KANSAS CITY — A federal judge has ordered a lawsuit brought by a California resident and 383 other California residents against H&R Block-related companies to be returned to state court, finding that the defendants’ removal of the case to federal court before they had been served was inconsistent with the purpose of federal law governing when defendants may move a case from state to federal court.
U.S. District Judge Greg Kays issued the order Sept. 24, granting a motion to remand filed by the plaintiffs in the lawsuit against HRB Digital LLC and HRB Tax Group Inc. The case was remanded to Jackson Circuit Court, where the plaintiffs originally filed it.
The lawsuit is a single-count declaratory judgment action seeking interpretation of H&R Block’s “Online Services Agreement,” according to the court. The plaintiffs are California citizens, while the defendants are Missouri citizens. The plaintiffs filed the lawsuit in Jackson County Circuit Court as required by the agreement.
The defendants removed the case to federal court before the plaintiffs had served them. The court referred to that procedure as “snap removal.” The plaintiffs subsequently asked the federal court to return the case to state court.
The case was filed Nov. 17, 2025, in Jackson Circuit Court. Four days later, on Nov. 21, the defendants removed it to the U.S. District Court for the Western District of Missouri based on diversity jurisdiction. The removal occurred before the plaintiffs served the defendants. The plaintiffs filed their motion to remand Dec. 12, 2025.
Federal law generally permits defendants to remove cases from state court when the federal district court would have original jurisdiction. Diversity jurisdiction applies to cases involving citizens of different states when the amount in controversy exceeds $75,000. However, the court explained that removal is subject to the “forum defendant rule” under 28 U.S.C. § 1441(b)(2). That rule generally prohibits removal when a properly joined and served defendant is a citizen of the state where the lawsuit was filed.
The court noted that the U.S. Court of Appeals for the Eighth Circuit, which includes Missouri, has not ruled on whether a defendant may use snap removal before being served when the defendant is a citizen of the state where the lawsuit was filed.
The order said federal appellate courts have split on the issue, with the Fifth, Second, Third and Sixth circuits permitting snap removal in some circumstances. The court also noted that the 11th Circuit has criticized snap removal in a similar situation.
The Western District of Missouri, however, has generally remanded cases involving pre-service removal by forum defendants. The order cited several previous decisions from the district, including a 2023 case in which the court held that snap removal when only forum defendants are named is inconsistent with the purposes of removal and the forum defendant rule.
In this case, the plaintiffs raised several arguments for remand. They argued that the defendants’ notice of removal did not adequately establish complete diversity, that the defendants could not establish the required amount in controversy and that the removal violated the forum defendant rule.
The defendants disagreed with those arguments.
Kays said the court did not need to resolve all of those issues because the forum defendant rule argument was sufficient to decide the motion.
The judge relied on the court’s prior ruling that allowing removal when all defendants are forum defendants would undermine the purpose of the rule.
The order explained that the forum defendant rule is intended to allow out-of-state defendants to avoid potential local bias by moving qualifying cases to federal court, while preventing plaintiffs from improperly naming forum defendants simply to prevent removal.
In this case, the defendants themselves were Missouri citizens, meaning they were not the out-of-state litigants the rule is designed to protect from local bias. The court said the plaintiff was the only out-of-state litigant subject to such potential bias.
The court also found that the plaintiffs had not engaged in improper joinder to prevent removal because they named only forum defendants. Had the plaintiffs been allowed an opportunity to serve the defendants, the court said, removal would have been precluded under its interpretation of the forum defendant rule. Instead, the defendants removed the case before the plaintiffs had that opportunity.
Kays concluded that “snap removal where only forum defendants are named” remains inconsistent with the fundamental purposes of the removal statutes and the forum defendant rule.
The judge said there had been no change in controlling law since the court’s 2023 decision addressing the issue and determined that remand was therefore appropriate.
The plaintiffs also asked the court to award attorneys’ fees and costs associated with the removal under 28 U.S.C. § 1447(c). The court denied that request.
Kays said the U.S. Supreme Court has held that, absent unusual circumstances, such fees generally may be awarded only when the party removing a case lacked an objectively reasonable basis for doing so.
Because the Eighth Circuit has not issued binding precedent foreclosing the defendants’ theory of removal, Kays determined that the defendants had an objectively reasonable basis for attempting to move the case to federal court.
The court therefore granted the plaintiffs’ motion to remand but declined to award attorneys’ fees and costs.
U.S. District Court for the Western District of Missouri, Western Division case number: 4:25-cv-00912
