Tki, Inc. v. Nichols Research Corp., CIV.A. 01-1691N.

• Decision Date: 12 March 2002
• Docket Number: No. CIV.A. 01-1691N.,CIV.A. 01-1691N.
• Citation: 191 F.Supp.2d 1307
• Parties: TKI, INC.; Digital One Communication, Inc.; and Charles Stephenson, Plaintiffs, v. NICHOLS RESEARCH CORPORATION, Computer Sciences Corporation, Dean Hodge, et al., Defendants.
• Court: U.S. District Court — Middle District of Alabama

191 F.Supp.2d 1307

TKI, INC.; Digital One Communication, Inc.; and Charles Stephenson, Plaintiffs, v. NICHOLS RESEARCH CORPORATION, Computer Sciences Corporation, Dean Hodge, et al., Defendants.

No. CIV.A. 01-1691N.

United States District Court, M.D. Alabama, Northern Division.

March 12, 2002.

COPYRIGHT MATERIAL OMITTED

Thomas T. Gallion, III, Jamie A. Johnston, Haskett Slaughter Young & Rediker LLC, Montgomery, for TKI, Inc., Digital One Communication, Inc., Charles F. Stephenson, plaintiffs.

Hope T. Stewart, Bradley, Arant, Rose & White, LLP, Birmingham, Charles A. Stewart, III, Bradley Arant Rose & White, LLP, Dean Hodge, Montgomery, for Nichols Research Corporation, Computer Sciences Corporation, Dean Hodge, defendants.

MEMORANDUM OPINION AND ORDER

ALBRITTON, Chief Judge.

I. INTRODUCTION

This cause is before the court on a Motion to Remand (Doc. # 3), filed by the Plaintiffs, TKI, Inc., Digital One Communication, Inc., and Charles Stephenson ("Stephenson") (collectively "the Plaintiffs"), and two Motions and an Amended Motion for Attorneys' Fees (Doc # 's 4, 7, 9) filed by the Plaintiffs and Defendants Nichols Research Corporation ("NRC") and Computer Sciences Corporation ("CSC")(collectively "the Defendants"), respectively.

The Plaintiffs originally filed their Complaint in this case in the Circuit Court of Montgomery County, Alabama. In their Complaint, the Plaintiffs bring claims for breach of contract and negligent misrepresentation.

Defendants NRC and CSC filed a Notice of Removal on November 30, 2000, stating that this court had diversity jurisdiction because the only one non-diverse Defendant, Dean Hodge ("Hodge") had been fraudulently joined. The Plaintiffs contested that Hodge had been fraudulently joined, and contended that NRC was also a non-diverse Defendant. On February 13, 2001, this court remanded the case after determining that the defendants had failed to meet their burden to establish fraudulent joinder. Defendants then filed a second Notice of Removal on June 8, 2001. The Plaintiffs filed a Motion to Remand July 2, 2001.

Upon review of the parties' submissions on the Plaintiffs' Motion to Remand, the court concluded that oral argument would be helpful on the issue of the citizenship of NRC. On February 1, 2002, the Defendants filed evidence to supplement their opposition to remand. On February 4, 2002 oral argument was held on the Motion. Because the Plaintiffs had not received the supplemental evidence with sufficient time to review it before the oral argument, the Plaintiffs were given additional time in which to brief their response to that evidence, which they did.

For reasons to be discussed, the Motion to Remand is due to be DENIED and the Motions and Amended Motions for Attorneys' Fees are due to be DENIED.

II. REMAND STANDARD

Federal courts are courts of limited jurisdiction. See Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994); Burns v. Windsor Insurance Co., 31 F.3d 1092, 1095 (1994); Wymbs v. Republican State Executive Committee, 719 F.2d 1072, 1076 (11th Cir.1983), cert. denied, 465 U.S. 1103, 104 S.Ct. 1600, 80 L.Ed.2d 131 (1984). As such, federal courts only have the power to hear cases that they have been authorized to hear by the Constitution or the Congress of the United States. See Kokkonen, 511 U.S. at 377, 114 S.Ct. 1673. Because federal court jurisdiction is limited, the Eleventh Circuit favors remand of removed cases where federal jurisdiction is not absolutely clear. See Burns, 31 F.3d at 1095. Federal court remand orders under 28 U.S.C. 1447(c) are generally not subject to judicial review or reconsideration. See Harris v. Blue Cross/Blue Shield, 951 F.2d 325, 330 (11th Cir.1992). A party can only remove a previously unremovable case in very limited circumstances. See 28 U.S.C. § 1446(b).

