RICHMOND, F. & PR CO. v. Intermodal Services

• Decision Date: 19 February 1981
• Docket Number: Civ. A. No. 80-0898-R.
• Citation: 508 F. Supp. 804
• Court: U.S. District Court — Eastern District of Virginia
• Parties: RICHMOND, FREDERICKSBURG & POTOMAC RAILROAD CO., etc. v. INTERMODAL SERVICES, INC.

508 F. Supp. 804

RICHMOND, FREDERICKSBURG & POTOMAC RAILROAD CO., etc. v. INTERMODAL SERVICES, INC.

Civ. A. No. 80-0898-R.

United States District Court, E. D. Virginia, Richmond Division.

February 19, 1981.

John O. Peters, Robert E. Eicher, Channing J. Martin, Richmond, Va., for plaintiff.

John W. Fain, Richmond, Va., for defendant.

MEMORANDUM

WARRINER, District Judge.

This action was originally filed in the Circuit Court of Henrico County, Virginia. On 10 November 1980 defendant filed a timely petition for removal pursuant to 28 U.S.C. § 1441. At the initial pre-trial conference the Court, sua sponte, questioned whether defendant had alleged sufficient facts in its petition to establish diversity of citizenship as required under 28 U.S.C. § 1332. Specifically, defendant had failed to state its principal place of business in its petition for removal. See 28 U.S.C. § 1332(c). Defendant concedes that its petition is deficient in this regard and requests leave to amend its petition to allege sufficient facts establishing diversity of citizenship. Defendant recognizes that the 30-day period prescribed by 28 U.S.C. § 1446(b) within which to file a petition for removal has expired.

I.

The parties have presented three issues to the Court. First, where a petition for removal in a diversity case fails to state the principal place of business of the corporate defendant, may this jurisdictional defect be cured by amendment to the petition after expiration of the 30-day period prescribed by 28 U.S.C. § 1446(b)? Second, is the answer to this question affected by the fact that the "cover sheet" (Form JS 44C, Rev. 7/80), filed with the petition by counsel for defendant, contained a notation that defendant's principal place of business is in a named State different from the State of plaintiff's citizenship? Finally, does 28 U.S.C. § 1653, permitting amendment to "defective allegations of jurisdiction," even as late as appeal, answer the initial question raised?

The Court concludes that all three questions must be answered in the negative.

II.

In Thompson v. Gillen, 491 F.Supp. 24 (E.D.Va.1980), this Court recognized the general rule that allegations of jurisdiction imperfectly stated in the original petition for removal may be amended even after expiration of the 30-day removal period, whereas "missing allegations may not be supplied nor new allegations furnished." Id. at 27. This Court, as well as the Fourth Circuit, has not had an occasion to apply the rule to the specific situation where a corporate defendant has failed to allege its principal place of business. Courts which have ruled on this issue adhere to either a liberal or a strict construction of this general rule.

The liberal view allows amendments after the 30-day removal period where jurisdiction is alleged in a conclusory fashion or where some allegations, such as principal place of business, but not all other necessary specifics, are absent. An important consideration under the liberal view is whether the plaintiff would be prejudiced by the amendment. See, e. g., Barrow Development Co. v. Fulton Insurance Co., 418 F.2d 316, 317-18 (9th Cir. 1969); London v. Standard Oil Co. of Cal., Inc., 417 F.2d 820, 822 (9th Cir. 1969); Rossi, Turecamo & Co. v. Best Resume Serv., Inc., 497 F.Supp. 437, 439-41 (S.D.Fla.1980). The liberal view has been endorsed by some notable commentators. E. g., C. Wright, A. Miller, E. Cooper, Federal Practice and Procedure § 3733 (1976); J. Moore & J. Wicker, Moore's Federal Practice ¶ 0.157 10.2 (2d Ed.1979). A prime example of the liberal construction can be found in Hendrix v. New Amsterdam Casualty Co., 390 F.2d 299 (10th Cir. 1968), where the 10th Circuit stated:

We are not unmindful of numerous district court opinions which question the power to allow such amendments under varying circumstances after the time for initially filing removal petitions has expired. But if applied to circumstances comparable to those of the present case no allegation of corporate defendant's state of incorporation, we believe that their reasoning would be too grudging with reference to the controlling statute 28 U.S.C. § 1653, too prone to equate perfect allegations of jurisdiction with the total absence of jurisdictional foundations, and would tend unduly to exhault form over substance and legal flaw-picking over the orderly disposition of cases properly committed to federal courts.

Id. at 301 (footnotes omitted).

