Russell Corp. v. American Home Assurance Co.

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
________________________ SEPT. 06, 2001
THOMAS K. KAHN
CLERK
No. 00-13934
________________________
D. C. Docket No. 99-03269-CV-N-S

RUSSELL CORPORATION,

Plaintiff-Appellee,

versus

AMERICAN HOME ASSURANCE COMPANY,
COMMERCE AND INDUSTRY INSURANCE COMPANY, et al.

Defendants,

AETNA CASUALTY & SURETY INSURANCE COMPANY, INC.,
THE, a.k.a. Travelers Casualty and Surety Company, et al.,

Defendants-Appellants.

________________________

Appeals from the United States District Court
for the Northern District of Alabama
_________________________

(September 6, 2001)

Before DUBINA and KRAVITCH, Circuit Judges, DUPLANTIER*, District
Judge.

DUBINA, Circuit Judge:

The Appellants in this case are a group of insurance companies (the

“Insurers”) who were sued in state court by Appellee Russell Corporation

(“Russell”). The Insurers removed the case on diversity grounds, but the district

court remanded for want of unanimous consent to removal. We affirm.

I. Background

Russell filed this action in the Circuit Court for Jefferson County, Alabama,

seeking to determine whether there is insurance coverage for contamination to a

lake and surrounding property allegedly caused by Russell. Russell claimed that

the 23 Insurers breached their obligations to defend and indemnify Russell with

respect to two civil actions for property damage and personal injury. Two of the

Insurers timely removed the case to the United States District Court for the

Northern District of Alabama, based on diversity jurisdiction. Russell, however,

argued that a service of suit clause contained in its insurance policy with defendant

First State Insurance Company (“First State”) rendered First State’s

__________________________
*Honorable Adrian G. Duplantier, U.S. District Judge for the Eastern District of Louisiana,
sitting by designation.

2
consent void. The service of suit clause provides:

It is agreed that in the event of the failure of this COMPANY to pay any
amount claimed to be due hereunder, this COMPANY, at the request of the
INSURED, will submit to the jurisdiction of any Court of competent
jurisdiction within the United States and will comply with all requirements
necessary to give such Court jurisdiction and all matters arising hereunder
shall be determined in accordance with the law and practice of such Court.1

The district court agreed with Russell and found that the foregoing clause

prevented First State from consenting to removal. Accordingly, the district court

granted Russell’s motion to remand pursuant to 28 U.S.C. § 1447(c) for want of

unanimous consent to removal. The Insurers filed timely notices of appeal

challenging the district court’s remand order.

II. Issues

(1) Whether this court can review the district court’s decision to remand for

failure to comply with the unanimity requirement when the district court’s decision

was based on a service of suit clause that prevented one defendant from consenting

to removal.

(2) If the remand order is reviewable, the remaining issue is whether the

1
The particular insurance policy containing the service of suit clause is one of 79
insurance policies at issue in this case. Although some of the other policies contain similar
service of suit clauses, the district court did not address these other clauses because the First
State clause was the only one undisputedly binding upon the parties. Likewise, our review will
be limited to that particular service of suit clause. See Singleton v. Wulff, 428 U.S. 106, 120
(1976) ("It is the general rule, of course, that a federal appellate court does not consider an issue
not passed upon below.").

3
district court erred in interpreting the service of suit clause and concluding that the

case was due to be remanded because all defendants did not consent to removal.

III. Standards of Review

This court has a duty to independently examine our appellate jurisdiction

and dismiss when our jurisdictional limits are exceeded. See Mansfield, C. & L.M.

Ry. Co. v. Swan, 111 U.S. 379, 382 (1884); Wahl v. McIver, 773 F.2d 1169, 1173

(11th Cir. 1985).

We review a district court’s interpretation of a service of suit clause de novo.

See Galindo v. ARI Mut. Ins. Co., 203 F.3d 771, 774 (11th Cir. 2000); McDermott

Intern., Inc. v. Lloyds Underwriters of London, 944 F.2d 1199, 1204 (5th Cir.

1991).

