Schmidt v. G.S. Polymers, Inc.

• Decision Date: 02 December 2019
• Docket Number: CASE NO. 1:19-CV-01605-DAP
• Parties: RHONDA SCHMIDT, Plaintiff, v. G.S. POLYMERS, INC., et al., Defendants.
• Court: U.S. District Court — Northern District of Ohio

RHONDA SCHMIDT, Plaintiff, v. G.S. POLYMERS, INC., et al., Defendants.

CASE NO. 1:19-CV-01605-DAP

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION

December 2, 2019

JUDGE DAN AARON POLSTER

MAGISTRATE JUDGE JONATHAN D. GREENBERG

REPORT & RECOMMENDATION

This matter is before the magistrate judge pursuant to Local Rule 72.2. Before the Court is Plaintiff's Motion to Remand. (Doc. No. 8.) For the following reasons, the undersigned recommends that the Motion to Remand be GRANTED.

I. Factual and Procedural Background

Defendants Ellsworth Corporation, Resinlab, LLC, GS Polymers, and Ellsworth Adhesives Specialty Chemical Distribution, Inc. ("the Removing Defendants") removed this state-law personal injury case to federal court after being notified by counsel for defendant Lincoln Electric "that it had reached a settlement with Plaintiff and would be dismissed from the litigation." (Doc. No. 1 at ¶¶5-9.) The email on which the Removing Defendants rely in support of removal and jurisdiction was sent on June 21, 2019, from Gregory Thompson, counsel for Lincoln Electric, and reads as follows:

All,

Pursuant to the joint defense agreement (the "JDA"), I am providing notice that Lincoln Electric has reached a confidential settlement and will be dismissed from Schmidt litigation (Cuyahoga County Court of Common Pleas Case No. CV-18-900797). Lincoln Electric will provide notice to LMI that it has settled and will be dismissed. Regarding the experts: because Roetzel & Andress has been coordinating their retention, Lincoln Electric will deem this email as the requisite notice under the JDA to relieve it of any further obligations for payment of expert fees and expenses. Please send us any final invoices. The site inspection for June 25 is still on. We will certainly cooperate with you in scheduling any defense site inspection or depositions of Lincoln Electric employees.

Regards,

Greg

(Doc. No. 1-3.)

As defendant Lincoln Electric is the only non-diverse party in the case,¹ the Removing Defendants assert that removal is proper, and this Court has diversity jurisdiction over this case. (Doc. No. 1, 11.) Plaintiff contests the Removing Defendants' assertion that removal is proper and filed a motion to remand to state court. (Doc. No. 8.)

II. Law and Analysis

A. Applicable Standards

This district has previously stated the standard for motions to remand as follows:

A defendant may remove to federal court only state court actions that originally could have been filed in federal court. Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 107 S. Ct. 2425, 96 L.Ed. 2d 318 (1987); 28 U.S.C. § 1441(a). As a court of limited jurisdiction, a federal district court must proceed cautiously in determining that it has subject matter jurisdiction. Musson Theatrical, Inc. v. Fed. Express Corp., 89 F.3d 1244, 1252 (6th Cir. 1996). The court must give "due regard" to the power reserved to the states under the Constitution for the determination of controversies in the state courts. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09,61 S. Ct. 868, 85 L.Ed. 1214 (1941). Accordingly, removal statutes must be construed strictly to promote comity and preserve jurisdictional boundaries between state and federal courts. Alexander v. Elec. Data Sys. Corp., 13 F.3d 940, 949 (6th Cir. 1994). "All doubts as to the propriety of removal are resolved in favor of remand." Coyne v. Am. Tobacco Co., 183 F.3d 488, 493 (6th Cir. 1999). The removing defendant bears the burden of proving the court's jurisdiction. See Rogers v. Wal-Mart Stores, Inc., 230 F.3d 868, 871 (6th Cir. 2000).

Sanders v. Arctic Cat, Inc., No. 5:15-CV-2286, 2016 WL 1409212, at *2 (N.D. Ohio Apr. 11, 2016). An order remanding a case to state court "is not reviewable on appeal or otherwise," with two exceptions that are not applicable here. 28 U.S.C. § 1447(d).²

28 U.S.C. § 1446 sets forth the timing and procedure for the removal of civil actions. Under § 1446(b)(1), notice of removal must be filed within 30 days of the receipt of the initial pleadings or summons by the defendant. 28 U.S.C. § 1446(b)(1). If the civil action is not removable when filed, the timing for removal set forth in § 1446(b)(3) controls: "a notice of removal may be filed within 30 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)(3).

"Removability under § 1446(b)(3) is conditioned upon the 'voluntary actions' of plaintiff." Sanders, 2016 WL 1409212, at *3 (quoting Davis v. McCourt, 226 F.3d 506, 510 n.3 (6th Cir. 2000)). This requirement that a plaintiff take some "voluntary action" to create diversity jurisdiction where it did not exist before, known as the "voluntary-involuntary rule," "'is meant to safeguard the integrity of federal jurisdiction.'" Id. (citing Jackson v. E-Z-Go Div. of Textron, Inc., Civil Action No. 3:12-CV-154-H, 2012 WL 2562830, at *3 (W.D. Ky. June 29, 2012)).

