Fialho v. Apple Corps, LP

• Decision Date: 14 November 2013
• Docket Number: No. 4:13-cv-00352 - JEG,4:13-cv-00352 - JEG
• Court: U.S. District Court — Southern District of Iowa
• Parties: MICHAEL FIALHO, Plaintiff, v. APPLE CORPS, LP, d/b/a APPLEBEE'S NEIGHBORHOOD GRILL & BAR; TERRY DAVIS; JEREMIAH HAMILTON; MATTHEW WALTERS; and LINDSEY FITZGERALD, Defendants.

MICHAEL FIALHO, Plaintiff, v. APPLE CORPS, LP, d/b/a APPLEBEE'S NEIGHBORHOOD GRILL & BAR; TERRY DAVIS;

JEREMIAH HAMILTON; MATTHEW WALTERS; and LINDSEY FITZGERALD, Defendants.

No. 4:13-cv-00352 - JEG

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF IOWA CENTRAL DIVISION

Dated: November 14, 2013

ORDER

This matter comes before the Court on Motion by Plaintiff Michael Fialho (Plaintiff) to Remand this case to the Iowa District Court for Polk County. Defendants Apple Corps, LP, d/b/a Applebee's Neighborhood Grill & Bar (Applebee's), Terry Davis (Davis), Jeremiah Hamilton (Hamilton), Matthew Walters (Walters), and Lindsey Fitzgerald (Fitzgerald) (collectively Defendants) resist the Motion. A hearing was not requested, and the Court finds that a hearing is not necessary. The matter is fully submitted and ready for disposition.

I. BACKGROUND

A. Factual Background

Plaintiff, a homosexual male, alleges that while employed as a server at Applebee's in Ankeny, Iowa, he was subjected to various forms of harassment based upon his sexual orientation. Plaintiff alleges derogatory comments and harassing behavior were directed toward him by his supervisors, Walters and Fitzgerald, as a result of his sexual orientation. Plaintiff further alleges that his supervisor, Hamilton, shortened Plaintiff's hours, gave him unequal shares of tables during shifts as compared to other servers, and disciplined him for similar conduct for which heterosexual employees were not disciplined. Finally, Plaintiff alleges that he reported these harassing activities to the general manager, Davis, who failed to take prompt remedialaction. Plaintiff states that the last alleged discriminatory act occurred on February 3, 2012. Plaintiff was terminated from his job on February 3, 2012.

B. Procedural Background

On October 22, 2012, Plaintiff filed a Complaint with the Iowa Civil Rights Commission (ICRC) and the Equal Employment Opportunity Commission alleging sexual orientation discrimination, harassing conduct, hostile work environment, and retaliation. Plaintiff received his "Right to Sue" Letter from the ICRC on April 17, 2013.

On July 16, 2013, Plaintiff filed a Petition and Jury Demand in the Iowa District Court for Polk County alleging claims against Defendants under the Iowa Civil Rights Act (ICRA), Iowa Code Chapter 216, for sexual orientation discrimination, hostile work environment, and retaliation. Plaintiff also alleged a sexual orientation discrimination claim under Title VII, 42 U.S.C. § 2000e-2. Prior to formal service of the Petition and Summons, Defendants became aware of the lawsuit and filed a Notice of Removal on August 15, 2013. Also on August 15, 2013, following removal, Plaintiff filed an Amended Petition and withdrew his Title VII claim. On August 22, 2013, Plaintiff filed a Motion to Remand for lack of subject matter jurisdiction. On September 9, 2013, Defendants filed a Resistance to the Plaintiff's Motion. On September 12, 2013, Defendants waived service of process. Plaintiff filed his Reply on September 19, 2013.

II. DISCUSSION

A. Motion to Remand

To the extent that Plaintiff argues the Court does not have subject matter jurisdiction over this case, the Court addresses this argument.¹

When a case filed in state court includes a claim over which the federal courts may exercise jurisdiction, a defendant has the right to remove the case to federal court pursuant to 28 U.S.C. § 1441 on the basis of claims alleged in the Petition at the time of removal.² See 28 U.S.C. § 1441(a) ("[A]ny 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."). Defendants argue that because they "became aware of the lawsuit on July 18, 2013," they "were required to remove the lawsuit by August 19, 2013, at the latest." Defs.' Resist. 1, ECF No. 6 (emphasis added). Upon a careful reading of the applicable removal statutes, the Court must disagree.

