Tilley v. Tisdale

• Decision Date: 27 December 2012
• Docket Number: Civil Action No. 1:12–CV–367.
• Citation: 914 F.Supp.2d 846
• Parties: Michael TILLEY, Plaintiff, v. Paul TISDALE d/b/a Green Light Music, Young Money Records Entertainment, LLC, Cash Money Records, Inc., and Universal Music Group, Inc., Defendants.
• Court: U.S. District Court — Eastern District of Texas

914 F.Supp.2d 846

Michael TILLEY, Plaintiff,

v.Paul TISDALE d/b/a Green Light Music, Young Money Records Entertainment, LLC, Cash Money Records, Inc., and Universal Music Group, Inc., Defendants.

Civil Action No. 1:12–CV–367.

United States District Court, E.D. Texas.

Dec. 27, 2012.

Gary Michael Riebschlager, Brent Coon & Associates, Houston, TX, for Plaintiff.

Patricia Anne Hair, Phelps Dunbar, Houston, TX, Bruce V. Schewe, Dan B. Zimmerman, Phelps Dunbar, New Orleans, LA, for Defendants.

MEMORANDUM AND ORDER

MARCIA A. CRONE, District Judge.

Pending before the court is Plaintiff Michael Tilley's (“Tilley”) Motion for Remand (# 8). Tilley argues that the court lacks subject matter jurisdiction of this action because Defendants Cash Money Records, Inc. (“Cash Money Records”) and Universal Music Group, Inc. (“Universal Music”) did not obtain consent from all properly joined and served defendants and Tilley's original petition does not present a question arising under federal law. Having considered the motion, the submissions of the parties, and the applicable law, the court is of the opinion that remand is warranted.

I. Background

On June 20, 2012, Tilley filed his original petition in the 136th Judicial District Court of Jefferson County, Texas, asserting claims for breach of contract, conversion, tortious interference with contract, tortious interference with business relationship, breach of fiduciary duty, and conspiracy against Cash Money Records, Universal Music, Paul Tisdale d/b/a Green Light Music (“Tisdale”), and Young Money Records Entertainment, LLC (collectively, “Defendants”). On July 24, 2012, Cash Money Records and Universal Music (“Removing Defendants”) removed the case to federal court on the basis of federal question jurisdiction, contending that Tilley alleges violations of federal law. On August 23, 2012, Tilley filed a motion to remand the case to state court, maintaining that his claims rely solely on state law and that Removing Defendants failed to obtain consent from Tisdale.

There is no dispute that Cash Money Records and Universal Music were served on June 27, 2012. Whether Tisdale was properly served, however, is at issue in the instant motion. Tilley contends that service on Tisdale was perfected on July 14, 2012, while Removing Defendants aver that Tisdale was never properly served because the return of service was fatally defective. There are two returns of service in the record before the court, neither of which was included with the Notice of Removal because Removing Defendants contend that the returns did not appear on the state court's docket at the time of removal. In connection with Tilley's motion to remand, he attached a document filed in state court on July 20, 2012, by Lt. Joseph L. Toth (“Lt. Toth”), on behalf of Tisdale, requesting a stay under § 522 of the Service Member Civil Relief Act (“SMCRA”).¹ Attached to the request was a partially-completed return of service (“first return of service”). In conjunction with his reply, however, Tilley included a second return of service from Jefferson County (“Jefferson County return of service”), evidencing service of Tisdale via certified mail on July 14, 2012. Removing Defendants challenge the validity of both returns of service.

II. AnalysisA. Remand–Consent to Removal

The procedure for effectuating removal is set forth in 28 U.S.C. § 1446. Johnson v. Heublein, Inc., 227 F.3d 236, 240 (5th Cir.2000); see In re 1994 Exxon Chem. Fire, 558 F.3d 378, 391 (5th Cir.2009); Bd. of Regents of Univ. of Tex. Sys. v. Nippon Tel. & Tel. Corp., 478 F.3d 274, 278 (5th Cir.2007); Moreno Energy, Inc. v. Marathon Oil Co., 884 F.Supp.2d 577, 581–83 (S.D.Tex.2012). Section 1446(a) provides:

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.

28 U.S.C. § 1446(a). In December 2011, § 1446 was amended as part of the Federal Courts Jurisdiction and Venue Clarification Act of 2011 (“JVCA”) to, inter alia, clarify the procedural requirements for removal.²

Penson Fin. Servs., Inc. v. Golden Summit Investors Grp., Ltd., No. 3:12–CV–300, 2012 WL 2680667, at *2 (N.D.Tex. July 5, 2012); seePub.L. No. 112–63, § 103(b), 125 Stat. 758, 760–61 (Dec. 7, 2011). The amended version codifies the court-created “rule of unanimity” and provides that in cases involving multiple defendants, “all defendants who have been properly joined and served must join in or consent to the removal of the action.” 28 U.S.C. § 1446(b)(2)(A); see Adams v. Ford Motor Co., Civil Action No. 12–2168, 2012 WL 5877957, at *2 (W.D.La. Nov. 20, 2012) (noting that § 1446(b)(2)(A) codified the rule of unanimity); Penson Fin. Servs., 2012 WL 2680667, at *5 (same). Although the United States Court of Appeals for the Fifth Circuit traditionally followed the “First–Served Defendant Rule” established in Getty Oil Corp.,³§ 1446, as amended by the JVCA, adopted the “Last–Served Defendant Rule.” See Elchehabi v. Chase Home Fin., LLC, No. H–12–1486, 2012 WL 3527178, at *2 (S.D.Tex. Aug. 15, 2012); Penson Fin. Servs., 2012 WL 2680667, at *5 n. 3. Accordingly, § 1446(b)(2)(B) states that “[e]ach defendant shall have 30 days after receipt by or service on that defendant of the initial pleading or summons ... to file the notice of removal.” 28 U.S.C. § 1446(b)(2)(B).

