Russo v. Eastwood Constr. Partners

• Decision Date: 07 March 2023
• Docket Number: 2:22-cv-1686-DCN
• Parties: RUSSO, ET AL., Plaintiffs, v. EASTWOOD CONSTRUCTION PARTNERS, LLC, ET AL., Defendants.
• Court: U.S. District Court — District of South Carolina

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RUSSO, ET AL., Plaintiffs, v. EASTWOOD CONSTRUCTION PARTNERS, LLC, ET AL., Defendants.

No. 2:22-cv-1686-DCN

United States District Court, D. South Carolina, Charleston Division

March 7, 2023

ORDER

DAVID C. NORTON, UNITED STATES DISTRICT JUDGE

The following matter is before the court on plaintiffs Jessica Ancrum, Sherryl Anderson, Brianna Bendik, Justin Bendik Randy Brown, Juliann Callery, Juan Dozier, Darryl Felkel Megan Felkel, Nicole Floyd, Candid Fortner, Peter Fortner Kyle Grego, Ashley Hallock, Christian Hallock, Karen Halverson, Samuel Halverson, Kathleen Harvey, Arthur Hunter Janica Hunter, John Jefferson, Sheila Jefferson, Sanchelle Johnson, Ahmad Lewis, Patricia Lewis, Lucinda Liferidge, Phillip Liferidge, Jeremy McNeer, Timothy O'Brien, Wendi O'Brien, Jason Pogar, Lindsay Pogar, Tristan Proctor, Marvin Ravenel, Mary Russo, Diane Sass, Jeremy Sheltra, Matthew Shreve, Dolores Smiley, Mae Taylor, Neverrol Thompson, John Turner, Maria Turner, Lynn Washington, and Janelle Wright's (collectively, “plaintiffs”) motion to remand to state court, ECF No. 11. For the reasons set forth below, the court grants the motion to remand.

I. BACKGROUND

Plaintiffs brought this action against defendants alleging that either due to defective products, defective installation, or otherwise improper construction, water intrusion resulted or will result in the plaintiffs' homes. ECF No. 2-2, 3d. Amend.

Compl. ¶¶ 56-67. This damage will require, or has required, plaintiffs to spend substantial sums of money to repair the properties. Id. The class is defined as all owners of the affected properties, with a few limited exceptions, and is composed of 388 homeowners situated in the Wynfield Forest, Oakley Pointe, Sophia Landing, Ryder's Landing, and Retreat at Beresford developments near Charleston, South Carolina. Id. ¶¶ 45-46, 70-71.

Plaintiffs allege that defendants Eastwood Construction and Eastwood Homes (combined^[1], “Eastwood”) constructed and were the general contractors for the construction of the properties. 3d. Amend. Compl. ¶ 47. Eastwood engaged subcontractors to construct the properties including defendants Exterior Contract Services (“Exterior Services”), Alpha Omega Construction Group, Inc. (“Alpha Omega”), and Southcoast Exteriors, Inc. (“Southcoast”). Id. ¶¶ 48-50. Exterior Services, Alpha Omega, and Southcoast were engaged to install roofing. Id. Defendants Ciro Lopez (“Lopez”) and Juan Garza Ramos (“Ramos”) performed roofing work on the properties as subcontractors to Exterior Services, and John Doe Subcontractors 1-25 (“John Does”) furnished labor, services, and/or materials in the construction of roofing on the properties as subcontractors and suppliers to Eastwood, Exterior Services, Southcoast, or Alpha Omega. Id. ¶¶ 51-52. John Does' identities were not yet known at the time of the filing of the third amended complaint. Plaintiffs alleged three causes of action against Eastwood, Exterior Services, Alpha Omega, Southcoast, Lopez, Ramos, and John Does (collectively, the “Contractor Defendants”). Id. ¶¶ 89-114. Plaintiffs bring this class action for (1) negligence/gross negligence, (2) breach of implied warranties, and (3) violation of the South Carolina Unfair Trade Practices Act (“SCUTPA”), SC Code Ann. §§ 29-5-10, et seq., against the Contractor Defendants. Id. Defendant Air Vent, Inc. (“Air Vent”) manufactured and sold the roof ridge vent product installed on the roofs of the properties that the plaintiffs allege is defective. Id. ¶¶ 53-54, 56. Plaintiffs brought three claims against Air Vent: (1) breach of implied warranties, (2) negligence, and (3) violation of SCUTPA. Id. ¶¶ 115-50.

Plaintiffs filed this class action lawsuit on behalf of homeowners in several subdivisions in the Charleston, South Carolina area on August 26, 2020, in the Charleston County Court of Common Pleas. ECF No. 2-1, 3d Amend. Compl., Civil Action No. 2020-CP-10-03786. The court heard a similar matter on March 18, 2021. Russo v. Eastwood Construction Partners, LLC, 2020-CP-10-03794, 2021 WL 1059023 (D.S.C. Mar. 18, 2021) (“Russo”). This court dismissed that case under Colorado River Water Conservation District v. United States, 424 U.S. 800 (1976), citing the federal court's right to abstain from matters duplicative of a state court proceeding. The state court proceeding at issue is Smiley v. Exterior Contract Services, No. 2020-CP-10-03786 (Charleston Cnty. C.P. Aug. 26, 2020) (“Smiley”). On May 27, 2022, Air Vent removed Smiley, the instant action, from state court to federal court pursuant to 28 U.S.C. §§ 1332, 1441, 1446, and 1453. ECF No. 2. Plaintiffs filed this motion to remand to state court on June 24, 2022. ECF No. 11. Eastwood responded in opposition on July 15, 2022, ECF No. 16, and Air Vent responded in opposition, ECF No. 17, on that same day. Plaintiffs replied to those responses on July 22, 2022. ECF No. 18.