IV. Discussion

As a preliminary matter, we must decide whether we have jurisdiction over

this appeal. Because the district court’s remand order constitutes a final judgment

for the purpose of our appellate jurisdiction, we may review that order unless 28

U.S.C. § 1447(d) applies. Florida Polk County v. Prison Health Servs., Inc., 170

F.3d 1081, 1083 (11th Cir. 1999). Section 1447(d) provides that “[a]n order

remanding a case to the State court from which it was removed is not reviewable

4
on appeal or otherwise . . . .”2 Despite this broad provision, the Supreme Court has

held that § 1447(d) bars appellate review only where the remand order is based

upon grounds specified in § 1447(c). Thermtron Prods., Inc., v. Hermansdorfer,

423 U.S. 336, 346 (1976); see also Snapper, Inc. v. Redan, 171 F.3d 1249, 1260

(11th Cir. 1999). Section 1447(c) specifies two grounds for remanding a removed

case: (1) lack of subject matter jurisdiction; or (2) procedural defect in the removal

of the case. Things Remembered, Inc. v. Petrarca, 516 U.S. 124, 127-28 (1995);

Florida Polk County, 170 F.3d at 1083. Therefore, in order to determine whether

we have jurisdiction to review this appeal, we must decide whether the instant

remand order was based upon either of those grounds.

While there is no question that the first ground dealing with subject matter

jurisdiction is not at issue in this case, the second ground is a different matter.

Here, the district court remanded the case to state court because the “unanimity

requirement” was not met. The unanimity requirement mandates that in cases

involving multiple defendants, all defendants must consent to removal. Chicago,

R.I. & P. Ry. Co. v. Martin, 178 U.S. 245, 247-48 (1900); In re Ocean Marine Mut.

Protection and Indem. Ass’n, Ltd., 3 F.3d 353, 355-56 (11th Cir. 1993); In re

2
Although not at issue here, we note that § 1447(d) does not bar appellate review of
remand orders based on 28 U.S.C. § 1443.

5
Federal Savings & Loan Ins. Corp., 837 F.2d 432, 434 (11th Cir. 1988). We have

held that a remand based solely on the unanimity requirement, “is clearly based on

a defect in the removal process.” In re Bethseda Mem’l Hosp. Inc., 123 F.3d 1407,

1410 & n.2 (11th Cir. 1997); In re Ocean Marine, 3 F.3d at 355-56. In other

words, the general rule is that if a case is remanded for failure to comply with the

unanimity requirement, the remand is based on the second ground set forth in §

1447(c). In re Ocean Marine, 3 F.3d at 356. Consequently, such a remand is

normally not subject to appellate review. Id. The matter at hand, however, is not

the normal case.

Here, the district court found that the unanimity requirement was not met

only after it had interpreted the service of suit clause and determined that the clause

rendered First State’s consent void. In essence, the court made a substantive

determination of a contractual provision, which was external to the removal

process, and found that the provision precluded First State from removing or

consenting to the removal of the state court action. As a result of this finding, the

district court concluded that there was a lack of unanimous consent, which, as

explained above, is considered a procedural defect. Thus, the remand order was

based on a substantive determination outside of the removal process, which led the

court to find a defect in the removal process.

6
 This court recently addressed a similar situation in the case of Snapper, Inc.

v. Redan, 171 F.3d 1249, 1260 (11th Cir. 1999). Snapper involved litigation over

numerous security agreements, each of which contained the following forum

selection clause:

The [Guarantor] agrees that any legal action or proceeding with respect
to this instrument may be brought in the courts of the State of Georgia
or the United States District Court, Northern District of Georgia, Atlanta
Division, all as Creditor may elect. By execution of this instrument, the
[Guarantor] hereby submits to each such jurisdiction, hereby expressly
waiving whatever rights may correspond to it by reason of its present or
future domicile.

Snapper, 171 F.3d at 1260. Snapper, Inc., the Creditor, instituted litigation in state

court against each of the Guarantors. Id. at 1251. The Guarantors timely removed

the case to the United States District Court for the Northern District of Georgia,

Dekalb County. Id. However, the district court promptly remanded the case to

state court finding that the forum selection clause in each of the security

agreements signed by the Guarantors constituted a waiver of their right to remove.

Id. at 1251-52.

On appeal, the Snapper court noted that § 1447(d) bars appellate review of a

remand order based on a defect in the removal process. Id. at 1254 & 1259 (citing

New v. Sports & Recreation, Inc., 114 F.3d 1092, 1095-96 (11th Cir. 1997)).

However, the court determined that the remand order before it was based solely on

7
the forum selection clauses, which were entirely separate from the removal

process. Id. at 1253. The court reasoned that

[a] remand based on a forum selection clause depends on an adjudication
of the meaning of the clause, a determination that is external to the
removal process. The ultimate determination that the clause does not
permit further adjudication in that particular federal forum does not
render the removal “defective” in any ordinary sense of the word; it
merely means that the federal court has held the parties to the terms of
their agreement, as with any other contractual adjudication.

