Wynn v. Philip Morris, Inc., No. CV-98-BU-1597-S

• Court: United States District Courts. 11th Circuit. United States District Court of Northern District of Alabama
• Writing for the Court: Buttram
• Citation: 51 F.Supp.2d 1232
• Parties: William J. WYNN, ex relator, State of ALABAMA, Plaintiff, v. PHILIP MORRIS INC., et al., Defendants.
• Docket Number: No. CV-98-BU-1597-S
• Decision Date: 28 April 1999

51 F.Supp.2d 1232 William J. WYNN, ex relator, State of ALABAMA, Plaintiff,
v.
PHILIP MORRIS INC., et al., Defendants. No. CV-98-BU-1597-S United States District Court, N.D. Alabama, Southern Division. April 28, 1999

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William J. Wynn, Circuit Court Judge, State of Alabama 10th Judicial Circuit, Jefferson County Courthouse, Birmingham, AL, pro se.

Charles M. Thompson, Johnson P. Willis, IV, Thompson Hutsler & Carson PC, Birmingham, AL, for William J. Wynn.

Vernon L. Wells, II, Helen C. Foster, Randall D. Quarles, Julia Boaz Cooper, Walston Wells Anderson & Bains LLP, Birmingham, AL, for Philip Morris Inc., a corporation, defendant.

H. Thomas Wells, Jr., John Albert Smyth, III, Maynard Cooper & Gale, Birmingham, AL, for Brown & Williamson Inc.

Bruce F. Rogers, Bainbridge Mims Rogers & Smith, Birmingham, AL, for Liggett Group Inc.

Samuel H. Franklin, William H. Brook, Stephen J. Rowe, Lightfoot Franklin & White LLC, Birmingham, AL, Paul S. Ryerson, Jones Day Reavis & Pogue, Washington, DC, for R.J. Reynolds Tobacco Company.

John C. Morrow, Burr & Forman LLP, Birmingham, AL, for Lorillard Corporation.

Memorandum Opinion

BUTTRAM, District Judge.

On March 16, 1999, this court entered a show cause order requesting the parties to this litigation to demonstrate why the instant action should not be remanded to the Circuit Court of Jefferson County, Alabama, from whence it came. On March 30, 1999, a brief was filed by the defendants, Philip Morris, Inc., R.J. Reynolds Tobacco Company, Brown and Williamson Tobacco Corporation and Lorrilard Tobacco Company, in response to the show cause order of this court with regard to the issue of jurisdiction. On April 9, 1999, defendant Liggett Group, Inc., filed a motion to join in the brief of the other defendants in support of jurisdiction over the instant action. In their brief, the defendants argued that jurisdiction was properly vested in this court as the court had jurisdiction over the action under the federal question statute, 28 U.S.C. § 1331,¹ and based upon diversity of citizenship as set forth at 28

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U.S.C. § 1332.² For the consequent reasons, this court will remand the instant action to the Circuit Court of Jefferson County, Alabama.

Under 28 U.S.C. § 1447(c), the court has the authority to remand a case to state court "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction...." See In re Bethesda Memorial Hosp., Inc., 123 F.3d 1407, 1410 (11th Cir.1997). As the Eleventh Circuit Court of Appeals further explained in University of South Alabama v. American Tobacco Co., 168 F.3d 405, (11th Cir.1999):

This provision is mandatory and may not be disregarded based on speculation about the proceeding's futility in state court. See International Primate Protection League v. Administrators of Tulane Educ. Fund, 500 U.S. 72, 87-89, [111 S.Ct. 1700, 114 L.Ed.2d 134] (1991); Smith v. Wisconsin Dep't of Agric., Trade and Consumer Protection, 23 F.3d 1134, 1139 (7th Cir.1994); see also Bruns v. National Credit Union Admin., 122 F.3d 1251, 1257 (9th Cir.1997) (section 1447(c) is mandatory); Bromwell v. Michigan Mut. Ins. Co., 115 F.3d 208, 213 (3d Cir.1997) (same); Maine Ass'n of Interdependent Neighborhoods v. Commissioner, Me. Dep't of Human Servs., 876 F.2d 1051, 1054 (1st Cir.1989) (same). Moreover, a federal court must remand for lack of subject matter jurisdiction notwithstanding the presence of other motions pending before the court. See, e.g., Marathon Oil, 145 F.3d at 220 (holding that district court should have considered motion to remand for lack of subject matter jurisdiction before it addressed motion to dismiss for want of personal jurisdiction); Toumajian v. Frailey, 135 F.3d 648, 655 (9th Cir.1998) (holding that district court should have remanded for lack of subject matter jurisdiction and should not have dismissed on grounds of ERISA preemption); Avitts v. Amoco Prod. Co., 53 F.3d 690, 693 (5th Cir.1995) (per curiam) (holding that district court had no jurisdiction to order interim costs and attorneys' fees where action should have been immediately remanded for lack of subject matter jurisdiction); Smith, 23 F.3d at 1139 (holding that district court had no authority to dismiss removed claim without subject matter jurisdiction); In re Bear River Drainage Dist., 267 F.2d 849, 851 (10th Cir.1959) (holding that motion to remand for lack of subject matter jurisdiction necessarily precedes motion to dismiss); Nichols v. Southeast Health Plan of Ala., Inc., 859 F.Supp. 553, 559 (S.D.Ala.1993) (same).

