HOUSTON (LN) — Senior U.S. District Judge Sim Lake denied a motion to remand on Friday, ruling that First National Bank of Giddings acted in bad faith by joining a Texas resident defendant solely to prevent JPMorgan Chase Bank from removing the case to federal court.
The dispute centers on an alleged altered check that resulted in funds being improperly taken from the plaintiff's customer. First National Bank of Giddings filed the suit in Harris County state court on February 16, 2024, naming both JPMorgan Chase Bank, N.A. and individual defendant Taijah Elizares.
Chase removed the case to the U.S. District Court for the Southern District of Texas on July 30, 2025, arguing that the one-year deadline for removal had passed but that an exception applied under 28 U.S.C. § 1446(c)(1). The statute allows removal after one year if the district court finds the plaintiff acted in bad faith to prevent removal.
Judge Sim Lake found that First National Bank of Giddings failed to serve Elizares with process, failed to request a citation for service, and failed to propound any discovery on her since the suit began. The plaintiff admitted in its filings that its litigation strategy was to pursue claims only against Chase because it viewed Chase as the "most culpable" party.
Under Fifth Circuit precedent, specifically Hoyt v. Lane Construction Co., plaintiffs act in bad faith when they half-heartedly pursue claims against non-diverse defendants. The court noted that failing to serve a non-diverse defendant with process is sufficient on its own to support a finding of bad faith.
The plaintiff argued it could not serve Elizares because it could not confirm her address, but the court rejected this, noting the bank had sent a Request for Authorization to Release Records via certified mail and could have sought substituted service under Texas law.
The court also rejected the plaintiff's argument that Chase waived its right to remove by participating in state court discovery and filing a partial motion for summary judgment. Judge Sim Lake held that waiver requires a clear and unequivocal decision to abandon the right to remove, and that actions taken before the case became removable do not constitute waiver.
First National Bank of Giddings also sought attorney's fees, but the order focused on the jurisdictional question, leaving the fee request unresolved in this specific memorandum.
The case remains in federal court as the parties proceed with litigation over the altered check, with the plaintiff now facing the prospect of litigating against a major national bank in a federal forum rather than state court.