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United States District Court, Southern District of New York

April 29, 1991


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


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.


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


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 the action but also to the time of removal. Making express that which would normally be assumed from the facts alleged is a formal change of the type which should be allowed to prevent the loss of an important right.

Pro forma defects cannot suffice to deprive a party of a plain entitlement to a federal forum. See D.J. McDuffie Inc. v. Old Reliable Fire Ins., 608 F.2d 145 (5th Cir. 1979) (failure to allege citizenship at the time suit was brought and at the time of removal can be cured by amendment), cert. denied, 449 U.S. 830, 101 S.Ct. 97, 66 L.Ed.2d 35 (1980); Barrow Development Co. v. Fulton Ins. Co., 418 F.2d 316 (9th Cir. 1969) (permitting removal petition to be amended on appeal to allege both state of incorporation and principal place of business of corporate parties); George v. Douglas Aircraft Co., 332 F.2d 73 (2d Cir. 1964) (complaint by individual residents of Texas against Delaware corporation based on diversity was defective for failure to assert that corporation's principal place of business was not Texas, but court would assume that complaint could have been amended to allege this), cert. denied, 379 U.S. 904, 85 S.Ct. 193, 13 L.Ed.2d 177 (1964).

The Amended Notice of Removal, filed March 7, 1991, cures the jurisdictional defect by amplifying the allegations of citizenship, i.e., by alleging that the respective citizenships of CBS and Snyder did not change between the time the proceeding was commenced and the time it was removed. In the instant case, Snyder's amendment was in no way inconsistent with his original Notice. It is more analogous to a clarification or amplification of an ill-pleaded allegation than it is to the assertion of an entirely new ground for removal.

The amendment is authorized by the terms of 28 U.S.C. § 1653, which provides that, "[d]efective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts." In Hendrix v. New Amsterdam Casualty Company, 390 F.2d 299 (10th Cir. 1968), the Court of Appeals for the 10th Circuit affirmed the trial court's decision permitting the amendment of a removal petition to add allegations of the principal place of business of the defendant insurance company and the citizenship of the plaintiff insured. The plaintiff contended that the defendant's diversity allegations were fatally flawed, thus requiring remand. The court rejected such an inflexible rule and concluded that the plaintiff's approach would be contrary to 28 U.S.C. § 1653 and the interests of justice:

  We are not unmindful of numerous district court
  opinions which question the power to allow such
  amendments under varying circumstances after the
  time for initially filing removal petitions has
  expired. But if applied to circumstances
  comparable to those of the present case, we
  believe that their reasoning would be too grudging
  with reference to the controlling statute, too
  prone to equate imperfections with the total
  absence of jurisdictional foundations, and would
  exalt form over substance and legal flaw-picking
  over the orderly disposition of cases properly
  committed to the federal courts.

390 F.2d at 301 (footnotes omitted). This reasoning has been followed in a majority of the cases in this District which have confronted the issue.*fn5 Other district courts have likewise concluded that the failure to allege properly the citizenship of the parties both at the time the action was commenced and at the time removal is sought is a defect which can be cured by an amended removal petition.*fn6 While some cases cited by CBS involved the failure to allege diversity of citizenship at the time the action was filed, Outdoor World Corp. v. Calvert, 618 F. Supp. 446 (E.D.Va. 1985); Garza v. Midland National Insurance Co., 256 F. Supp. 12 (S.D.Fla. 1966); Carlton Properties Inc. v. Crescent City Leasing Corp., 212 F. Supp. 370 (E.D.Pa. 1962), these cases are factually distinct from the situation at issue here, the failure to allege diversity at the time of removal. In the former category of cases, the missing jurisdictional allegation raises the inference that the defendant might have changed its citizenship after the state court action was filed solely in order to invoke the jurisdiction of the federal court. PepsiCo., Inc. v. Wendy's Int'l. Inc., 118 F.R.D. 38, 40-41 (S.D.N.Y. 1987). This Court has noted that the purpose of the rule requiring allegations of diversity both at the commencement of the action and at the time of removal is to "prevent[] a nondiverse defendant from manipulating the court's jurisdiction by changing its state of residence after the action is commenced and then seeking to remove based on the newly created diversity." PepsiCo., 118 F.R.D. at 40 (citation omitted). Here, where the missing allegation relates to diversity at the time of removal, the policy of avoiding manipulation does not come into play.

This Court finds that Snyder's deficient allegation of diversity at the time of removal is not tantamount to "the total absence of jurisdictional foundations," and that there is no underlying controversy over the propriety of federal jurisdiction. See Hendrix, 390 F.2d at 301. CBS has not shown that it would be prejudiced if this Court were to allow Snyder to amend his petition for removal. This Court hereby accepts the Amended Notice of Removal and finds that Snyder has met the burden of establishing his right to remove.*fn7


For the reasons set forth above, CBS's motion for remand is denied.


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