African Methodist Episcopal Church v. Lucien

• Decision Date: 30 June 2014
• Docket Number: No. 13–30617.,13–30617.
• Citation: 756 F.3d 788
• Parties: AFRICAN METHODIST EPISCOPAL CHURCH, Plaintiff–Appellee v. Willard LUCIEN, Jr.; Roger Kennedy; Saint James Mission Church; George Gaton, Sr.; Thomas J. Hogan, Defendants–Appellants Saint James Mission Church, Plaintiff–Appellant v. Annual Conference of the African Methodist Episcopal Church in Mississippi and Louisiana; Carlton Galmon, Sr.; James Martin; Otis Lewis, Defendants–Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

756 F.3d 788

AFRICAN METHODIST EPISCOPAL CHURCH, Plaintiff–Appellee

v.Willard LUCIEN, Jr.; Roger Kennedy; Saint James Mission Church; George Gaton, Sr.; Thomas J. Hogan, Defendants–Appellants

Saint James Mission Church, Plaintiff–Appellant

v.Annual Conference of the African Methodist Episcopal Church in Mississippi and Louisiana; Carlton Galmon, Sr.; James Martin; Otis Lewis, Defendants–Appellees.

No. 13–30617.

United States Court of Appeals,Fifth Circuit.

June 30, 2014.

Nelson Dan Taylor, Sr., Esq., Chief Counsel, J.K. Haynes Legal Defense Fund, Thibodaux, LA, for Plaintiff–Appellee/Defendant–Appellee.

Thomas Joseph Hogan, Jr., Esq., Hogan & Hogan, Hammond, LA, for Defendant–Appellant.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before SMITH, WIENER, and PRADO, Circuit Judges.

WIENER, Circuit Judge:

This appeal concerns a dispute over church property between a dissident local congregation (“Saint James”) and the national church (“AME”) with which it had been affiliated for many decades. Saint James filed an action in the City Court of Hammond, Louisiana, to evict several AME officeholders who had changed the church's locks and taken over the premises. AME countered by filing its own action in federal district court several weeks later, seeking a declaration that in fact it was the members of the congregation's dissident majority who, by severing ties with AME, had disassociated themselves from the true Saint James congregation and thereby relinquished any rights to ownership and control of the disputed property. Two days later, AME removed Saint James's eviction action to the same federal court.¹ Saint James then followed with a motion to have its eviction action remanded to state court and now seeks reversal of the district court's denial of its remand motion or, alternatively, reversal of that court's summary judgment granted to AME in its federal action. We hold that the district court lacked subject matter jurisdiction over Saint James's first-filed state court eviction action, and that federal precedent mandates that the district court abstain from the exercise of jurisdiction over AME's federal complaint for declaratory and injunctive relief while the remanded eviction action is pending in state court. We therefore vacate the rulingsof the district court and remand with instructions for it to remand Saint James's eviction action to state court and to stay AME's federal action during the pendency of the state proceedings.

I. FACTS AND PROCEEDINGS

This appeal comprises two proceedings that were consolidated in the district court. The first commenced on September 27, 2011, when Saint James filed a Rule to Evict Occupants (the “eviction proceeding” or the “rule to evict”) in the City Court of Hammond, Louisiana. The premises from which Saint James sought to evict the defendants in rule (the “property”) is located in Hammond, Louisiana. Named as defendants in rule were the Annual Conference of the African Methodist Episcopal Church in Mississippi and Louisiana (the “Annual Conference,” a regional division of AME), Carlton Galmon, Sr. (Saint James's pastor until the time that the congregation split), Otis Lewis (the presiding bishop of the Annual Conference), and James Martin (one of but a few members of Saint James's congregation who had remained loyal to AME). On October 24, 2011, roughly four weeks after the eviction proceeding was filed in state court, AME removed that action to the district court for the Eastern District of Louisiana on behalf of the defendants-in-rule, asserting diversity jurisdiction.

Two days before it removed the Saint James eviction proceeding from state court, however, AME had instituted the second proceeding (the “federal action”) by filing a petition for declaratory and injunctive relief in the same federal district court. In that action, AME named as defendants Saint James, its attorney (Thomas J. Hogan, Jr.), and three of its trustees (Willard Lucien, Jr., George Gaten, Sr., and Roger Kennedy), alleging diversity jurisdiction. ² AME sought, inter alia, (1) a declaration that the defendants' acts in purporting to transfer title to the property and in obstructing AME's access to it were illegal, and (2) an injunction prohibiting further interference.

