Radio Shack Franchise Dept. v. Williams

Decision Date08 September 1992
Docket NumberCiv. A. No. 92-4072-S.
Citation804 F. Supp. 151
PartiesRADIO SHACK FRANCHISE DEPT., A DIVISION OF TANDY CORPORATION, Plaintiff/Counterclaim Defendant, v. Wayne A. WILLIAMS, Defendant/Counterclaim Plaintiff/Third-Party Plaintiff, v. RADIO SHACK FRANCHISE DEPT., A DIVISION OF TANDY CORPORATION, Tandy Corporation, Paul Crump, Paul Zoeller, Robert T. Owens, and Jack O'Connor, Third-Party Defendants.
CourtU.S. District Court — District of Kansas

Mark J. Schultz, Gallas & Schultz, Kansas City, Mo., William G. Howard, Lathrop & Norquist, Overland Park, Kan., Daniel

M. Dibble, Lathrop & Norquist, Kansas City, Mo., for Radio Shack Franchise Dept.

Robert L. Pottroff, Myers, Pottroff & Ball, Manhattan, Kan., for Wayne A. Williams.

William G. Howard, Lathrop & Norquist, Overland Park, Kan., Daniel M. Dibble, Lathrop & Norquist, Kansas City, Mo., for Tandy Corp., Paul Crump, Paul Zoeller, Robert T. Owens and Jack O'Connor.

MEMORANDUM AND ORDER

SAFFELS, Senior District Judge.

This matter is before the court after response by the parties to the court's order to show cause why the matter should not be remanded to the Riley County District Court because the United States District Court lacks subject matter jurisdiction through the improvident removal of this case by the plaintiff/counterclaim defendant Radio Shack Franchise Dept. ("Radio Shack"). Because the court finds removal by the third-party defendants improper, the case will be remanded to the Riley County District Court.1

This action was brought in state court by Radio Shack to recover from the defendant Wayne Williams on a promissory note held by Radio Shack. The defendant filed an answer and counterclaim against Radio Shack, Tandy Corporation, Paul Crump, Paul Zoeller, Robert T. Owens, and Jack O'Connor. The counterclaim alleges a pattern of racketeering activity under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961 et seq. The third-party defendants then removed the case to this court.

The statute under which the third-party defendants removed this case reads in pertinent part:

Whenever a separate and independent claim or cause of action within the jurisdiction conferred by section 1331 of this title, is joined with one or more otherwise nonremovable claims or causes of action, the entire case may be removed and the district court may determine all issues therein, or, in its discretion, may remand all matters in which state law predominates. 28 U.S.C. § 1441(c).

As an initial matter, the court notes that Radio Shack contends the defendant's RICO claims are subject to the court's original jurisdiction as required by 28 U.S.C. § 1441(b), implying that section would permit removal. This section has not been construed to apply to a counterclaim filed by the defendant. See Gully v. First National Bank in Meridan, 299 U.S. 109, 57 S.Ct. 96, 81 L.Ed. 70 (1936); Lewis v. Windsor Door Co., 926 F.2d 729, 732-33 (8th Cir.1991). Rather, the claim stating a federal question must be apparent on the face of the plaintiff's complaint. Gully v. First National Bank in Meridan, 299 U.S. at 112-13, 57 S.Ct. at 97-98. The only section conceivably allowing removal by a third-party defendant is 28 U.S.C. § 1441(c). Lewis v. Windsor Door Co., 926 F.2d at 732-33.

The law is not clear regarding whether, or under what circumstances, a third-party defendant may remove a case. The Tenth Circuit has not addressed the question and the court's research has discovered few other circuits which have taken a position on the issue. Numerous district courts have treated the situation in varying fashions. As stated by one commentator:

1. Courts agree that a third-party claim cannot afford a basis for removal unless the `separate and independent claim or cause of action' of § 1441(c) applies.
2. Some courts permit removal under § 1441(c), by a third-party defendant, of a separate and independent third-party claim which could be removed if sued on alone. This takes the entire action into the federal court. The district court may, however, exercise its discretion and remand all matters not otherwise within its original jurisdiction.
3. Other courts do not permit removal on the basis of a third-party claim, although it would have been removable by the defending party if the claim had been sued on alone. These courts limit removal under § 1441(c) to a party defending against claims which have been joined by the plaintiff. 1A James W. Moore et al., Moore's Federal Practice ¶ 0.16710 (2d ed. 1990).

The commentator also stated that not allowing removal on the basis of a third-party claim is the sound view.

In Thomas v. Shelton, 740 F.2d 478 (7th Cir.1984), the court noted that the majority of cases, primarily district court cases, have determined that third-party defendants may not remove under 28 U.S.C. § 1441(c). Often, the courts have looked to the language of the statute and determined that the separate and independent removable claim joined with a non-removable claim means one that the plaintiff has joined. Lewis v. Windsor Door Co., 926 F.2d at 733. Therefore, a third-party claim can never be the basis of removal. This comports with the established general principles of strictly construing removal statutes and resolving any doubts in favor of remand. Elkhart Co-op Equity Exchange v. Day, 716 F.Supp. 1384 (D.Kan.1989).

In Thomas v. Shelton, the court stated that the apparent purpose of the statute was to prevent a plaintiff suing in state court on a claim that states a...

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  • Chavez v. Kincaid
    • United States
    • U.S. District Court — District of New Mexico
    • May 14, 1998
    ...in favor of remand. See Fajen v. Foundation Reserve Insurance Co., 683 F.2d 331, 333 (10th Cir. 1982); Radio Shack Franchise Department v. Williams, 804 F.Supp. 151, 153 (D.Kan. 1992); see also Lorraine Motors, Inc. v. Aetna Casualty and Surety Co., 166 F.Supp. 319, 323 (E.D.N.Y.1958) (Beca......
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    ...; Menninger Clinic Inc. v. Schilly, No. CIV 92–4104, 1992 WL 373927, at *1–2 (D.Kan. Nov. 23, 1992) ; Radio Shack Franchise Dep't v. Williams, 804 F.Supp. 151, 152–53 (D.Kan.1992) ; Elkhart Co-op Equity Exch. v. Day, 716 F.Supp. 1384, 1385, 1387 (D.Kan.1989) (cross-claim). These cases, howe......
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    ...Menninger Clinic Inc. v. Schilly, No. 92–4104, 1992 WL 373927, at *1–2 (D.Kan. November 23, 1992); Radio Shack Franchise Dep't v. Williams, 804 F.Supp. 151, 152–53 (D.Kan.1992); Elkhart Co-op Equity Exch. v. Day, 716 F.Supp. 1384, 1385, 1387 (D.Kan.1989); Garnas v. Am. Farm Equip. Co., 502 ......
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