Because removal jurisdiction raises significant federalism concerns, federal courts are directed to construe removal statutes strictly. See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09, [61 S.Ct. 868, 85 L.Ed. 1214] (1941). Indeed, all doubts about jurisdiction should be resolved in favor of remand to state court. See Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir.1994) (citing Boyer v. Snap-on Tools Corp., 913 F.2d 108 (3d Cir.1990); Coker v. Amoco Oil Co., 709 F.2d 1433 (11th Cir. 1983)). A presumption in favor of remand is necessary because if a federal court reaches the merits of a pending motion in a removed case where subject matter jurisdiction may be lacking it deprives a state court of its right under the Constitution to resolve controversies in its own courts. For example, in Marathon Oil, the district court dismissed an action on removal from state court for want of personal jurisdiction before reaching the issue of subject matter jurisdiction. 145 F.3d at 215. On rehearing en banc, the Fifth Circuit held that the district court erred in failing to first examine its subject matter jurisdiction

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and, because jurisdiction was in fact lacking, in failing to remand to state court. See id. at 220. The court reasoned that such an approach "accords the proper respect to the state courts, as the residual courts of general jurisdiction, to make the personal jurisdiction inquiry when [federal courts] lack either constitutional or statutory subject-matter jurisdiction over a removed case." Id.; see also Bromwell, 115 F.3d at 214 (noting that justiciability is a matter for the state court to decide where case should have been remanded to state court for lack of subject matter jurisdiction rather than dismissed); Smith, 23 F.3d at 1139 (declining to speculate on issue of state law where case should have been remanded to state court for lack of subject matter jurisdiction rather than dismissed).

The facts essential to resolving whether this action should be remanded to state court are relatively uncomplicated. On May 27,1998, the plaintiff, William Wynn ("Wynn"), as a relator for the State of Alabama,³ filed an application for writ of quo warranto in the Circuit Court of Jefferson County, Alabama, against the defendant tobacco companies, pursuant to the State of Alabama's quo warranto provision, § 6-6-590, Alabama Code of 1975.⁴ The relief originally sought by the plaintiff was the revocation of the defendants' corporate charters. The reason for granting this relief originally asserted by the plaintiff was that the defendants had violated a litany of Alabama statutes and had committed a host of Alabama common law torts in the course of their sale of tobacco products within the State of Alabama.

The defendants, desiring not to try the action in the state court, promptly filed a notice of removal with this court pursuant to 28 U.S.C. § 1446(a),⁵ contending that this court had diversity jurisdiction over the instant action permitting the court to hear the case.⁶ The plaintiff responded with a motion to remand filed on July 14, 1998, in which he contended that given the peculiar nature of the quo warranto action there could exist no diversity jurisdiction over the instant action and that the value of the matter in controversy did not exceed $75,000.00.⁷ This court denied the motion to remand on November

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23, 1998, citing as its reasons for denying remand, one, that a federal court can have diversity jurisdiction over a quo warranto action — i.e., that a quo warranto action had no special characteristics that prevented its removal to federal court,⁸ and two, that the action was similar to an action in which punitive damages are sought and the relief, which would certainly benefit the State in an amount greater than $75,000.00, actually accrues to the State as aggregate relief, the full amount being attributable to State of Alabama, the "named" plaintiff in the suit, as well as the relator to the action, Wynn.⁹

Prior to entry of this court's order denying remand of the instant action, the defendants, on November 6, 1998, filed a motion for judgment on the pleadings. Among other contentions, the defendants argued that the plaintiff had not pursued his quo warranto claim under the appropriate statutory section and asserted that his failure to post a security bond to cover the defendants' costs in litigating the action divested any court, state or federal, of jurisdiction over the claims. This court entered a memorandum opinion and an order on February 1, 1999, denying the defendants' motion, but requesting that the plaintiff file an amended complaint clarifying his claim, ordering the plaintiff to plead his claim under the appropriate statutory section and requiring that the plaintiff post appropriate security within ten days of the entry of the order. Soon after the entry of that order and a later clarifying order, the plaintiff complied with these requests.

The plaintiff filed his amended complaint on February 16, 1999. In that complaint, the plaintiff restates his claim against the defendants, seeking as relief the revocation of the defendants' certificates of authority to do business within the State under § 6-6-591.¹⁰ As grounds

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for the relief, the plaintiff asserts that the defendants have violated a host of federal and state...