Somlyo v. J. Lu-Rob Enterprises, Inc.

• Decision Date: 09 May 1991
• Docket Number: No. 932,LU-ROB,D,932
• Parties: Roy A. SOMLYO, Plaintiff-Appellant, v. J.ENTERPRISES, INC.; and Louis G. Bond, Defendants-Appellees. ocket 90-7551.
• Court: U.S. Court of Appeals — Second Circuit

Page 1043

932 F.2d 1043

19 Fed.R.Serv.3d 1076

Roy A. SOMLYO, Plaintiff-Appellant, v. J. LU-ROB ENTERPRISES, INC.; and Louis G. Bond, Defendants-Appellees.

No. 932, Docket 90-7551.

United States Court of Appeals Second Circuit.

Argued Jan. 16, 1991.

Decided May 9, 1991.

David M. Somlyo, New York City (John J. Witmeyer III, Ford Marrin, Esposito & Witmeyer, of counsel) for plaintiff-appellant.

Koteles Alexander, Silver Spring, Md. (Stephanie Y. Bradley, Gartrell & Alexander, of counsel), for defendants-appellees.

Before OAKES, Chief Judge, and CARDAMONE and WALKER, Circuit Judges.

OAKES, Chief Judge:

Diversity of citizenship jurisdiction is permitted by Article III of the federal Constitution and statutes promulgated thereunder in order to protect the citizens of one state from "local prejudice"--unfair discrimination by courts of another state. Under 28 U.S.C. Sec. 1441, diversity cases are removable to federal court if certain requirements are met. This case presents a novel question of civil procedure that inverts the semantic history of diversity jurisdiction: whether compliance with the Local Rules of a federal district court is a prerequisite to the timely filing of a notice of removal under the removal statute. Today, we answer this question in the affirmative. We further hold, however, that the district court has power to interpret the Local Rules as well as the discretion to determine when fairness demands that departure from the Local Rules be excused. On this basis, we affirm the order of the district court and remand for further proceedings.

I. PROCEDURAL BACKGROUND

This action for breach of contract, fraud, conversion, and breach of fiduciary duty arises out of an agreement between appellant Roy A. Somlyo ("Somlyo") and appellees Louis G. Bond ("Bond") and J. Lu-Rob Enterprises ("Lu-Rob") regarding a proposed, ill-fated Broadway musical, "Betsey Brown." Somlyo filed the action on December 2, 1989 in the Supreme Court of the State of New York. Bond, President of Lu-Rob, a Massachusetts corporation, sought to remove the action from state to federal court by mailing a petition for removal, ¹ a filing fee, as well as a bond fee to the Clerk's Office for the District Court for the Southern District of New York (the "Clerk's Office") on December 29, 1989. The Clerk's Office received and accepted the petition on January 2, 1990, logging it in under the attorney's name. However, on January 4, 1990, when the papers were passed to the Cashier's Office, the cashier discovered that the petition did not have a civil cover sheet and legal backing, which are required under Rule 4 of the Rules for the Division of Business Among District Judges of the Southern District of New York ("Business Rule 4") ² and Local Civil Rule 1(a) ³ respectively. The cashier noted the deficiencies in the Clerk's Office's rejection log and called Bond to notify him of the problems. In a letter dated January 4, 1990, the cashier confirmed the notification to Bond. Although the Clerk's Office's usual policy is to return non-conforming documents to the attorney, upon Bond's request, the Clerk's Office kept the petition pending the receipt of the cover sheet and backing. After several failed attempts to comply with the Local Rules, appellees delivered a conforming petition on January 12, 1990, which the Clerk's Office processed on January 16, 1990 and stamped filed as of that date, forty-five days after the complaint had been filed in state court.

Upon learning of appellees' petition for removal, Somlyo moved to remand the action pursuant to 28 U.S.C. Sec. 1447(c) on the ground that appellees' petition had not been filed within the thirty-day period prescribed by 28 U.S.C. Sec. 1446(b). On May 3, 1990, the district court denied Somlyo's motion, holding that appellees' petition should be deemed filed as of the date it was first received by the Clerk's office, and certified the case for interlocutory appeal pursuant to 28 U.S.C. Sec. 1292(b). On May 22, 1990, the district court issued an amended order clarifying the issue for interlocutory appeal as, "when a petition for removal is timely filed within the meaning of 28 U.S.C. Sec. [1446(b) ] and the extent to which the resolution of that issue can properly turn upon compliance with the local court rules."

II. DISCUSSION

A. Standard of Review

The district court correctly characterized the issue at hand as "a pure question of law." As such, we review the district court's ruling de novo. See Pullman-Standard v. Swint, 456 U.S. 273, 287, 102 S.Ct. 1781, 1789, 72 L.Ed.2d 66 (1982); United States v. Rexach, 896 F.2d 710, 713 (2d Cir.) cert. denied, --- U.S. ----, 111 S.Ct. 433, 112 L.Ed.2d 417 (1990).