A defendant's mere knowledge of a lawsuit filed against him does not trigger the thirty-day time limit for removal under the statute. See State Farm Fire & Cas. Co. v. Valspar Corp., Inc., 824 F. Supp. 2d 923, 930 (D.S.D. 2010) ("[A] district court need not inquire into the subjective knowledge of the defendant when determining whether the defendant first ascertained the action had become removable."). Rather, the thirty-day time limit for removal begins either upon receipt of service of process, see Kreinbring v. Alternative Claims Servs., Inc., No. C03-123-LRR, 2004 WL 1293927, at *2 (N.D. Iowa May 27, 2004) ("[I]f the case stated by the initial pleading is removable, then notice of removal must be filed within thirty days from the receipt of the initial pleading by the defendant."), or is recommenced after service of process upon "receipt of a copy of an 'amended pleading, motion, order or other paper' which supplies a basis . . . from which 'it may first be ascertained that the case is or has become removable.'" See Dahl v. R.J. Reynolds Tobacco Co., 478 F.3d 965, 968 (8th Cir. 2007) (quoting 28 U.S.C. § 1446(b)(3)). Because Defendants in this case were not served, they were not "required" to remove this case by August 19, 2013. In fact, at the time of removal, the Defendants' deadline for removing the case to federal court could not be determined.

While Defendants were not required to remove by August 19, 2013, that does not mean removal at that time was improper.³ Section 1441(a) states that "any civil action brought in State court of which the district courts of the United States have original jurisdiction, may be removedby the defendant or the defendants . . . ." 28 U.S.C. § 1441(a) (emphasis added). A plain reading of this language permits a defendant's removal of a case filed in state court to federal court at the time the plaintiff "brought" their action to state court, via the filing of his or her petition - and not at the time of service. See Taylor v. Cottrell, Inc., No. 4:09-cv-536-HEA, 2009 WL 1657427, at *2 (E.D. Mo. June 10, 2009) ("[A]s courts have recognized, nothing in 28 U.S.C. § 1441 or any other statute requires defendants to have been served themselves prior to removing a case to federal court."); Watanabe v. Lankford, 684 F. Supp. 2d 1210, 1214-15 (D. Haw. 2010) ("[T]here is no statutory requirement that a defendant must formally receive the Complaint before removing the case."); Arthur v. Litton Loan Servicing LP, 249 F. Supp. 2d 924, 931 (E.D. Tenn. 2002) ("Service of process is not a prerequisite to the defendants exercising their right of removal under 28 U.S.C. § 1446.").

Next, turning to the language of 28 U.S.C. § 1446(b), the statute states "[t]he notice of removal of a civil action or proceeding shall be filed within 30 days of receipt by the defendant, through service or otherwise." Thus, a defendant may not file a notice of removal after the thirty-day window provided in 28 U.S.C. § 1446(b) has passed, and the statute says nothing about limiting a defendant's ability to file such a notice before service of process has been completed. The date of service, therefore, is relevant only to the extent that it sets a deadline for removal. See Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 354 (1999) ("[T]he defendant's period for removal will be no less than 30 days from service, and in some categories, it will be more than 30 days from service, depending on when the complaint is received."). For the reasons stated above, and in light of the plain language of the removal statutes, the Court finds that 28 U.S.C. §§ 1441(a) and 1446(b) permit Defendants' removal of this case to this Court prior to formal service of process, though they do not require Defendants'removal within 30 days of their mere knowledge of the lawsuit without service or another act that falls into the "or otherwise" language of the statute.⁴

B. Supplemental Jurisdiction

This Court has discretion to exercise supplemental jurisdiction over state law claims when the claims establishing its original jurisdiction have been dismissed, and it may remand those claims if the Court determines that exercising supplemental jurisdiction would be inappropriate for any reason provided under 28 U.S.C. § 1367(c). See Carnegie Mellon Univ. v. Cohill, 484 U.S. 343, 357 (1988) ("We conclude that a district court has discretion to remand to state court a removed case involving pendent claims upon a proper determination that retaining jurisdiction over the case would be inappropriate."); see also Lindsey v. Dillard's, Inc., 306 F.3d 596, 598 (8th Cir. 2002) ("[A] district court may decline jurisdiction over supplemental claims if it 'has dismissed all claims over which it has original jurisdiction . . . .'" (quoting 28 U.S.C. § 1367(c)(3))); Gregoire v. Class, 236 F.3d 413, 419 (8th Cir. 2000) ("Once claims over which a district court has original jurisdiction are dismissed, it is left to the court's discretion whether to exercise supplemental jurisdiction.").⁵

Pursuant to 28 U.S.C. § 1367(c), federal courts are given the authority to refuse to exercise supplemental jurisdiction in several circumstances. Section 1367(c) provides as follows:

(c) The district courts may decline to exercise supplemental jurisdiction over a claim under subsection (a) if -

(1) the claim raises a novel or complex issue of State law,(2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction,

(3) the district court has dismissed all claims over which it has original jurisdiction, or

(4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction.

The Eighth Circuit has stated that "novel, complex, and important issues of state law on which the [state] appellate courts have given us little or no prior guidance ....