Audi v. Sam's W.

• Decision Date: 20 April 2021
• Docket Number: CIVIL ACTION NO. 3:20-CV-00557
• Parties: EDWARD AUDI, Plaintiff, v. SAM'S WEST, INC. et al., Defendants.
• Court: U.S. District Court — Middle District of Pennsylvania

EDWARD AUDI, Plaintiff, v. SAM'S WEST, INC. et al., Defendants.

CIVIL ACTION NO. 3:20-CV-00557

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF PENNSYLVANIA

April 20, 2021

(MEHALCHICK, M.J.)

MEMORANDUM

Before the Court is a Motion to Remand to State Court filed by Plaintiff Edward Audi on February 5, 2021, and a Motion to Amend/Correct Defendants' Notice of Removal filed by Defendants Sam's Club and Sam's West, Inc. (hereinafter collectively known as "Defendants") on February 19, 2021.¹ (Doc. 21; Doc. 17). Plaintiff requests that the current matter be remanded back to state court due to Defendants' failure to allege diversity jurisdiction under 28 U.S.C. § 1332. (Doc. 17, at 1, 2). Defendants seek leave to amend the notice of removal. (Doc. 21, at 4). For the following reasons, the Court will grant Plaintiff's motion to remand and deny Defendants' motion to amend the notice of removal.

I. BACKGROUND AND PROCEDURAL HISTORY

On April 3, 2020, Defendants removed this matter to the United States District Court for the Middle District of Pennsylvania from the Court of Common Pleas for Luzerne County, Pennsylvania. (Doc. 1, at 3). Defendants filed their answer to Plaintiff's Complaint on April 10, 2020. (Doc. 3). On February 5, 2021, Plaintiff filed a motion to remand to state court. (Doc. 17). In his motion, Plaintiff submits that Defendants failed to make any averments of "locations of 'citizenship' of the parties" or of "damages meeting the $75,000 threshold for possible federal jurisdiction based on any diversity of citizenship" and that the "matter should be remanded back to state court for lack of jurisdiction." (Doc. 17, at 1-2). On February 19, 2021, Defendants filed a motion to amend/correct their notice of removal. (Doc. 22; Doc. 21). These motions have been fully briefed and are ripe for disposition. (Doc. 23; Doc. 25).

II. REMOVAL STANDARD

The removal of cases from state courts to federal courts is governed by 28 U.S.C. §§ 1441-1455. Under § 1441(a), a defendant may remove "any civil action brought in a state court of which the district courts of the United States have original jurisdiction . . . to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. § 1441(a). In the case at bar, Defendants filed a notice of removal pursuant to 28 U.S.C. § 1441(b), invoking diversity of citizenship under 28 U.S.C. § 1332(a). (Doc. 1, at 2). This provision states that a district court "shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs," between "citizens of different states." 28 U.S.C. § 1332(a)(1).

Section 1446 of the removal statute further sets forth the procedures for removal, explaining that a defendant seeking removal of an action must file a petition for removal with the district court that contains "a short and plain statement of the grounds for removal, together with a copy of all process, pleadings, and orders served upon such defendant or defendants" in the state court action. 28 U.S.C. § 1446(a). In addition, a notice of removal "shall be filed within 30 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[.]." 28 U.S.C. §§ 1446(b). After a case has been removed, a plaintiff may move to remand the action back to state court under 28 U.S.C. § 1447(c) for "(1) lack of district court subject matter jurisdiction or (2) a defect in the removal procedure." Ramos v. Quien, 631 F.Supp.2d 601, 607 (E.D. Pa. 2008) (quoting PAS v. Travelers Ins. Co., 7 F.3d 349, 352 (3d Cir.1993)). However, a "motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction must be made within 30 days after the filing of the notice of removal[.]." 28 U.S.C. § 1447(c).

Because federal courts are courts of limited jurisdiction, both the Supreme Court of the United States and the Third Circuit Court of Appeals have recognized that removal statutes are to be strictly construed against removal with all doubts resolved in favor of remand. See, e.g., Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108 - 109 (1941); Samuel-Bassett v. KIA Motors America, Inc., 357 F.3d 392, 396 (3d Cir. 2004) (citing Boyer v. Snap-on Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990)). "If the citizenship of the parties is not disclosed in the complaint, the case is not removable unless the defendant can affirmatively plead and later prove the existence of diversity." Balilaj v. Marshalls, Inc., No. CIV.A. 03-5908, 2004 WL 437448, at *2-4 (E.D. Pa. Mar. 2, 2004) (citing 16 James Wm. Moore et al., Moore's FederalPractice ¶ 107.14 (3d ed. 2002)); see also Rosenfield v. Forest City Enterprises, L.P., 300 F. Supp. 3d 674, 674-75 (E.D. Pa. 2018) ("[W]here, as here, it is not apparent from the face of the complaint that a case is removable, a defendant may remove within thirty days of receipt of an amended complaint, motion, order, or 'other paper' from which it may first be ascertained that the case is removable.") (citing 28 U.S.C. § 1446(b)3)). The Third Circuit has also repeatedly held that "the party asserting federal jurisdiction in a removal case bears the burden of showing, at all stages of the litigation, that the case is properly before the federal court." Frederico v. Home Depot, 507 F.3d 188, 193 (3d Cir. 2007); see also Samuel-Bassett, 357 F.3d at 396. Moreover, "a defendant utilizing diversity for removal must show that diversity existed not only upon removal but also at the time of commencement of the action in state court." Fiorentino v. Huntingside Assocs., 679 F. Supp. 3, 5 (E.D. Pa. 1987) (citing Kerstetter v. Ohio Casualty Ins. Co., 496 F.Supp. 1305, 1307 (E.D. Pa. 1980)); Ellerbee v. Union Zinc, Inc., 881 F.Supp. 162, 164 (E.D. Pa. 1995).

