First Response Metering, LLC. v. City of Wilmington
| Decision Date | 29 March 2021 |
| Docket Number | Case No. 1:20-cv-329 |
| Parties | FIRST RESPONSE METERING, LLC., Plaintiff, v. CITY OF WILMINGTON, Defendant. |
| Court | U.S. District Court — Southern District of Ohio |
This civil case is before the Court on Defendant City of Wilmington's motion to dismiss for failure to state a claim and lack of jurisdiction (Doc. 15), and the parties' responsive memoranda (Docs. 17, 18).1
For purposes of this motion to dismiss, the Court must: (1) view the complaint in the light most favorable to Plaintiff; and (2) take all well-pleaded factual allegations as true. Bickerstaff v. Lucarelli, 830 F.3d 388, 396 (6th Cir. 2016).
Around December 20, 2018, the City of Wilmington ("Wilmington") contracted with Global Management, LLC d/b/a Fathom ("Fathom") to replace its water metering infrastructure (the "Project"). (Doc. 14 at ¶ 8). Fathom then contracted with PlaintiffFirst Response Metering ("First Response") to perform various tasks related to the Project. (Id. at ¶ 11). First Response performed its work from October 2019 to December 2019. (Id. at ¶ 12).
During First Response's work on the Project, First Response learned that Fathom was ending its business, including work on the Project. (Id. at ¶ 13). First Response contends that, despite Fathom's business termination, Wilmington encouraged First Response to continue working. (Id. at ¶ 14). First Response states that representatives of Wilmington indicated First Response would still be appropriately compensated for its work on the Project. (Id. at ¶ 14).
According to First Response, Wilmington has never fully paid Fathom for work performed during the time period First Response was working on the Project. (Id. at ¶¶ 15-16). First Response has not been paid for its work on the Project. (Id. at ¶ 14).
Pursuant to this Court's diversity jurisdiction, First Response brings one cause of action against Wilmington under Ohio Rev. Code § 1311.25, et seq. in order to enforce an asserted lien claim against Wilmington. (Id. at ¶ 23). First Response argues that Wilmington approved its work on the Project and that First Response is entitled to collect amounts owed for its work on the Project from Wilmington. (Id. at ¶¶ 21-27).
Wilmington moves to dismiss First Response's Amended Complaint, arguing that: (1) First Response fails to state a claim because Ohio Rev. Code § 1311.32 and § 1311.311 mandate exclusive jurisdiction for First Response's cause of action in state court; and/or (2) this Court should abstain from exercising jurisdiction over this case. (Doc. 15). Wilmington's motion to dismiss is ripe for review.
A motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6) operates to test the sufficiency of the complaint and permits dismissal of a complaint for "failure to state a claim upon which relief can be granted." To show grounds for relief, Fed. R. Civ. P. 8(a) requires that the complaint contain a "short and plain statement of the claim showing that the pleader is entitled to relief."
While Fed. R. Civ. P. 8 "does not require 'detailed factual allegations,'...it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)). Pleadings offering mere " 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.'" Id. (citing Twombly, 550 U.S. at 555). In fact, in determining a motion to dismiss, "courts 'are not bound to accept as true a legal conclusion couched as a factual allegation[.]'" Twombly, 550 U.S. at 555 (citing Papasan v. Allain, 478 U.S. 265 (1986)). Further, "[f]actual allegations must be enough to raise a right to relief above the speculative level[.]" Id.
Accordingly, "[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Iqbal, 556 U.S. at 678. A claim is plausible where "plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Plausibility "is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. "[W]here the well-pleaded facts do not permit the court to infer more than the merepossibility of misconduct, the complaint has alleged—but it has not 'show[n]'—'that the pleader is entitled to relief,'" and the case shall be dismissed. Id. (citing Fed. Rule Civ. P. 8(a)(2)).
Wilmington argues this case should be dismissed because: (1) this Court cannot hear this case because state statute limits the jurisdiction of First Response's claim to state court; and/or (2) this Court should otherwise abstain for hearing the case. The Court will take each argument in turn.
