Graff v. Qwest Communications Corp.

• Decision Date: 25 January 1999
• Docket Number: No. CIV. 98-2592 (DSD/AJB).,CIV. 98-2592 (DSD/AJB).
• Citation: 33 F.Supp.2d 1117
• Parties: Brian W. GRAFF, Plaintiff, v. QWEST COMMUNICATIONS CORPORATION, Defendant.
• Court: U.S. District Court — District of Minnesota

Page 1117

33 F.Supp.2d 1117

Brian W. GRAFF, Plaintiff, v. QWEST COMMUNICATIONS CORPORATION, Defendant.

No. CIV. 98-2592 (DSD/AJB).

United States District Court, D. Minnesota.

January 25, 1999.

Eldon J. Spencer, Jr., Brian F. Kidwell, and Leonard, O'Brien, Wilford, Spencer & Gale, St. Paul, MN, and Thomas C. Atmore, Leonard, O'Brien, Wilford, Spencer & Gale, Minneapolis, MN, counsel for plaintiff.

Melissa Raphan, Michael Iwan, and Dorsey & Whitney, Minneapolis, MN, counsel for defendant.

ORDER

DOTY, District Judge.

This matter is before the court on the motion of plaintiff Brian W. Graff to remand this case to Hennepin County District Court and the motion of defendant Qwest Communications Corporation to transfer this case to the United States District Court for the District of Colorado. Based on a review of the file, record, and proceedings herein, and for the reasons stated, the court denies plaintiff's motion and grants defendant's motion.

BACKGROUND

Plaintiff Brian W. Graff alleges that at the time of the filing of this action in Hennepin County District Court on November 6, 1998, he was a resident of Colorado. Defendant Qwest Communications (hereafter "Qwest") at all times has been a Delaware corporation with its principal place of business in Colorado. The substantive facts underlying Graff's breach of contract and promissory estoppel claims are not now at issue. The court's recitation of the relevant facts and subsequent discussion will therefore focus primarily on the two procedural motions now pending.

Plaintiff accepted an offer of employment from defendant on November 7, 1997, and he and his family moved from their home in Hudson, Wisconsin to the Denver, Colorado area. The letter sent by defendant containing the formal offer stated that "You will be eligible to participate in Qwest's long-term incentive plan (Equity Incentive Plan). You will receive a grant of 10,000 shares at the market price on your first day of employment." Letter dated November 4, 1997, Exhibit A to Affidavit of Brian W. Graff in Opp'n to Mot. for Transfer (Docket No. 20). The parties' employment relationship ended, however, on June 16, 1998.

Alleging that defendant had breached its written employment contract by failing to tender the stock upon the inception of his employment, plaintiff served defendant with a summons and complaint in an action filed in Minnesota State Court (hereafter "the Hennepin County action") on November 6, 1998. The Hennepin County action was removed by defendant to the United States District Court for the District of Minnesota (hereafter "the Minnesota federal action") on December 4, 1998. Also on December 4, 1998, defendant filed a declaratory judgment action in the United States District Court for the District of Colorado (hereafter "the Colorado federal action"), seeking a judicial declaration that it did not breach the parties' employment contract by not tendering the shares of stock in question.

Plaintiff, arguing that there is no basis for federal court jurisdiction, moves to remand this case to Hennepin County District Court. Defendant, while opposing plaintiff's motion to remand, simultaneously moves to transfer this case to Colorado for consolidation with the Colorado federal action. After extensive briefing and oral argument, these matters are now before the court for decision.¹

DISCUSSION

A. Plaintiff's Motion to Remand

Plaintiff originally brought this action in state court. Pursuant to 28 U.S.C. § 1446, defendant removed the action to federal court. Plaintiff then filed his motion to remand this action to state court.

Federal courts are courts of limited jurisdiction. Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 374, 98 S.Ct. 2396, 57 L.Ed.2d 274 (1978). A lack of federal subject-matter jurisdiction cannot be waived. See Id.; Magee v. Exxon Corp., 135 F.3d 599, 601 (8th Cir.1998) (citing Berger Levee Dist., Franklin County, Mo. v. U.S., 128 F.3d 679, 680 (8th Cir.1997)). An action may be removed to federal court only if it presents a federal question or if diversity jurisdiction exists. See 28 U.S.C. § 1441. The purpose of the removal statutes is to restrict and limit removal jurisdiction, such that removal statutes are to be construed narrowly and any doubt should be resolved against removal jurisdiction. American Fire & Cas. Co. v. Finn, 341 U.S. 6, 71 S.Ct. 534, 95 L.Ed. 702 (1951). See also Johansen v. Employee Ben. Claims, Inc., 668 F.Supp. 1294, 1295-96 (D.Minn.1987) (discussing defendant's burden in showing action was properly removed and the justification for narrowly construing removal statute).

