United States District Court, S.D. New York
January 29, 2004.
ALLSTATE INSURANCE COMPANY, NATIONAL-BEN FRANKLIN INSURANCE COMPANY OF ILLINOIS, THE CONTINENTAL INSURANCE COMPANY, FIREMEN'S INSURANCE COMPANY OF NEWARK, NEW JERSEY, BUCKEYE UNION INSURANCE COMPANY, GLEN FALLS INSURANCE COMPANY, and BOSTON OLD COLONY INSURANCE CO, Plaintiffs, -against- GARRI ZHIGUN, VIRENDRA BHAREL, M.D., MIRON FAYNGERSH, M.D., GENNADY FINKELBERG a/k/a GENA FINKELBERG, GENNADY KISELMAN, STEVE ZELTSER a/k/a VLADISLAV ZELTSER, YAKOV MELMAN a/k/a JACK MELMAN, KONSTANTIN MARKEVICK, ANATOLI POPILEVSKY, ROMAN POPILEVSKY, ALEXANDER VAYNER, ZAKHAR VOLOZIN, LEONID TYLMAN, PACIFIC MEDICAL, P.C., ESSENTIAL MEDICAL SERVICES, P.C., COMPLETE MEDICAL OF NEW YORK, P.C, BIOTECH SURGICAL SUPPLIES, INC., TRANS MEDICAL SUPPLIES, INC., MEDTCH MEDICAL SUPPLIES, INC., FOSTER MEDICAL EQUIPMENT & SUPPLIES, INC., CERTIFIED HEALTH PRODUCTS, INC., ORTHO MED DISTRIBUTORS, INC., UMBER MEDICAL DISTRIBUTORS, INC., MED CARE PRODUCTS, INC., RODNEY HAWKINS, QUENTIN HAWKINS, JOHN DOES 1 THROUGH 20, JANE DOES 1 THROUGH 20, ABC CORPORATIONS 1 THROUGH 20, AND XYZ CORPORATIONS 1 THROUGH 20. Defendants
The opinion of the court was delivered by: SIDNEY STEIN, District Judge
OPINION & ORDER
Four defendants have removed this action from New York Supreme Court,
New York County, to the United States District Court of the Southern
District of New York pursuant to 28 U.S.C. § 1441(a). However, because
all defendants over whom the state court had acquired jurisdiction did
not join in the notice of removal, this action is remanded to the state
court in which it was originally filed.
This action was filed in Supreme Court, New York County, on November
20, 2003. Plaintiff insurance companies allege that defendants violated
the federal Racketeer Influenced and Corrupt Organizations Act ("RICO"),
18 U.S.C. § 1961, 1962(c) & (d) and 1964(c), and New York statutes and
common law, and seek relief from fifty-five named and unnamed individual
defendants and fifty-one named and unnamed corporate defendants. In
general, the complaint alleges that defendants engaged in schemes to
submit false claims to the insurance companies.
On the last day of 2003, four defendants Miron Fayngersh, M.D.,
Pacific Medical, P.C., Jack Melman and Konstantin Markevich petitioned
for removal of the state action to this Court pursuant to 28 U.S.C. § 1441
(a) on the grounds that the RICO claims in the complaint are federal
questions, and therefore this Court has original jurisdiction over the
complaint because it is a "civil action arising under the
Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331.
In their notice of removal, those four defendants represented that the
removal was timely because it was made within thirty days of their
receipt of the summons and complaint, as required by 28 U.S.C. § 1446(b).
(Def.'s Not. Removal, p. 3). They did not represent whether the other
defendants who had been served with process had consented to removal. As
of December 31, 2003, when defendants filed the notice of removal,
eighteen defendants had been served with the Summons and Complaint in
this action. (Pl.'s Mem. Supp. Remand, Exh. 1, "Affidavits of Service").
On January 12, 2004, this Court ordered the removing defendants to show
cause why this action should not be remanded to the state court based on
their failure to comply
with the statutory requirements of 28 U.S.C. § 1447(c) in preparing the
notice of removal. Oral argument was heard on that motion on January 20,
At that argument, counsel for the removing defendants stated that he
had spoken with plaintiffs' counsel prior to removing this action and was
informed by him that other defendants, in addition to the removing
defendants, had been served in the state court with process. (See Trans.
Oral Arg., Jan. 20, 2004, p. 5-8).
A. Removal Generally
Pursuant to 28 U.S.C. § 1441, a civil action initially filed in state
court may be removed by the defendant to the federal district court
embracing the place where the state court action is pending if the
district court has original subject matter jurisdiction over the
plaintiff's claim. See Lupo v. Human Affairs Int'l, Inc., 28 F.3d 269, 271
(2d Cir. 1994).*fn1
The procedures governing a removal pursuant to 28 U.S.C. § 1441 are set
forth in 28 U.S.C. § 1446 and 1447. Section 1446 requires a defendant to
take certain steps in order to remove an action properly, and section
1447 grants any federal district court presiding over a removed action
discretion to remand that action if the statutory prerequisites of
section 1446 have not been met as follows:
"[a] motion to remand the case on the basis of any
defect other than lack of subject matter jurisdiction
must be made within 30 days after the filing of the
notice of removal under section 1446(a). If at any
time before final judgment it appears that the
district court lacks subject matter jurisdiction, the
case shall be remanded. . . ."