The Fifth Circuit has held that there must be a timely filed, written indication from each served defendant, or from some person purporting to act formally on the defendant's behalf and with the authority to do so, confirming that the defendant has actually consented to removal.⁴See Gillis v. Louisiana, 294 F.3d 755, 759 (5th Cir.2002); Getty Oil Corp., 841 F.2d at 1262 n. 11;see also Extreme Outdoors Ltd. v. Gary Yamamoto Custom Baits, Inc., No. H–08–1259, 2008 WL 2810874, at *4 (S.D.Tex. July 21, 2008); Smith v. Union Nat'l Life Ins. Co., 187 F.Supp.2d 635, 640 (S.D.Miss.2001); Spillers v. Tillman, 959 F.Supp. 364, 369 (S.D.Miss.1997). The failure to include all defendants properly joined and served in the state action renders the notice of removal defective. See Farias v. Bexar Cnty. Bd. of Trs. for Mental Health Mental Retardation Servs., 925 F.2d 866, 871 (5th Cir.), cert. denied,502 U.S. 866, 112 S.Ct. 193, 116 L.Ed.2d 153 (1991); Acme Brick Co. v. Agrupacion Exportadora de Maquinaria Ceramica, 855 F.Supp. 163, 165 (N.D.Tex.1994).

District courts within the Fifth Circuit have closely adhered to the requirements for removal under § 1446. See, e.g., Louisiana v. Aspect Energy, LLC, No. 2:11–CV–489, 2011 WL 3759754, at *2–3 (W.D.La. Aug. 23, 2011); Extreme Outdoors Ltd., 2008 WL 2810874, at *4–5;Rodriguez v. Nat'l R.R. Passenger Corp., 483 F.Supp.2d 553, 558 (W.D.Tex.2007). The court “must presume that a suit lies outside this limited jurisdiction, and the burden of establishing federal jurisdiction rests on the party seeking the federal forum.” Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir.), cert. denied,534 U.S. 993, 122 S.Ct. 459, 151 L.Ed.2d 377 (2001) (citing Kokkonen v. Guardian Life Ins. Co. Of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994)); see also Hertz Corp. v. Friend, 559 U.S. 77, 95–96, 130 S.Ct. 1181, 1194, 175 L.Ed.2d 1029 (2010); Boone v. Citigroup, Inc., 416 F.3d 382, 388 (5th Cir.2005). When considering a motion to remand, “[t]he removing party bears the burden of showing that federal jurisdiction exists and that removal was proper.” Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir.2002); accord DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 n. 3, 126 S.Ct. 1854, 164 L.Ed.2d 589 (2006); Gutierrez v. Flores, 543 F.3d 248, 251 (5th Cir.2008); In re Hot–Hed Inc., 477 F.3d 320, 323 (5th Cir.2007); Guillory v. PPG Indus., Inc., 434 F.3d 303, 308 (5th Cir.2005); Boone, 416 F.3d at 388. “ ‘This extends not only to demonstrating a jurisdictional basis for removal, but also necessary compliance with the requirements of the removal statute.’ ” Roth v. Kiewit Offshore Servs., Ltd., 625 F.Supp.2d 376, 382 (S.D.Tex.2008) (quoting Albonetti v. GAF Corp.-Chem. Grp., 520 F.Supp. 825, 827 (S.D.Tex.1981)); accord Crossroads of Tex., L.L.C. v. Great–West Life & Annuity Ins. Co., 467 F.Supp.2d 705, 708 (S.D.Tex.2006); Smith v. Baker Hughes Int'l Branches, Inc., 131 F.Supp.2d 920, 921 (S.D.Tex.2001). “The removal statute ties the propriety of removal to the original jurisdiction of the federal district courts.” Frank v. Bear Stearns & Co., 128 F.3d 919, 922 (5th Cir.1997); see28 U.S.C. § 1441(a); Hoskins v. Bekins Van Lines, 343 F.3d 769, 772 n. 2 (5th Cir.2003). Because removal raises significant federalism concerns, the removal statutes are strictly and narrowly construed, with any doubt resolved against removal and in favor of remand. See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108–09, 61 S.Ct. 868, 85 L.Ed. 1214 (1941); Gutierrez, 543 F.3d at 251;Gasch v. Hartford Accident & Indem. Co., 491 F.3d 278, 281–82 (5th Cir.2007); In re Hot–Hed Inc., 477 F.3d at 323. “District courts have no power to overlook procedural errors relating to the notice of removal; instead, a district court must remand a case which was removed pursuant to a procedurally defective notice.” Harden v. Field Mem. Cmty. Hosp., 516 F.Supp.2d 600, 606 (S.D.Miss.2007) (citing Shamrock Oil & Gas Corp., 313 U.S. at 108–09, 61 S.Ct. 868).

The consent requirements of § 1446(b), however, do not apply to defendants who have not been served with process. See28 U.S.C. § 1446(b)(2)(B) (“[A]ll defendants who have been properly joined and served must join in or consent to the removal of the...