was in effect a substantive motion addressed to the merits of the case.
First, the forum non conveniens motion in this case was effectively a dispositive one, since New York recognizes the cause of action sued upon, while the laws of England, the assertedly more relevant forum, do not. Second, the New York court in fact had to consider the merits of the case in determining that motion, to determine what contacts with the forum were relevant and what law was applicable. Several courts have also stated that such a motion necessarily implicates the merits of a case. See, e.g., Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508, 67 S. Ct. 839, 843, 91 L. Ed. 1055, (1947) (considering whether grant of forum non conveniens dismissal is appealable under Coopers & Lybrand test); Carlenstolpe v. Merck & Co., 819 F.2d 33, 36 (2d Cir. 1987) ("The determining factors in the forum non conveniens motion are 'enmeshed' in the underlying cause of action and necessarily involve an inquiry into the merits of the action.") (citations omitted). Third, at least where a forum non conveniens motion involves a choice of law dispute, as this one did, it is a holding on the merits of the case. Quintero v. Klaveness Ship Lines, 914 F.2d 717, 719 (5th Cir. 1990).
Since the defendants filed and litigated a potentially dispositive motion in state court, they have proceeded past the commencement of "trial" within the meaning of section 632, and have accordingly waived their right to removal under that statute. See Manas y Pineiro, supra, 443 F. Supp. at 420.
An analogous waiver doctrine in removal cases brought under the general removal statute, 28 U.S.C. § 1446, buttresses the court's conclusion that defendants have proceeded too far in their action in state court. In cases removed under section 1446, defendants who have filed a removal petition within the thirty-day limit may nevertheless waive their right to remove where they demonstrate an intention to litigate in the state forum. Such an intent is shown where defendants take affirmative action in state court, such as initiating motion practice, not where their action in state court is merely defensive, such as responding to an ex parte order to show cause. See Heafitz v. Interfirst Bank of Dallas, 711 F. Supp. 92, 96 (S.D.N.Y. 1989) (Leisure, J.).
As the court in Heafitz explained, "the basic inquiry involves the nature of the action taken in state court before the removal petition is filed. . . . 'If the motion is made only to preserve the status quo ante and not to dispose of the matter on its merits, it is clear that no waiver has occurred. On the other hand, if a motion seeks a disposition, in whole or in part, of the action on its merits, the defendant may not attempt to invoke the right to remove after losing on the motion.'" 711 F. Supp. at 96 (quoting Bolivar Sand Co. v. Allied Equipment, Inc., 631 F. Supp. 171, 173 (W.D. Tenn. 1986)).
Under this standard, the fact that defendants initiated a motion to dismiss for forum non conveniens, which addresses the merits of the case and in this instance was dispositive, means that they have waived their right to remove, at least under section 1446. In the court's view, this waiver doctrine is as appropriate to issues of removal under section 632 as to those brought under section 1446.
Plaintiffs have also moved for an award of costs and attorney's fees under 28 U.S.C. § 1447(c). However, as noted above, this case was removed under 12 U.S.C. § 632, not 28 U.S.C. §§ 1441 and 1446, and all of the provisions of the general removal statutes are not projected into the removal provisions of section 632. That statute does not authorize an award of attorney's fees for improvident removal, and accordingly none can be granted here. Further, even under the terms of section 1447(c), an award of attorney's fees would not be appropriate since defendants presented a colorable claim for removal. See Lewis v. Travelers Ins. Co., 749 F. Supp. 556 (S.D.N.Y. 1990) (Lasker, J.). An award of costs to plaintiff is appropriate, however, since plaintiff is the prevailing party.
For the reasons stated above, this action is remanded to New York Supreme Court. Plaintiff is awarded costs but not attorney's fees.
IT IS SO ORDERED.
Dated: New York, New York
August 21, 1992
Robert L. Carter
© 1992-2004 VersusLaw Inc.