Rose v. Giamatti

• Citation: 721 F. Supp. 906
• Decision Date: 31 July 1989
• Docket Number: Bankruptcy No. C-2-89-0577.
• Court: U.S. District Court — Southern District of Ohio
• Parties: Peter E. ROSE, Plaintiff, v. A. Bartlett GIAMATTI, et al., Defendants.

721 F. Supp. 906

Peter E. ROSE, Plaintiff, v. A. Bartlett GIAMATTI, et al., Defendants.

Bankruptcy No. C-2-89-0577.

United States District Court, S.D. Ohio, E.D.

July 31, 1989.

COPYRIGHT MATERIAL OMITTED

Robert G. Stachler, Taft, Stettinius & Hollister, Cincinnati, Ohio, for plaintiff.

Gerald V. Weigle, Dismore & Shohl, Cincinnati, Ohio, for Giamatti, MLB.

Robert C. Martin, Lindhorst & Dreidame, Cincinnati, Ohio, for Cincinnati Reds.

John Elam, Vorys, Sater, Seymour and Pease, Columbus, Ohio, for Giamatti & Major League Baseball.

MEMORANDUM AND ORDER

HOLSCHUH, District Judge.

I. INTRODUCTION

This action by Peter Edward Rose against A. Bartlett Giamatti and others, initially filed in the Court of Common Pleas of Hamilton County, Ohio at Cincinnati, and removed to the United States District Court for the Southern District of Ohio on July 3, 1989, was transferred forthwith to the Eastern Division of this Court by an order issued by Judge Carl B. Rubin and Judge Herman J. Weber, Judges of this Court sitting in the Western Division at Cincinnati. In that transfer order, Judges Rubin and Weber stated:

Plaintiff is not just another litigant. He is instead a baseball figure of national reputation closely identified with the Cincinnati Reds and the City of Cincinnati. Under such circumstances, it would appear advisable that this case be transferred to a city of the Southern District of Ohio other than Cincinnati.

Although in that same order Judges Rubin and Weber expressed doubt whether this action is removable to federal court, that doubt was expressed, of course, without the benefit of the extensive briefs, voluminous exhibits and oral argument presented to the undersigned judge subsequent to removal. Within the expedited time schedule set by the Court and the parties, I have resolved those issues based upon the record now before me.

The Court emphasizes that the issues decided by this Memorandum and Order are solely questions of law concerning the jurisdiction of a United States district court when a case is removed from a state court based upon diversity of citizenship of the parties to the controversy. The essential facts relative to these jurisdictional issues are not in dispute, and the merits of the controversy between plaintiff Rose and defendant Giamatti are not before the Court at this time. The fact that a judge of the Court of Common Pleas of Hamilton County, Ohio, where this action was commenced, issued a temporary restraining order against the defendants, while a relevant factor among all the circumstances, is clearly not dispositive of any of the jurisdictional issues confronting this Court. The sole question raised by the notice of removal and the motion to remand is whether, under applicable law, the federal court has jurisdiction over the subject matter of this action. For the reasons stated hereafter, I conclude that the action was properly removed to this Court, and that this Court does have jurisdiction over the action which I have a duty to recognize and to enforce.

II. PROCEDURAL HISTORY

Plaintiff, Peter Edward Rose, is the Field Manager of the Cincinnati Reds baseball team. In February of this year, then Commissioner of Baseball Peter V. Ueberroth and then Commissioner of Baseball-elect A. Bartlett Giamatti initiated an investigation regarding allegations that Rose wagered on major league baseball games. On February 23, 1989 Giamatti retained John M. Dowd as Special Counsel for the purpose of conducting the investigation. On May 9, 1989 Dowd submitted a report to Giamatti summarizing the evidence obtained during the investigation. Commissioner Giamatti ultimately scheduled a hearing concerning the allegations for June 26, 1989.

In an effort to prevent Commissioner Giamatti from conducting the June 26 hearing, Rose filed an action in the Court of Common Pleas of Hamilton County, Ohio, on June 19, 1989, seeking a temporary restraining order and preliminary injunction against the pending disciplinary proceedings. Named as defendants in that action were A. Bartlett Giamatti, Major League Baseball, and the Cincinnati Reds. The crux of the complaint¹ is Rose's contention that he is being denied the right to a fair hearing on the gambling allegations by an unbiased decisionmaker. The complaint requests permanent injunctive relief, which, if granted, would prevent Commissioner Giamatti from ever conducting a hearing to determine whether Rose has engaged in gambling activities in violation of the Rules of Major League Baseball. Rose asks that the Court of Common Pleas of Hamilton County, Ohio determine whether he has wagered on major league baseball games, including those of the Cincinnati Reds.