The parties do not dispute the material facts relevant to whether there is federal diversity jurisdiction over the rule to evict, viz., that Saint James and all of its members are citizens of Louisiana; that AME is an incorporated religious denomination and a citizen of Pennsylvania ³; that Carlton Galmon, Sr., Otis Lewis, and James Martin (collectively, “forum defendants”) are citizens of Louisiana; and that the property includes land and improvements located in Louisiana, as well as associated movables and bank accounts, the total value of which exceeds $75,000.

Similarly, although the parties dispute the relevance of the facts and circumstances of the property's ownership, they do not dispute the existence of those facts: Saint James holds record title to the property ⁴; AME is a “hierarchical, connectionalreligious society” governed by The Book of Discipline of the African Methodist Episcopal Church, which includes specific provisions relating to the ownership of property by local churches, and which governed the relationship between AME and Saint James, at least up until the time of the split.

The split was made official by a letter dated July 15, 2011 from Saint James to the Bishop of the Eighth Episcopal District, in which Saint James announced its decision “to no longer be a part of the African Methodist Episcopal Organization and ... to disassociate from the denomination.... From this point on, our church name shall be returned to Saint James African Methodist Episcopal Mission Church.” Again, the parties dispute the legal effect of this letter, but not its existence. The same is true of a record document that was executed after the split and purports to transfer the property from “Saint James AME Mission Church, Inc., successor in interest to Saint James A.M.E. Mission” to “Saint James Mission Church–Airport Road”: the parties dispute the legal effectiveness of this document, but not its existence.

On October 25, 2011, one day after removal of the eviction proceeding, Saint James filed a motion in the district court seeking remand of that action to state court. It insisted that the federal court lacked subject matter jurisdiction because of (1) the absence of a federal question, and (2) the lack of complete diversity of citizenship among the parties. Saint James followed that filing a week later with a motion to dismiss the federal action, again asserting the lack of subject matter jurisdiction.

The district court consolidated Saint James's rule to evict and AME's federal action on November 23, 2011. Both the remand motion and the dismissal motion were under submission when, five days later, the consolidated case was transferred to Section “G.” ⁵ The following May, the court denied the remand motion, holding that it could properly exercise diversity jurisdiction over the rule to evict.⁶ Saint James filed a motion for reconsideration of the denial of its remand motion, but the district court denied it.

In the meantime, Saint James had answered AME's complaint in the federal action and filed a counterclaim in which it sought (1) a declaration that it (Saint James) is the rightful owner of the property and (2) damages for AME's interference. In early March 2013, AME moved for summary judgment in the federal action. On March 19, 2013, Saint James filed an opposition styled “Opposition ... and Cross Motion for Partial Summary Judgment.” As the court's existing scheduling order required that all motions for summary judgment be filed and served by March 12, 2013, however, AME responded with a motion to strike Saint James's cross-motion for summary judgment. The following month, the district court entered an Order and Reasons (1) granting AME's motion for summary judgment, (2) denying Saint James's cross-motion, and (3) denying as moot AME's motion to strike Saint James's cross motion. Saint James timely filed its notice of appeal.

II. STANDARD OF REVIEW

We “review de novo a denial of remand to state court.” ⁷ A court must remand a case “if at any time before final judgment it appears that the district court lacks subject matter jurisdiction over a case removed from state court.” ⁸ A federal court may exercise subject matter jurisdiction over a state action when the amount in controversy suffices and when there is complete diversity of citizenship between the properly joined parties.⁹ The removing party must bear the burden of showing that removal is proper.¹⁰ Any “doubts regarding whether removal jurisdiction is proper should be resolved against federal jurisdiction.” ¹¹

III. ANALYSIS

A. Applicable law

A removing party may establish federal diversity jurisdiction by demonstrating that the state court plaintiff “improperly joined” all forum defendants.¹² To establish improper joinder, the removing party must prove either “(1) actual fraud in the pleading of jurisdictional facts, or (2) [the] inability of the plaintiff to establish a cause of action against the non-diverse party in state court.” ¹³ We have explained that “the test for fraudulent joinder is whether the defendant has demonstrated that there is no possibility of recovery by the plaintiff against an in-state defendant, which stated differently means that there is no reasonable basis for the district court to predict that the plaintiff might be able to recover against an in-state defendant.” ¹⁴ A mere theoretical possibility of recovery in state court will not preclude a finding of improper joinder.¹⁵ The federal court's inquiry into the reasonable basis for the plaintiff's state-court recovery is a “Rule 12(b)(6)-type analysis,” although the court retains discretion to pierce the pleadings and conduct summary...