United States District Court, D. Maryland
TEAMSTERS LOCAL 677 HEALTH SERVICES & INSURANCE PLAN, on behalf of itself and all others similarly situated, Plaintiff,
HOWARD E. FRIEDMAN, et al., Defendants, and SINCLAIR BROADCAST GROUP, INC., Nominal Defendant.
From Circuit Court of Maryland for Baltimore County
Catherine C. Blake United States District Judge.
case originated in the Circuit Court of Maryland for
Baltimore County. Defendant Martin R. Leader
("Leader") filed a Notice of Removal, asserting
diversity jurisdiction in this court pursuant to § 28
U.S.C. 1332(a). Now pending before the court is plaintiff
Teamsters Local 677 Health Services & Insurance
Plan's ("Teamsters") motion to remand. For the
reasons stated below, the court will grant the motion.
AND PROCEDURAL HISTORY
December 6, 2018, Teamsters filed a shareholder derivative
complaint in the Circuit Court of Maryland for Baltimore
County. (Shareholder Derivative Complaint
("Compl."), Notice of Removal Ex. A, ECF No. 1-2).
Teamsters named the Board of Directors and Chief
Executive Officer of Sinclair Broadcast Group, Inc.
("Individual Defendants") as defendants. Teamsters
filed the derivative suit on behalf of nominal defendant
Sinclair Broadcast Group, Inc. ("Sinclair"),
alleging that the Individual Defendants breached fiduciary
duties owed to Sinclair and its stockholders. Specifically,
Teamsters alleges that during an attempted merger, with
Tribune Media Co. ("Tribune"), the Individual
Defendants engaged in a scheme to flout Federal
Communications Commission ("FCC") ownership rules
and antitrust regulations. (Compl. ¶¶
4-6). As a result of the alleged scheme, the
proposed merger was the subject of an FCC hearing, and
Tribune ultimately withdrew. (Compl. ¶ 8-9). Tribune
also filed a lawsuit with the Delaware Chancery Court,
seeking $1 billion in damages for alleged breaches of the
merger agreement. (Compl. ¶ 10). Teamsters claims that
the financial fallout from the attempted Tribune merger has
irreparably harmed Sinclair's shareholders. (Compl.
Clerk of the Circuit Court of Maryland for Baltimore County
issued summonses for Sinclair and the Individual Defendants
on December 11, 2018. (Writs of Summons, Notice of Removal
Ex. C at 8-27, ECF No. 1-4). On December 14, 2018, before
Teamsters had served process on Sinclair or the Individual
Defendants, defendant Leader filed a notice of removal in
this court. (Notice of Removal, ECF No. 1). Leader claims
that this court properly has diversity jurisdiction over the
action, as Teamsters is a Connecticut citizen, Leader is a
Florida citizen, defendant Daniel C. Keith is a South
Carolina citizen, and Sinclair and the remaining Individual
Defendants are Maryland citizens, but had not yet been
served. (Notice of Removal ¶¶ 5-8)., 
December 20, 2018, Teamsters filed a motion to remand to
state court. The motion has been fully briefed and no
oral argument is necessary. See Local Rule 105.6 (D.
defendant sued in state court may remove the action to
federal district court only if the district court would have
had original jurisdiction over the action. 28 U.S.C. §
1441(a). Federal district courts generally have
"original jurisdiction of all civil actions where the
matter in controversy exceeds the sum or value of $75,
000," and is between "citizens of different
States." 28 U.S.C. § 1332(a)(1).
removal of a case from state to federal court "raises
significant federalism concerns." Mulcahey v.
Columbia Organic Chems. Co., Inc., 29 F.3d 148, 151 (4th
Cir. 1994). In crafting removal statutes, Congress has set a
"clear intention to restrict removal and to resolve all
doubts about the propriety of removal in favor of retained
state court jurisdiction:" Marshall v. Manville
Sales Corp., 6 F.3d 229, 232 (4th Cir. 1993).
Accordingly, removal jurisdiction is "strictly
construe[d]." Mulcahey, 29 F.3d at 151. The
party removing"the case bears the burden of establishing
the court's jurisdiction. Hertz Corp. v. Friend,
559 U.S. 77, 96 (2010).
of the principal purposes of diversity jurisdiction was to
give a citizen of one state access to an unbiased court to
protect him from parochialism if he was forced into
litigation in another state in which he was a stranger and of
which his opponent was a citizen." Ziady v.
Curley, 396 F.2d 873, 875 (4th Cir. 1968). Accordingly,
under the so-called "forum defendant rule," an
otherwise-removable diversity case "may not be removed
if any of the parties in interest properly joined and served
as defendants is a citizen of the State in which such action
is brought." 28 U.S.C. § 1441(b)(2). The forum
defendant rule recognizes that there, is no need to protect
out-of-state defendants from local prejudice "where the
defendant is a citizen of the state in which the case is
brought." Lively v. Wild Oats Markets, Inc.,
456 F.3d 933, 940 (9th Cir. 2006); see also Morris v.
Nuzzo, 718 F.3d 660, 665 (7th Cir. 2013).
argues that this case should be remanded to state court
because its presence in federal court violates the forum
defendant rule, as Sinclair and six of the eight Individual
Defendants are citizens of Maryland. Leader counters that the
forum defendant rule prohibits removal only "if any of
the parties in interest properly joined and served
as defendants" are citizens of the forum state. 28
U.S.C. § 1441(b)(2) (emphasis added). Leader removed the
case to federal court before he or any other defendant had
been served; under the plain language of § 1441(b)(2),
he argues, the forum defendant rule does not apply.
courts are divided on whether the forum defendant rule
prohibits pre-service removal.See, e.g., Phillips Constr.,
LLC v. Daniels Law Firm, PLLC,93 F.Supp.3d 544, 550
(S.D.W.Va. 2015) ('There is a broad and growing divide
among the district courts as to whether the forum-defendant
rule bars pre-service removal based on diversity
jurisdiction."). The Fourth Circuit has not addressed the
issue, but the Second and Third Circuits have embraced a
literal reading of § 1441(b)(2) that permits pre-service
removal. See Gibbons v. Bristol-Myers Squibb Co.,919 F.3d 699, 707 (2d Cir. 2019); Encompass Ins. Co. v.
Stone Mansion Rest. Inc.,902F.3d 147, 154 (3d Cir.
2018). The Eleventh Circuit, ...