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CITY OF NEW YORK v. NEW YORK JETS FOOTBALL CLUB

April 14, 1977

THE CITY OF NEW YORK, Plaintiff,
v.
NEW YORK JETS FOOTBALL CLUB, INC., and LEON HESS, individually and as Acting President of the NEW YORK JETS FOOTBALL CLUB, INC.; METROPOLITAN BASEBALL CLUB, INC., and M. DONALD GRANT, individually and as Chairman of METROPOLITAN BASEBALL CLUB, INC.; NEW JERSEY SPORTS AND EXPOSITION AUTHORITY, and DAVID WERBLIN, individually and as Chairman of NEW JERSEY SPORTS AND EXPOSITION AUTHORITY: NATIONAL FOOTBALL LEAGUE and PETE ROZELLE, individually and as Commissioner of Football, Defendants



The opinion of the court was delivered by: EDELSTEIN

EDELSTEIN, Chief Judge:

 On March 18, 1977, plaintiff City of New York filed a complaint in New York State Supreme Court, New York County, against the above captioned defendants. By papers filed in this court March 24, 1977, defendants New Jersey Sports and Exposition Authority [hereinafter NJSEA] and David Werblin removed the state court action to federal court on the ground of diversity of citizenship. The city has now moved this court to remand the entire case to state court. Also before the court is an application by the City for an order extending a temporary restraining order, issued by the state court, for an additional ten days. The remand motion, raising the question of this court's jurisdiction, is logically prior and will be considered first.

 In 1961, the City and the Metropolitan Baseball Club, Inc. [hereinafter Mets] entered into a lease agreement whereby the Mets would play their scheduled home baseball games at Shea Stadium. In 1964 the City and Gotham Football Club, Inc. (later the New York Jets Football Club, Inc.) entered into a lease agreement whereby the Jets would play their scheduled home football games at Shea Stadium. In the fall of 1976, NJSEA began operating Giants Stadium, a football stadium located in what is known as the "Meadowlands" of East Rutherford, New Jersey. The underlying dispute in this lawsuit concerns what rights, if any, the Jets have to play scheduled home football games at Shea Stadium during the baseball season and to play scheduled home football games at a stadium other than Shea.

 The complaint sets forth four causes of action. *fn1" The last three causes of action incorporate by reference the allegations of the first. There is no dispute that the third cause of action against NJSEA and Werblin would be removable on the ground of diversity of citizenship had it been sued upon alone. There is also no dispute that the first cause of action against New York Jets Football Club, Inc. and Leon Hess, the second cause of action against Metropolitan Baseball Club, Inc. and M. Donald Grant, and the fourth cause of action against National Football League and Pete Rozelle would not be removable had they been sued upon alone.

 Defendants NJSEA and Werblin contend that the third cause of action is "separate and independent" from the others and that the entire case is, therefore, removable under 28 U.S.C. § 1441(c). *fn2" The parties seemingly agree that should this court determine that the case was properly removed to federal court, the court's discretion would be best exercised by maintaining the entire lawsuit in federal court and determining all the issues raised therein.

 The complaint alleges that NJSEA and Werblin are negotiating with the Jets a lease agreement pursuant to which the Jets would make Giants Stadium its home stadium and would play some number of its home football games at that stadium. The City alleges that by these actions NJSEA and Werblin:

 
are willfully and deliberately attempting to induce Jets to breach the agreement between plaintiff and the Jets and they have set upon a deliberate and intentional effort and design to interfere with the performance thereof. *fn3"

 Although the complaint speaks of both inducement of breach of contract and interference with the performance of a contract, the complaint read as a whole indicates that the City is seeking relief solely for inducement of breach. The clear meaning of the third cause of action is that NJSEA and Werblin are being sued for inducing the breach of the lease agreement between the City and the Jets and not for interference resulting in other than breach. *fn4"

 Against the Jets, the complaint alleges a threatened breach by the Jets of their lease agreement with the City and states that the City will suffer irreparable damage if the Jets breach their lease and play home football games outside of New York City.

 Defendants present to the court in opposition to the motion for remand five lines of argument pursuant to which they believe the cause of action against NJSEA and Werblin is "separate and independent" from the cause of action against the Jets and that the entire case is removable pursuant to 28 U.S.C. § 1441(c). The court will consider those theories seriatim after discussing briefly the background and development of 28 U.S.C. § 1441(c).

 The 1948 revision of the Judicial Code brought about the inclusion of 28 U.S.C. § 1441(c) as a replacement to the "separable controversy" doctrine as then found in 28 U.S.C. § 71. The congressional purpose behind the change was twofold: (1) effect a simplification of the prior law; and (2) limit removal from the state courts. *fn5" Consistent with that congressional intent, the requirement of a "separate and independent" cause of action has received a more restrictive judicial interpretation than the requirement of a separable controversy. *fn6"

 Any analysis of removal under section 1441(c) must start with the landmark Supreme Court decision in American Fire & Casualty Co. v. Finn, 341 U.S. 6, 95 L. Ed. 702, 71 S. Ct. 534 (1951). In Finn, a single plaintiff sued three defendants in state court seeking recovery for a fire loss. Plaintiff's complaint alleged liability among the three defendants although plaintiff admitted uncertainty as to which one was liable. The diverse companies removed pursuant to 28 U.S.C. § 1441(c). In its opinion, the Court recognized that there may well be separable controversies in a lawsuit covering multiple parties and issues. The Court also recognized that different facts will be relevant to different parties and issues. The Court found, however, that neither separable controversies nor differing facts without more meet the statutory test of a "separate and independent . . . cause of action." The Court concluded that:

 
where there is a single wrong to plaintiff, for which relief is sought, arising from an interlocked series of transactions, there is no separate and independent claim or cause of action under 1441(c). *fn7"

 Although in the years since Finn lower courts have considered a wide variety of cases concerning differing facts and legal claims, nothing has occurred to alter the Finn test that removal under section 1441(c) is improper where the plaintiff alleges a ...


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