City of Cleveland v. Deutsche Bank Trust Co.

• Decision Date: 08 August 2008
• Docket Number: No. 1:08 cv 0139.,1:08 cv 0139.
• Citation: 571 F.Supp.2d 807
• Parties: CITY OF CLEVELAND, Plaintiff, v. DEUTSCHE BANK TRUST COMPANY, et al., Defendants.
• Court: U.S. District Court — Northern District of Ohio

571 F.Supp.2d 807

CITY OF CLEVELAND, Plaintiff, v. DEUTSCHE BANK TRUST COMPANY, et al., Defendants.

No. 1:08 cv 0139.

United States District Court, N.D. Ohio, Eastern Division.

August 8, 2008.

COPYRIGHT MATERIAL OMITTED

Mark A. Stanton, Short, Shepherd & Stanton, Ellen M. Kramer, James B. Rosenthal, Joshua R. Cohen, Cohen, Rosenthal & Kramer, Gary S. Singletary, Michael F. Cosgrove, Robert J. Triozzi, City of Cleveland, Department of Law, Cleveland, OH, Judith B. Goldstein, Equal Justice Foundation, Columbus, OH, for Plaintiff.

Hugh E. McKay, Tracey L. Turnbull, Porter, Wright, Morris & Arthur, Joseph J. Jerse, Robert D. Kehoe, Kehoe & Associates, Andrew G. Fiorella, Geoffrey J. Ritts, David F. Adler, John M. Newman, Jr., Robert S. Walker, Jones Day, Robert N. Rapp, Scott C. Matasar, Calfee, Halter & Griswold, David J. Hooker, Kip T. Bollin, Robin M. Wilson, William W. Jacobs, Thompson Hine, David E. Kitchen, Louis A. Colombo, Baker & Hostetler, Majeed G. Makhlouf, Stephen M. O'Bryan, Taft, Stettinius & Hollister, Michael N. Ungar, Richik Sarkar, Shannan L. Katz, Ulmer & Berne, Joseph T. Dattilo, Michael P. O'Donnell, Patricia A. Screen, Brouse McDowell, Dan L. Makee, McDonald Hopkins, Adrienne B. Kirshner, Anthony R. Petruzzi, Patrick M. McLaughlin, McLaughlin & McCaffrey, Christine M. Garritano, Donald S. Scherzer, Robert B. Casarona, Roetzel & Andress, Cleveland, OH, Bernard E. Lesage, Buchalter Nemer, Los Angeles, CA, Joanne N. Davies, Buchalter Nemer, Irvine, CA, Shawn J. Organ, Jones Day, Columbus, OH, Andrew L. Sandler, Benjamin B. Klubes, Victoria Holstein-Childress, Skadden, Arps, Slate, Meacher & Flom, Charles E. Davidow, Paul, Weiss Rifkind, Wharton & Garrison, Thomas M. Hefferon, Goodwin Proctor, Brian P. Brooks, O'Melveny & Myers, Keith Noreika, Robert D. Wick, Stuart C. Stock, Theodore P. Metzler, Covington & Burling, Washington, DC, Jay B. Kasner, Skadden, Arps, Slate, Meagher & Flom, Colleen J. O'Loughlin, Jeffrey Q. Smith, Scott E. Eckas, McKee Nelson, Christopher J. Dunne, Gandolfo V. Diblasi, Michael T. Tomaino, Jr., Patrice A. Rouse Richard H. Klapper, Sullivan & Cromwell, New York, NY, James W. McGarry, Goodwin Procter, Boston, MA, James S. Wertheim, McGlinchey Stafford, Beachwood, OH, L. Clifford Craig, W. Stuart Dornette, Taft, Stettinius & Hollister, Cincinnati, OH, Martin M. Loring, Husch Blackwell Sanders, Kansas City, MO, John F. Marsh, Hahn, Loeser & Parks, Akron, OH, Elizabeth McKeen, O'Melveny & Myers, Newport Beach, CA, David H. Kistenbroker, Pamela G. Smith, Theresa L. Davis, Katten Muchin Rosenman, Chicago, IL, for Defendants.

MEMORANDUM OPINION AND ORDER

SARA LIOI, District Judge.

This matter is before the Court on motions filed by Plaintiff City of Cleveland ("Plaintiff" or "the City") to remand the case to state court (Doc. No. 5) and for leave to file an amended complaint. (Doc. No. 74.) Both motions have been briefed fully and are ripe for decision.

I. Factual and Procedural Background

The City filed the complaint in this case in the Cuyahoga County Court of Common Pleas on January 10, 2008. The complaint stated a single claim of public nuisance against a total of twenty-one defendants. Of the defendants named in the original complaint, none was a citizen of Ohio.

Defendant Lehman Brothers Holdings, Inc., ("Lehman") filed a notice of removal on January 16, 2008. (Doc. No. 1.) The notice of removal invoked the Court's diversity jurisdiction, 28 U.S.C. § 1332(a). At the time the action was removed, Lehman filed a notice of consent to removal by co-defendant Bank of America Corporation. (Doc. No. 1-3, Notice of Removal, Ex. B.)