B. Removal Statute

The right to remove a state court action to federal court on diversity grounds is statutory, see Little York Gold-Washing & Water Co. v. Keyes, 96 U.S. 199, 201, 24 L.Ed. 656 (1877), and must therefore be invoked in strict conformity with statutory requirements, see 1A J. Moore & B. Ringle, Moore's Federal Practice p 0.157, at 33-34 (2d ed.1989). In light of the congressional intent to restrict federal court jurisdiction, as well as the importance of preserving the independence of state governments, federal courts construe the removal statute narrowly, resolving any doubts against removability. See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108, 61 S.Ct. 868, 872, 85 L.Ed. 1214 (1941); 1A J. Moore & B. Ringle, Moore's Federal Practice p 0.157 at 38 (2d ed.1989).

Under 28 U.S.C. Sec. 1446(b), the petitioning party must file a notice of removal with the district court within thirty days after receipt of the initial pleading. See 28 U.S.C. Sec. 1446(b) (1988). While the statutory time limit is mandatory, it is "merely a formal and modal requirement and is not jurisdictional." Fristoe v. Reynolds Metals Co., 615 F.2d 1209, 1212 (9th Cir.1980). Nevertheless, absent a finding of waiver or estoppel, federal courts rigorously enforce the statute's thirty-day filing requirement. See, e.g., Nicola Prods. Corp. v. Showart Kitchens, Inc., 682 F.Supp. 171, 173 (E.D.N.Y.1988); Martropico Compania Naviera S.A. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 428 F.Supp. 1035, 1037 (S.D.N.Y.1977).

C. Local Rules

Pursuant to 28 U.S.C. Sec. 2071(a) and Rule 83 of the Federal Rules of Civil Procedure, district courts have the power to enact Local Rules governing their practice, procedure and conduct of business. Local Rules have the force of law, see Weil v. Neary, 278 U.S. 160, 169, 49 S.Ct. 144, 148, 73 L.Ed. 243 (1929), to the extent that they do not conflict with rules prescribed by the Supreme Court, Acts of Congress, or the Constitution, see United States v. Yonkers Bd. of Educ., 747 F.2d 111, 112 (2d Cir.1984).

The parties do not dispute that when appellees' petition for removal arrived for the first time in the Clerk's Office via Express Mail it did not conform to two of the Local Rules of the Southern District of New York. The petition did not contain an information and designation form, commonly known as a civil cover sheet, in violation of Business Rule 4(a). Similarly, it was not enclosed in a cover endorsed with the name and address of counsel, commonly called a legal back, in violation of Civil Rule 1(a). Not surprisingly, the parties disagree as to whether appellees' noncompliance with the Local Rules and the consequent refusal of the Clerk's Office to file the petition until it did conform may determine whether they filed their notice of removal in a timely manner. The absence of any other authority on this issue coupled with policy considerations convince us that this question must be answered in the affirmative.

With regard to potential conflicts between the Local Rules and other legal authority, we find no source of constitutional or statutory law that fully defines "filing" within the meaning of 28 U.S.C. Sec. 1446(b). While section 1446(b) prescribes a mandatory thirty-day time limit for the filing of a notice of removal, it does not address what one must do to file such a notice. In the face of such statutory silence, principles dictating a narrow construction of section 1446(b), see supra, are of no use to us here.

Similarly, Federal Rules of Civil Procedure 5(e), entitled "Filing With the Court Defined," does not provide an answer. Rule 5(e) states:

The filing of pleadings and other papers with the court as required by these rules shall be made by filing them with the clerk of the court, except that the judge may permit the papers to be filed with the judge, in which event the judge shall note thereon the filing date and forthwith transmit them to the office of the clerk.

Rule 5(e) answers the "who" and "where" of the filing inquiry, but not the "how"; it tells us that litigants must file documents with the clerk of the court, or, on occasion, with the judge, but it does not tell us what procedure must be followed, if any, before a document may be deemed filed. The rule's references to the clerk of the court and the judge, however, indicate that the clerk, and ultimately the district court judge, are the arbiters of the filing process.

Our review of case authority construing federal statutes also fails to supply a definition of "filing" under the removal statute. Appellees unpersuasively contend that Greenwood v. State of New York Office of Mental Health, 842 F.2d 636 (2d Cir.1988), provides a binding definition. Greenwood holds that when a complaint is filed in a night depository box maintained by the clerk pursuant to a Local Rule, the filing date for the purposes of the statute of limitation is the day the plaintiff placed the complaint in the depository box, as recorded by the date stamper provided by the clerk, rather than the following day as provided for in the Local Rule. See id. at 639. The decision in Greenwood turns on a recognition that "[i]t makes little sense to disregard the actual time of delivery after establishing...