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Cooper v. The Trustees of College of The Holy Cross

United States District Court, S.D. New York

June 17, 2014

ASHLEY COOPER, Plaintiff,
v.
THE TRUSTEES OF THE COLLEGE OF THE HOLY CROSS, et al., Defendants.

OPINION AND ORDER

KATHERINE POLK FAILLA, District Judge.

On October 15, 2013, Plaintiff commenced an action in the Supreme Court of the State of New York, County of New York, against the Trustees of the College of the Holy Cross, the College of the Holy Cross, Bill Gibbons, Richard Regan, Jr., and Ann Zelesky. On November 13, 2013, Defendants removed that action to this Court on the basis of diversity jurisdiction. In so doing, Defendants contend that all Defendants are citizens of the State of Massachusetts; that Plaintiff is a citizen of the State of New York; and that the threshold jurisdictional amount is satisfied. Plaintiff objects to Defendants' removal and, to that end, has filed a motion for remand pursuant to 28 U.S.C. § 1447(c) for lack of diversity jurisdiction. Alternatively, Plaintiff has requested leave to amend the Complaint to join additional defendants, some of whom are alleged to be New York citizens. Because Defendants have established diversity jurisdiction under the Complaint as currently pleaded, Plaintiff's motion under § 1447(c) is denied. However, Plaintiff's motion for leave to amend the Complaint to join additional defendants is granted, because (i) joinder of these defendants is permissible under 28 U.S.C. § 1447(e) and (ii) the proposed amendment to the Complaint is not futile. The Court recognizes that granting Plaintiff's motion to join the additional defendants who are alleged to be New York citizens will destroy diversity jurisdiction. Consequently, upon the filing of an amended complaint in conformance with that suggested by Plaintiff in her briefing, this case will be remanded to New York State Supreme Court.

BACKGROUND[1]

A. Plaintiff's Complaint

On October 15, 2013, Plaintiff commenced an action in the Supreme Court of the State of New York, County of New York, against the Trustees of the College of the Holy Cross (the "College"), the College of the Holy Cross ("Holy Cross"), Bill Gibbons, Richard Regan, Jr., and Ann Zelesky (collectively, "Defendants"). (Eilender Decl., Ex. A). Defendants accepted service of the Summons and Complaint on or about October 24, 2013. ( See id., Ex. B). In naming the College, Plaintiff alleged that the College did business as Holy Cross, and that the Trustees of the College are "the individuals who comprise the corporate body constituted to conduct the business of the College of the Holy Cross, many of whose members are citizens of the State of New York." (Compl. ¶ 3). Plaintiff identified 10 trustees who, Plaintiff alleged upon information and belief, were citizens of the State of New York. ( Id. at ¶ 15). None of these trustees, however, was named as a defendant or served with a copy of the Summons and Complaint. (O'Rourke Remand Decl. ¶ 9). Plaintiff also alleged that Defendants Gibbons, Regan, and Zelesky were acting as agents of the College at the time of, and in connection with, the events underlying the Complaint. (Compl. ¶¶ 8, 10, 12).

A general understanding of the Complaint's allegations is in order. Plaintiff is a student-athlete who previously attended Holy Cross on a basketball scholarship starting in the fall of 2011. (Compl. ¶ 25). In her Complaint, Plaintiff alleges that while at Holy Cross, she sustained injuries due to the physical, mental, and emotional abuse inflicted on her by Gibbons, the Holy Cross women's basketball coach. ( See, e.g., id. at ¶¶ 29-41). The Complaint alleges further that Plaintiff suffered injuries due to inaction by Defendants College, Holy Cross, Regan (the Holy Cross Athletic Director), and Zelesky (the Associate Athletic Director), who, despite actual knowledge of Gibbons's conduct, did nothing to remedy or prevent the conditions to which Plaintiff and other women's basketball players were subjected. ( See, e.g., id. at ¶¶ 49, 52). Plaintiff alleges, among other things, that these defendants "were reckless, careless and negligent in failing to properly supervise defendant Gibbons [and] in failing to prevent Gibbons' abusive and outrageous behavior, " and, further, that they "continue until the present time to protect, cover-up and otherwise ignore defendant Gibbons' outrageous conduct to the detriment of all the players past and present." ( Id. at ¶¶ 76, 52). Plaintiff alleges that "[a]s a result of the conduct of defendant Gibbons and the remaining defendants' failure to take any action or to remediate the toxic environment, " Plaintiff had no choice but to leave Holy Cross after two years, thereby forfeiting her scholarship and expending funds to attend another educational institution. ( Id. at ¶ 55). Plaintiff brought certain claims specifically against Gibbons, and other claims solely against the remaining defendants for what can be construed as failure to supervise or aiding and abetting. ( Id. at ¶¶ 69-79, 86-89).[2]

B. Defendants' Removal and Evidence of Diversity Jurisdiction

On November 13, 2013, Defendants removed this action from the New York State Supreme Court to this Court by filing the Notice. (Eilender Decl., Ex. C). The Notice alleges that this Court has original jurisdiction over this matter pursuant to 28 U.S.C. § 1332(a) because this is a civil action in which the amount in controversy exceeds $75, 000, exclusive of costs and interest, and is between citizens of different states. ( Id. at ¶ 1).

