Bedminster Fin. Grp., Ltd. v. Umami Sustainable Seafood, Inc.
| Decision Date | 26 March 2013 |
| Docket Number | 12 Civ. 5557 (JPO) |
| Parties | BEDMINSTER FINANCIAL GROUP, LTD., WILLIAM MIDDLETON, and ALBERT PLEUS Plaintiffs, v. UMAMI SUSTAINABLE SEAFOOD, INC., AURORA FJARESTINGAR, LTD., and OLI VALUR STEINDORSSON Defendants. |
| Court | U.S. District Court — Southern District of New York |
Presently before the Court are Plaintiffs' motion to remand and to award attorneys' fees and costs, and Defendants' motion to dismiss. For the reasons that follow, this case is remanded to the Supreme Court of the State of New York, Plaintiffs' motion for attorneys' fees and costs is denied, and Defendants' motion to dismiss is denied as moot.
On June 7, 2012, Plaintiffs filed the Complaint in this case in the Supreme Court of the State of New York, County of New York, alleging numerous state law causes of action. On July 18, 2012, Defendant Umami Sustainable Seafood, Inc. ("Umami") filed a notice of removal ("the Notice") pursuant to 28 U.S.C. §§ 1332(a), 1441, and 1446. In the Notice, counsel for Umami represented that Defendant Oli Valur Steindorsson ("Steindorsson") "consented to this removal without waiving any defenses that Steindorsson may have, including but not limited to defenses to inadequate service of process, personal jurisdiction, or improper venue." RegardingDefendant Aurora Fjarestingar, Ltd. ("Aurora"), Umami stated in the Notice that "Aurora has not been served in the State court action."
Though diverse for purposes of federal jurisdiction, the defendants are closely related: Aurora is wholly owned by Steindorsson, who is also majority shareholder of Umami and CEO of both Aurora and Umami. The parties agree that on June 18, 2012, Plaintiffs served Umami with a summons and complaint originating in New York state court. The parties adopt different views of service on Steindorsson and Aurora. Because the Court grants the motion to remand on the basis of a breach of the rule of unanimity, it is only necessary to consider Steindorsson.
A process server attempted service on Steindorsson at Umami's office in San Diego, California on June 12, 13, and 14 of 2012 before delivering the Summons and Complaint to a person of suitable age and discretion at Umami's office for delivery to Steindorsson. That same day—June 18, 2012—the service papers were mailed to Steindorsson at Umami, his usual place of business. Plaintiffs filed Proof of Service on Steindorsson with the New York Supreme Court on June 25, 2012, and then re-filed a copy of that Proof of Service with this Court on July 31, 2012. Although Steindorsson did not join the Notice filed by Umami, he did authorize counsel to Umami to indicate his consent to removal in that Notice. Further, he now indicates in a written declaration dated September 19, 2012 that "I expressly consent to the removal of the above-captioned matter to federal court without waiving any defenses I may have, including but not limited to inadequate service of process, lack of personal jurisdiction or improper venue, just as I consented to removal as of July 18, 2012." Steindorsson disputes "any contention that I have been properly served with the complaint and summons in this action."
The parties do not dispute that the requirements of diversity jurisdiction—complete diversity of citizenship and the amount in controversy requirement—are satisfied in this case.Plaintiffs, however, have filed a motion to remand this case back to state court on the ground that Umami failed to obtain the consent of Aurora and Steindorsson to removal prior to filing the Notice. In that motion, Plaintiffs request attorneys' fees and costs.
After the Notice was filed, but before Plaintiffs filed their motion to remand, Plaintiffs requested and received a Clerk's Certificate of Default as to Steindorsson and Aurora. Plaintiffs have not filed any papers with this Court requesting the entry of default judgment.
Federal courts are courts of limited jurisdiction. See Keene Corp. v. United States, 508 U.S. 200, 207 (1993). Therefore, "removal jurisdiction exists in a given case only when that jurisdiction is expressly conferred on the courts by Congress." Fed. Ins. Co. v. Tyco Int'l Ltd., 422 F. Supp. 2d 357, 367 (S.D.N.Y. 2006) (internal quotation marks and citation omitted).
"To remove a case to federal court, a defendant must file a notice of removal within 30 days of receiving the summons and complaint." Fernandez v. Hale Trailer Brake & Wheel, 332 F. Supp. 2d 621, 622 (S.D.N.Y. 2004) (citing 28 U.S.C. § 1446). "If the plaintiff challenges the removal through a motion to remand, the party seeking to remove the case bears the burden of establishing that removal is proper." Id. at 623 (citations omitted).
