Umc Dev., LLC v. Dist. of Columbia

• Decision Date: 08 October 2013
• Docket Number: Civil Action No. 13–899 (GK)
• Citation: 982 F.Supp.2d 13
• Parties: UMC Development, LLC and Jacksophie GSCH, LLC, Plaintiffs, v. District of Columbia, et al., Defendants.
• Court: U.S. District Court — District of Columbia

982 F.Supp.2d 13

UMC Development, LLC and Jacksophie GSCH, LLC, Plaintiffs,

v.District of Columbia, et al., Defendants.

Civil Action No. 13–899 (GK)

United States District Court, District of Columbia.

October 8, 2013

Derek Lawrence Shaffer, Heather H. Martin, Quinn Emanuel Urquhart & Sullivan, LLP, Washington, DC, for Plaintiffs.

Melissa Lael Baker, Thomas Louis Koger, Robert Joseph Rich, Office of the Attorney General for the District of Columbia, Emil Hirsch, Steven Andrew Pozefsky, Bradley Arant Boult Cummings LLP, Kenneth Hanson Rosenau, Rosenau & Rosenau, Washington, DC, for Defendants.

MEMORANDUM OPINION

GLADYS KESSLER, United States District Judge

Plaintiffs UMC Development, LLC (“UMC”) and Jacksophie GSCH, LLC (“Jacksophie”) (collectively, “Plaintiffs”) bring this action against the District of Columbia and its Mayor, Vincent Gray (collectively, the “District Defendants”), Specialty Hospital of Washington–GSE Holdings, LLC (“SHW–GSE”), CMC Realty, LLC (“CMC”), and Not–for–Profit–Hospital, Corporation (“NFPHC”) (collectively, “Defendants”) for wrongful foreclosure, breach of contract, and related claims.

This matter is before the Court on Plaintiffs' Motion to Remand the case to the District of Columbia Superior Court [Dkt. No. 6]. Upon consideration of the Motion, the District Defendants' Opposition [Dkt. No. 7], Plaintiffs' Reply [Dkt. No. 8], NFPHC's Notice of Consent to Accept Service of Process [Dkt. No. 10], the District Defendants' Sur–Reply [Dkt. No. 13], Plaintiffs' Response to Docket Nos. 10, 11, and 13 and in Support of Plaintiffs' Motion to Remand [Dkt. No. 15], Plaintiffs' Evidentiary Objections to Docket No. 11–1 [Dkt. No. 14], NFPHC's Opposition to Plaintiffs' Motion to Remand [Dkt. No. 20], and NFPHC's Notice of Joinder in Removal [Dkt. No. 24], and the entire record herein, and for the reasons set forth below, the Motion to Remand is granted as to Plaintiffs' District of Columbia claims and denied as to Plaintiffs' federal claims.

I. BACKGROUND¹

This action arises out of a 2007 public-private development project between the District, Specialty Hospitals of America, LLC (“SHA”), and various SHA entities, which was aimed at rescuing the District's Greater Southeast Community Hospital (“Hospital”) from financial insolvency. Compl. ¶¶ 1, 16, 17. As part of this undertaking, the District entered into a limited partnership agreement with Defendant SHW–GSE, a subsidiary of SHA, pursuant to which the District invested $49 million for the purpose of refinancing the Hospital and redeveloping its surrounding property. Compl. ¶¶ 20–25. Another SHA subsidiary, Defendant CMC, was created to own and manage the real property containing and surrounding the Hospital. Compl. ¶ 13. SHW–GSE and CMC then entered into a joint venture with Plaintiff Jacksophie through which Plaintiff UMC was to acquire some of the land surrounding the Hospital from CMC, along with related development rights. Compl. ¶¶ 29, 30, 32.

Despite the infusion of more than $50 million of public funds into the refinancing and redevelopment project, the Hospital's financial condition continued to deteriorate. Compl. ¶¶ 46–59. In 2010, the District declared the parent developer in default of various loan agreements, and foreclosed on the land containing and surrounding the Hospital, including the lots to be acquired by UMC. Compl. ¶¶ 60–71. Defendant CMC sued the District to prevent foreclosure, but dropped its case in 2011 after settling with the District. Compl. ¶¶ 69, 73; see CMC Realty, LLC v. Dist. of Columbia, No. 2010 CA 004571 (D.C. Super. Ct.) (the “Foreclosure Action”).

On May 31, 2013, Plaintiffs filed this action in the Superior Court for the District of Columbia bringing claims for, inter alia, wrongful foreclosure, breach of contract, specific performance, restitution, unjust enrichment, breach of fiduciary duty, tortious interference with prospective economic advantage, and violations of the Due Process Clause and the Takings Clause of the Fifth Amendment. See Compl. ¶¶ 76–147.

On June 14, 2013, the District Defendants removed the case to this Court pursuant to 28 U.S.C. §§ 1441(a) and 1446. See Notice of Removal, ¶¶ 2–3 [Dkt. No. 1].² The Notice of Removal stated that Defendant NFPHC consented to removal id. at 1, but did not indicate whether Defendants SHW–GSE and CMC also consented.

