Smith v. Union Nat. Life Ins. Co.

• Decision Date: 07 November 2001
• Docket Number: No. CIV.A. 5:01-cv-170(Br)(S).,CIV.A. 5:01-cv-170(Br)(S).
• Citation: 187 F.Supp.2d 635
• Parties: Adele SMITH, Individually and as Mother and Next Friend of Marquita Smith, et al., Plaintiffs, v. UNION NATIONAL LIFE INSURANCE COMPANY, et al., Defendants.
• Court: U.S. District Court — Southern District of Mississippi

187 F.Supp.2d 635

Adele SMITH, Individually and as Mother and Next Friend of Marquita Smith, et al., Plaintiffs, v. UNION NATIONAL LIFE INSURANCE COMPANY, et al., Defendants.

No. CIV.A. 5:01-cv-170(Br)(S).

United States District Court, S.D. Mississippi, Western Division.

November 7, 2001.

COPYRIGHT MATERIAL OMITTED

David Lee Sullivan, Laurel, MS, Timothy L. Waycaster, Waycaster & Waycaster, LLP, for Plaintiffs.

Charles E. Griffin, Griffin & Associates, Jackson, MS, Arthur F. Jernigan, Jr., Samuel E.L. Jackson, Watson & Jernigan P.A., Jackson, MS, William C. Brabec, Phelps Dunbar, Jackson, MS, for Defendants.

MEMORANDUM OPINION AND ORDER

BRAMLETTE, District Judge.

This cause is before the Court on the plaintiffs' motion to remand (docket entry no. 6). Having carefully reviewed the motion, response, and memoranda of the parties, as well as the applicable law, the Court finds as follows:

On or about April 26, 2001, the plaintiffs commenced this action by filing their complaint in the Circuit Court of Jefferson County, Mississippi. The complaint names as defendants Union National Life insurance Company ("Union National") and United Insurance Company of America ("United"), as well as nine individual agents. It is undisputed that there is complete diversity of citizenship between the plaintiffs and the insurance company defendants, and that the amount in controversy, exclusive of interest and costs, exceeds $75,000. It is also undisputed that at least some of the individual defendants are Mississippi residents, as are at least some of the plaintiffs.

On May 31, 2001, defendant Union National filed a Notice of Removal. In the Notice, Union National contends that this Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332. Although at least some of the plaintiffs and some of the individual defendants are residents of Mississippi, Union National claims that the Court can properly exercise diversity jurisdiction over this matter because the plaintiffs fraudulently joined the individual defendants to defeat the complete diversity requirement found in 28 U.S.C. § 1331. Union National maintains that the plaintiffs have no cognizable claim against the individual defendants and, therefore, complete diversity exists.

On June 29, 2001, the plaintiffs filed their Motion to Remand asserting that they did not fraudulently join the individual defendants, and accordingly, diversity jurisdiction does not exist. The plaintiffs also assert that removal was not procedurally proper because defendant United did not join in or consent to removal.

The federal removal statute permits a defendant in a state court action to remove the lawsuit to federal district court if federal subject matter jurisdiction existed when the complaint was initially filed. 28 U.S.C. § 1441(a); see Baris v. Sulpicio Lines, Inc., 932 F.2d 1540, 1546 (5th Cir. 1991). In other words, removal of a case from state to federal court is proper if the case could have been brought originally in federal court. Id.

In considering disputes concerning jurisdiction, a "district court, in a challenged case, may retain jurisdiction only where its authority to do so is clear." Gorman v. Abbott Laboratories, 629 F.Supp. 1196, 1203 (D.R.I.1986). A removing defendant bears the burden of demonstrating that jurisdiction properly lies with the district court, and that removal was, indeed, proper. DeAguilar v. Boeing Co., 47 F.3d 1404, 1408 (5th Cir.1995); Jernigan v. Ashland Oil Co., 989 F.2d 812, 815 (5th Cir.1993); Scott v. Communications Services, 762 F.Supp. 147, 149 (S.D.Tex.1991). A federal district court may assert jurisdiction in a case involving citizens of different states where the amount in controversy, exclusive of interest and costs, exceeds $75,000. See 28 U.S.C. § 1332(a). The removing party's responsibility "extends not only to demonstrating a jurisdictional basis for removal, but also necessary compliance with the requirements of the removal statute." Albonetti v. GAF Corporation-Chemical Group, 520 F.Supp. 825, 827 (S.D.Tex. 1981). A defendant's failure to satisfy this burden requires remand. Furthermore, when doubt exists as to the right to removal in the first instance, ambiguities are to be construed against removal. Dodson v. Spiliada Maritime Corp., 951 F.2d 40, 42 (5th Cir.1992); Butler v. Polk, 592 F.2d 1293, 1296 (5th Cir.1979); Samuel v. Langham, 780 F.Supp. 424, 427 (N.D.Tex.1992); see also, Fellhauer v. Geneva, 673 F.Supp. 1445, 1447 (N.D.Ill.1987).