Courts police compliance with the rules governing removal with particular care to control the federal docket and to respect the independence of state courts. See, e.g., Stan Winston Creatures, Inc. v. Toys "R" Us, Inc., 314 F. Supp. 2d 177, 179 (S.D.N.Y. 2003) (Lynch, J.). Accordingly, it is well established that "[t]he party asserting federal jurisdiction generally bears the burden of proving that the case is properly in federal court." See Goel v. Ramachandran, 823 F. Supp. 2d 206, 210 (S.D.N.Y. 2011) (citing McNutt v. Gen. Motors Acceptance Corp. of Ind.,298 U.S. 178, 189 (1936)). In other words, "[w]hen the removal of an action to federal court is contested, the burden falls squarely upon the removing party to establish its right to a federal forum by competent proof." Stan Winston, 314 F. Supp. 2d at 179 (quotation marks and internal citations omitted). All doubts are resolved against removability. See, e.g., Somlyo v. J. Lu-Rob Enterprises, Inc., 932 F.2d 1043, 1045-46 (2d Cir. 1991); Wilds v. United Parcel Serv., Inc., 262 F. Supp. 2d 163, 176 (S.D.N.Y. 2003) .
It is "well-established that the time limitation for removal and/or joinder of all defendants is not jurisdictional, and may be waived" by plaintiffs. In re Consol. Welfare Fund "ERISA" Litig., No. 92 Civ. 424, 1992 WL 212348, at *3 (S.D.N.Y. Aug. 21, 1992). Waiver may occur even where the removing defendant failed to obtain the consent of other defendants necessary to removal. See Perkins v. Beltway Capital, LLC, 773 F. Supp. 2d 553, 556 (E.D. Pa. 2011).
A plaintiff may waive its right to move for remand under these circumstances through "affirmative action in the federal court prior to making a motion to remand . . . even if the 30-day period has not expired." 16-107 MOORE'S FEDERAL PRACTICE - CIVIL § 107.41; see also Fax Telecommunicaciones Inc. v. AT&T, 138 F.3d 479, 487 (2d Cir. 1998). More precisely:
A plaintiff may not voluntarily invoke and then disavow by way of remand motion federal jurisdiction following removal. Stated differently, a plaintiff may not take affirmative action in federal court after removal without risking waiving the right to remand, even when the 30-day period has not expired. Thus, for example, a plaintiff waives a claim of improper removal by stipulation to be bound by a decision in a consolidated action in federal court. Further, when a plaintiff voluntarily amends the complaint in federal court, the plaintiff ordinarily waives the right to remand.
MOORE'S FEDERAL PRACTICE, § 107.41 (footnotes omitted).
As one court in this District has explained, "[s]uch a waiver or estoppel may be found where . . . the plaintiff has engaged in 'affirmative conduct or unequivocal assent of a sort which would render it offensive to fundamental principles of fairness to remand.'" In re Consol. Welfare Fund, 1992 WL 212348, at *3 (quoting Transport Indemnity Co. v. Financial Trust Co., 339 F. Supp. 405, 408 (C.D. Cal. 1972)). In other words:
To constitute a waiver . . . there must be affirmative conduct or unequivocal assent of a sort which would render it offensive to fundamental principles of fairness to remand, as where the party seeking remand has been unsuccessful in litigation of a substantial issue, such as the right to a jury trial, or the right to take depositions, or has filed an amended complaint seeking further or different relief from the federal court.
Maybruck v. Haim, 290 F. Supp. 721, 723 (S.D.N.Y. 1968) (citations omitted); see also Midwestern Distribution, Inc. v. Paris Motor Freight Lines, Inc., 563 F. Supp. 489, 493 n.8 (E.D. Ark. 1983) (); Oil Tank Cleaning Corp. v. Reinauer Transp. Co., 149 F. Supp. 401, 402 (E.D.N.Y. 1957) ().
Determinations of whether a plaintiff has waived the right to move for remand through affirmative action in the federal forum are deeply fact- and context-sensitive. It is thereforedifficult to describe in general terms the sorts of action that necessarily constitute waiver. See, e.g., Lanier v. Am. Bd. of Endodontics, 843 F.2d 901, 905 (6th Cir. 1988) (); Knowles v. Hertz Equip. Rental Co., 657 F. Supp. 109, 110 (S.D. Fla. 1987) (...
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