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The Stop & Shop Supermarket Company LLC v. Stuart O. Goldsmith and Gator Stony Point LLC

March 31, 2011

THE STOP & SHOP SUPERMARKET COMPANY LLC,
PLAINTIFF,
v.
STUART O. GOLDSMITH AND GATOR STONY POINT LLC, DEFENDANTS.



The opinion of the court was delivered by: Kenneth M. Karas, District Judge:

OPINION AND ORDER

On or about March 3, 2010, Plaintiff, the Stop & Shop Supermarket Co. LLC ("Stop & Shop"), brought this action in New York State Court. (Notice of Removal ("Notice") (Dkt. No. 1) ¶ 1.) Defendant Gator Stony Point LLC ("Gator") was served with the state court complaint on March 23, 2010, and removed the case to this Court on April 9, 2010. (Id. ¶ 2.) Plaintiff seeks remand and attorneys' fees. (Dkt. No. 8.)

I. Background

Plaintiff is a Massachusetts company. (Verified Compl. (Decl. of Todd E. Soloway ("Soloway Decl.") (Dkt. No. 14) Exh. A ("Compl.")) ¶ 1.) The domicile of Defendant Stuart O. Goldsmith is disputed, but it is either New York or New Jersey. (Pl.'s Mem. of Law in Supp. of its Mot. to Remand this Action Back to State Ct. ("Pl.'s Mem.") (Dkt. No. 10) 1; Notice ¶ 4(b).) Plaintiff has not disputed Gator's assertion that the amount in controversy exceeds $75,000. (Notice ¶ 5.) Gator is a Florida corporation that was properly served as of the date of removal, April 9, 2010. (Decl. of Gary A. Kreinik ("Kreinik Decl.") (Dkt. No. 9) ¶ 9; Decl. of Todd E. Soloway ("Soloway Decl.") (Dkt. No. 14) ¶¶ 7-8; Compl. ¶ 3; Verified Answer with Countercls. ("Gator's Answer") (Dkt. No. 4) ¶ 3.) One day before that, on April 8, 2010, a copy of the Complaint was left with the doorman of Goldsmith's New York residence and a copy was sent by mail to the same address. (Kreinik Decl. ¶ 13.) Gator argues that Goldsmith had not been properly served at the time it removed this case. (Def.'s Mem. of Law in Opp'n to Pl.'s Mot. to Remand ("Gator's Mem.") (Dkt. No. 12) 6-9 & nn.3-4.)

II. Discussion

A. Removal - Standard of Review

Federal courts are courts of limited jurisdiction. See Keene Corp. v. United States, 508 U.S. 200, 207 (1993). Accordingly, "removal jurisdiction exists in a given case only when that jurisdiction is expressly conferred on the courts by Congress." Fed. Ins. Co. v. Tyco Int'l Ltd., 422 F. Supp. 2d 357, 367 (S.D.N.Y. 2006) (internal quotation marks omitted); see also Irving Trust Co. v. Century Exp. & Imp., S.A., 464 F. Supp. 1232, 1234 (S.D.N.Y. 1979) (noting that the right of removal is "a matter of legislative grace" (citing Great N. Ry. Co. v. Alexander, 246 U.S. 276 (1918))). Judicial scrutiny is especially important "in the context of removal, where considerations of comity play an important role." Johnston v. St. Paul Fire & Marine Ins. Co., 134 F. Supp. 2d 879, 880 (E.D. Mich. 2001). Thus, "[o]ut of respect for the independence of state courts, and in order to control the federal docket, federal courts construe the removal statute narrowly, resolving any doubts against removability." Stan Winston Creatures, Inc. v. Toys "R" Us, Inc., 314 F. Supp. 2d 177, 179 (S.D.N.Y. 2003) (internal quotation marks omitted); see also Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941) (noting that federalism concerns call for "the strict construction" of the removal statute); Lupo v. Human Affairs Int'l, Inc., 28 F.3d 269, 274 (2d Cir. 1994) ("In light of the congressional intent to restrict federal court jurisdiction, as well as the importance of preserving the independence of state governments, federal courts construe the removal statute narrowly, resolving any doubts against removability." (internal quotation marks omitted)); Zerafa v. Montefiore Hosp. Hous. Co., 403 F. Supp. 2d 320, 324 (S.D.N.Y. 2005) ("Removal jurisdiction is strictly construed inasmuch as it implicates significant federalism concerns and abridges the deference courts generally give to a plaintiff's choice of forum.").