III. DISCUSSION

A. MOTION FOR REMAND

In moving to remand, Plainitff argues that Defendants have not sufficiently established the jurisdictional requirement of diversity of citizenship. (Doc. 17, at 2). Specifically, Plaintiff alleges that the notice of removal "makes no averments regarding Plaintiff's 'citizenship,' but rather merely his residency" and that "Defendants have failed to properly aver and satisfy their burden to establish diversity jurisdiction." (Doc. 17, at 2). In response, Defendants argue that their failure to allege citizenship is a mere technical defect and that they should be allowed a curative amendment to correct such deficiencies. (Doc. 24, at 10, 17-18).

In challenging the propriety of removal, Audi claims that the Defendants failed to adequately allege the parties' citizenship in their Notice of Removal. (Doc. 17, at 1-2). As discussed supra, "[i]f the grounds [for removal] are premised on diversity, the notice [of removal] must allege diversity at the time of the commencement of the action and at the time of the notice filing." Moser v. Bostitch Div. of Textron, Inc., 609 F. Supp. 917, 918-19 (W.D. Pa. 1985). Here, Defendants' Notice of Removal avers as follows:

3. Plaintiff is a resident of Luzerne County, Pennsylvania. See, Ex. A.

4. The proper corporate Defendant, Sam's East, Inc., is a foreign corporation incorporated in Arkansas, with a principal place of business in Bentonville, Arkansas. See, Ex. A. Sam's East, Inc., is not a citizen of Pennsylvania.

5. The amount in controversy in the underlying action is believed to exceed $75,000, exclusive of interest and costs. See, Ex. A.

(Doc. 1, at 1-2).

Based on these allegations, Audi asserts that the notice of removal does not properly allege diversity of citizenship between the parties, as "[t]he Complaint contains no averments of locations of 'citizenship' of the parties." (Doc. 20, at 4). Defendants submit that this is merely a technical mistake and "they should be permitted leave to amend . . . to allege that Plaintiff is a citizen of Luzerne County, Pennsylvania." (Doc. 21, at 5-6). The Notice of Removal states that Audi is a resident of Luzerne County, Pennsylvania without referring to his citizenship. (Doc. 1, at 1). The terms "resident" and "citizen" are not interchangeable for diversity purposes and have distinct definitions under the law. See McCann v. Newman Irrevocable Trust, 458 F.3d 281, 286 (3d Cir. 2006) ("Citizenship is synonymous with domicile and the domicile of an individual is his true, fixed and permanent home and place of habitation.") (internal citations omitted); Krasnov v. Dinan, 465 F.2d 1298, 1300 (3d Cir. 1972)("Where one lives is prima facie evidence of domicile, but mere residency in a state is insufficient for purposes of diversity.") (citations omitted). As such, the allegation that Audi is a resident of Pennsylvania "does not meet the jurisdictional requirement of 28 U.S.C. § 1332(a)." See Camacho v. Cove Trader, Inc., 612 F. Supp. 1190, 1191 (E.D. Pa. 1985) (emphasis in original); GBForefront, L.P. v. Forefront Mgmt. Grp., LLC, 888 F.3d 29, 35 (3d Cir. 2018) ("Alleging residency alone is insufficient to plead diversity of citizenship.") (citing McNair v. Synapse Grp. Inc., 672 F.3d 213, 219 n. 4 (3d Cir. 2012)); Sayles v. Allstate Ins. Co., No. 3:16-CV-01534, 2016 WL 4701653, at *2 (M.D. Pa. Sept. 8, 2016) (noting that the defendant's notice of removal contained "defects in its diversity jurisdiction allegations" because it merely alleged that Plaintiff was a resident, as opposed to a citizen, of Pennsylvania); Fiorentino v. Huntingside Assocs., 679 F. Supp. 3, 4 (E.D. Pa. 1987) (finding that diversity of citizenship is not shown by mere averments of a party's residence). "'[D]omicile' is not necessarily synonymous with 'residence,'" as one's "domicile is established by physical presence in a place in connection with a certain state of mind concerning one's intent to remain there." Mississippi Band of Choctaw Indians v. Holyfield, 490 U.S. 30, 48 (1989) (emphasis...