SCOTUS Opinion: Third-Party Counterclaim Defendants Cannot Remove State Cases To Federal Courts

In Home Depot U.S.A., Inc. v. Jackson, Citibank filed a state debt-collection action against George Jackson for charges on his Home Depot card. Jackson counterclaimed against Citibank and filed third-party class-action counterclaims against Home Depot and another company, alleging a scheme in which those companies induced consumers to buy water treatment systems at inflated prices. Citibank dismissed its claims against Jackson, and Home Depot tried to remove the case to federal court. Jackson moved to remand. The district court granted the remand request, and the Fourth Circuit affirmed. The Court, in a 5-4 decision by Justice Thomas, affirmed, holding that the removal statute permits only a defendant in a civil action the right to remove, as opposed to any defendant to a counterclaim or third-party claim. The majority further emphasized how the Federal Rules differentiate between defendants, counterclaim defendants, and third-party defendants. Justice Alito, joined by Chief Justice Roberts and Justices Gorsuch and Kavanaugh, dissented, arguing that the majority’s distinction was “irrational,” leaving counterclaim defendants at risk of facing bias in state courts. A link to the opinion is here.