Ariel Land Owners, Inc. v. Dring

• Decision Date: 28 January 2003
• Docket Number: No. CIV.A.3:01-CV-0294.,CIV.A.3:01-CV-0294.
• Citation: 245 F.Supp.2d 589
• Parties: ARIEL LAND OWNERS, INC, Plaintiff, v. Lori DRING and Nancy Asaro, Defendants.
• Court: U.S. District Court — Middle District of Pennsylvania

245 F.Supp.2d 589

ARIEL LAND OWNERS, INC, Plaintiff, v. Lori DRING and Nancy Asaro, Defendants.

No. CIV.A.3:01-CV-0294.

United States District Court, M.D. Pennsylvania.

January 28, 2003.

Joseph A. O'Brien, Oliver Price & Rhodes, Clarks Summitt, PA, Michael P. Lehutsky, Honesdale, PA, for Plaintiff.

Donald H. Brobst, Elizabeth C. Leo, Rosenn Jenkins & Greenwald, Garry S. Taroli, Wilkes-Barre, PA, Jennifer J. Clark, U.S. Attorney's Office, Scranton, PA, Michael Profita, Huttle Profita LLC, Teaneck, NJ, for Defendants.

Mark R. Zimmer, Honesdale, PA, for Unknown Party.

MEMORANDUM

CAPUTO, District Judge.

Before the Court is a motion by Defendants Lori Dring and Nancy Asaro to stay concurrent state court proceedings concerning this matter. (Doc. 57.) In opposition, Plaintiff Ariel Land Owners, Inc. contends that Defendants removed this case in violation of the one-year time limitation of 28 U.S.C. § 1446(b). Therefore, Plaintiff argues, the Court lacks subject matter jurisdiction over this case. (Doc. 61.) The Court agrees. I lack subject matter jurisdiction to hear this case because § 1446(b) applies to this case and because this one-year time limitation is a jurisdictional requirement. I will remand this matter to the Court of Common Pleas of Wayne County, Pennsylvania. Because I lack subject matter jurisdiction, all other pending motions will be denied as moot.

DISCUSSION

1. Procedural history

Plaintiff commenced this action on May 17, 1999 by filing a complaint to quiet title in the Court of Common Pleas of Wayne County.¹ This action could have been filed in federal court through diversity jurisdiction, and it was removable at the time of filing.² On February 15, 2001—nearly 21 months after Ariel commenced this action—Defendants removed based on diversity jurisdiction. On March 22, 2001, Plaintiff filed a motion to remand solely on the ground that Defendants failed to satisfy the $75,000 amount-in-controversy requirement. (Doc. 4.) The Court denied Plaintiffs motion on July 3, 2001. (Doc. 16.)

The motion before the Court is really a dispute over whether this case will proceed in state or federal court: Plaintiff wants to be in state court; Defendants want to be in federal court. Each side had the opportunity to secure its desired forum. Defendants could have ensured themselves a federal forum by removing within 30 days of the filing of the complaint in 1999. (28 U.S.C. § 1446(b) states that "[t]he notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant" in cases that are initially removable.) After Defendant failed to remove within 30 days of filing, Plaintiff had its chance to ensure a state forum. Plaintiff could have filed a motion to remand within 30 days of Defendant's late removal; the case then would have been remanded. See 28 U.S.C. § 1447(c). Defendant's failure to comply with the 30-day time limitation is a procedural defect, and Plaintiff waived this requirement by not objecting within 30 days. In re FMC Corp. Packaging Sys. Div., 208 F.3d 445, 450-52 (3d Cir.2000); Korea Exchange Bank v. Trackwise Sales Corp., 66 F.3d 46, 50-51 (3d Cir.1995); Two Bros. Scotto, Inc. v. SDG Macerich Props., L.P., 2000 WL 1052017 at *3 (E.D.Pa. July 24, 2000) (a defendant's failure to comply with the 30-day requirement of § 1446(b) is a waivable procedural defect in the removal process under the rubric of 28 U.S.C. § 1447(c) and not a non-waivable jurisdictional defect).

2. Section 1446(b) and the "except that" clause

The issue before the Court relates to § 1446(b) and the scope and nature of the "except that" clause. Section 1446(b) reads as follows:

The notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within thirty days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter. If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable, except that a case may not be removed on the basis of jurisdiction conferred by section 1332 of this title more than 1 year after commencement of the action.

(emphasis added).

