Andrews v. Electric Motor Systems, Inc.

• Decision Date: 10 July 1991
• Docket Number: No. C-1-91-246.,C-1-91-246.
• Citation: 767 F. Supp. 853
• Parties: Charles ANDREWS, et al., Plaintiffs, v. ELECTRIC MOTOR SYSTEMS, INC., Defendant/Third Party Plaintiff, v. NN INVESTORS LIFE INSURANCE CO., Third Party Defendant.
• Court: U.S. District Court — Southern District of Ohio

767 F. Supp. 853

Charles ANDREWS, et al., Plaintiffs, v. ELECTRIC MOTOR SYSTEMS, INC., Defendant/Third Party Plaintiff, v. NN INVESTORS LIFE INSURANCE CO., Third Party Defendant.

No. C-1-91-246.

United States District Court, S.D. Ohio, W.D.

July 10, 1991.

Michael Gay, Cincinnati, Ohio, for plaintiffs.

William Seitz, III, Cincinnati, Ohio, Mark Chilson, Dayton, Ohio, for defendants.

ORDER

CARL B. RUBIN, District Judge.

This matter is before the Court upon Defendant/Third Party Plaintiff Electric Motor Systems, Inc.'s motion to remand and for costs and expenses, Third Party Defendant NN Investors Life Insurance Company's memorandum in opposition thereto, and the original defendant's reply memorandum. (Docs. 4, 6, 7).

Procedural History/The Parties' Claims

On April 15, 1991, Third Party Defendant NN Investors Life Insurance Company ("NN Investors") removed this action from the Court of Common Pleas of Hamilton County, Ohio, characterizing the third party complaint against NN Investors as a claim arising under the federal Employee Retirement Income Security Act of 1974 ("ERISA"), over which this Court has original jurisdiction pursuant to 28 U.S.C. § 1331. (Doc. 1).

On April 25, 1991, Defendant/Third Party Plaintiff Electric Motor Systems, Inc. ("EMS") filed its motion to remand this matter to the Hamilton County court, arguing that NN Investors improperly removed the proceedings to this Court. EMS offers two justifications for the requested remand: 1) that NN Investors, as a third party defendant, lacks the power to remove; and 2) that removal requires that all defendants consent, and EMS does not. EMS further requests that the Court assess fees and costs against NN Investors for the expenses EMS has incurred incident to the improper removal. (Doc. 4).

NN Investors contends that third party defendants may remove actions to the federal courts without the approval of other defendants, provided that the third party claim is separate and independent from the main claim. It argues that the ERISA claim asserted against NN Investors is separate and independent from the employment contract claim that plaintiffs are asserting against EMS, and would be removable if sued upon alone. NN Investors therefore claims that removal was proper. In the event that this Court should find otherwise, however, NN Investors further urges that the law is not sufficiently clear to justify sanctions. (Doc. 6).

EMS counters by suggesting that NN Investors waived the "separate and independent claim" justification for removal by failing to articulate that rationale as grounds for removal in its petition. In addition, EMS asserts that the courts permitting removal by a third party defendant represent the minority, and less desirable, view. Finally, EMS argues that the third party claim against NN Investors is neither an ERISA claim nor a claim otherwise "separate and independent" from plaintiffs' contract claim against EMS. Rather, EMS asserts, the third party claim merely seeks to assign responsibility to the appropriate entity for any damages owed to plaintiffs on their original claim. EMS thus requests that the matter be remanded and that EMS be awarded fees and costs. (Doc. 7).

OPINION

Defendants in state court civil actions over which the federal district courts have original jurisdiction may remove such actions to the appropriate federal district court. 28 U.S.C. § 1441(a). If the action involves joint claims against several parties without a separable controversy, all defendants ordinarily must join in the removal petition. Chicago, R.I. & Pac. Ry. Co. v. Martin, 178 U.S. 245, 20 S.Ct. 854, 44 L.Ed. 1055 (1900); Hood v. Security Bank of Huntington, 562 F.Supp. 749, 750 (S.D. Ohio 1983). However, where a separate and independent claim that would be removable if sued upon alone is joined with an otherwise non-removable claim, the defendants to that separate claim may remove the entire action, and the district court may exercise its discretion to remand all matters not within its original jurisdiction. 28 U.S.C. § 1441(c).

