McDaniel v. Manatt's, Inc.
| Decision Date | 29 September 2015 |
| Docket Number | No. 15-CV-2077-LRR,15-CV-2077-LRR |
| Parties | MICHAEL MCDANIEL, Plaintiff, v. MANATT'S, INC. et al., Defendants. |
| Court | U.S. District Court — Northern District of Iowa |
I. INTRODUCTION ....................................... 1
II. PROCEDURAL HISTORY ................................. 1
III. SUBJECT MATTER JURISDICTION ......................... 2
IV. THE MOTION TO DISMISS AND REMAND .................... 3
V. DEFENDANTS' COSTS .................................. 6
VI. CONCLUSION ....................................... 10
I. INTRODUCTION
The matter before the court is Plaintiff Michael McDaniel's "Motion to Dismiss and Motion to Remand" ("Motion") (docket no. 5).
II. PROCEDURAL HISTORY
On July 17, 2015, McDaniel filed a "Petition at Law and Jury Demand" ("Petition") (docket no. 3) in the Iowa District Court for Black Hawk County, Iowa ("Iowa District Court"). In the Petition, he asserts the following seven claims againstManatt's, Inc., Harold Kavalier, Bill Hanken, Chad (Hank) Schares and Chad Linquist (collectively, "Defendants"): (1) Count I asserts that Defendants violated Iowa Code Chapter 216 by discriminating against McDaniel in the terms and conditions of his employment based on the race of his romantic partner, calling it a "race by association" claim; (2) Count II asserts that Defendants violated Title VII of the Civil Rights Act of 1964 by discriminating against McDaniel in the terms and conditions of his employment based on the race of his romantic partner; (3) Count III asserts that Defendants violated Iowa Code Chapter 216 by harassing McDaniel and creating a hostile work environment based on the race of his romantic partner; (4) Count IV asserts that Defendants violated Title VII of the Civil Rights Act of 1964 by harassing McDaniel and creating a hostile work environment based on the race of his romantic partner; (5) Count V asserts that Defendants violated Iowa Code Chapter 216 by retaliating against McDaniel for reporting the alleged discriminatory practices; (6) Count VI asserts that Defendants violated Title VII of the Civil Rights Act of 1964 by retaliating against McDaniel for reporting the alleged discriminatory practices; and (7) Count VII asserts a claim for intentional infliction of emotional distress under Iowa law.
On August 18, 2015, Defendants filed a Notice of Removal (docket no. 2), which brought the case before the court. On August 21, 2015, McDaniel filed the Motion. On September 8, 2015, Defendants filed a "Response to Plaintiff's Motion to Dismiss and Motion to Remand" ("Response") (docket no. 8). On September 9, 2015, McDaniel filed a "Reply Brief to Defendant's Response" ("Reply") (docket no. 10). No party has requested oral argument on the Motion, and the court finds that oral arguments are unnecessary. The Motion is fully submitted and ready for decision.
III. SUBJECT MATTER JURISDICTION
The court has original jurisdiction over the claims in Counts II, IV and VI because they arise under the United States Code. See 28 U.S.C. § 1331 (). The court has supplemental jurisdiction over the claims in Counts I, III, V and VII because they arise out of the same common nucleus of operative fact as the federal claims. See 28 U.S.C. § 1367(a); United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 725 (1966).
IV. THE MOTION TO DISMISS AND REMAND
In the Motion, McDaniel seeks to dismiss with prejudice Counts II, IV and VI of the Petition, "contingent on the Court's grant of Plaintiff's Motion to Remand." Motion at 2. Once the federal claims have been dismissed, McDaniel argues that remand is appropriate because the court has dismissed all claims over which it exercises original jurisdiction, his state law claims raise novel issues of state law and the case has not progressed very far. Brief in Support of Motion (docket no. 5-1) at 3-4. The Defendants do not resist dismissal of the federal claims, so long as the counts are dismissed with prejudice. Response at 1.
Pursuant to Federal Rule of Civil Procedure 41(a)(2)1, the court may order that an action be dismissed, "on terms that the court considers proper." According to the Eighth Circuit Court of Appeals:
A decision whether to allow a party to voluntarily dismiss a case rests upon the sound discretion of the court. In exercising that discretion, a court should consider factors such as whether the party has presented a proper explanation for its desire to dismiss; whether a dismissal would result in a waste of judicialtime and effort; and whether a dismissal will prejudice the defendants.