The party asserting federal jurisdiction generally bears the burden of proving that the case is properly in federal court. See McNutt v. Gen. Motors Acceptance Corp. of Ind., 298 U.S. 178, 189 (1936). "Where, as here, jurisdiction is asserted by a defendant in a removal petition, it follows that the defendant has the burden of establishing that removal is proper." United Food & Commercial Workers Union, Local 919 v. CenterMark Props. Meriden Square, Inc., 30 F.3d 298, 301 (2d Cir. 1994).

B. Unanimity and Forum-Defendant Rules

1. General Law Stop & Shop argues remand is required for two reasons. (Pl.'s Mem. 1, 3.) First, it contends that it is undisputed that Goldsmith has not consented to removal. (See generally Notice.) Indeed, "[w]here there are multiple defendants, 'all named defendants over whom the state court acquired jurisdiction must join in the removal petition for removal to be proper.'" Burr ex rel. Burr v. Toyota Motor Credit Co., 478 F. Supp. 2d 432, 437 (S.D.N.Y. 2006) (quoting Miller v. First Sec. Invs., Inc., 30 F. Supp. 2d 347, 350 (E.D.N.Y. 1998)); see also Smith v. Kinkead, No. 03-CV-10283, 2004 WL 728542, at *2 (S.D.N.Y. Apr. 5, 2004) ("[T]he removal statute has consistently been interpreted to require that all defendants consent to removal within the thirty day period." (internal quotation marks omitted)). This is known as the rule of unanimity or the unanimity rule. "Courts have very little discretion - if any - to forgive a failure to comply with the rule of unanimity." Patrick v. Porter-Cable Corp., No. 10-CV-131, 2010 WL 2574121, at *3 (D. Conn. Apr. 1, 2010); see also Russell Corp. v. Am. Home Assurance Co., 264 F.3d 1040, 1049 (11th Cir. 2001) (noting that the unanimity rule is "strictly interpreted and enforced"). Although all Defendants need not sign the removal petition, courts "typically require that each defendant timely submit some form of unambiguous written evidence of consent." Tate v. Mercedes-Benz USA, Inc., 151 F. Supp. 2d 222, 224 (N.D.N.Y. 2001) (internal quotation marks omitted).*fn1

Second, Stop & Shop argues that Goldsmith is a citizen of New York and that under the "forum-defendant rule," removal is improper when a defendant is a citizen of the forum state. Again, the legal premise behind Stop & Shop's argument is unassailable. See 28 U.S.C. § 1441(b) (allowing removal of cases, other than federal question cases, "only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought"); HSBC Bank, USA v. Norley, No. 04-CV-547, 2004 WL 813024, at *1 (D. Conn. Apr. 7, 2004) (holding that remand was required when no federal question was present, and defendant was a citizen of the forum state).

2. Exception to These Rules Gator argues that this case is excepted from these rules, and therefore was properly removed, because Goldsmith was not served as of the date of the Notice. As Gator notes, the rule of unanimity and the forum-defendant rule apply only to parties properly served. See 28 U.S.C. § 1441(b) (removal is proper only if "none of the parties in interest properly joined and served as defendants" is an in-state defendant); Patrick, 2010 WL 2574121, at *3 (noting that one of the three exceptions to the "rule of unanimity" applies when "the nonjoining defendants have not been served with service of process at the time the removal petition is filed" (internal quotation marks omitted)); Flores v. Merck & Co. (In re Fosamax Prods. Liab. Litig.), MDL No. 1789, 2008 WL 2940560, at *2 (S.D.N.Y. July 29, 2008) ("Courts almost uniformly have read [the forum-defendant provision of § 1441(b)] to allow removal where an in-state defendant has not been served by the time the removal petition is filed."); Deveer v. Gov't Emps. Ins. Co., No. 07-CV-4437, 2008 WL 4443260, at *4 (E.D.N.Y. Sept. 26, 2008) ("[R]emoval of a diversity case is permissible where an in-state defendant has not been served by the time the removal petition is filed." (internal quotation marks omitted)).

Stop & Shop attempted to serve Goldsmith according to the procedure set forth in N.Y. C.P.L.R. § 308(2), which provides in relevant part:

Personal service upon a natural person shall be made . . . by delivering the summons within the state to a person of suitable age and discretion at the actual place of business, dwelling place or usual place of abode of the person to be served and by either mailing the summons to the person to be served at his or her last known residence or by mailing the summons by first class mail to the person to be served at his or her actual place of business . . . ; proof of such service shall be filed with the clerk of the court designated in the summons within twenty days of either such ...


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