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Erroneous Removal as a Tool for Silent Tort
Footnotes: 113
Reform: An Empirical Analysis of Fee Awards
and Fraudulent Joinder

Christopher Terranova
New York University School of Law

Willamette Law Review, Vol. 44, p. 799, 2008

Abstract:
By erroneously removing cases to federal court, defendants impose a cost (in
time and money) on plaintiffs and the court system. If borderline cases are
removed by defendants for precisely this purpose, defendants would be able to
effect tort reform without needing new Congressional legislation. Using remand
rates to measure erroneous removal, this paper finds that the remand rate for
diversity cases has significantly changed over time: doubling between the years
1988 and 2000, but sharply declining to the historical level thereafter.

Two hypotheses are studied to explain the fluctuation in the remand rate. First,
were the changes to the removal statute in 1988 -- authority to impose higher fee
awards and elimination of the bond posting requirement -- responsible for the
uptick in the likelihood of remand during the 1990s and the sharp decline after
2000? Second, could doctrinal differences between circuit courts -- in how they
awarded fees and analyzed fraudulent joinder arguments -- explain both the
differences between the circuits and the fluctuation in the remand rate?

Two empirical findings stand out. First, diversity cases removed on the basis of
fraudulent joinder arguments are much more likely to be remanded than other
similar cases. This provides an opportunity for defendants to abuse the doctrine,
if not constrained by courts. Second, the identity of the removing defendant --
individual, corporation, or other -- does not matter as much as the identity of the
plaintiff. All types of defendants are more likely to erroneously remove a case
against an individual plaintiff, perhaps because such plaintiffs suffer more from
delay and added cost than would the average corporate plaintiff.

Keywords: civil procedure, jurisdiction, removal, remand, fraudulent joinder,

federal courts, torts, empirical analysis, regression

Accepted Paper Series

Date posted: December 16, 2007 ; Last revised: February 10, 2009

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SSRN-Erroneous Removal as a Tool for Silent Tort Reform: An Empirica... http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1073402

Suggested Citation

Terranova, Christopher, Erroneous Removal as a Tool for Silent Tort Reform: An

Empirical Analysis of Fee Awards and Fraudulent Joinder. Willamette Law Review,
Vol. 44, p. 799, 2008. Available at SSRN: http://ssrn.com/abstract=1073402

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Contact Information
Christopher Terranova (Contact
Author)
New York University School of Law (
email )
40 Washington Square South
New York, NY 10012-1099
United States

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