Id. In other words, the court concluded that the district court did not remand due to

a defect in the removal process. Id. at 1260. Accordingly, the court in Snapper

held that § 1447(d) did not bar appellate review. Id.

We recognize that Snapper is not directly on point to the case at bar because

the unanimity requirement was not at issue there. However, Snapper does provide

instruction that an appellate court may properly exercise jurisdiction over a remand

order which was based on the district court’s interpretation of a contractual

provision between the parties. Id. Many of our sister circuits share this view.

Karl Koch Erecting Co. v. New York Convention Center Dev. Corp., 838 F.2d 656,

658 (2d Cir. 1988) (reviewing on appeal a remand order based on a forum selection

clause); Foster v. Chesapeake Ins. Co., 933 F.2d 1207 (3d Cir. 1991) (same);

McDermott Intern., Inc. v. Lloyds Underwriters of London, 944 F.2d 1199, 1201

(5th Cir. 1991) (reviewing on appeal a remand order based on a service of suit

8
clause); Regis Associates v. Rank Hotels (Management) Ltd., 894 F.2d 193, 194

(6th Cir. 1990) (holding that in a case where the remand order was based on a

forum selection clause, the order was reviewable on appeal because it was

predicated on a “substantive decision on the merits of a collateral issue as opposed

to just matters of jurisdiction"); Pelleport Investors, Inc. v. Budco Quality

Theatres, Inc., 741 F.2d 273, 276-77 (9th Cir. 1984) (holding that an order

remanding to state court on the basis of an interpretation of a forum selection

agreement is reviewable on appeal); Milk ‘N’ More, Inc. v. Beavert, 963 F.2d 1342,

1344 (10th Cir. 1992) (same). While the foregoing cases represent persuasive

authority, only one circuit court has addressed the precise issue at hand.

In SBKC Service Corp. v. 1111 Prospect Partners, L.P., 105 F.3d 578 (10th

Cir. 1997), the Tenth Circuit considered a case virtually identical to the one before

us and concluded that § 1447(d) did not prohibit appellate jurisdiction. Id. at 581.

The district court in SKBC remanded the case to state court because one defendant

waived its right to remove the case according to the district court’s interpretation of

certain choice-of-venue clauses. Id. at 580. The district court concluded that as a

result of the one defendant’s inability to remove the case, that defendant was

prevented “from joining in or consenting to the removal by the other defendants as

required under 28 U.S.C. § 1446.” Id. In essence, the district court remanded for

9
failure to comply with the unanimity requirement. Id. On appeal, the appellee

argued that the remand order was not reviewable because it was based on a

procedural defect. Id. The court of appeals disagreed.

After discussing an earlier case where the Tenth Circuit held that a remand

order based on a forum selection clause was reviewable, the SBKC court concluded

that § 1447(d) did not prevent it from entertaining the appeal. Id. at 581. In

reaching this conclusion, the court disregarded the fact that the district court’s

remand order was ostensibly based on a procedural defect, because “the

‘procedural defect’ found by the district court arose only because it held [that] the

choice of venue clauses rendered [the defendant’s] consent void.” Id.

Furthermore, the SBKC court noted that if it accepted the district court’s

characterization of the basis for the remand, it would create an opportunity for any

district court to “insulate from review a remand decision predicated upon a contract

interpretation by specifically stating that its construction of the agreement voids

unity or consent to removal.” Id. This practice, the court reasoned, would

contravene public policy. Id. Accordingly, the court exercised jurisdiction over

the appeal. Id. We agree with the Tenth Circuit’s analysis.

As stated, this case is essentially indistinguishable from SKBC. Like the

district court in that case, the district court here made a decision on the substantive

10
merits of a contractual provision before concluding that the unanimity requirement

had not been fulfilled. As in SKBC, the district court in this case characterized its

remand order as one based on a procedural defect. However, after analyzing the

remand order,3 we conclude that the district court’s finding of procedural defect

was premised upon its substantive decision regarding the service of suit clause,

which was completely external to the removal process. Based on the reasoning

contained in SKBC, we determine § 1447(d) should not preclude us from reviewing

that substantive decision. Because we agree with the holding in SKBC and adopt

the reasoning contained therein, we hold that the instant remand order is subject to

appellate review.

