Gmfs, L.L.C. v. Bounds

• Decision Date: 08 August 2003
• Docket Number: No. CIV.A. 03-0348-WS-M.,CIV.A. 03-0348-WS-M.
• Citation: 275 F.Supp.2d 1350
• Parties: GMFS, L.L.C., Plaintiff, v. Robert BOUNDS, et al., Defendants.
• Court: U.S. District Court — Southern District of Alabama

275 F.Supp.2d 1350

GMFS, L.L.C., Plaintiff, v. Robert BOUNDS, et al., Defendants.

No. CIV.A. 03-0348-WS-M.

United States District Court, S.D. Alabama, Southern Division.

August 8, 2003.

Charles William Daniels, Jr., James R. Turnipseed, Bowron, Latta & Wasden, PC, Mobile, AL, for Plaintiff.

George R. Irvine, III, Stone, Granade & Crosby, P.C., Daphne, AL, Shawn Tavel Alves, Stone, Granade & Crosby, P.C., Bay

Minette, AL, David A. Bagwell, Fairhope, AL, Thomas P. Ollinger, Jr., Barry L. Thompson, Mobile, AL, for Defendants.

ORDER ON MOTION TO REMAND

STEELE, District Judge.

This matter is before the Court on the plaintiff's motion to remand. (Doc. 10). The Court-ordered briefing has been completed, (Docs. 19, 20), and the motion is now ripe for resolution. After carefully considering the foregoing materials, as well as all other relevant materials in the file, the Court concludes that the motion to remand is due to be granted.

The original complaint was filed in state court on or about July 17, 2002. Named as defendants were: (1) Robert Bounds; (2) Constance Stanley (allegedly the common-law wife of Bounds); (3) Doug Houston; and (4) Doug Houston & Associates (collectively, "Houston"). Service was promptly obtained as to Houston but was not obtained as to Bounds or Stanley, with the return of service marked, "not found." The original complaint alleged only state-law claims and sought compensatory damages of an indeterminate amount. Although complete diversity of citizenship apparently existed, removal was precluded by 28 U.S.C. § 1441(b) because Houston is a citizen of Alabama.

The case proceeded in state court for almost a year, generating considerable discovery, several orders of court and a motion for summary judgment. In February 2003, with Bounds and Stanley still unserved, the plaintiff filed a motion to permit service on these defendants by publication, which motion the trial judge granted on February 24, 2003. Bounds and Stanley were served by publication effective May 9, 2003.

Meanwhile, the plaintiff filed an amended complaint on or about April 30, 2003. Houston was served with the amended complaint by service on his attorney on or about May 1, 2003. The amended complaint added several defendants and several counts, including one against all defendants for civil violations of RICO. The notice of removal, based on federal question, was then timely filed on May 30, 2003. All defendants save Bounds and Stanley joined in the removal. The plaintiff argues that remand is required because Bounds and Stanley did not join in or consent to removal.

Congress has specified that "[a] defendant or defendants desiring to remove any civil action . . . shall file in the district court . . . a notice of removal . . . ." 28 U.S.C. § 1446(a). Although this language does not expressly contemplate that removal be agreed to by all defendants, "[t]he unanimity requirement mandates that in cases involving multiple defendants, all defendants must consent to removal." Russell Corp. v. American Home Assurance Co., 264 F.3d 1040, 1044 (11th Cir. 2001).¹ The parties have been unable to locate any case considering whether a defendant served by publication falls within this "rule of unanimity," and the Court's research has been only marginally more productive.² Thus, the defendants' argument proceeds more indirectly. As their first line of attack, the defendants identify several recognized exceptions to the rule of unanimity and suggest that Bounds and Stanley fall within at least one of them.

The defendants note, correctly, that "nominal" defendants need not join in or consent to removal.³ The defendants then argue that Bounds and Stanley are "likely to be defaulted" and "will clearly play no role whatever in this lawsuit" and so are nominal defendants "in every common sense meaning of the term." (Doc. 19 at 8). Whatever the common-sense meaning of a "nominal party," Mr. Black defines it as "a party who, having some interest in the subject matter of a lawsuit, will not be affected by any judgment but is nonetheless joined in the lawsuit to avoid procedural defects," giving as an example "the disinterested stakeholder in a garnishment action." Black's Law Dictionary 1145 (7th ed.1999). Defendants (if such be Bounds and Stanley) willing to suffer default rather than defend themselves may be un interested in the litigation, but they are hardly dis interested. While courts applying the "nominal defendant" exception to the rule of unanimity have defined the term in varying ways, none of these formulations even colorably describes Bounds and Stanley.⁴ The defendants are understandably frustrated that Bounds and Stanley are not aggressively defending this case, but "an obdurate litigant is not on that account a nominal one." In re Amoco Petroleum Additives Co., 964 F.2d 706, 711 (7th Cir.1992)(describing defendants that refused to respond to a demand for arbitration, answer the complaint, or join in removal). In short, Bounds and Stanley are not nominal parties to this litigation.

