Disher v. Citigroup Global Markets, Inc.

• Decision Date: 03 May 2007
• Docket Number: Civil No. 07-132-GPM.,Civil No. 07-185-GPM.
• Parties: Richard DISHER, individually and on behalf of all others similarly situated, Plaintiff, v. CITIGROUP GLOBAL MARKETS, INC., d/b/a Smith Barney, Defendant. Richard Disher, individually and on behalf of all others similarly situated, Plaintiff, v. Citigroup Global Markets, Inc., d/b/a Smith Barney, Defendant.
• Court: U.S. District Court — Southern District of Illinois

487 F.Supp.2d 1009

Richard DISHER, individually and on behalf of all others similarly situated, Plaintiff, v. CITIGROUP GLOBAL MARKETS, INC., d/b/a Smith Barney, Defendant.

Richard Disher, individually and on behalf of all others similarly situated, Plaintiff, v. Citigroup Global Markets, Inc., d/b/a Smith Barney, Defendant.

Civil No. 07-132-GPM.

Civil No. 07-185-GPM.

United States District Court, S.D. Illinois.

May 3, 2007.

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Robert L. King, Stephen M. Tillery, Korein Tillery, St. Louis, MO, for Plaintiff.

Jon A. Santangelo, Stinson, Morrison Et Al., St. Louis, MO, Justin D. Lerer, Paul, Weiss et al., New York City, for Defendant.

MEMORANDUM AND ORDER

MURPHY, Chief Judge.

These cases are before the Court on motions for remand to state court, docketed as Document 7 in both of the above-captioned cases. On its own motion, the Court CONSOLIDATES the above-captioned cases. Plaintiff Richard Disher's request for remand is GRANTED, and the consolidated cases are REMANDED to state court on the basis of procedural defects in removal.

BACKGROUND

The above-captioned cases involve putative class-action claims under state law against Defendant Citigroup Global Markets, Inc. ("Citigroup"), the successor in interest of Salomon Smith Barney, Inc. ("Smith Barney"). Disher alleges that Smith Barney, operating as a full-service securities firm, offered research and brokerage services to investors like him. The gravamen of Disher's complaint is that Smith Barney disseminated misleading research concerning the value of shares in certain Internet and telecommunications companies, thereby inducing Smith Barney customers like Disher to hold the shares. The instant cases are successors to an earlier action before the Court, Disher v. Citigroup Global Markets, Inc., ___ F.Supp.2d ____, 2007 WL 1231632 (S.D.Ill. 2004), and some discussion of the convoluted procedural history of that case is necessary in order properly to evaluate the instant motions for remand.

Case No. 04-308 was filed by Disher against Citigroup in the Circuit Court of the Third Judicial Circuit, Madison County, Illinois, in March 2004, then removed by Citigroup to this Court in May 2004 on the basis of, inter alia, the Securities Litigation Uniform Standards Act of 1998 ("SLUSA"), Pub.L. 105-353, 112 Stat. 3227 (codified at 15 U.S.C. § 77p(b)-(f) and 15 U.S.C. § 78bb(f)).¹ In August 2004 the Court remanded Case No. 04-308 to state court for lack of subject matter jurisdiction. Citigroup then appealed from the Court's order of remand. In August 2005 the United States Court of Appeals for the Seventh Circuit held on the basis of Kircher v. Putnam Funds Trust, 373 F.3d 847 (7th Cir.2004), that 28 U.S.C. § 1447(d) did not preclude appellate review of the Court's remand order. See Disher v. Citigroup Global Mkts. Inc., 419 F.3d 649, 652 (7 th Cir.2005) ("Disher I "). The Disher I court held further that, on the basis of Kircher v. Putnam Funds Trust, 403 F.3d 478 (7th Cir.2005), the claims of Disher and the proposed class were precluded by SLUSA and ordered the Court to vacate the remand order and to dismiss the claims of Disher and the proposed class. See Disher I, 419 F.3d at 654-55. In October 2005 the Court executed the mandate of the Seventh Circuit Court of Appeals in Disher I, vacating the order of remand and dismissing the claims of Disher and the proposed class pursuant to SLUSA.

In June 2006 the Supreme Court of the United States granted Disher's petition for a writ of certiorari in Disher I. See Disher v. Citigroup Global Mkts. Inc., ____ U.S. ____, 126 S.Ct. 2964, 165 L.Ed.2d 947 (2006) ("Disher II"). In light of Kircher v. Putnam Funds Trust, ____ U.S. ____, 126 S.Ct. 2145, 165 L.Ed.2d 92 (2006), which held that appellate review of orders remanding cases removed under SLUSA is precluded by 28 U.S.C. § 1447(d), see 126 S.Ct. at 2157, the Supreme Court vacated Disher I, and remanded the case to the Seventh Circuit Court of Appeals for further proceedings consistent with the Supreme Court's decision in Kircher. See Disher II, 126 S.Ct. at 2964. Thereafter, the Seventh Circuit Court of Appeals issued its mandate, remanding the case to this Court for further proceedings consistent with In re Mutual Fund Market-Timing Litigation, 468 F.3d 439 (7th Cir. 2006). See Disher v. Citigroup Global Mkts. Inc., No. 04-3073, 2007 WL 173824, at *1 (7th Cir. Jan.22, 2007) ("Disher III"). On March 2, 2007, the Court executed the mandate in Disher III by remanding Case No. 04-308 to state court.

