Whitaker v. American Telecasting Inc.

• Decision Date: 14 December 2000
• Docket Number: Docket Nos. 99-9275
• Citation: 261 F.3d 196
• Parties: (2nd Cir. 2001) RIDLEY M. WHITAKER, Plaintiff-Appellant, v. AMERICAN TELECASTING, INC. and ROSENTHAL, JUDELL & UCHIMA, Defendants-Appellees, and FRESNO TELSAT, INC., JAMES A. SIMON and JAS PARTNERS, LTD., and JOHN DOES NOS. 1-10 (which are individuals and entities whose identities are unknown), Defendants. (L), 00-7313 (CON) August Term 2000 Argued:
• Court: U.S. Court of Appeals — Second Circuit

Page 196

261 F.3d 196 (2nd Cir. 2001)

RIDLEY M. WHITAKER, Plaintiff-Appellant, v. AMERICAN TELECASTING, INC. and ROSENTHAL, JUDELL & UCHIMA, Defendants-Appellees and FRESNO TELSAT, INC., JAMES A. SIMON and JAS PARTNERS, LTD., and JOHN DOES NOS. 1-10 (which are individuals and entities whose identities are unknown), Defendants.

Docket Nos. 99-9275 (L), 00-7313 (CON)

August Term 2000

UNITED STATES COURT OF APPEALS, SECOND CIRCUIT

Argued: December 14, 2000

Decided: July 25, 2001

This is a consolidated appeal from two orders rendered in the United States District Court for the Southern District of New York, Scheindlin, J., denying the plaintiff's motion to remand and dismissing the amended complaint pursuant to Fed. R. Civ. P. 12(b)(2) for want of personal jurisdiction.

Affirmed.

[Copyrighted Material Omitted]

RIDLEY M. WHITAKER, New York City, Pro Se.

MICHAEL S. SOMMER and LISA V. MORAN, New York City (McDermott, Will & Emery), for Defendant- Appellee American Telecasting, Inc.

Before: FEINBERG and PARKER, Circuit Judges, and COVELLO,¹ District Judge.

COVELLO, District Judge:

Plaintiff-appellant Ridley M. Whitaker appeals from two orders rendered in the United States District Court for the Southern District of New York, Scheindlin, J., denying the plaintiff's motion to remand and dismissing the amended complaint. In the first order appealed, the district court denied the motion to remand on grounds that removal was timely under 28 U.S.C. § 1446(b), with jurisdiction in federal court proper under 28 U.S.C. § 1332(a). See Whitaker v. Fresno Telsat, Inc., No. 99 Civ. 6059, 1999 WL 767432 (S.D.N.Y. Sept. 28, 1999). In concluding that removal was timely, the district court held that, in the wake of Murphy Brothers, Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 119 S. Ct. 1322 (1999), the relevant event for triggering the thirty day removal clock under section 1446(b) is the defendant's receipt of the complaint, which, in this case, had been received within thirty days prior to removal. Whitaker, 1999 WL 767432, at *1-2. The principal question we must answer is whether the Supreme Court's decision in Murphy Brothers requires a defendant's receipt of the complaint for triggering the removal period. We conclude that it does not, and that the district court erred in so holding. The history and text of section 1446(b) clearly make the defendant's receipt of "the initial pleading" the relevant triggering event, which is any pleading (and not necessarily the complaint) containing sufficient information to enable the defendant to intelligently ascertain the basis for removal. Because only the complaint in this case provided such information, we find no error with the district court's ultimate conclusion that the notice of removal was timely filed. Further, we find no error with the district court's conclusion that jurisdiction was proper in federal court under 28 U.S.C. § 1332(a) and accordingly, we affirm the order denying the motion to remand.

In the second order appealed, the district court dismissed the action pursuant to Fed.R.Civ.P. 12(b)(2) for want of personal jurisdiction. See Whitaker v. Fresno Telsat, Inc., 87 F.Supp.2d 227 (S.D.N.Y. 1999). We find no error. Accordingly, we affirm the judgment of the district court in connection with both orders.

BACKGROUND

In November 1993, Fresno Telsat, Inc. (FTI) and FTI's principal shareholder, James A. Simon, retained the plaintiff-appellant, Attorney Ridley M. Whitaker (Whitaker) to represent FTI in a California state court action for breach of fiduciary duty against FTI's partner and appellee herein, American Telecasting, Inc. (ATI). FTI and ATI were partners in a California general partnership known as Fresno MMDS Associates. In June of 1996, Whitaker hired the New York law firm of Rosenthal, Judell & Uchima (RJU) to assist him with the case.

In February and March of 1998, the parties proceeded to trial in California state court and, prior to judgment, FTI retained Attorney Martin Fletcher (Fletcher) to negotiate a possible settlement with ATI. Fletcher subsequently settled the matter on behalf of FTI with an agreement that characterized the settlement as a sale of substantially all of FTI's interest in the partnership to ATI. Whitaker objected to the agreement, claiming that the deal unfairly deprived him of legal fees in breach of his agreement with FTI. The objection, however, fell on deaf ears. Consequently, Whitaker asserted a statutory charging lien under N.Y. Judiciary Law § 475² against both his client, FTI, and the settling defendant, ATI.

