FIA Card Services, NA (FIA) obtained a default judgment in a collection action against Jerome Redman in West Virginia state court. FIA, through its counsel Javitch Block LLC (Javitch), then filed a wage garnishment action against Redman to collect the judgment. Once Redman became aware of the default judgment, he filed a motion to set aside the default, which the state court granted, as well as a third-party complaint against Javitch. Ultimately, Redman and FIA entered into a settlement, and Redman dismissed his claims against Javitch.
Redman then filed a class action against Javitch in the same court, alleging state law violations. The case was originally assigned to a different judge that in the garnishment case. Redman then amended the complaint to add claims under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (FDCPA), triggering a 30-day deadline in which Javitch could remove the case pursuant to 28 U.S.C. § 1441(a). Fourteen days after filing the amended complaint, however, Javitch filed a motion to dismiss all of Redman’s claims in the state court, as well as several other filings, including a notice of supplemental authority and a motion to stay discovery pending resolution of the motion to dismiss. Twenty days after removal, the assigned judge recused himself, and the case was then reassigned to the judge who presided in the garnishment action. A few hours later, Javitch filed a notice of removal.
Redman filed a motion to remand in the federal court, arguing that Javitch waived its right to remove by continuing to litigate in state court after it had sufficient notice of removal eligibility. The district court granted the motion, finding that Javitch’s filings in state court “demonstrated its desire to litigate the matter in state court,” which intent was particularly evident in Javitch’s raising “dispositive arguments.” Javitch appealed.
The Court of Appeals for the Fourth Circuit began by noting that “waiver determination involves a factual and objective inquiry as to the defendant’s intent to waive,” and that a district court’s factual finding is reviewed for “clear error.” The court found that the “district court was not clearly erroneous in determining that Javitch waived its right to remove.” Filing a motion to dismiss is equivalent to adjudication on the merits of the case, which — along with the other actions taken by Javitch — constituted “actively” engaging in defending the litigation in state court. Further, Javitch “sought to use the state court proceedings to its advantage several times over, and only changed its mind once [the prior judge] was assigned to the case.”
Click here to access a copy of the Redman v. Javitch Block ruling.