Andersen v. Khanna

Decision Date06 September 2011
Docket NumberNo. 4:11–cv–00291–JEG.,4:11–cv–00291–JEG.
Citation827 F.Supp.2d 970
PartiesAlan ANDERSEN, Individually and as Injured Parent of Chelsea Andersen and Brody Andersen; Diane Andersen, Wife of Alan Andersen; and Syngenta Seeds, Inc., as Subrogor, Plaintiffs, v. Sohit KHANNA, M.D.; and Iowa Heart Center, P.C., Defendant.
CourtU.S. District Court — Southern District of Iowa

OPINION TEXT STARTS HERE

Richard N. Bien, Lathrop & Gage LC, Kansas City, MO, Gerald M. Kraai, Lathrop & Gage LC, Overland Park, KS, for Syngenta Seeds, Inc.

John Martin French, Law Offices of John M. French, Council Bluffs, IA, Joseph B. Muller, Ronald J. Palagi, The Law Offices of Ronald J. Palagi, P.C., L.L.O., Omaha, NE, for Alan Andersen, Brody Andersen, Chelsea Andersen and Diane Andersen.

John D. Hilmes, Eric G. Hoch, Finley Alt Smith Scharnberg Craig Hilmes & Gaffney PC, Des Moines, IA, for Catholic Health Initiatives–Iowa, Corp.Robert D. Houghton, Jennifer E. Rinden, Shuttleworth & Ingersoll, Cedar Rapids, IA, for Iowa Heart Center, P.C. and Sohit Khanna.

ORDER

JAMES E. GRITZNER, District Judge.

This matter comes before the Court on Motion to Remand to State Court filed by Defendants Sohit Khanna, M.D., and the Iowa Heart Center, P.C. (Defendants), with a request for expedited hearing. Defendants allege Syngenta Seeds, Inc. (Syngenta), improperly removed this case and therefore also move for sanctions under Federal Rule of Civil Procedure 11(b). Syngenta resists both motions. These matters came on for hearing on August 30, 2011. Attorneys Jennifer Rinden and Robert Houghton appeared for Defendants; Richard Bien appeared for Syngenta. The motions are fully submitted and ready for ruling. The Motion for Sanctions will be addressed by separate Order.

I. FACTUAL AND PROCEDURAL BACKGROUND

In 2005, Alan Andersen (Andersen) and his family filed a medical malpractice action against Defendants in Iowa District Court for Polk County alleging three claims: negligence, spousal consortium, and parental consortium. Syngenta's Resp. Br., Ex. A; ECF No. 9–1. Syngenta was the Plan administrator for Syngenta Preferred Provider Organization Health Care Plan (the Syngenta Plan), a self-funded employee welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001–1461, which had paid a portion of the medical bills and expenses incurred allegedly due to Defendants' negligence. In 2008, as a result of a subrogation issue that arose during the litigation, Syngenta was joined in the lawsuit as a party Plaintiff, and an amended petition was filed adding a subrogation claim (Count IV). Count IV was the only claim that involved Syngenta.

In February of 2009, the state court dismissed Count IV on a partial motion for summary judgment. Syngenta filed an interlocutory appeal, which the Supreme Court of Iowa denied on March 17, 2009. Then, shortly before the case was to go to trial, Andersen filed a motion requesting clarification of the reimbursement provisions of the Syngenta Plan, which covered Andersen's medical bills subsequent to his injury. Andersen sought clarification to determine the enforceability of the Syngenta Plan's reimbursement provisions and whether the jury would consider this in determining damages. When the motion for clarification was filed, after having been absent in the litigation since the denial of its interlocutory appeal, Syngenta reappeared and filed a memorandum addressing the impact of the motion to clarify upon Syngenta's interests. On June 20, 2011, apparently after the newly assigned state judge declined to revisit the ruling on partial summary judgment, Syngenta filed a notice of removal, alleging this Court had original jurisdiction over the underlying case pursuant to 28 U.S.C. § 1331, because the underlying claims in this case are preempted under ERISA. Thus, apart from the ruling on the partial motion for summary judgment as to Count IV, it is unresolved how the state court would charge that jury.

Defendants filed a motion to remand, asserting that Syngenta had been dismissed from the underlying state court action and therefore could not remove the case. Defendants further argue that in addition to being a non-party, removal was improper because (1) the case was removed well beyond the 30–day time period for removing under 28 U.S.C. § 1446(b); and (2) under the well-pleaded complaint rule, the state law claims do not support federal question jurisdiction and Syngenta has failed to establish that any claims are preempted by ERISA. Syngenta asserts that despite the dismissal of the only count in which it was named in the amended complaint, it remained a party to the action because it was never officially dismissed as a party and it continued to be served all pleadings involved in the action as a party of record.