On July 12, 2013, Plaintiffs moved to remand the case to Superior Court, arguing that the District Defendants' removal was procedurally defective because they had not obtained SHW–GSE's and CMC's timely consent to removal. [Dkt. No. 6]. On July 26, 2013, the District Defendants filed an Opposition to the Motion (“Dist. Defs.' Opp'n”) [Dkt. No. 7]. On July 30, 2013, Plaintiffs filed a Reply (“Pls.' Reply”) [Dkt. No. 8]. On August 5, 2013, the District Defendants filed a Sur–Reply (“Dist. Defs.' Sur–Reply”) [Dkt. No. 13].

Separately, on August 2, 2013, NFPHC, who had not previously appeared in the action, filed an appearance along with a Notice of Consent to Accept Service of Process Rendering Plaintiffs' Motion to Remand Moot (“NFPHC's Notice”) [Dkt. No. 10]. NFPHC's Notice indicated that it also sought removal of the action, and contended, therefore, that even if the District Defendants' removal was procedurally defective, its own timely removal rendered the basis of Plaintiffs' Motion to Remand moot. NFPHC's Notice was accompanied by the written consent to removal of all Defendants. [Dkt. No. 10–1]. On August 9, 2013, Plaintiffs filed a Response to NFPHC's Notice and the District Defendants' Sur–Reply (“Pls.' Sur–Sur–Reply”) [Dkt. No. 15] and a Notice of Evidentiary Objections to the exhibit to the District Defendants' Sur–Reply [Dkt. No. 14]. On August 15, 013, NFPHC filed an Opposition to Plaintiffs' Motion to Remand (“NFPHC's Opp'n”) [Dkt. No. 20]. Plaintiffs did not file a further response.³

II. STANDARD OF REVIEW

Under the federal removal statute “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.” 28 U.S.C. § 1441(a). Where the case stated by the plaintiff's initial complaint is removable, a defendant must file its notice of removal within 30 days of the time it is formally served with the summons and the complaint. See28 U.S.C. § 1446(b)(1); Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 347–48, 119 S.Ct. 1322, 143 L.Ed.2d 448 (1999).

Where, as here, an action has been removed solely pursuant to 28 U.S.C. § 1441(a), “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). Courts in this District have construed this provision to require that each defendant consent to removal within 30 days of the time that defendant is served. SeeBallard v. Dist. of Columbia, 813 F.Supp.2d 34, 38 (D.D.C.2011) (citing cases); see also28 U.S.C. § 1446(b)(2)(B).

If a defendant's notice of removal is procedurally defective, a plaintiff may, within 30 days of such removal, move the court to remand the case back to state court. See28 U.S.C. § 1447(c). Because federal courts are courts of limited jurisdiction, the removal provisions are strictly construed, and any doubts about removal should be resolved in favor of remand. SeeShamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 104–09, 61 S.Ct. 868, 85 L.Ed. 1214 (1941); Diaz v. Sheppard, 85 F.3d 1502, 1505 (11th Cir.1996).

III. ANALYSIS

Plaintiffs' primary contention is that the District Defendants' Notice of Removal was defective because it was not accompanied by the timely consent of SHW–GSE and CMC. See Pls.' Mem. at 2–5. The District Defendants argue that they were not required to obtain the consent of SHW–GSE and CMC because SHW–GSE and CMC had not yet been served when the case was removed. Dist. Defs.' Opp'n at 2–4.

Although the parties spend the better part of their papers debating these points, the Court need not reach them. Section 1446(b) provides that “[i]f defendants are served at different times, and a later-served defendant files a notice of removal, any earlier-served defendant may consent to the removal even though that earlier served defendant did not previously initiate or consent to removal.” 28 U.S.C. § 1446(b)(2)(C) (emphasis added). As discussed, NFPHC's August 2 Notice conveyed its independent intent to remove the case with the consent of all Defendants. See NFPHC's Notice & Exhibit B (emails dated August 1, 2013) [Dkt. Nos. 10, 10–1]. Accordingly, NFPHC's removal renders any defect in the District Defendants' removal moot, so long as it was timely.

A. NFPHC's Removal Was Timely

Plaintiffs contend that NFPHC's removal was not timely because it was filed more than 30 days after Plaintiffs purportedly served NFPHC by mailing a copy of the summons, Complaint and initial order to the Mayor and the District of Columbia Office of the Attorney General. Pls.' Sur–Sur–Reply at 6.

In response, NFPHC points out that Plaintiffs' counsel's own affidavit establishes that she never attempted to serve NFPHC through the Mayor and the Attorney General, but instead endeavored to effect service through the District of Columbia's Superintendent of Corporations. NFPHC's Opp'n at 5–6; see also Affidavit of Heather H. Martin ¶ 4 [Dkt. No. 8–1]. NDPHC also maintains that it would make no difference if Plaintiffs had served NFPHC through the Mayor and Attorney General because NFPHC could not be served through those offices; instead, it was required to be served through its chief executive officer pursuant to Rule 4(j)(2) of the D.C. Superior Court Rules of Civil Procedure. NFPHC's Opp'n at 2–4. Accordingly, NFPHC contends that it was not properly served, and the 30–day time period for removal not triggered, until its counsel consented to accept service on ...