For the purposes of citizenship, Defendants alleged that "The Trustees of the College of the Holy Cross' [abbreviated in this Opinion as "the College"] is the formal name of the corporate entity doing business as the College of the Holy Cross, a private college located [in] Worcester, Massachusetts, " and that "[n]o entity exists under the formal name College of the Holy Cross.'" (Eilender Decl., Ex. C at n.1).[3] Defendants also alleged that the College "is a private college chartered under the laws of Massachusetts and therefore is a citizen of Massachusetts" for purposes of diversity jurisdiction. ( Id. at ¶ 5). As for the remaining parties, Defendants allege that Gibbons, Regan, and Zelesky are each citizens of Massachusetts, whereas Plaintiff is a citizen of New York. ( Id. at ¶¶ 5-6).

Defendants also submitted proof of the College's corporate status. To start, Defendants attest that the College is a non-profit corporation that was first incorporated in the Commonwealth of Massachusetts in March 1865 under the name "the Trustees of the College of the Holy Cross." (O'Rourke Remand Decl. ¶ 3). Defendants further attest that the College was formed pursuant to an act of the Massachusetts Legislature to "incorporate the Trustees of the College of the Holy Cross." ( Id. at ¶ 3). As proof of that point, Defendants provided the College's Articles of Organization, which indicate that the then-trustees "hereby constituted a body corporate by the name of the Trustees of the College of the Holy Cross... and shall be and remain a body corporate of that name forever." ( Id. at ¶ 4 & Ex. A).[4]

The Articles of Organization further provide that the corporation "may sue or be sued... by the name of the Trustees of the College of the Holy Cross, " but do not allow for the Trustees to sue on behalf of the College. (O'Rourke Remand Decl., Ex. A). In a similar vein, the Articles of Organization were amended in 1987 to state, in relevant part, that "[n]o officer or director of the Corporation shall be liable to the Corporation or its members for monetary damages for breach of fiduciary duty as an officer or director, notwithstanding any provision of law imposing such liability." ( Id., Ex. B). The Articles of Amendment were filed with the Massachusetts Secretary of State on August 19, 1988. ( Id. at ¶ 5). As of January 22, 2014, the Corporations Division of the Massachusetts Secretary of State's website identified the College as being first organized in Massachusetts in March 24, 1865, and assigned it an identification number. ( Id. at ¶ 6 & Ex. C).

As to the amount in controversy, Defendants identify that Plaintiff's Complaint seeks at least $107, 930, representing the forfeited scholarship for two years, thus satisfying the jurisdictional amount. (O'Rourke Decl. ¶ 5).

C. The Instant Litigation

On November 14, 2013, just one day after Defendants removed the case to this Court, they requested that the Court hold a pre-motion conference on their anticipated motion to dismiss Plaintiff's Complaint. (Dkt. #9). Plaintiff responded on November 18, 2013, arguing that Defendants had improperly removed the action to this Court, and that it should be remanded because diversity jurisdiction under 28 U.S.C. § 1332(a) did not exist. (Dkt. #10). Specifically, Plaintiff contended that several of the individuals who are trustees of the College are citizens of New York, and because Plaintiff is also a citizen of New York, diversity jurisdiction does not exist. ( Id. ). More to the point for the purposes of the pre-motion conference request, Plaintiff suggested that the Court address the threshold issue of whether Defendants' removal of this case was proper prior to addressing Defendants' motion to dismiss. ( Id. ). To that end, Plaintiff informed the Court that she anticipated filing a motion to remand pursuant to 28 U.S.C. § 1447. ( Id. ).

In an attempt to resolve this matter without Court intervention, on November 27, 2013, Plaintiff's counsel requested that Defendants stipulate to remand. (Eilender Decl., Ex. D). Defendants refused by letter dated December 4, 2013. ( Id., Ex. E). In that letter, Defendants indicated, as they did in the Notice of Removal, that "The Trustees of the College of the Holy Cross' is the formal name of the College of the Holy Cross, a corporate entity organized under the laws of Massachusetts, " and urged that the Complaint's reference to certain members of the Holy Cross Board of Trustees and those members' citizenship did not alter the corporate form of the entity nor impact federal subject matter jurisdiction. ( Id. ).

The Court held a conference on December 17, 2013, to discuss the parties' anticipated motions. At that conference, the Court determined that logic and efficiency dictated that the Court resolve Plaintiff's anticipated motion to remand before Defendants filed their motion to dismiss. Plaintiff filed her motion to remand on January 16, 2014 (Dkt. #17); Defendants' filed their opposition on February 14, 2014 (Dkt. #20); and the motion was fully submitted when Plaintiff filed her reply on February 26, 2014 (Dkt. #22).

DISCUSSION

A. Applicable Law

"[F]ederal courts are courts of limited jurisdiction and, as such, lack the power to disregard such limits as have been imposed by the Constitution or Congress." Purdue Pharma L.P. v. Kentucky, 704 F.3d 208, 213 (2d Cir. 2013) (internal quotation marks omitted). "Congress has granted district courts original jurisdiction over cases in which there is a federal question, see 28 U.S.C. § 1331, and certain cases between citizens of different states, ...


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