On December 30, 1998, Whitaker, a New York resident, commenced this action by filing a summons with notice, but no complaint, in the Supreme Court of the State of New York, New York County, seeking to enforce the charging lien and for a declaratory judgment regarding his rights and the rights of RJU to share in the claimed legal fees. Whitaker named as defendants FTI and James A. Simon (both Indiana residents), JAS Partners, Ltd. (a Colorado business entity), ATI (a Delaware corporation located in Colorado), and certain John Does Nos. 1-10 (identities and residence unknown). Whitaker also named as a defendant his fellow New Yorker, RJU, but did not assert any claims against it.

On April 29, 1999, Whitaker served the defendants by mail with copies of the summons with notice. On May 25, 1999, FTI served Whitaker with a demand for service of the complaint. On June 17, 1999, ATI served Whitaker with a demand for service of the complaint and, on July 2, 1999, Whitaker responded by serving FTI with the complaint. On July 6, 1999, Whitaker served ATI with the complaint and, on July 15, 1999, Whitaker served ATI with an amended summons and complaint (the amended complaint).

On July 29, 1999, twenty-seven days after Whitaker served FTI with the complaint, FTI, James A. Simon and JAS Partners, Ltd., (the FTI defendants) removed the action from New York State Supreme Court to the United States District Court for the Southern District of New York pursuant to 28 U.S.C. § 1441(a), with jurisdiction in federal court based upon diversity of citizenship. See 28 U.S.C. § 1332(a). On August 3, 1999, ATI filed a consent to the notice of removal upon Whitaker's request.

A. The Motion To Remand

On September 16, 1999, Whitaker moved to remand the case back to state court, arguing that the removal was untimely because the defendants failed to file their notice of removal within thirty days of receiving the initial pleading under 28 U.S.C. § 1446(b), with the initial pleading being, allegedly, the summons with notice. Further, Whitaker maintained that, because both he and RJU were New York residents, jurisdiction in federal court was improper under 28 U.S.C. § 1332(a) on account of incomplete diversity.

On September 28, 1999, the district court denied the motion to remand, concluding that in accordance with Murphy Brothers, Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 119 S. Ct. 1322 (1999), the initial pleading under § 1446(b) is the complaint which, in this case, had been served within the statutory period of thirty days prior to the date of removal. Whitaker, 1999 WL 767432, at *1-2. Further, the district court observed in a footnote that, even under pre-Murphy Brothers case law, the summons with notice failed as the initial pleading because removability could not be ascertained from the face of that document. Whitaker, 1999 WL 767432, at *2 n.5. Finally, the district court concluded that, because Whitaker had not asserted any claims against RJU, Whitaker had fraudulently joined RJU in an attempt to defeat federal diversity jurisdiction. Id. at *3. Consequently, the court dismissed the action against RJU under Fed. R. Civ. P. 21 and, with the dismissal of the only non-diverse party, concluded that federal jurisdiction was proper under 28 U.S.C. § 1332(a). Id. On October 27, 1999, Whitaker filed a notice of appeal.

B. The Motion To Dismiss

On August 3, 1999, ATI, as a Delaware corporation located in Colorado, moved pursuant to Fed. R. Civ. P. 12(b)(2) to dismiss the amended complaint for want of personal jurisdiction. As the record disclosed, ATI is not incorporated, licensed or qualified to do business in New York. It has no offices, agents, employees, property, bank accounts or telephone listing in New York, and has not appointed an agent for service of process in New York. ATI neither sells any products in New York nor does it otherwise transact any business in New York.

On December 14, 1999, the district court granted ATI's motion, concluding that Whitaker failed to demonstrate any factual predicate authorizing jurisdiction over ATI under the New York long arm statute, N.Y.C.P.L.R. § 302(a), and that, in any event, compelling ATI to litigate in New York would offend the due process clause of the Fourteenth Amendment to the United States Constitution. Whitaker v. Fresno Telsat, Inc., 87 F.Supp.2d 227, 233 (S.D.N.Y. 1999). On January 5, 2000, Whitaker moved for reargument and for reconsideration and, on February 9, 2000, the court denied the motion. Whitaker subsequently settled his claims with respect to the FTI defendants, and on March 7, 2000, the district court entered a consent order dismissing the action with prejudice as to all defendants except for ATI and RJU. On March 20, 2000, Whitaker filed a notice of appeal, naming only ATI and RJU as the defendants-appellees.

DISCUSSION

I Motion To Remand

Whitaker argues that, in denying the motion to remand, the district court:

(1) erred in interpreting Murphy Brothers to require that only the complaint can constitute the initial pleading under 28 U.S.C. § 1446(b); (2) erred by considering arguments in support of removal that were not raised in the notice of removal; (3) erred in concluding that the defendants could not ascertain removability from the face of the summons with notice; and (4) erred in concluding that Whitaker had fraudulently joined RJU....