (Doc. 13) is GRANTED.
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`I. Background and facts
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`Plaintiff filed a petition in the District Court of Johnson County, Kansas, on April 14, 2023,
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`asserting claims of fraud, conversion, and breach of fiduciary duties relating to a family trust. (Doc.
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`1-1.) The trust was created by Plaintiff’s parents. It provides in part that the trust estate (which
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`includes ownership of the McCray Lumber Company) shall be divided into five equal shares for
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`each of the grantors’ five children, including Plaintiff and Defendants Chandler McCray and Harry
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`C. McCray III (referred to as “Hatch”). The trust provided in part that any of the five children still
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`1 The court finds that Plaintiff’s reply brief (Doc. 24) did not raise new arguments beyond the scope of his initial brief
`and that no grounds have been shown for striking the arguments or allowing a surreply.
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`Case 2:23-cv-02175-JWB-ADM Document 28 Filed 07/21/23 Page 2 of 5
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`employed by McCray Lumber at a specified “Termination Date” would have the right to buy out
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`the shares of the other siblings. Chandler and Hatch are officers of and continue to work at McCray
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`Lumber. According to Plaintiff’s petition, the Termination Date had not yet occurred but
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`Defendants improperly terminated the trust, purported to have purchased Plaintiff’s shares, and
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`have converted Plaintiff’s shares to their own use and benefit.
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`On April 24, 2023, McCray Lumber filed a notice of removal, alleging removal to this
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`court was proper because there was complete diversity of citizenship between Plaintiff and
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`Defendants, and the amount in controversy exceeded $75,000, such that this court has original
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`subject matter jurisdiction under 28 U.S.C. § 1332. (Doc. 1 at 2.) After a show cause order by the
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`magistrate judge pointed out deficiencies in the jurisdictional allegations, McCray Lumber filed
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`an amended notice of removal which alleged that Plaintiff is a citizen of Texas, Chandler and
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`Hatch are both citizens of Kansas, and McCray Lumber is a citizen of both Kansas and Missouri.2
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`(Doc. 12 at 2-3.)
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`The amended notice of removal further alleged that Plaintiff filed his complaint in state
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`court on April 14 and requested summonses be issued for service by an authorized process server.
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`(Id. at 1.) The summonses were issued on April 17, but “[n]one of the defendants were served prior
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`to McCray Lumber’s initial Notice of Removal filed on April 24, 2023.” (Id.)
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`Plaintiff filed a motion to remand the action to state court, arguing the removal contravenes
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`the “forum defendant rule” of 28 U.S.C. § 1441(b)(2), which provides in part that a diversity action
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`may not be removed “if any of the parties in interest properly joined and served as defendants is a
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`citizen of the State in which such action is brought.” Plaintiff argues that allowing a so-called
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`2 McCray Lumber’s initial notice of removal alleged, with respect to itself, only that it “is incorporated in Missouri.”
`(Doc. 1 at 2.) The magistrate judge’s show cause order pointed out, among other things, that a corporation’s citizenship
`includes the state where its principal place of business is located, and noted the removal notice “does not allege the
`state where [McCray Lumber’s] principal place of business is located.” (Doc. 7 at 2.)
`2
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`Case 2:23-cv-02175-JWB-ADM Document 28 Filed 07/21/23 Page 3 of 5
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`“snap removal” of this type “would eviscerate the purpose behind both diversity jurisdiction and
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`removal jurisdiction based on an overly restrictive reading of the Forum Defendant Rule and
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`ignoring good policy.” (Doc. 13 at 9.)
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`II. Standards
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`Any civil action brought in state court over which a federal district court has original
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`jurisdiction (including diversity jurisdiction under § 1332) generally “may be removed by the
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`defendant or the defendants, to the district court of the United States … where such action is
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`pending.” 28 U.S.C. § 1441(a). But the existence of original jurisdiction “is not the only
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`requirement for removal,” because “[t]he removal statute, 28 U.S.C. § 1441, also imposes
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`nonjurisdictional limitations.” Woods v. Ross Dress for Less, Inc., No. 19-5089, 2021 WL 137561,
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`*3 (10th Cir. Jan. 15, 2021). “[E]ven when the parties have diverse citizenship, removal may be
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`prohibited when one of the defendants is a citizen of the forum state.” Id. at *4 (citing 28 U.S.C.
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`§ 1441(b)(2)). This forum defendant rule “reflects the view that the purpose of removal under
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`diversity jurisdiction is to protect defendants who fear parochial bias in state courts, so local
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`defendants have no legitimate need to remove cases to federal court.” Id.
