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LLC v. Think Passenger, Inc.

United States District Court, Second Circuit

June 20, 2013

180 VARICK, LLC, Plaintiff,
v.
THINK PASSENGER, INC., Defendant.

MEMORANDUM OPINION & ORDER

KATHERINE B. FORREST, District Judge.

This commercial landlord-tenant dispute alleging nonpayment of rent for a commercial property is a summary proceeding that is better heard in state court. Defendant Think Passenger, Inc. ("Think") removed this action on the basis of diversity jurisdiction from the Civil Court for the City of New York (the "Civil Court") on April 1, 2013. (Not. of Removal, ECF No. 1.) Plaintiff 180 Varick, LLC ("Varick") now seeks remand to the Civil Court and attorneys fees incurred in the preparation of its motion.

For the reasons stated below, plaintiff's motion to remand is GRANTED. Its request for attorneys fees and costs is DENIED.

Factual and Procedural Background

Defendant is a Delaware corporation headquartered in Los Angeles, CA. (Not. of Removal ¶ 7.) Plaintiff is a New York Limited Liability Company headquartered in New York City. (Id. ¶ 6.) Plaintiff's sole member is a citizen of New York. (See Letter from Jeffrey Klarsfeld, Esq., to Hon. Katherine B. Forrest ("Klarsfeld Letter"), June 18, 2013, ECF No. 18.)

On July 28, 2008, the parties entered into a commercial lease for space at 180 Varick St. in Manhattan, covering the period September 15, 2008 - September 30, 2013. (Aff. of Steven Martin in Suppt. of Mot. to Remand ("Martin Aff.") Ex. A, ECF No. 6.) Plaintiff alleges that defendant has failed to pay rent and expenses since January 1, 2013. (Compl., Martin Aff. Ex. C.) Plaintiff seeks $46, 757.34 in rent arrears, as well as defendant's eviction, (Id. ¶ 4.) The parties agree that the value of the relief requested exceeds $75, 000. (See Not. of Removal ¶ 8, Klarsfeld Letter.)

On April 1, 2013, defendant filed a Notice of Removal on the basis of diversity jurisdiction, pursuant to 28 U.S.C.A. § 1332(a)(1). In its answer, defendant asserted counterclaims for unjust enrichment and promissory estoppel, related to the $194, 400 security deposit retained by plaintiff. (Not. of Removal ¶ 8; id. Ex. E.)

Remand to State Court

Plaintiff seeks to remand this action to state court, arguing that this Court lacks subject matter jurisdiction and should follow a tradition of federal court abstention in landlord-tenant matters. Defendant argues that once the statutory requirements for federal diversity jurisdiction - complete diversity and an amount in controversy in excess of $75, 000 - are satisfied, this Court must hear the case. In the landlord-tenant context, however, the Court will abstain.

Removal of an action filed in state court to federal court is proper in "any civil action... of which the district courts of the United States have original jurisdiction." 28 U.S.C.A. § 1441(a). If a case is not properly before the district court for lack of jurisdiction, "the case shall be remanded." 28 U.S.C.A. § 1447(c). A case where diversity jurisdiction is proper ¶ e.g., "where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, and is between - (1) citizens of different States" - is one type of original jurisdiction. 28 U.S.C.A. § 1332(a)(1).

"Even if diversity jurisdiction exists, removal is proper only if the court had original jurisdiction of the matter. Removal acts to the prejudice of state court jurisdiction and the privilege, therefore, is to be strictly construed." Glen 6 Associates, Inc. v. Dedai , 770 F.Supp. 225, 227-28 (S.D.N.Y. 1991).

Defendant here argues that removal was proper because diversity jurisdiction exists (i.e., the parties are completely diverse and the amount in controversy exceeds $75, 000). 28 U.S.C.A. § 1332(a)(1).

Plaintiff does not dispute that prerequisites for diversity jurisdiction are satisfied.[1] However, plaintiff argues-and the Court agrees - that this Court lacks original jurisdiction to hear summary proceedings, such as New York eviction actions. This court agrees with the analysis of the District Court in Dedaj, which held:

[A] summary process and a plenary civil trial, shaped by the federal rules, are very different. In light of Hanna v. Plumer and its progeny, unless there is express statutory authorization... or compelling reasons... a federal court cannot allow ...

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