Thatcher v. Hanover Ins. Group, Inc., 659 F.3d 1212, 1213-14 (8th Cir. 2011) (quoting Hamm v. Rhone-Poulenc Rorer Pharm., Inc., 187 F.3d 941, 950 (8th Cir. 1999)). The Eighth Circuit has also noted that the use of voluntary dismissal as an avenue for seeking a more favorable forum is inappropriate. Id. at 1214; see also Cahalan v. Rohan, 423 F.3d 815, 818 (8th Cir. 2005) (). "In the removal context, this rule coincides with other measures which 'strike a balance between the plaintiff's right to select a particular forum and the defendant's right to remove the case to federal court.'" Thatcher, 659 F.3d at 1214 (quoting Knudson v. Sys. Painters, Inc., 634 F.3d 968, 976 (8th Cir. 2011)); cf. Chaganti & Assocs., P.C. v. Nowotny, 470 F.3d 1215, 1220 (8th Cir. 2006) ().
As a general matter, the court is reluctant to allow a plaintiff to rob a defendant of its right to have a federal court adjudicate federal claims against it. However, in the instant action, Defendants have renounced their right to a federal forum contingent on McDaniel's dismissal of the federal claims with prejudice. See Response at 1. All parties agree that, absent the federal claims, the case should proceed before the Iowa District Court. While the court is mindful that it must consider the plaintiff's purpose in seeking dismissal and whether such purpose is an improper forum-shopping measure, the court gives this consideration little weight because Defendants have consented to the dismissal.
The court agrees that, if it were to dismiss the federal claims from the instant action, it would be proper to remand the case back to the Iowa District Court. See 28 U.S.C. § 1367(c)(3); Streambend Props. II, LLC v. Ivy Tower Minneapolis, LLC, 781 F.3d 1003, 1016-17 (8th Cir. 2015) ("When a district court dismisses federal claims over which it has original jurisdiction, the balance of interests usually will point toward declining to exercisejurisdiction over the remaining state law claims." (quoting In re Canadian Import Antitrust Litig., 470 F.3d 785, 792 (8th Cir. 2006)); Condor Corp. v. City of St. Paul, 912 F.2d 215, 220 (8th Cir. 1990) ( ). The court recognizes that the case is at the outset, and there has been no "substantial amount of time and judicial resources expended in this case." Thomas v. United Steelworkers Local 1938, 743 F.3d 1134, 1141 (8th Cir. 2014). Furthermore, as far as the court is aware, McDaniel is correct that "the Iowa Supreme Court has not yet directly ruled on whether discrimination on the basis of race includes that discrimination on the basis of association with a member of a protected class." Brief in Support of Motion at 3. This unsettled question of state law further counsels that remand would be appropriate. See 28 U.S.C. § 1367(c)(1); see also Thomas, 743 F.3d at 1141 ().
The court finds that the parties should be given an opportunity to litigate this action in the Iowa District Court if they so desire. Accordingly, the court will provisionally grant the Motion.2 In the Iowa District Court, McDaniel shall file an amended complaint omitting the federal causes of action, or dismiss those claims with prejudice, and proceedin the Iowa District Court by October 9, 2015. The court retains jurisdiction over the instant action in the event that McDaniel fails to do so. If McDaniel fails to take appropriate action in the Iowa District Court, the instant action will proceed before the court with the federal claims intact. In such case, pursuant to the court's August 26, 2015 Order (docket no. 7), Defendants will have ten days to file an answer or pre-answer motion. See Aug. 26, 2015 Order at 1. The parties shall be directed to notify the court whether they are proceeding in the Iowa District Court or in this forum.
V. DEFENDANTS' COSTS
Though Defendants do not resist McDaniel's request to dismiss the federal claims and remand to the Iowa District Court, they do seek costs and attorney's fees incurred in removing the case from the Iowa District Court. Response at 2. They argue that they are entitled to recover under 28 U.S.C. § 1447(c) and under the court's "inherent authority . . . to award costs incurred in defending an action prior to its voluntary dismissal by the plaintiff." Brief in Support of Response (docket no. 8-1) at 2, 5. McDaniel disagrees, arguing that "Defendants' request is a misplaced application of the fee-shifting provision of [§] 1447(c), and, even if the [c]ourt determines that a removing defendant may recover costs, the underlying facts do not warrant such an award." Reply at 1.
Pursuant to 28 U.S.C. § 1447(c), "[a]n order remanding [a] case may require payment of just...
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