On or around December 20, 2022, plaintiffs dismissed without prejudice all claims against Air Vent, Alpha Omega, and the named and unnamed individual contractors. See ECF Nos. 30, 32. Shortly thereafter, the court requested that the parties file supplemental briefs on the issue of timeliness of removal to federal court under the Class Action Fairness Act of 2005 (“CAFA”), Pub. L. No. 109-2, 119 Stat. 4-14 (codified in scattered sections of Title 28 of the United States Code), given the dismissal of Air Vent. On January 6, 2023, plaintiffs responded in support of the motion to remand, ECF No. 36; defendant Southcoast responded in support, ECF No. 33; whereas both Eastwood and Exterior Services responded in opposition, ECF Nos. 34, 35. On February 10, 2023, the court requested that the parties file a second supplementary brief on the discrete issue as to whether the court may still consider Air Vent's response in opposition to the motion to remand. On February 15, 2023, plaintiffs filed a brief explaining the court could not consider those arguments, ECF No. 41, whereas Eastwood and Exterior Services filed a joint brief explaining that the court could consider those arguments, ECF Nos. 39, 40. On February 16, 2023, the court held a hearing on the motion to remand. ECF No. 42. As such, the motion has been fully briefed and is now ripe for review.

II. STANDARD

A. Motion to Remand

Federal courts are of constitutionally limited jurisdiction. “The party seeking removal bears the burden of demonstrating that removal jurisdiction is proper,” In re Blackwater Security Consulting, LLC, 460 F.3d 576, 583 (4th Cir. 2006), and doubts regarding the propriety of removal are to be resolved in favor of retaining state court jurisdiction, Baxley v. Advance Auto Parts, Inc., 2011 WL 586072 at *1 (D.S.C. Feb. 9, 2011) (citing Marshall v. Manville Sales Corp., 6 F.3d 229, 232 (4th Cir. 1993)). Because removal raises significant federalism concerns, “[i]f federal jurisdiction is doubtful, a remand is necessary.” Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994).

Generally, 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 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). Original jurisdiction exists where a claim arises from federal law, see 28 U.S.C. § 1331, or where the amount in controversy exceeds the sum or value of $75,000 and the claim is between citizen of different states, see 28 U.S.C. § 1332.

Under 28 U.S.C. § 1332(a), a federal district court has “original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between . . . citizens of different States.” 28 U.S.C. § 1332(a). There must be complete diversity, meaning “no party shares common citizenship with any party on the other side.” Mayes v. Rapoport, 198 F.3d 457, 461 (4th Cir. 1999) (citing Strawbridge v. Curtiss, 7 U.S. 267 (1806)). Therefore, if a case originally brought in state court could have been instituted in federal court under diversity jurisdiction, the defendant may remove the action to federal court so long as certain procedures are followed and specific conditions are met. 28 U.S.C. §§ 1441, 1446. For purposes of diversity jurisdiction, the citizenship of an artificial entity other than a corporation is coextensive with the citizenship of all of its members or partners. Americold Realty Tr. v. Conagra Foods, Inc., 577 U.S. 378, 382 (2016); Cent. W.Va. Energy Co., Inc. v. Mountain State Carbon, LLC, 636 F.3d 101, 103 (4th Cir. 2011) (“For purposes of diversity jurisdiction, the citizenship of a limited liability company . . . is determined by the citizenship of all of its members.”).

To remove a case to federal court, “the defendant or defendants must file a ‘notice of removal[] containing a short and plain statement of grounds for removal.'” Hartford Fire Ins. Co. v. Harleysville Mut. Ins. Co., 736 F.3d 255, 259 (4th Cir. 2013) (quoting 28 U.S.C. § 1446(a)).

B. Class Action Fairness Act of 2005, 28 U.S.C. § 1453

“Congress enacted CAFA in 2005 to expand subject matter jurisdiction in the federal courts over ‘interstate' class actions ‘of national importance.'” Dominion Energy, Inc. v. City of Warren Police & Fire Ret Sys., 928 F.3d 325, 329 (4th Cir. 2019) (quoting CAFA, Pub. L. No. 190-2, § 2(b)(2), 119 Stat. 4, 5 (2005)). To accomplish this purpose, it amended the diversity statute, 28 U.S.C. § 1332. Id.; see also Johnson v. Advance Am., 549 F.3d 932, 935 (4th Cir. 2008) (“CAFA amended, among other things, the concept of diversity jurisdiction for class actions to require only minimal diversity.”). In general, removal pursuant to CAFA is...