Wasting no time, the City filed a motion to remand on January 17, 2008. The City's motion to remand asserted that Lehman's removal of the action was improper because Lehman failed to obtain the consent to removal of all defendants prior to filing the notice, and provided no explanation for this failure. By January 28, 2008, all of the remaining defendants¹ filed consents to the removal.

On February 4, 2008, the City filed its motion for leave to amend the complaint. The amended complaint seeks to add JP Morgan Chase Bank, N.A. ("JP Morgan"), a citizen of Ohio, as a party defendant. Defendants and JP Morgan opposed the motion for leave.

On February 29, 2008, oral argument was held on the motion to remand. After oral argument, the City filed a supplemental brief in support of the motion to remand, adding to its previous arguments a new challenge to the validity of the consents to removal filed by certain defendants.² The Court subsequently requested, and the parties filed, supplemental briefs addressing specific aspects of the consents. (Doc. Nos. 166, 167.)

II. Law and Analysis

A. Motion to Remand

Any civil case filed in state court may be removed to federal court if the case could have been brought originally in federal court. 28 U.S.C. § 1441(a); Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). The defendant bears the burden of establishing that removal is proper. Rogers v. Wal-Mart Stores, Inc., 230 F.3d 868, 871 (6th Cir.2000). All doubts regarding the removal petition must be resolved against removal. Queen ex rel. Province of Ont. v. City of Detroit, 874 F.2d 332, 339 (6th Cir.1989). Federal jurisdiction in this case is based on diversity of citizenship. There is no question that, at least with respect to the original complaint, which is operative at present, diversity is complete and the amount in controversy exceeds $75,000. Thus, the issues regarding the motion to remand go to the propriety of the removal petition, not to subject matter jurisdiction.

To remove a civil action to federal court, the defendant or defendants seeking to do so must file a notice of removal signed pursuant to Rule 11 and containing a short and plain statement of the grounds for removal. 28 U.S.C. § 1446(a). Removal generally requires unanimity among the defendants. "This rule of unanimity demands that all defendants must join in a petition to remove a state case to federal court." Loftis v. United Parcel Serv., Inc., 342 F.3d 509, 516 (6th Cir.2003) (citing Brierly v. Alusuisse Flexible Packaging, Inc., 184 F.3d 527, 533-34 n. 3 (6th Cir. 1999), cert. denied, 528 U.S. 1076, 120 S.Ct. 790, 145 L.Ed.2d 667 (2000)). All defendants in the action are required to "join in the removal petition or file their consent to removal in writing within thirty days of receipt of (1) a summons when the initial pleading demonstrates that the case is one that may be removed, or (2) other paper in the case from which it can be ascertained that a previously unremovable case has become removable." Id. (citing Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 354, 119 S.Ct. 1322, 143 L.Ed.2d 448 (1999)). "Failure to obtain unanimous consent forecloses the opportunity for removal under Section 1446." Id.

Considering that the City filed its motion to remand just a day after the notice of removal was filed, asserting that fewer than all Defendants consented to the removal, the motion clearly was premature at that time. The thirty-day consent period had not elapsed; indeed, it began to run only a day earlier. However, the thirty-day period since has expired, and the City continues to press the remand issue. The motion is therefore ripe.

The City concedes that all defendants now have filed consents to the removal, and that all did so within thirty days of being served with the summons. Thus, it would appear that Defendants have complied with the rule of unanimity. The City, however, maintains several additional objections to the notice of removal. Its objections are highly technical and, as explained infra, the City waived those objections it failed to raise within thirty days of removal. In any event, none of the City's objections finds sufficient support in the law. Put simply, the City has attempted, unsuccessfully, to wield the rule of unanimity for far more than it is worth. For the reasons explained herein, the City's motion to remand is denied.

1. At the Time the Notice of Removal Initially Was Filed, Lehman Had No Duty to Explain Why Fewer than All Defendants Filed Consents to Removal

The City argues that Lehman, as the removing defendant, had a duty to explain in the notice of removal why all the defendants had not provided consent to removal at that time, and that its failure to do so represents a fatal flaw mandating remand. This is the only argument raised in the City's original brief in support of the motion (Doc. No. 6) or in its reply. (Doc No. 91). Accordingly, it is the only argument that was raised in a timely manner. The argument is without merit. Under the circumstances presented, no such requirement exists.³

The City's support for its argument comes from a footnote in an unpublished decision of the Sixth Circuit issued in 1994, Klein v. Manor Healthcare Corp., 19 F.3d 1433, 1994 WL 91786, at *9 n. 8 (6th Cir.1994) (unpublished). The footnote excerpt cited by the City states: "A petition for removal filed by less than all defendants is considered defective if it does not contain an explanation for the non-joinder of those defendants." Id. (citing Courtney v. Benedetto, 627 F.Supp. 523, 525-26 (M.D.La.1986)). The City's use of this citation, however, is misleading.

According to the City, this means that unless the removing defendant explains in the notice of removal the reasons why the written consent of any of its co-defendants is not attached to the notice, the removal is defective and the case must be remanded to state court. As any honest discussion of Klein would have revealed, however, the Sixth Circuit expressly rejected this argument in the Klein case itself. The footnote cited by the City is part of an explanation of historical precedent on the scrutiny applied to technical issues regarding removal. This explanation highlights a shift in the law from the traditionally strict...