B. Application

1. "Other paper" under § 1446(b)(3)

The Removing Defendants argue the email from Lincoln Electric's counsel constitutes "other paper" under § 1446(b)(3) and assert that since Lincoln Electric does not need to be dismissed from the case before removal is proper, they removed this case timely and this Court has jurisdiction. (Doc. No. 1 at 1-4.) Plaintiff asserts the email from Lincoln Electric's counsel fails to qualify as "other paper" under the statute on two grounds: (1) it came from a co-defendant, and therefore is not a "voluntary act" by the Plaintiff as required; and (2) the email "does not clearly and with certainty assure when and under what terms dismissal of Lincoln Electric will occur . . . ." (Doc. No. 8 at 4.)

Both sides note there is little Sixth Circuit case law on the definition of "other paper" under § 1446(b)(3). (Doc. No. 8 at 4; Doc. No. 1 at 3.) See also Berera v. Mesa Med. Grp., PLLC, 779 F.3d 352, 365 (6th Cir. 2015) ("We have yet to fully expound the meaning of 'other paper' under § 1446(b)(3)."). "The definition of 'other paper' is broad and may include any formal or informal communication received by a defendant." Hiser v. Seay, No. 5:14-CV-170, 2014 WL 6885433, at *2 (W.D. Ky. Dec. 5, 2014). See also Berera, 779 F.3d at 365 ("Thus, as a general matter, 'documents such as deposition transcripts, answers to interrogatories and requests for admissions, ... amendments to ad damnum clauses of complaints, and correspondence between the parties and their attorneys or between the attorneys' may constitute 'other papers' under § 1446(b)(3).") (citation omitted).³ "Virtually every court that has considered the issue hasheld that settlement demand letters and other correspondence between parties may constitute 'other paper.'" Mathes v. Waller, No. 3:19-cv-00751, 2019 WL 5394310, at *5 (M.D. Tenn. Oct. 22, 2019).

Settlement is a "voluntary act" by a plaintiff for purposes of the voluntary-involuntary rule. Comer v. Schmitt, No. 2:15-cv-2599, 2015 WL 5954589, at *3 (S.D. Ohio Oct. 14, 2015) ("The Court is mindful that other courts in the Sixth Circuit have held that where a plaintiff agrees to a settlement with all non-diverse defendants, '[p]laintiff, by his voluntary act has definitely indicated his intention to discontinue the action as to the non-diverse defendant [and] indicated that he no longer desires to dictate the forum and the case then becomes removable under 28 U.S.C. § 1446(b).'") (quoting DiNatale v. Subaru of America, 624 F. Supp. 340, 343 (E.D. Mich. 1985)). "Courts have [] held that, in the case of a settlement agreement, if a defendant has come into possession of a settlement agreement showing that all claims against the non-diverse defendant have been settled and that the claims will be dismissed, the remaining defendant does not need to wait until the state court actually dismisses all claims against the non-diverse defendant in order to remove." Mathes, 2019 WL 5394310, at *6 (citing Hiser, 2014 WL 6885433, at *2) (additional citations omitted).

At least one district within this circuit holds "that removal is improper when the diverse defendant removes an action before the plaintiff executes a release with the non-diverse parties." Bruin v. Miller, Civil Action No. 12-129-DLB-JGW, 2012 WL 12925030, at *2 (E.D. Ky. Aug. 30, 2012) (citing Reid v. Am. Commerce Ins. Co., No. 6:07-cv-73, 2007 WL 1173030, at *4 (E.D. Ky. Apr. 19, 2007)) (In Reid, "[t]he [c]ourt noted that the plaintiff 'had not entered into a binding and enforceable settlement agreement and [plaintiff] was not obliged to proceed with the settlement of her claims against [the non-diverse defendant].'").

As the court noted in Mathes, the ultimate question is whether the June 21, 2019 email from counsel for Lincoln Electric "constituted a document from which it could be 'ascertained' that the case had become removable." Mathes, 2019 WL 5394310, at *6. In Forest Creek, the Sixth Circuit emphasized:

We have stated that the thirty-day period for removal begins to run when the initial pleading or subsequent paper first provides 'solid and unambiguous information that the case is removable." Berera v. Mesa Med. Grp., PLLC, 779 F.3d 352, 364 (6th Cir. 2015) (internal quotation marks and citation omitted). Therefore, the thirty-day period for removal begins when a defendant has solid and unambiguous information that a federal district court would have jurisdiction over the case.

695 F. App'x at 912 (emphasis added).

Courts "evaluate[] whether removal was proper by looking at the four corners of the 'other paper' - here the email - and not considering anything else, such as the subjective knowledge of the defendant or general context." Nancy Doty, Inc. v. Fox Head, Inc., No. 3:19-cv-0405-SI, 2019 WL 4237760, at *3 (D. Ore. Sept. 6, 2019) (citing Harris v. Bankers Life & Cas. Co., 425 F.3d 689, 694 (9th Cir. 2005)). See also Mathes, 2019 WL...