Thus, the district court has thirty days from the date of the filing of
the notice of removal to remand the action for a defect in the filing. 28
U.S.C, § 1447(c).
Federal courts must construe the removal statute narrowly, "resolving
any doubts against removability." Somlyo v. J. Lu-Rob Enters., Inc.,
932 F.2d 1043, 1045-46 (2d Cir. 1991). "[T]he language of the Act of 1887
evidence[d] the Congressional purpose to restrict the jurisdiction of the
federal courts on removal, [and] the policy of the successive acts of
Congress regulating the jurisdiction of federal courts . . . call[s] for
the strict construction of such legislation." Shamrock Oil & Gas Corp.
v. Sheets, 313 U.S. 100, 108 (1941). Therefore, "the party requesting
removal carries a heavy burden to demonstrate that the removal was
proper." United Food & Commercial Workers Union, Local 919, APL-CIO v.
CenterMark Props. Meriden Square, Inc., 30 F.3d 298, 301 (2d Cir. 1994).
B. The Removing Defendants Failed to Show that All Defendants Who Had
Been Served Consented to Removal
A removing defendant must present "unambiguous written" proof that all
of the other defendants who had been served in the action consent to
removal within the thirty day time period for removal. See e.g., Payne
v. Overhead Door Corp., 172 F. Supp.2d 475, 477 (S.D.N.Y. 2001); Ell v.
S.E.T. Landscape Design, Inc., 34 F. Supp.2d 188, 193 (S.D.N.Y. 1999);
Still v. DeBuono, 927 F. Supp. 125, 129 (S.D.N.Y. 1996). This requirement
has been labeled the "rule of unanimity" and is a "precondition to
removal." In re Consol. Welfare Fund "ERISA" Litig., No. 92 Civ. 0424,
1992 WL 212348, at *2 (S.D.N.Y. Aug 21, 1992).
The notice of removal in this action fails to comply with the rule of
unanimity because prior to the date of that notice, plaintiffs had
apparently served the summons and
complaint on fourteen additional defendants who did not join in the
removal In addition, the affidavits of service for two of those
defendants had been filed with the clerk of the Supreme Court, New York
County, prior to removal. (Pl's Mem. in Supp. Remand, Exh. 1, p. 1-2).
The four defendants removing this action failed to submit any proof that
any other defendant had consented to removal, as required by the rule of
C. The Rule of Unanimity Can Be Raised Sua Sponte
Certain courts have found that section 1447 does not provide for sua
sponte remands for a procedural failure in the removal process.*fn2 See
e.g., Loftis v. United Parcel Service, Inc., 342 F.3d 509, 516-517 (6th
Cir. 2003); Velchez v. Carnival Corp., 331 F.3d 1207, 1209 (11th Cir.
2003); In re Cont'l Cas. Co., 29 F.3d 292, 293-95 (7th Cir. 1994); In re
Allstate Ins. Co., 8 F.3d 219 (5th Cir. 1993) (same). Several district
courts in this district have reached the opposite conclusion. See e.g.
Soms v. Aranda, No. 00 Civ. 9626, 01 Civ. 4706, 2001 WL 716945, at *1
(S.D.N.Y. Jun 26, 2001)("This Court has the authority to remand on these
grounds, sua sponte, if it does so within thirty days of the procedurally
flawed removal."); Am. Home Assur. Co. v. RJR Nabisco Holdings Corp.,
70 F. Supp.2d 296, 299 (S.D.N.Y. 1999)("[T]he Court itself, within that
30 day period, could have remanded the case for defects other than lack
of subject matter jurisdiction."). Cf. Loftis v. United Parcel Service,
Inc., 342 F.3d at 517 ("[F]rank opposition to removal by a codefendant
who affirmatively seeks a remand within the thirty-day period satisfies
the prerequisite of a motion.").
Not only does the Court's order to show cause satisfy the statutory
requirement in 28 U.S.C. § 1447(c) that remand based on a procedural
defect in the notice of removal be made upon motion within thirty days of
removal, see Cassara v. Ralston, 832 F. Supp. 752, 753 (S.D.N.Y. 1993),
but also plaintiffs have submitted a Memorandum of Law in Support of
Remand and argued in favor of remand at the argument on this motion.
Thus, the requirement of section 1447(c) that a motion be made within
thirty days of removal has been met.
Because the four removing defendants have failed to comply with the
procedural requirements set forth in 28 U.S.C. § 1447(c) for removal,
this action is remanded to the New York Supreme Court, New York County.