Subsequent to a two-day evidentiary hearing, Common Pleas Court Judge Norbert Nadel issued a temporary restraining order on June 25, 1989. The order enjoined all defendants (1) from any involvement in deciding whether Rose should be disciplined or suspended from participation in baseball and (2) from terminating Rose's employment as Field Manager of the Cincinnati Reds, or interfering with his employment in response to any action taken by Giamatti, or in retaliation for Rose having filed the action. Judge Nadel set July 6, 1989 as the date for a hearing on plaintiff Rose's motion for a preliminary injunction. Commissioner Giamatti and Major League Baseball unsuccessfully sought review of the temporary restraining order in the Ohio Court of Appeals, First Judicial District, in Hamilton County, Ohio; the Court of Appeals held on June 28, 1989 that the temporary restraining order was not an appealable order.

On July 3, 1989, defendant Giamatti filed a notice of removal of the action from the state court to the United States District Court for the Southern District of Ohio, Western Division at Cincinnati, contending that the federal court has diversity jurisdiction over this action. Defendants Cincinnati Reds and Major League Baseball consented to the removal of the action. As previously noted, when the notice of removal was filed Judges Rubin and Weber issued an order transferring the case from the Western Division of this District to the Eastern Division for a random draw among the resident judges. The case was randomly drawn and assigned to the undersigned judge.

On July 5, 1989, Rose filed a motion to remand this action to the Court of Common Pleas of Hamilton County, Ohio, asserting that there is a lack of complete diversity of citizenship between himself and the defendants, and that even if complete diversity exists, defendant Giamatti waived his right of removal by participating in the above-described proceedings in the state courts. At a conference of counsel held on July 5, 1989, the parties agreed and stipulated that the defendants would take no action against Rose until three days after the determination of the pending motion to remand. On July 10, 1989 the Cincinnati Reds filed a memorandum regarding the motion to remand, stating that the Reds take no position concerning the propriety of removal and have assumed an "entirely neutral" position in the litigation. The Commissioner filed a memorandum opposing the motion to remand on July 12, 1989, and Rose filed a reply memorandum on July 17, 1989. Oral argument was heard on July 20, 1989, and the Court, in order to decide the jurisdictional questions promptly, agreed to render its decision on July 31, 1989.

III. DIVERSITY JURISDICTION

The United States district courts are courts of limited jurisdiction, and the federal statute permitting removal of cases filed in state court restricts the types of cases which may be removed from state court to federal court. The removal statute provides in pertinent part that "any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. § 1441(a). The statute also provides that except for a civil action founded on a claim arising under federal law, "any other such action shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought." 28 U.S.C. § 1441(b).

Defendant Giamatti contends in his notice of removal that the district court has original jurisdiction of this action by virtue of 28 U.S.C. § 1332(a), which grants original jurisdiction to the district courts in civil actions where the amount in controversy exceeds $50,000 and the action is between citizens of different states. This jurisdiction of federal courts is commonly known as "diversity" jurisdiction. The reason for granting diversity jurisdiction to federal courts was stated many years ago by Chief Justice Marshall:

However true the fact may be, that the tribunals of the states will administer justice as impartially as those of the nation, to parties of every description, it is not less true that the Constitution itself either entertains apprehensions on this subject, or views with such indulgence the possible fears and apprehensions of suitors, that it has established national tribunals for the decision of controversies between aliens and a citizen, or between citizens of different States.

Bank of the United States v. Deveaux, 5 Cranch 61, 87, 3 L.Ed. 38 (1809).² The diversity statute has historically been interpreted to require complete diversity of citizenship: "... diversity jurisdiction does not exist unless each defendant is a citizen of a different State from each plaintiff." Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365, 373, 98 S.Ct. 2396, 2402, 57 L.Ed.2d 274 (1978) (emphasis in original). If diversity of citizenship is found to exist among the parties to this action and none of the defendants in interest properly joined and served is a citizen of Ohio, then the action is properly...