US Court of Appeals Reviews 30-Day Time Limit for Filing a Notice of Removal

Hubert Walker represented a class of truck owner-operators who sued Trailer Transit Inc., a broker of trucking services, for breach of contract. The lawsuit was filed in an Indiana state court. The underlying lawsuit concerned a lease agreement between Walker, who owned and operated a long-haul truck and trailer transit. Under the contract, Trailer Transit leased Walker’s equipment and Walker picked up and delivered shipments arranged by Trailer Transit. 

The parties’ agreement required Trailer Transit to pay Walker 71% of the gross revenues derived from the use of the truck, less all items intended to reimburse trailer transit for special services.

Walker alleged in his complaint that Trailer Transit violated the lease agreement with him and hundreds of other truckers by charging “add-on fees” to customers that exceeded the costs of special services. Because the overcharge fees were not intended to be reimbursed to Trailer Transit, Walker maintained that the truckers were entitled to a portion of those fees under the lease agreement. The complaint alleged that the truckers would be entitled to 71% of the overcharge.

The case was class certified by the state court and then Trailer Transit moved for summary judgment. Trailer Transit argued that the truckers’ theory of damages was not supported by their agreement.

Soon after the response to the motion for summary judgment was filed by Walker, Transit’s authorities served Walker with a request for admission of facts asking Walker’s attorney to clarify which theory of damages the class was proceeding under. Walker responded by stating that the class was seeking 71% of the entire fees.

Within 30 days of receiving Walker’s response to the request for admission, Trailer Transit filed a notice of removal under the Class Action Fairness Act of 2005. The notice included an affidavit from a Trailer Transit executive estimating that the possible damages could exceed $5 million if the class sought 71% of the total fees, but would be under $5 million if the class sought only 71% of the alleged overcharges. 

Walker did not contest the amount in controversy, but moved to remand back to the state court on timeliness grounds, arguing that Trailer Transit had become aware of the possibly higher amount of damages sought by the class before their response to the request for admission was filed. The district court judge denied Walker’s motion to remand, and Walker took this appeal.

The 30-day time limit for removal from a state court to a federal court is short because it is intended to force a defendant to make a quick decision once a pleading or other litigation document provides clear notice that the predicates for removal are met. 

The appellate court also stated that the 30-day removal clock is triggered only by the defendant’s receipt of a pleading or litigation paper that affirmatively states on its face that the plaintiff seeks damages sufficient for federal court jurisdiction.

The panel of the court of appeals decided to follow the lead of the other circuit court and adopt a bright line rule. It stated that with respect to the amount in controversy, the pleading or other paper must distinctly disclose the amount of monetary damages sought to trigger the 30-day removal clock.

This panel determined that the earliest possible trigger for the removal clock was Walker’s response to Trailer Transit’s request for admission seeking formal clarification of the theory of damages. However, the court of appeals determined that even that document did not classify a damage figure under the classes’ new theory.  Therefore, the 30-day clock never started to run, and Trailer Transit’s notice of removal was still timely. Accordingly, the U.S. Court of Appeals affirmed the district court’s ruling allowing the case to be removed to the federal district court.

Hubert Walker v. Trailer Transit, Inc., No. 13-8015.

Kreisman Law Offices has been handling federal litigation, business litigation and personal injury cases for more than 37 years in and around Chicago, Cook County and its surrounding areas, including Chicago (Logan Square, Ukrainian Village, Little Italy, Chinatown, Stockyards, Gresham, Lawndale), Justice, Bedford Park, Burr Ridge, Countryside and Crestwood, Ill.

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