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CENTRAL SYNAGOGUE v. TURNER CONST. CO.

September 16, 1999

CENTRAL SYNAGOGUE, PLAINTIFF,
v.
TURNER CONSTRUCTION COMPANY, AMIS INC. AND ARIS DEVELOPMENT CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Sweet, District Judge.

OPINION

Plaintiff Central Synagogue ("Central") has moved, pursuant to 28 U.S.C. § 1447, for an order to remand this action to New York State Supreme Court for lack of subject matter jurisdiction. For the reasons set forth below, the motion is granted.

Prior Proceedings

This action arises out of the tragic fire that consumed the historic Central Synagogue Sanctuary (the "Sanctuary") of plaintiff Central on August 28, 1998. As a result of the fire, Central's insurance carrier, Wausau Business Insurance Company ("Wausau"), allegedly paid a certain sum of money to Central. Wausau subsequently filed an action (the "Wausau case") in this Court on January 29, 1999, seeking amounts in subrogation against defendants Turner Construction Company ("Turner"), Amis Inc. ("Amis"), and Aris Development Corporation ("Aris," and, together with Turner and Amis, the "Defendants"). Subject matter jurisdiction in the Wausau case was predicated on diversity, as Wausau is a Wisconsin entity and all Defendants are New York corporations.*fn1

On February 25, 1999, Central, a New York entity, filed the instant action (the "Central case") in Supreme Court of the State of New York, New York County against Defendants. Central's complaint alleges state law claims of breach of contract, negligence, and breach of fiduciary duty, and seeks damages for uninsured losses sustained in the Sanctuary fire.

On April 2, 1999, Turner removed the Central case to this Court pursuant to 28 U.S.C. § 1441, seeking joinder with the Wausau case. Subject matter jurisdiction in the Central case is predicated on 28 U.S.C. § 1367, the "supplemental jurisdiction" statute.

On June 7, 1999, Central filed the instant motion to remand the Central case to New York State Supreme Court, pursuant to 28 U.S.C. § 1447. Oral argument on the motion was heard on June 23, 1999, at which time the motion was deemed fully submitted.

Discussion

The Basis for the Remand Action

Central's motion for remand based on lack of subject matter jurisdiction rests on three assertions. First, Central asserts that supplemental jurisdiction is not a valid basis for removal, since § 1441 only permits removal of a "civil action brought in a State court of which the district courts of the United States have original jurisdiction." 28 U.S.C.A. § 1441(a) (West 1993 & Supp. 1999) (emphasis added). Central construes this language to mean that only an action which could have been brought in federal court originally can be removed to federal court. Since § 1367 only supplies "supplemental jurisdiction" to a claim, not original jurisdiction, and since the Central case could not otherwise have been brought in federal court originally — lacking a federal question claim under 28 U.S.C. § 1331 and failing to meet the diversity requirements under § 1332 — Central maintains that the case cannot be removed.

Second, Central asserts that, even if supplemental jurisdiction somehow overcame the § 1441 "original" jurisdiction defect, § 1367 nevertheless only applies to claims brought in a single action. Here, the claims were brought in two separate actions.

Third, Central asserts that § 1367(b) explicitly disallows the exercise of supplemental jurisdiction over "claims by persons proposed to be joined as plaintiffs under Rule 19 . . . when exercising supplemental jurisdiction over such claims would be inconsistent with the jurisdictional requirements of section 1332." Id. § 1367(b). Since Turner proposes to join Central as a plaintiff in the Wausau case, presumably under Rule 19, and since such joinder would destroy subject matter jurisdiction in the Wausau case, which is premised on diversity (because Central and Turner are both New York "citizens"), § 1367 cannot be used as a basis for supplemental jurisdiction and thus as a basis for removal.

Turner replies that a rational reading of §§ 1367 and 1441, buttressed by case law in this Circuit and elsewhere, firmly establishes that (1) the "original" jurisdiction requirement of § 1441 does not bar claims in which jurisdiction is predicated on § 1367; (2) jurisdiction under § 1367 is not limited to claims brought in a single action; and (3) § 1367(b) ...


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