Wilmington's first argues First Response's Amended Complaint should be dismissed because this Court cannot exercise jurisdiction over the action.2 (Doc. 15 at 5). Wilmington contends that, under Ohio Rev. Code § 1311.32 and § 1311.311, First Response is required to pursue its lien claim in a state court of common pleas.
Ohio Rev. Code § 1311.32 provides that a duty to pay claimants, such as First Response, "may be enforced by an action in the court of common pleas or [First Response] may, when the amounts are due, recover through the public in the court of common pleas." Id. (emphasis added). If a claimant brings such an action, the claimant's action "shall be brought in the county in which the public property involved is situated." Id. Moreover, if the public authority fails to make payments for public improvements, "the principal contractor or subcontractor may file an action in the courtof common pleas of the county in which the property is located." Id. at § 1311.311 (emphasis added).
Wilmington contends these sections divest this Court of its subject-matter jurisdiction pursuant to 28 U.S.C. § 1332 (diversity). The Court disagrees.
As the Sixth Circuit explains:
The jurisdiction of federal courts is defined by Article III of the United States Constitution and by acts of Congress. It is generally true that the jurisdiction of the federal courts "cannot be limited or taken away by state statutes." 17A Wright, et al., Fed. Practice & Procedure § 4211 (3d ed. 2012). Generally, the jurisdiction of a federal court will only be limited by state statute under special circumstances, such as when the federal court sits in diversity pursuant to 28 U.S.C. § 1332. Even in such circumstances, a state cannot defeat federal jurisdiction over a matter by limiting jurisdiction to a specialized state court. See Marshall v. Marshall, 547 U.S. 293, 314, 126 S.Ct. 1735, 164 L.Ed.2d 480 (2006) () (quoting McClellan v. Carland, 217 U.S. 268, 281, 30 S.Ct. 501, 54 L.Ed. 762 (1910)). This rule applies even if the cause of action was created by state statute. Id. () (quoting Tennessee Coal, Iron & R.R. Co. v. George, 233 U.S. 354, 360, 34 S.Ct. 587, 58 L.Ed. 997 (1914)).
Williams v. Duke Energy Int'l, Inc., 681 F.3d 788, 798 (6th Cir. 2012) (emphasis added).
For the purposes of jurisdiction, the crux of Wilmington's argument is that because the state statute outlines First Response's possible rights and remedies, and the state statute requires suits to be brought in a court of common pleas, First Response must bring its action in the appropriate court of common pleas.
The first issue with Wilmington's argument is that is fails to read the plain language of the statutes it cites. Both statutes indicate the claimant may bring its action in a court of common pleas. The one clause of mandatory language requires that, if a claimant brings an action in a court of common pleas, the claimant then shall bring the action in the county in which the public property involved is situated. Thus, when reading the language of the statute, First Response is not precluded from asserting the action in an appropriate federal court. Moreover, this Court is not convinced that these statutes are even intended to divest the Court of jurisdiction. See also In re Ohio Execution Protocol Litig., 709 F. App'x 779, 785 (6th Cir. 2017) (); State of Ohio ex rel. Star Supply, Div. of Star Indus., Inc. v. City of Greenfield, Ohio, 528 F. Supp. 955, 956 (S.D. Ohio 1981) ().
However, even if the language of the statutes were mandatory, and the statute is seeking to limit federal jurisdiction, Wilmington's reading of the statute is in direct contradiction with Supreme Court and Sixth Circuit precedent recognizing that a state cannot defeat federal diversity jurisdiction by limiting the matter to a certain state court - in this instance, a court of common pleas. See Marshall, 547 U.S. at 314; Williams, 681 F.3d at 798. See also Superior Beverage Co. v. Schieffelin & Co., 448 F.3d 910, 917 (6th Cir. 2006) ) ("A state statute cannot divest a federal court of diversity jurisdiction." ); West v. Kentucky Horse Racing Comm'n, 425 F. Supp. 3d 793, 802 (E.D. Ky. 2019), aff'd, 972 F.3d 881 (6th Cir.2020) (quotation omitted) (citing cases) ("A state cannot confer rights upon private parties and require that litigation between those parties must be confined to the courts of the state itself.").
Finally, it bears recognizing that...
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