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`III. Analysis
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`“Federal courts are split on whether ‘snap removal’—hasty removal by a non-forum
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`defendant before the plaintiff has an opportunity to serve the forum defendant—is permissible
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`under the removal statute, and the Tenth Circuit has not addressed the issue.” Osburn v. Ardmore
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`Suzuki, Inc., No. 21-CV-234-JWB, 2023 WL 1927991, at *4 (E.D. Okla. Feb. 10, 2023). As the
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`undersigned previously noted, “a review of district court cases in the Tenth Circuit reveals that
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`courts have generally concluded that snap removal is not permitted if the forum defendant is not a
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`sham party, and where a defendant removes before the plaintiff has had a reasonable opportunity
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`3
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`to serve the forum defendant.” Id. (citing Woods v. Dr Pepper Snapple Grp., Inc., 2020 WL
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`917284, at *2 (W.D. Okla. 2020); Flandro v. Chevron Pipe Line Co., 2019 WL 1574811, at *6
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`(D. Utah 2019)). Other circuits have found the practice to be permissible, relying on the statute’s
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`reference to “served” defendants. See Texas Brine Co., L.L.C. v. Am. Arbitration Ass'n, Inc., 955
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`F.3d 482, 487 (5th Cir. 2020) (allowing removal by an out-of-state defendant five days after action
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`was filed, despite an unserved in-state defendant because the plain language of § 1441(b)(2) is
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`unambiguous and did not lead to an absurd result); Gibbons v. Bristol-Myers Squibb Co., 919 F.3d
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`699 (2d Cir. 2019) (same); Encompass Ins. Co. v. Stone Mansion Restaurant Inc., 902 F.3d 147
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`(3d Cir. 2018) (same).
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`No suggestion is made here (nor is one plausible) that any of the Defendants were
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`fraudulently named as parties by Plaintiff to defeat a right of removal to federal court. (The
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`undisputed facts also refute any suggestion that Plaintiff unreasonably delayed service of process
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`on Defendants after filing the petition in state court.) Virtually all of the cases examining this issue
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`acknowledge that § 1441(b)(2) prevents removal where any of the defendants is a citizen of the
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`forum (in this instance all of the Defendants are citizens of Kansas), and that Congress’s purpose
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`in inserting the phrase “parties in interest properly joined and served” was to prevent
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`gamesmanship by a plaintiff who seeks to prevent removal by “fraudulently” adding a forum
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`defendant who is not a proper party. See Goodwin v. Reynolds, 757 F.3d 1216, 1221 (11th Cir.
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`2014) (“In the view of these courts, the purpose of the language is ‘to prevent a plaintiff from
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`blocking removal by joining as a defendant a resident party against whom [the plaintiff] does not
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`intend to proceed, and whom [the plaintiff] does not even serve.’”) But by isolating the word
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`“served” and ignoring the preceding context, those courts have “turn[ed] the statute’s ‘properly
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`joined and served’ language on its head.” Id. And as Goodwin indicated, the gamesmanship will
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`only multiply if snap removal is permitted, as after a defendant outruns the process server and
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`arrives at federal court, that court may properly turn around and grant a plaintiff’s motion for
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`dismissal under Fed. R. Civ. P. 41, thereby permitting the plaintiff to refile in his preferred state
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`forum. That is the long way of carrying out Congress’s exclusion of resident defendants from the
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`right of removal in § 1441(b)(2). The short way is to recognize that a “part[y] in interest properly
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`joined and served” includes one who is properly named as a defendant in the state petition but who
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`races to federal court to avoid imminent service of process in the state proceeding. Cf. Woods,
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`2021 WL 137561, *4 (citing 16 Moore's Federal Practice § 107.55[1], at 107–108) (“The
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`justification for the forum defendant rule is simple. The purpose of diversity jurisdiction is to
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`provide litigants with an unbiased forum by protecting out-of-state litigants from local prejudices.
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`Therefore, it makes no sense to allow an in-state defendant to take advantage of removal on the
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`basis of diversity jurisdiction.”).
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`IV. Conclusion
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`Defendant’s motion to strike or supplement (Doc. 25) is DENIED. Plaintiff’s motion to
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`remand (Doc. 13) is GRANTED. The clerk is instructed to REMAND this action to the District
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`Court of Johnson County, Kansas. IT IS SO ORDERED this day 21st of July, 2023.
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`_____s/ John W. Broomes_________
`JOHN W. BROOMES
`UNITED STATES DISTRICT JUDGE
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`5
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