III. FACTS

The facts, as they pertain to the Motion to Remand, are as follows:

The Plaintiffs are all citizens of the State of Alabama. Defendant CSC is a corporation organized under the laws of the State of Nevada with its principal place of business in the State of California. Hodge is a citizen of the State of Alabama. NRC is incorporated under the laws of Delaware and the Plaintiffs allege that NRC has its principal place of business in the State of Alabama. The Defendants contend that NRC has its principal place of business in the State of California.

The Defendants asserted previously that Hodge was fraudulently joined by the Plaintiffs. This court found that the Plaintiffs might be able to develop evidence that would establish a claim of misrepresentation against the resident Defendant, Hodge, based on an affidavit of Plaintiff Stephenson, and granted the Plaintiffs' Motion to Remand. After the case was remanded to the Circuit Court of Montgomery County, the Defendants removed a second time, again asserting that Hodge was fraudulently joined. In support of their contentions, the Defendants offer the post-remand deposition of Plaintiff Stephenson, in addition to their previously offered evidence submitted in the first removal. The Plaintiffs continue to rely on the affidavit and deposition testimony of Stephenson and assert that this court cannot revisit its remand order based on the Defendants' allegedly new evidence.

IV. DISCUSSION

This case presents several distinct issues. The first is whether this court can consider a second removal of this case based on new evidence offered by the Defendants to support the removal of the action. The second is, if this court does consider the second removal, whether the new evidence, coupled with the previous evidence, sufficiently establishes the court's subject matter jurisdiction. Third, is the issue of the principal place of business of NRC. Finally all parties have requested attorneys' fees. The court will address each of these issues in turn.

A. Second Notice of Removal Pursuant to 28 U.S.C. § 1446(b)

The Defendants assert that 28 U.S.C. § 1446(b) allows a district court to consider a second removal of a case which was previously remanded by the court. This is despite 28 U.S.C. § 1447(d)'s apparent bar to appeal or review of a district court's remand order.

"Unquestionably, [§ 1447(d) ] not only forecloses appellate review, but also bars reconsideration ... by the district court [of its own remand order]." Harris v. Blue Cross/Blue Shield, 951 F.2d 325, 330 (11th Cir.1992). The First Circuit has stated, "(t)he district court has one shot, right or wrong." In re La Providencia Dev. Corp., 406 F.2d 251, 253 (1st Cir. 1969). Standing alone, § 1447(d) is clear: on any remand issued pursuant to § 1447(c), the district court cannot reconsider its own remand order. If § 1446(b) is to allow the district court to consider a second removal, it must not conflict with § 1447(d).

Section 1446 is entitled "Procedure for Removal" and is listed prior to § 1447, which is entitled "Procedure after Removal." Section 1446(b) deals with the time for filing the Notice of Removal. It states:

(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.

If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty 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, except that a case may not be removed on the basis of jurisdiction conferred by section 1332 of this title more than 1 year after commencement of the action.

28 U.S.C. § 1446(b)

The Defendants assert that the second paragraph of § 1446(b) contemplates a situation where a second removal would be proper. On its face, the statute does not address this. The second paragraph must be read in conjunction with the first paragraph of § 1446(b). In that sense, the second portion of § 1446(b) provides an avenue for avoiding the strict thirty day time limit imposed by the first paragraph of § 1446(b). In enacting the second paragraph, Congress commented:

The second paragraph of the amendment to subsection (b) is intended to make clear that the right of removal may be exercised at a later stage of the case if the initial pleading does not state a removable case but its removability is subsequently disclosed. This is declaratory of the existing rule laid down by the decisions. (See for example, Powers v. Chesapeake etc., Ry. Co., 169 U.S. 92, 18 S.Ct. 264, 42 L.Ed. 673.).

16 Moore's Federal Practice, ¶ 107 App.02[2] (3d ed.2001)(quoting H.R.Rep. No. 352, 81st Cong., 1st Sess. (1949)).

This statement clearly supports the premise that if the initial pleading on its face is not removable, but later becomes removable, then the second paragraph of § 1446(b) would allow removal. It does not seem to resolve the issue of whether § 1446(b) applies to a case that has already been removed and remanded, but the early Supreme Court cases mentioned in the legislative history support the proposition that the statute can be used for re-removals. See Powers v. Chesapeake & Ohio Ry. Co., 169 U.S. 92, 102, 18 S.Ct. 264, 42 L.Ed. 673 (1898)(subsequent pleadings or conduct may lead to second removal).

This does not mean that § 1446(b) can be used every time the defendant receives any new evidence. Section 1446(b) can allow a second removal, but the statute indicates that this should only be in limited circumstances. Section 1446(b) states "... after receipt by the defendant, through service or otherwise,... from which it may ...