II. DISCUSSION

In contested remand matters, the burden of establishing that removal was proper rests with the proponent of removal. See, e.g., In re Bus. Men's Assur. Co. of Am., 992 F.2d 181, 183 (8th Cir.1993) (per curiam); Comes v. Microsoft Corp., 403 F.Supp.2d 897, 902 (S.D.Iowa 2005). Since removal jurisdiction raises significant federalism concerns, federal courts strictly construe such jurisdiction. See Merrell Dow Pharms. Inc. v. Thompson, 478 U.S. 804, 808, 106 S.Ct. 3229, 92 L.Ed.2d 650 (1986); Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 104, 61 S.Ct. 868, 85 L.Ed. 1214 (1941). Of substantial importance here, where a federal court has doubts about the propriety of a removal, the court should resolve that doubt in favor of remand to the state court jurisdiction. See Shamrock Oil, 313 U.S. at 108–09, 61 S.Ct. 868; Dahl v. R.J. Reynolds Tobacco Co., 478 F.3d 965, 968 (8th Cir.2007).

The matter now at bar presents a creative, if not elastic, approach to a series of procedural questions. This has required the parties and the Court to reach well beyond the dictates of this circuit for persuasive authority in an effort to determine if Syngenta has carried its burden to demonstrate this Court's jurisdiction.

A. Syngenta's Status as a Party at the Time of Removal

The “general rule” is that “once a person has been dismissed from an action he is no longer a party....” Wong v. Tai Jing, 189 Cal.App.4th 1354, 117 Cal.Rptr.3d 747, 757 (2010). See Dumont v. Keota Farmers Coop., 447 N.W.2d 402, 404 (Iowa 1989) (concluding that where the claims against one defendant had been dismissed, that defendant was no longer a party and it was not proper to permit the jury to consider the dismissed defendant's liability). A non-party to a state court proceeding has no right to remove that proceeding to federal court. See FDIC v. Loyd, 955 F.2d 316, 326 (5th Cir.1992) (“Common sense and the practicalities of pleading dictate that no non-party to a state court proceeding has a mature right to remove that proceeding to federal court.”); Cmty. Insur. Co. v. Rowe, 85 F.Supp.2d 800, 809 (S.D.Ohio 1999) (“It is axiomatic that a non-party has no right to remove the litigation from state court to federal court.”). This is true even if the non-party has an interest or a stake in the proceedings. See generally Rowe, 85 F.Supp.2d at 809 (finding that an insurer that had a financial stake in the outcome of the case nonetheless could not remove the case because the insurer was a “stranger” to the proceeding). It follows that when all claims against a litigant are dismissed, that litigant is no longer a party to the lawsuit and is not authorized to remove the action.

Syngenta resists this general proposition by saying that although the single claim to which it was a party was dismissed, “Syngenta nonetheless remained a party to the litigation” because [t]he Court never dismissed Syngenta from the case....” Syngenta's Resp. Br. 12; ECF No. 9–1. According to Syngenta, it remained a party to the proceeding because its name remained on the caption, it continued to receive service of documents connected to the proceeding, and it maintained a right to appeal from final judgment in the case.

It is not clear from existing authority if the failure of a court to remove a person as a party of record, even though the only claim to which that person was a party had been dismissed, is enough to qualify that person as a party to the continuing claims in the suit. However, analogous concepts suggest that it is not.

Under Iowa law, “a petition is not limited by its caption, but is required to be read in light of the allegations and legal ramifications contained within the four corners” of the document. Roush v. Mahaska State Bank, 605 N.W.2d 6, 9 (Iowa 2000). Moreover, simply because a party's “name is included in the caption,” that does not make it “clear from the record that [it] is a party to the case at all.” Capital Food Co. v. Globe Coal Co., 142 Iowa 134, 120 N.W. 704, 705 (1909). See also McCullough v. Connelly, 137 Iowa 682, 114 N.W. 301, 302–02 (1907) (stating that [i]t is of no significance that the name” of an intervener “was inserted in the caption of a court document” and that the court would have committed a “conscious judicial wrongdoing” if it had allowed the entry of default to include the non-party intervener simply because the intervener's name appeared in the caption). Therefore, Syngenta's name never having been removed as a party of record in the state court action is an insufficient legal basis upon which to declare Syngenta as a party in fact.

Syngenta further argues that it is a party because it has the right to appeal from a judgment in the case. This argument also fails. It is axiomatic that a party that has been dismissed from an action, like Syngenta, “may still have collateral statutory rights” such as the right to “notice and [a] hearing on a motion to set aside the dismissal at a later time. Wong, 117 Cal.Rptr.3d at 757 (citations omitted). Syngenta's right to appeal its dismissal once final judgment has been entered in the case does not sustain Syngenta as a party to the action. Instead,...

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