Pursuant to 28 U.S.C. § 1446(b), "all served Defendants must join in the petition for removal to federal court no later than 30 days from the date on which the first Defendant was served." On May 3, 2001, Union National and United were both served with process through the Insurance Commissioner, pursuant to Miss. Code Ann. § 83-21-1. On May 31, 2001, Union National filed its notice of removal. On June 29, 2001, the plaintiffs filed their motion to remand, asserting, inter alia, that removal was not procedurally proper because United did not join in or consent to removal as required by 28 U.S.C. § 1446(a). Thereafter, on July 6, 2001, United filed its joinder to Union National's notice of removal.

The statute governing what actions are removable states in part:

(a) Except as otherwise expressly provided by Act of Congress, 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....

(b) Any civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties or laws of the United States shall be removable without regard to the citizenship or residence of the parties ....

28 U.S.C. § 1441(a)(b). The statute governing the procedure for removal states:

(a) A defendant or defendants desiring to remove any civil action ... from a State court shall file in the district court of the United States for the district and division within which such action is pending a notice of removal signed pursuant to Rule 11 of the Federal Rules of Civil Procedure and containing a short and plain statement of the grounds for removal, together with a copy of all process, pleadings, and orders served upon such defendant or defendants in such action.

(b) The notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within thirty days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter.

28 U.S.C. § 1446(a)(b).

The right to remove is purely statutory. Lewis v. Rego Co., 757 F.2d 66, 68 (3d Cir.1985). Most cases emphasize that the procedural requirements for removal from state to federal court, although not jurisdictional, are to be strictly construed and enforced in favor of state court jurisdiction. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09, 61 S.Ct. 868, 872, 85 L.Ed. 1214 (1941); McManus v. Glassman's Wynnefield, Inc., 710 F.Supp. 1043, 1045 (E.D.Pa.1989). There is nothing in the removal statute that suggests that a district court has "discretion" to overlook or excuse prescribed procedures. Defective removal procedure is a proper ground for remand. Foster v. Chesapeake Ins. Co., Ltd., 933 F.2d 1207, 1215 (3d Cir.1991); Employers Ins. of Wausau v. Certain Underwriters, 787 F.Supp. 165, 166 (W.D.Wis.1992); Shamrock Oil & Gas, 313 U.S. at 108-09, 61 S.Ct. at 872; Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir.1990) (stating that "all doubts [about removal] should be resolved in favor of remand").

When there is doubt as to the right to removal in the first instance, ambiguities are to be construed against removal. Samuel v. Langham, 780 F.Supp. 424, 427 (N.D.Tex.1992); see also, Fellhauer v. Geneva, 673 F.Supp. 1445, 1447 (N.D.Ill. 1987). "The district court, in a challenged case, may retain jurisdiction only where its authority to do so is clear." Gorman v. Abbott Laboratories, 629 F.Supp. 1196, 1203 (D.R.I.1986). "The removing party bears the burden of showing that removal was proper." Medical College of Wisconsin Faculty Physicians & Surgeons v. Pitsch, 776 F.Supp. 437, 439 (E.D.Wis. 1991). "This extends not only to demonstrating a jurisdictional basis for removal, but also necessary compliance with the requirements of the removal statute." Albonetti v. GAF Corporation-Chemical Group, 520 F.Supp. 825, 827 (S.D.Tex. 1981).

As a general rule, all defendants must join in a removal petition in order to effect removal.¹ Northern Illinois Gas Co. v. Airco Industrial Gases, Div. of Airco, Inc., 676 F.2d 270, 272 (7th Cir.1982); Padden v. Gallaher, 513 F.Supp. 770, 771 (E.D.Wis.1981); Creekmore v. Food Lion, Inc., 797 F.Supp. 505, 508 (E.D.Va.1992); Knickerbocker v. Chrysler Corporation, 728 F.Supp. 460 (E.D.Mich.1990); Fellhauer, 673 F.Supp. at 1447; Fields v. Reichenberg, 643 F.Supp. 777, 778 (N.D.Ill. 1986); Darras v. Trans World Airlines, Inc., 617 F.Supp. 1068, 1069 (N.D.Ill.1985). See also Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, 14A Federal Practice and Procedure § 3731, at 504-07 (West 2d Ed.1985).

There is no express statutory requirement for joinder or consent by co-defendants; however, the case law firmly establishes this requirement, which is known as the "rule of unanimity." See Martin Oil Co. v. Philadelphia Life Ins. Co., 827 F.Supp. 1236, 1237 (N.D.W.Va. 1993). Although it is not necessary that all defendants sign the notice of removal, each defendant who has been served must at least communicate its consent to the...