We turn now to the merits of this dispute. The question is whether First

State waived its right to consent to removal when it issued an insurance policy to

Russell containing a service of suit clause. As noted earlier, the service of suit

clause provides that in the event that First State fails to pay any amount claimed to

be due under the policy, Russell may bring suit in any court of competent

jurisdiction and First State must “comply with all requirements necessary to give

such court jurisdiction . . . .” The district court found that by executing this clause,

3
In determining the basis for a remand order, we examine not only the district court’s
stated reasons, but also the substance of the order. See Ferrari, Alvarez, Olsen & Ottoboni v.
Home Ins. Co., 940 F.2d 550, 553 (9th Cir. 1991); SBKC, 105 F.3d at 581.

11
First State had “agreed to go to, and stay in, the forum chosen by Russell.” The

court reasoned that allowing First State to participate in the removal from Russell’s

selected forum would “ignore[] the plain meaning and diminish[] the importance of

the language found in the service of suit clause.” In short, the district court refused

to allow First State to avoid its promise by seeking to remove a claim brought by

Russell in state court. After reviewing the record, we find ourselves in agreement

with the district court’s decision.

The Insurers argue that First State’s consent to removal was allowable

because the binding service of suit clause is contained in only one of three policies

issued by First State to Russell. We disagree. First State clearly granted Russell

the power to select the court in which disputes concerning the policy in question

would be adjudicated, and the clause in question contains no exception for cases

also involving other First State policies. Accordingly, First State’s argument is

unavailing.

While this court has not ruled upon the precise language contained in the

First State policy, every federal court (excluding those addressing removal under

the Foreign Sovereign Immunities Act)4 interpreting this clause has determined

4
The Federal Sovereign Immunity Act provides an absolute right of removal to the
federal courts by a foreign state to resolve sovereign immunity issues. 28 U.S.C. § 1441(d); In
re Delta America Re Ins. Co., 900 F.2d 890, 893 (6th Cir. 1990).

12
that language essentially identical to that contained in the First State policy

constitutes a waiver of the right to remove. See, e.g., The Travelers Ins. Co. v. The

Charter Oak Fire Ins. Co., 996 F.2d 1485, 1487-90 (2d Cir. 1993); Foster v.

Chesapeake Ins. Co. 933 F.2d 1207, 1216-19 (3d Cir. 1991); Transit Cas. Co. v.

Certain Underwriters at Lloyd’s of London, et al., 119 F.3d 619, 622-23 (8th Cir

1997); Public Utility Dist. No. 2 of Grant County v. Illinois Employers Ins. Co. of

Wausau, 15 F.3d 1088 (9th Cir. 1994) (unpublished opinion). Thus, the collective

holdings of all federal courts that have addressed similar service of suit clauses

would support a remand in this case because First State consented to be sued in any

jurisdiction chosen by Russell thereby waiving its right to remove this case to

federal court. Moreover, as discussed above, this court has ruled that a similarly

worded forum selection clause constitutes a waiver of the ability to seek removal.

See Snapper, 171 F.3d at 1262.

The Insurers attempt to distinguish Snapper to salvage their position against

remand. They argue that the Snapper court interpreted a policy with slightly

different language from that contained in the First State policy. The distinction,

however, is immaterial because in both cases the pertinent clause gave the party

commencing a lawsuit the sole right to choose the forum for litigation. By the

plain language of the service of suit clause contained in its policy, First State

13
agreed to submit to any court of competent jurisdiction selected by Russell and to

comply with all requirements necessary to give such court jurisdiction over a

dispute between First State and Russell. To permit First State to consent to

removal from the forum selected by Russell would defy the express language of

First State’s contract. See Snapper, 171 F.3d at 1260.

In their attempt to evade the effect of the service of suit clause, the Insurers

rely on a series of inapposite cases that either depend upon a rationale that has been

rejected by this court or concern distinguishable contract clauses that have nothing

to do with the right of removal. Indeed, four of the cases relied upon by the

Insurers are state court cases (none from Alabama) that do not serve as

authoritative precedent for this court. See Brook Group, Ltd. v. JCH Syndicate

488, 640 N.Y.S. 2d 479 (N.Y. 1996); Cannelton Industries, Inc. v. Aetna Cas. &

Sur. Co. of America, 460 S.E.2d 1 (W. Va. 1994); Whirlpool Corp. v. Certain

Underwriters at Lloyd’s, London, 662 N.E.2d 467 (Ill. App. Ct. 1996); Columbia

Cas. Co. v. Bristol-Myers Squibb Co., 635 N.Y.S. 2d 173 (N.Y. 1995). These state

court cases do not even concern a waiver of the right to remove as here; rather,

they address the issue of forum non conveniens. This critical difference is

determinative since private parties cannot bargain away the power of a federal

court to order the dismissal or transfer of a case based upon forum non conveniens