The view of strict construction holds that all statutory requisites of diversity jurisdiction must be alleged at least imperfectly in the original petition for removal, otherwise the petition may not be amended after expiration of the 30-day removal period. This rule was well stated by the court in F & L Drug Corp. v. American Central Insurance Co., 200 F.Supp. 718 (D.Conn.1961), in which the corporate defendant failed to allege its principal place of business in its petition: But where the essential facts necessary to justify removal are not alleged, either perfectly or imperfectly, then the case must be remanded. (Citations omitted.)

. . . . .

An absence of an allegation cannot be regarded as an allegation defective in form. Here the defendant does not seek to amend an allegation; it seeks to introduce one not heretofore made.

Id. at 722. Reaching a similar result is the holding in Van Horn v. Western Electric Co., 424 F.Supp. 920 (E.D.Mich.1977).

In this case, the allegation in the Petition for Removal failed to plead principal place of business for a corporate party and, thus, an essential allegation for establishing jurisdiction is lacking. This is not a situation where a jurisdictional allegation was erroneously made through inadvertence or failure to plead sufficient facts to satisfy a jurisdictional allegation. Rather, this case typifies those cases where a jurisdictional allegation is completely lacking and, thus, for this court to permit an amendment to the Petition for Removal, would not do justice to the requirements set forth in 28 U.S.C. § 1446(b). In other words, this is a case where the jurisdictional allegation is "so defective as to be incurable." Kinney v. Columbia Savings and Loan, 191 U.S. 78, 80, 24 S.Ct. 30, 31, 48 L.Ed. 103 (1903). When the defendant removed this case, the court did not acquire jurisdiction, since jurisdiction was not properly alleged. To permit defendant to now amend its Petition for Removal to include a new and proper allegation of jurisdiction would, in effect, allow defendant to vest in this court removal jurisdiction more than thirty days after service of and receipt by the defendant of the complaint. This the Court cannot permit.

Id. at 925 (footnote omitted). See also Jennings Clothier of Fort Dodge, Inc. v. United States Fidelity & Guaranty Co., 496 F.Supp. 1254, 1255 (N.D.Iowa 1980); Capitol Cake Co. v. Lloyd's Underwriters, 453 F.Supp. 1156, 1161 (D.Md.1978); Fort v. Ralston Purina Co., 452 F.Supp. 241, 242 (E.D.Tenn. 1978); Eubanks v. Krispy Kreme Doughnut, 208 F.Supp. 479, 482-83 (E.D.Tenn. 1961).

III.

This Court has in Thompson v. Gillen, supra, endorsed the view of strict construction. In that case the record indicated that the parties resided in different states. The record did not indicate, however, that the parties were of diverse citizenship, citizenship being determined, of course, by domicile and not residence. Id. at 27. This Court held in Thompson v. Gillen that removal jurisdiction was lacking.

The State defendant, in her petition for removal, has not simply alleged federal jurisdiction imperfectly; she has failed to allege jurisdiction at all. Moreover, the statutory period for filing a removal petition has expired, and no amendment to the petition has been offered. In these circumstances it is not for the Court, on its own motion, to direct the petitioner to amend her pleading and establish the Court's authority to hear and decide the case. Finally, even if proffered, an amendment should not be filed because of the running of the 30-day removal period.

Id. at 29. Accordingly, this Court remanded the action to State court.

The Court believes that strict construction should be applied to the facts in this case. The Court recognizes that in so deciding the Court is being "grudging" with its removal jurisdiction. Nonetheless, the Court believes that what may be characterized as "legal flaw-picking" with respect to the jurisdictional requisites for removal is necessarily required by 28 U.S.C. § 1446(b). There are at least four reasons for this belief.

First, an "important reason for strict construction of removal statutes is that the exercise of removal jurisdiction— particularly when based on diversity—is in derogation of State sovereignty." Thompson v. Gillen, supra, at 26. See Van Horn v. Western Electric Co., supra, at 923. In the removal situation, an action pending before a court of competent jurisdiction is removed to federal court at the behest of one of the parties and over the objection of the other. Considerations of State sovereignty, comity, and traditional judicial respect for the jurisdiction of other courts, suggests that federal courts should be "grudging" with the exercise of removal jurisdiction. See Evans-Hailey Co. v. Crane Co., 207 F.Supp. 193, 198 (M.D.Tenn.1962).

A second basis for strict construction is that the jurisdictional allegations for removal are extremely simple for any lawyer to draft. Counsel for defendant argues in its Motion for Leave to Amend, at 2-3, that the allegation can be made in a sentence:

Petitioner is, and was at the time the action was commenced, a corporation incorporated in Georgia, with its principal place of business in Georgia.

For lawyers confused about the jurisdictional requisites for removal, the drafters of the Federal Rules of Civil Procedure have, in Form 2, published a clear and unmistakable form for the allegation of diversity jurisdiction.¹...