Hinkhouse Williams Walsh

Ninth Circuit Adopts the Last-Served Rule to Determine the Timeliness of Removal and Affirms Dismissal With Prejudice Secured by HWW.

On January 21, 2011, the Ninth Circuit affirmed the dismissal with prejudice of a complex fraud and federal RICO complaint secured by HWW and announced its adoption of the last-served rule to determine the timeliness of a defendant’s removal to federal court in the case captioned Destfino, et al. v. Kennedy, et al., Case No. 09-16214.  Plaintiffs alleged that defendants were engaged in a broad conspiracy promoting fraudulent tax and debt elimination programs used by defendants to bilk investors in the programs.  HWW removed the case to federal court.  Plaintiffs sought remand, alleging, among other things, that the removal was untimely because certain non-removing defendants were served more than thirty days before the removal was filed.  Plaintiffs argued that the Eastern District of California should adopt the last-served rule, under which the statutory period of removal for all defendants begins upon service of any defendant.  HWW argued that the Court should adopt the last-served rule, under which each defendant is granted an independent thirty day removal period irrespective of the prior service of other defendants, and that the removal was timely under the last-served rule.  The Eastern District of California agreed with defendants, held removal was timely and ultimately dismissed the case for failure to state a claim under Rule 8(a) and 9(b) of the Federal Rules of Civil Procedure.

On appeal, the Ninth Circuit examined the split between the Federal Circuit Courts on this issue, and held that the last-served rule is “the wiser and more equitable approach” in affirming the District Court’s denial of the motion to remand.  The Ninth Circuit further affirmed the dismissal with prejudice of the complaint.  HWW Attorneys John T. Williams, Sarah H. Dearing and Jason H. Nash prepared the Appellate Brief.  On April 15, 2010, John T. Williams argued before Chief Judge Alex Kozinski and Circuit Judges Glenn Archer and Consuelo Callahan.  Chief Judge Kozinski authored the Court’s Opinion, which has been selected for publication.

Read the full opinion.