A defendant seeking to remove an action to federal court on the basis of diversity jurisdiction must normally demonstrate that diversity existed both at the time the action was filed and at the time removal is sought. See, e.g., Freeport-McMoRan, Inc. v. K.N. Energy, Inc., 498 U.S. 426, 428, 111 S.Ct. 858, 112 L.Ed.2d 951 (1991) ("The well-established rule [is] that diversity of citizenship is assessed at the time the action is filed."). An exception to the rule requiring diversity both at the time of the filing of the complaint and at the time of removal, however, applies when the plaintiff takes some voluntary action subsequent to filing the complaint which creates diversity of citizenship amongst the parties. This "voluntary-involuntary rule" was first recognized in Powers v. Chesapeake & Ohio Ry. Co., 169 U.S. 92, 18 S.Ct. 264, 42 L.Ed. 673 (1898), and was incorporated into the United States Code in 1949:

If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable[.]

28 U.S.C. § 1446(b). The purpose of this provision "is to recognize that the action as originally brought may not be removable, but that it may become so through some event occurring afterwards." Commentary on 1988 Revision of Section 1446 by David D. Siegel (found at 28 U.S.C.A. § 1446).

Courts have recognized the continued validity of the "voluntary-involuntary" rule after the enactment of § 1446(b). See, e.g., Hager v. Gibson, 108 F.3d 35, 41 (4th Cir. 1997) ("It has long been settled that a basis for diversity jurisdiction not present at the time of commencement of an action may be supplied by later voluntary acts of a plaintiff, though not of a defendant."); Poulos v. Naas Foods, Inc., 959 F.2d 69, 72 (7th Cir. 1992) ("[W]hen Congress referred to `a case which is or has become removable' in section 1446(b), Congress apparently intended to incorporate the existing definition of `removable,' a definition that included the voluntary/involuntary rule."); In re Iowa Mfg. Co. of Cedar Rapids, Iowa, 747 F.2d 462, 463 (8th Cir.1984) (recognizing continued validity of voluntary-involuntary rule first announced by Supreme Court in Powers); Self v. General Motors Corp., 588 F.2d 655, 657 (9th Cir.1978) (reviewing voluntary-involuntary rule, recognizing doctrine's continued validity, and citing cases). The rule is commonly used by a defendant seeking to remove a case to federal court when a plaintiff voluntarily dismisses a separate nondiverse defendant. See In re Iowa Mfg., 747 F.2d at 463. Nothing in the rule, however, limits its applicability to this specific scenario. DeBry v. Transamerica Corp., 601 F.2d 480, 486-87 (10th Cir.1979) (holding that a plaintiff's voluntary change of residence leading to complete diversity of parties rendered case removable by defendant to federal court, despite fact that diversity not present when case originally filed). The only prerequisite to the rule's applicability is that the action creating diversity must be a voluntary act on the part of the plaintiff.

For removal to be appropriate, diversity between the parties must have been established at the time of removal by a voluntary action of the plaintiff. Such diversity could exist in this case if plaintiff had changed his domicile to Minnesota by December 4, 1998, the date of removal. A change in domicile requires physical presence in a new location in connection with an intent to remain in that location indefinitely. See Blakemore v. Missouri Pacific R. Co., 789 F.2d 616, 618 (8th Cir.1986); Holmes v. Sopuch, 639 F.2d 431, 433 (8th Cir.1981). The court concludes that at the time of removal, both these elements were satisfied.

An affidavit submitted by plaintiff establishes that on November 12, 1998, plaintiff and his wife signed a purchase agreement to buy a home in Stillwater, Minnesota. Affidavit of Brian W. Graff (Docket No. 8) at ¶ 10. Plaintiff states that "[u]ntil the date on which that purchase agreement was signed, we had not decided to move to Minnesota, but continued to hope that we could find a suitable home which would permit us to return to the area of Hudson/River Falls, Wisconsin." Id. The court can therefore conclude that from November 12, 1998, forward, plaintiff intended to make Minnesota or Wisconsin his home indefinitely. Plaintiff further states that "[o]n December 1, 1998, following the closing on the sale of our Colorado home, we left Colorado and arrived in Minnesota on December 2, 1998." Id. at ¶ 11. This statement establishes plaintiff's physical presence in Minnesota at the time of removal. By his own voluntary acts, therefore, plaintiff had changed his domicile to Minnesota by December 4, 1998, thereby making removal by defendant proper.² See DeBry, 601 F.2d at 486-87.

The rationale for the voluntary act rule is that "although a defendant should not be allowed to change his domicile after the complaint is filed for the sole purpose of effectuating removal, there is no reason to protect the plaintiff against the adverse consequences of his own voluntary acts." Yarnevic v. Brink's, Inc., 102 F.3d 753, 754 (4th Cir.199...