14
grounds. As explained in Archdiocese of Milwaukee v. Underwriters at Lloyd’s,

London, 955 F. Supp 1066, 1069 (E.D. Wisc. 1997):

The difference between remand and forum non conveniens is the
difference between a purely private interest and a public interest;
therefore, the forum non conveniens cases have no application to a
remand case. The defendants' right to remove a case is their right alone.
They can waive it, exercise it, or bargain it away. The court and the
public have no interest in what the defendants do with their right to
remove. On the contrary, forum non conveniens deals with where a case
should be tried based on the interests of both the parties and the public.
Regardless of what a party bargains away, it may not waive the public's
interest; the court must still weigh the public interest involved. . . . The
issue is not whether the clause is a forum selection clause (whether it is
or not resolves neither the removal nor the forum non conveniens
issues); the issue is whether the defendants have waived their right to
remove the plaintiffs' case to federal court.

Id. (internal citations omitted).

The Insurers also rely on two decisions that are based upon a rationale

expressly rejected by this court and are factually distinguishable from this case.

Regis Assoc., Inc. v. Rank Hotels (Mgmt.) Ltd., 894 F.2d 193 (6th Cir. 1990); In re

Delta America Re Ins. Co., 900 F.2d 890 (6th Cir. 1990). Both Regis and Delta

were based on the discredited standard that “[a]lthough the right to remove can be

waived; the case law makes it clear that such waiver must be clear and

unequivocal.” Regis, 894 F.2d at 195; In re Delta America, 900 F.2d at 892. We

rejected this standard in Snapper:

The Guarantors contend that a contractual waiver of removal rights

15
 must be “clear and unequivocal” and that the provision at issue does
not meet this high threshold. We reject this standard.

171 F.3d at 1260 (emphasis added).

These two cases are also distinguishable because: (a) the Regis court had

considered a different and restrictive service of suit clause, namely that “the

parties hereby submit to the jurisdiction of the Michigan Courts,” which the court

believed was ambiguous as to whether the referenced court in Michigan was

federal or state; and (b) in Delta, the court strictly construed the service of suit

clause because the party in question was a foreign sovereign under the Foreign

Sovereign Immunity Act. The Delta court retained jurisdiction simply to clarify

that in “cases involving foreign states, . . . any claimed waiver of the right to

remove stemming from contractual language must be explicit.” Id. at 894. Of

course, the instant case does not implicate a foreign sovereign or any federal

interest which would weigh against remand.

Finally, the Insurer’s reliance on McDermott International, Inc. v. Lloyds

Underwriters of London, 944 F.2d 1199 (5th Cir. 1991), is particularly misplaced.

In fact, the McDermott court stated that a service of suit clause identical to that

contained in the First State policy at issue here would normally constitute a waiver

of an insurer’s removal rights: “When a policy’s service-of-suit clause applies, its

probable effect is to waive the insurer’s removal rights.” Id. at 1204. The

16
McDermott court, however, ultimately decided not to apply the service of suit

clause because the Lloyd’s policy did not expressly give the insured the right to

choose a forum to resolve arbitration disputes and under the Convention on the

Recognition of Foreign Arbitral Awards (9 U.S.C. § 205), a waiver of removal

rights must be express. Id. at 1207-1212. None of the concerns with the

enforcement of foreign arbitration awards discussed by the McDermott court are

present here. Rather, in this case, the Insurers seek to avoid a simple,

straightforward application of a service of suit clause, which as the McDermott

court observed, operates “to waive the insurer’s removal rights.” Id. at 1205.

Thus, the district court properly found that by executing the service of suit

clause, First State waived any right to seek removal from a court of competent

jurisdiction selected by Russell - - in this case, the Circuit Court of Jefferson

County, Alabama. Based on this finding, the district court concluded that the

Insurers failed to comply with the unanimity requirement. As set forth above, the

law is well settled that in cases involving multiple defendants, all defendants must

consent to the removal of a case to federal court. Chicago, R.I. & P. Ry. Co. v.

Martin, 178 U.S. 245, 247-48 (1900); In re Federal Savings & Loan Ins. Corp.,

837 F.2d 432, 434 (11th Cir. 1988). Like all rules governing removal, this

unanimity requirement must be strictly interpreted and enforced because of the

17
significant federalism concerns arising in the context of federal removal

jurisdiction. See University of South Alabama v. American Tobacco Co., 168 F.3d

405, 411 (11th Cir. 1999). Despite their vigorous attempts, the Insurers cannot

overcome this obstacle.