The defendants next note that a defendant fraudulently joined to defeat removal need not join in or consent to removal. Again, this is a correct proposition of law,⁵ but it has no application here. A defendant (typically a resident of the forum) is fraudulently joined if "there is no possibility that the plaintiff can prove a cause of action against" him. Triggs v. John Crump Toyota, Inc., 154 F.3d 1284, 1287 (11th Cir.1998). The defendants do not suggest that Bounds and Stanley were fraudulently joined under this test, and the record discloses no basis on which any such assertion could tenably be advanced.⁶

The defendants next note that a defendant that has not been served with process need not join in or consent to removal. Once again the defendants are correct,⁷ but they admit that Bounds and Stanley were served with process as of May 9, 2003, three weeks before the notice of removal was filed.

Finally, the defendants note that the citizenship of fictitious defendants may be disregarded in determining diversity of citizenship.⁸ While unstated, the defendants presumably intended to note that fictitious defendants need not join in or consent to removal.⁹ As missing persons served by publication, Bounds and Stanley may be invisible, but they are not fictitious.

The defendants argue that, even if Bounds and Stanley do not fit within the confines of any recognized exception to the rule of unanimity, the sum of these exceptions reflects that the rule "leaks like a sieve" so that it is or should be amenable to further assault in the context of defendants served by publication. The Court finds the rule of unanimity more water-tight than advertised and not subject to breach in this case.

The exception for unserved defendants rests on the "bedrock principle" that "[a]n individual or entity named as a defendant is not obliged to engage in litigation unless notified of the action, and brought under a court's authority, by formal process." Murphy Brothers, Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 347, 119 S.Ct. 1322, 143 L.Ed.2d 448 (1999). If, as in Murphy Brothers, an unserved defendant cannot be required to remove, neither can he or she be required to join in or consent to removal by another defendant.¹⁰ The exception for fictitious defendants rests on similar grounds; a fictitious defendant is necessarily one that, due to its unknown identity, has not been served with process. Both nominal defendants and fraudulently joined defendants have no personal stake in the litigation because relief against them is either not sought or not possible.

The rationales supporting these exceptions to the rule of unanimity do not justify excepting defendants served by publication on that basis alone. Because such defendants have been served, they cannot be excepted on the grounds they are not subject to the "procedural impositions" of litigation. Because affirmative relief is sought against them under claims that may succeed, they cannot be excepted on the grounds they have no stake in the litigation.¹¹ Nor are these exceptions supported by rationales so broad or so light as to suggest that additional exceptions may be easily engrafted on the rule.

Finally, the defendants suggest that the Eleventh Circuit has embraced an amorphous exception to the rule of unanimity, triggered whenever "the ends of justice and judicial efficiency are best served" by ignoring the rule. In Belasco v. W.K.P. Wilson & Sons, Inc., 833 F.2d 277 (11th Cir.1987), the plaintiffs sued an insurance carrier and an insurance broker on purely state-law claims. In prescient anticipation of Metropolitan Life Insurance Co. v. Taylor, 481 U.S. 58, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987), the carrier removed the case to federal court. The broker did not join in the removal but fully participated in the litigation thereafter. Upon interlocutory review of the trial court's denial of a motion for summary judgment based on preemption, the Court focused on the superpreemption doctrine and the defensive preemption of the plaintiffs' claims. See id. at 277-82. Addressing in conclusion the broker's failure to join in removal, the Court stated, "[W]e must agree with [the defendants] that given the novelty, complexity, and technicality of this question, the ends of justice and judicial efficiency are best served by treating the removal petition as if it had been amended to include [the broker]." Id. at 282.¹²

Belasco does not aid the defendants here. At most, Belasco stands for the proposition that a removal defective for non-compliance with the rule of unanimity may, in rare circumstances, be retroactively cured by an adequate post-removal expression of consent by the previously silent defendant. Here, of course, Bounds and Stanley have provided no such expression. Even had they done so, the defendants have identified no "novelty, complexity [or] technicality" that could support a conclusion that...