On February 16, 2007, Citigroup filed a notice of removal as to the claims of Disher and the proposed class in state court, resulting in the docketing of Case No. 07-132. On March 13, 2007, Citigroup filed still another notice of removal as to those claims, resulting in the docketing of Case No. 07-185.² Disher has moved for remand to state court in both cases. The remand motion in Case No. 07-132 has been fully briefed. The remand motion in Case No. 07-185 has not been fully briefed, but the Court's review of the motion and the record in the case discloses that the motion can be decided without a response by Citigroup. Accordingly, the Court now proceeds to rule on Disher's motions for remand in Case No. 07-132 and Case No. 07-185.

DISCUSSION

A. Consolidation

As an initial matter, the Court takes up sua sponte the question of consolidation of the instant cases. Rule 42 of the Federal Rules of Civil Procedure provides, in pertinent part, "[w]hen actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated; and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay." FED. R. CIV. P. 42(a). The decision regarding consolidation is committed to a court's discretion. See United States v. Knauer, 149 F.2d 519, 520 (7th Cir.1945); Hansa Med. Prods., Inc. v. Bivona, Inc., Nos. IP 85-340-C, IP 85-1056-C, 1987 WL 14496, at *1 (S.D.Ind. Jan. 14, 1987); Henderson v. National R.R. Passenger Corp., 118 F.R.D. 440, 441 (N.D.Ill.1987); Midwest Cmty. Council Inc. v. Chicago Park Dist., 98 F.R.D. 491, 499 (N.D.Ill.1983). A court may order consolidation sua sponte and, if need be, over the objections of parties. See Connecticut Gen. Life Ins. Co. v. Sun Life Assurance Co. of Canada, 210 F.3d 771, 774 (7 th Cir.2000); Smith v. Northeastern Ill. Univ., No. 98 C 3555, 2002 WL 377725, at *6 (N.D.Ill. Feb. 28, 2002); Allendale Mut. Ins. Co. v. Bull Data Sys., Inc., Nos. 91 C 6103, 91 C 7362, 1992 WL 159334, at *6 (N.D.Ill. June 30, 1992); American Photocopy Equip. Co. v. Fair (Inc.), 35 F.R.D. 236, 237 (N.D.Ill.1963). See also Davis v. Beeler, No. 5:04-HC-246H, 5:04-HC-369H, 2004 WL 3758049, at *1 (E.D.N.C. Sept. 27, 2004); Gregory v. Starwood Hotels & Resorts Worldwide, Inc., Nos. Civ.A. 02-3653, Civ.A. 02-3654, 2003 WL 446824, at *1 (E.D.La. Feb. 19, 2003); In re Pepco Employment Litig., Civ. A. No. 86-0603(RCL), 1990 WL 236073, at *1 (D.D.C. Dec. 20, 1990); 9 Charles A. Wright — Arthur R. Miller, Federal Practice & Procedure § 2383 (3d ed. 1998 & Supp.2007) (collecting cases).

In this instance the matters before the Court clearly present common questions of fact and law; in fact, as discussed, Case No. 07-132 and Case No. 07-185 are actually a single case filed in state court that Citigroup has removed on two occasions. The parties have not moved for consolidation, but neither is there any evidence that they oppose it, and, notably, their filings in this Court sometimes have treated Case No. 07-132 and Case No. 07-185 as though the cases have been consolidated.³ In any event, regardless of the parties' views on consolidation, it is apparent to the Court that Case No. 07-132 and Case No. 07-185 should be consolidated, if only to prevent further needless cluttering of the Court's docket through repeated notices of removal as to what is in fact only a single case. See In re Mutual Fund Market-Timing Litig., 468 F.3d at 444 (noting that "a single case was broken into two" through procedural maneuvering in the district court, and that "[t]he district court should not have allowed that to happen."). Accordingly, the Court will consolidate Case No. 07-132 and Case No. 07-185.

B. Remand

Under 28 U.S.C. § 1441, "any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, 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). The party seeking removal has the burden of establishing federal jurisdiction. See Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 540 (7th Cir.2006); LaRoe v. Cassens & Sons; Inc., 472 F.Supp.2d 1041, 1044 (S.D.Ill.2006); Lyerla v. Amco Ins. Co., 461 F.Supp.2d 834, 835 (S.D.Ill.2006). "`Courts should interpret the removal statute narrowly and presume that the plaintiff may choose his or her forum.' Put another way, there is a strong presumption in favor of remand." Fuller v. BNSF Ry. Co., 472 F.Supp.2d 1088, 1091 (S.D.Ill.2007) (quoting Doe v. Allied-Signal, Inc., 985 F.2d 908, 911 (7th Cir.1993)). "All doubts about the propriety of removal are to be resolved in favor of remand." Ford v. Keck, No. 06-cv-667-DRH, 2007 WL 1022003, at *1 (S.D.Ill. Apr. 2, 2007). See also Alsup v. 3-Day Blinds, Inc., 435 F.Supp.2d 838, 841 (S.D.Ill.2006) ("Doubts concerning removal must be resolved in favor of remand to the state court."); Littleton v. Shelter Ins. Co., No. 99-912-GPM, 2000 WL 356408, at * 1 (S.D.Ill. Mar. 9, 2000) ("The removal statute, 28 U.S.C. § 1441, is construed narrowly, and doubts concerning removal are resolved in favor of remand.").

In general, a defendant seeking to remove a case from state court to federal court must...