The Insurers cite numerous cases in their brief that do not concern the

unanimity requirement, and, therefore, are inapposite. For instance, the Insurers

discuss the case of Ferrari, Alvarez, Olsen & Ottoboni v. Home Ins. Co., 940 F.2d

550 (9th Cir. 1991), where the court addressed the scope of an oral agreement to

waive removal with respect to particularly identified claims. The Ferrari court

found that the narrow waiver of removal rights with respect to payment claims did

not necessarily constitute a waiver of the right to remove bad-faith claims that

were not identified in the oral waiver agreement. Id. at 554-55. The court

remanded and directed the district court to conduct further fact finding concerning

the scope of the waiver. Id. at 555. This case is distinguishable because, inter

alia, Russell’s claims asserted under the First State policy unquestionably fell

within the scope of the service of suit clause.

The Insurer’s reliance on Pegasus Transport, Inc. v. Lynden Air Freight,

18
Inc., 152 F.R.D. 574 (N.D. Ill. 1993),5 and Snider v. Lone Star Art Trading Co.,

Inc., 672 F. Supp. 977 (E.D. Mich. 1987), is similarly misplaced. In Pegasus, the

court declined to enforce forum selection clauses contained in 221 of 414 tariff

schedules because all the claims in the case presented federal questions and the

court did not have discretion to decline jurisdiction over claims arising from the

tariff schedules that did not contain forum selection clauses. 152 F.R.D. at 576.

In Snider, the court declined to enforce a forum selection clause applying to a

single defendant in a civil RICO action involving multiple defendants. 672 F.

Supp. 980-81. Further, the Snider court addressed the applicable forum selection

clause in the context of the defendants’ motion to transfer venue rather than on

defendants’ removal of the case. Id. at 979. Unlike the foregoing case, there is no

suggestion here that the state courts are not entirely competent to interpret a state

law contract dispute. This case does not contain the questions of federal law found

in Pegasus and Snider. In both Pegasus and Snider, the forum selection clauses

did not encompass the claims presented in those cases. Here, Russell’s claims on

5
The Pegasus court relied upon Farmland Indus., Inc. v. Frazier-Parrott Commodities,
Inc., 806 F.2d 848, 851 (8th Cir. 1987), rev’d on other grounds, Lauro Lines S.R.L. v. Chasser,
490 U.S. 495 (1989), which declined to enforce a forum selection clause because of allegations
that the forum selection clause was obtained fraudulently, the predominance of substantial
federal question claims that fell outside the scope of the forum selection clause, and the strong
state policy forbidding forum selection clauses. None of these circumstances are present in this
case.

19
the First State policy fall directly within the scope of the service of suit clause; this

is a dispute concerning the failure to pay a claim and nothing more. Moreover, in

neither Pegasus nor Snider was the court presented with the unanimity

requirement. Accordingly, we find those cases unpersuasive.

Finally, the Insurers contend that the district court’s remand order was

unfair and unreasonable because it was based on one out of 79 policies at issue in

this case. Stated differently, the Insurers propose that this court should recognize

some type of “fairness” exception to the unanimity requirement. However, to our

knowledge, no federal court has ever recognized such an exception.

Federal courts are courts of limited jurisdiction, and there is a presumption

against the exercise of federal jurisdiction, such that all uncertainties as to removal

jurisdiction are to be resolved in favor of remand. See Burns v. Windsor Ins. Co.,

31 F.3d 1092, 1095 (11th Cir. 1994). Beginning with the United States Supreme

Court’s decision in Chicago Rock Island & Pacific Railway Co. v. Martin, 178

U.S. 245, 248 (1900), federal courts have universally required unanimity of

consent in removal cases involving multiple defendants. There are several such

bright line limitations on federal removal jurisdiction (e.g. the removal bar for in-

state defendants and the one year time limit for diversity removals) that some

might regard as arbitrary and unfair. Such limitations, however, are an inevitable

20
feature of a court system of limited jurisdiction that strictly construes the right to

remove. We conclude that the district court correctly heeded these limitations.

V. Conclusion

Because the district court based its remand order on a substantive decision

separate from the removal process, § 1447(d) does not preclude us from reviewing

the order. After carefully considering the order, we conclude that the district court

correctly determined that First State waived its removal rights by executing the

service of suit clause at issue. Consequently, the district court properly remanded

the case to the state court for failure to comply with the unanimity requirement.

AFFIRMED.

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