Before reaching the issue of whether the third party claim in this case constitutes a separate, independent and therefore removable controversy, however, this Court first must consider whether NN Investors, as a third party defendant, is deemed a "defendant" for purposes of the removal statute.

A. Removal By Third Party Defendants

Most recognized commentators espouse the view that third party defendants are not empowered to remove actions from the state court where originally filed. See, e.g., 1A Moore's Federal Practice ¶ 0.16710 (2d ed. 1991) (hereinafter "Moore's") ("Lack of federal jurisdiction over the main claim is not supplied by the introduction of an ancillary third-party claim as to which federal jurisdiction would exist if asserted in an independent action."); 14A Wright, Miller & Cooper, Federal Practice and Procedure § 3731 (2d ed. 1985) ("Nor can third-party defendants brought into the action by the original defendant exercise the right of removal."). Nevertheless, an emerging minority of courts has interpreted 28 U.S.C. § 1441(c) to permit third party defendants to remove actions if the third party claims are separate and independent of the principal claim. See, e.g., Carl Heck Engineers, Inc. v. Lafourche Parish Police Jury, 622 F.2d 133 (5th Cir.1980).

Although NN Investors cites numerous cases in support of allowing third party removal (see Doc. 6, p. 2), the list of precedents is most noteworthy for its dearth of authority binding on this Court. We are not aware of any court in this Circuit which has held that a third party defendant may remove an action to the federal courts pursuant to 28 U.S.C. § 1441(c); indeed, at least one other federal district court in this state has found the contrary view to be "more persuasive." Sunny Acres Skilled Nursing Home v. Williams, 731 F.Supp. 1323, 1327 (N.D.Ohio 1990). This Court therefore must look to other sources for help in construing the removal statute.

Section 1441(c) was intended to restrict rather than expand the scope of removal from the state courts. See American Fire & Casualty Co. v. Finn, 341 U.S. 6, 9-10, 71 S.Ct. 534, 537-38, 95 L.Ed. 702 (1951). The removal statute should be construed narrowly, with any doubt being resolved against removal and in favor of remand to the state courts. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09, 61 S.Ct. 868, 872, 85 L.Ed. 1214 (1941); Bergmann v. Pennsylvania, O. & D.R. Co., 38 F.2d 209 (6th Cir.1930).

These statutory construction guidelines suggest that 28 U.S.C. § 1441(c) should not be read to permit third party defendants to remove actions to the federal courts. Moreover, this Court agrees that permitting another party to defeat the plaintiffs' choice of forum based upon the fortuitous addition of a removable third party claim would be "too much akin to the tail wagging the dog." 1A Moore's ¶ 0.16710. This Court therefore finds that NN Investors, as a third party defendant, lacks the power to remove this action to the federal courts.

B. Separate and Independent Cause of Action

Even those courts recognizing a third party defendant's right to remove actions have permitted such removal only where the third party claims are separate and independent of the main claim. See, e.g., Carl Heck Engineers, 622 F.2d at 135-36. Regardless of the theories on which the various claims rely, removal under 28 U.S.C. § 1441(c) is improper if all claims arise from "an interlocked series of transactions" and seek compensation for a single wrong. American Fire & Casualty Co., 341 U.S. at 14, 71 S.Ct. at 540.

NN Investors has failed to demonstrate that the claim against it is sufficiently "separate and independent" from the claim against EMS to warrant removal. Under ERISA, employers do not have standing to maintain actions regarding payment of employee benefits. Whitworth Bros. Storage Co. v. Central States, Southeast and Southwest Areas Pension Fund, 794 F.2d 221 (6th Cir.), cert. denied, 479 U.S. 1007, 107 S.Ct. 645, 93 L.Ed.2d 701 (1986). Indeed, EMS did not invoke ERISA in its third party complaint. See Doc. 1. Contrary to the assertion of NN Investors' removal petition, then, the third party claim against NN Investors is not an ERISA claim. Rather, EMS' claim against NN Investors is a contract claim seeking reimbursement for any...