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CBS INC. v. SNYDER

April 29, 1991

IN THE MATTER OF THE APPLICATION OF CBS INC., NEAL PILSON, AND TED SHAKER, PETITIONERS,
v.
JAMES SNYDER, RESPONDENT.



The opinion of the court was delivered by: William C. Conner, District Judge.

OPINION AND ORDER

This action to stay arbitration proceedings was initiated in state court on January 22, 1991. The matter is currently before this Court on the motion of CBS Inc. ("CBS") to remand this action to state court, pursuant to 28 U.S.C. § 1447(c). CBS argues that the Notice of Removal is fatally defective as it does not allege complete diversity both at the time of the commencement of the action and at the time of removal. For the reasons set forth below, CBS's motion for remand is denied.

BACKGROUND

This is an action in which CBS is seeking to stay labor arbitration initiated by James Snyder, a/k/a "Jimmy the Greek." The arbitration arises out of the January, 1988 discharge by CBS of Mr. Snyder, a well-known football analyst and sports commentator.

On January 15, 1991, Mr. Snyder commenced an arbitration proceeding against, inter alia, CBS, Neal Pilson ("Pilson"), and Ted Shaker ("Shaker") (collectively "petitioners"), by filing a Statement of Claim with the American Arbitration Association. On January 22, 1991, petitioners commenced a special proceeding in the Supreme Court of the State of New York, New York County to stay the arbitration.

On February 20, 1991, Snyder filed a Notice of Removal in this Court. The asserted jurisdictional basis for removal was diversity of citizenship. The Notice of Removal, however, was defective because it did not allege the citizenship of Pilson and Shaker at the time the proceeding was commenced and did not allege the citizenship of Snyder and CBS at the time the proceeding was removed.*fn1

On March 7, 1991, Snyder filed an Amended Notice of Removal after expiration of the time for removal and without leave of the Court.*fn2 The Amended Notice of Removal alleges, inter alia, that "[n]o change of citizenship of the parties has occurred since the commencement of this action." Thus, it alleges the citizenships of CBS, Pilson, and Shaker both when the proceeding was commenced and when the proceeding was removed.

On March 8, 1991, petitioners made a motion to remand this proceeding on the ground that a notice of removal may not be amended to cure a fundamental jurisdictional pleading defect after the statutory 30-day limit of § 1446(b) has expired.*fn3

DISCUSSION

The sole issue before this Court is whether the jurisdictional defect in Snyder's Notice of Removal may be cured by an untimely amendment.

A party seeking removal predicated on diversity of citizenship must allege sufficient facts to show diversity both at the time of the commencement of the action in state court and at the time of removal. Stevens v. Nichols, 130 U.S. 230, 231, 9 S.Ct. 518, 519, 32 L.Ed. 914 (1889). A petition for removal may be amended freely within the statutory 30-day period calculated from the date of service of the initial state court pleading. Thereafter it may be amended to set forth more specifically grounds for removal which were imperfectly stated in the original petition. The prior decisions have made a distinction between an "imperfect" or "defective" allegation and a wholly missing allegation, which cannot be supplied by amendment after the 30-day period has run.

The issue which this Court must resolve is the nature of the defect. Where the defect is "fundamental," as CBS asserts is the case here, the notice of removal may not be untimely amended. See Conticommodity Services, Inc. v. Lemme, Slip Op. No. 82 Civ. 6930 (CBM) (S.D.N.Y. March 3, 1983); Jacobs v. District Director of Internal Revenue, 217 F. Supp. 104, 105-06 (S.D.N.Y. 1963). On the other hand, where the defect is "technical" and there are averments reflecting an imperfect attempt to show jurisdiction, as Snyder and putative intervenor American Federation of Television and Radio Artists ("AFTRA") assert is the case, the trial court has the power to permit untimely amendment of the petition. See generally 14A C. Wright, A. Miller & E. Cooper Federal Civil Practice and Procedure § 3733 at 536-37.

CBS argues that the Notice of Removal is completely silent on the citizenship of CBS and Snyder at the time of removal and that it accordingly cannot be determined from the face of the Notice of Removal whether complete diversity existed between the parties at the time of removal. For this reason, CBS asserts, remand is appropriate. Moreover, CBS asserts, nothing in CBS's state court pleading provides this necessary information.*fn4 CBS urges that here defendant does not seek to amend an allegation imperfect in form, but, rather, seeks to introduce one not heretofore made. Citing F & L Drug Corp. v. American Cent. Ins. Co., 200 F. Supp. 718, 722 (D.Conn. 1961), it asserts that "where the essential facts necessary to justify removal are not alleged, either perfectly or imperfectly, then the case must be remanded. . . . An absence of an allegation cannot be regarded as an allegation defective in form."

Snyder contends that inasmuch as the factual requisites of federal jurisdiction undisputedly exist, and a good faith, albeit clumsy, attempt was made to allege them, he should be permitted to amend his petition to assert those facts despite the fact that the 30-day period has elapsed. This Court agrees. The Notice of Removal alleges that CBS was a New York corporation at the time the action was filed. Indeed, CBS's state court petition so alleged, and it has never been amended. There is no reason to believe that CBS changed its state of incorporation or its principal place of business in the four-week interval between the filing of that pleading and the filing of the Notice of Removal. Therefore, anyone reading the Notice of Removal would logically assume that the allegation respecting CBS's residence applied not only to the time of commencement of ...


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