Two questions arise concerning the one-year time limitation of the "except that" clause:

1. Does the one-year time limitation apply to all diversity cases or only cases that were not initially removable?

2. Is this time limitation procedural or jurisdictional?

Defendant argues that the one-year time limitation applies only to initially non-removable cases, and therefore it does not apply to this case. Alternatively, Defendant argues that the one-year time limitation is procedural (not jurisdictional) and therefore, under § 1447(c), it was waived because Plaintiff did not raised this objection within 30 days of removal. Plaintiff argues that the one-year time limitation applies to all diversity cases and that the one-year time limitation is a non-waivable jurisdictional requirement that may be raised pursuant to § 1447(c) at any time prior to final judgment.³

3. Does the one-year time limitation apply to all diversity cases or only cases that were not initially removable?

Te first question is whether the one-year time limitation applies to all diversity cases or only diversity cases that were not removable at the time they were initially filed. The Court of Appeals for the Third Circuit has not answered this question; nor has the United States Supreme Court addressed it directly. Thus, I must rely on my own interpretation of the statute's text and structure along with persuasive authority of other courts—including the Supreme Court—and consideration of the statute's purpose and legislative history.

a. Discussion of "plain meaning" cases

Courts of Appeals in four circuits, focusing on the "plain meaning" of § 1446(b), have held that the one-year time limitation applies only to cases that were not initially removable. Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1316 (9th Cir.1998); New York Life Ins. Co. v. Deshotel, 142 F.3d 873, 886 (5th Cir.1998); Brown v. Tokio Marine and Fire Ins. Co., 284 F.3d 871, 873 (8th Cir.2002); Brierly v. Alusuisse Flexible Packaging, Inc., 184 F.3d 527, 534-35 (6th Cir.1999).⁴ I am not persuaded by the analysis in these decisions.

This line of cases originated in 1998 when the Court of Appeals for the Ninth Circuit issued the Ritchey decision. Two months later, the Court of Appeals for the Fifth Circuit issued a similar decision in Deshotel.⁵ In Brierly and Brown, the Sixth and Eighth Circuit Courts of Appeals, respectively, followed Ritchey and Deshotel. I will focus on Ritchey and Deshotel, as they provide the most detailed explanation of the view for which they stand.

Ritchey begins its analysis by looking at "plain language" of § 1446(b) as a whole, which includes the statute's sentence structure. Citing the "general rule" that "a qualifying phrase or clause only modifies that which immediately precedes it," id. at 1316 {quoting Zogbi v. Federated Dep't Store, 767 F.Supp. 1037, 1039 (C.D.Cal.1991), Zogbi citing Norman J. Singer, SUTHERLAND STATUTORY CONSTRUCTION, § 47.33 (4th ed.1984)), the Ritchey court concluded that the "except that" clause must apply only to the type of cases described in the words immediately preceding the comma—viz., cases that were not removable at the time they were initially filed. To reach any other conclusion would be to "twist ordinary language usage and rules of grammar," the Ritchey court concluded. Id. at 1316.⁶

Similarly, the Deshotel court noted the subordinate positioning of the "except that" clause, suggesting that any construction of § 1446(b) that applied the one-year time limitation to all cases would require one to "read the words `except that' out of the statute and treat the remainder of the phrase as if it were an independent onesentence paragraph." Id. at 886. "If Congress had intended for the one-year limit to apply to all diversity removals," the Deshotel court continued, "it is highly unlikely it would have chosen such an eccentric and obscure means to accomplish its purpose." Id. at 886.

The Ritchey and Deshotel courts both viewed their approach to the interpretation of § 1446(b) as one of strict construction.⁷ The Deshotel court acknowledged that "[i]n determining the meaning of the statute, we must look not only to the particular statutory language, but also to the statute as a whole, including its design, object, and policy." Yet in the end, the Deshotel court finds the legislative history ambiguous and resolves this issue through a straightforward analysis of the plain meaning of the text. Id. at 886. The Ritchey court gives little weight to factors other than the statute's plain meaning, explaining that "[b]ecause we are satisfied that this reading is plain on the face of the statute, there should be little reason to consider legislative history." Id. at 1316. The Ritchey court discusses the legislative history briefly, concluding that it is "rather unhelpful." Id. at 1317.

For three reasons, I respectfully disagree with the view adopted in Ritchey and Deshotel that the scope of the one-year time limitation can be determined by the statute's plain meaning. First, although the Supreme Court has not addressed this question directly, the underlying methodology and the substance of Ritchey and Deshotel appear out-of-step with the Supreme Court's two recent decisions concerning § 1446(b).

Second, the Ritchey and Deshotel courts'...