(Article from Insurance Law Alert, March 2019)
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Addressing a matter of first impression, the Ninth Circuit ruled that the thirty-day clock for statutory removal begins when the insurer receives notice of a pleading, not when an insurer’s designated agent receives such notice. Anderson v. State Farm Mutual Auto. Ins. Co., 2019 WL 1086998 (9th Cir. Mar. 8, 2019).
Federal statutory law requires notice of removal to be filed “within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading.” 28 U.S.C. § 1446(b)(1). In this coverage dispute, the policyholders argued that the thirty-day clock began when the insurer’s designated in-state agent received notice of the pleadings. In contrast, the insurer contended that receipt by the insurer starts the removal clock. The Ninth Circuit agreed with the insurer, noting that allowing delivery to a designated agent to begin the removal clock would thwart the goals of uniformity and consistency. The court stated: “if delivery to a statutorily designated agent began the removal clock, the effective time a defendant had to remove would depend not only on differences in state law, but also on the efficiency of state agencies in each instance.” As the court noted, the Fourth Circuit has similarly held that notice to an in-state agent does not begin the removal clock. See Elliott v. Am. States Ins. Co., 883 F.3d 384 (4th Cir. 2018).