Frederick v. Serv. Experts Heating & Air Conditioning LLC

114 F.Supp.3d 1175

Brandi FREDERICK, Plaintiff,

v.SERVICE EXPERTS HEATING & AIR CONDITIONING LLC, et al., Defendants.

Case No. 2:14–CV–1647–RDP.

United States District Court, N.D. Alabama, Southern Division.

Signed June 22, 2015.

Joseph W. Carlisle, Spencer A. Kinderman, Gilpin Givhan PC, Birmingham, AL, Simeon F. Penton, Gilpin Givhan, PC, Montgomery, AL, for Plaintiff.

Grace L. Kipp, Michael Sansbury, Robert K. Spotswood, Spotswood Sansom & Sansbury LLC, Jeffrey P. Doss, Lee M. Hollis, Sara Anne Ford, Lightfoot Franklin

& White LLC, Birmingham, AL, for Defendants.

MEMORANDUM OPINION

R. DAVID PROCTOR, District Judge.

This matter is before the court on Plaintiff's Motion to Remand. (Doc. # 4). The Motion has been fully briefed, and on June 11, 2015, the court heard argument on the Motion. (Docs.# 8, 9, 12–17). After careful consideration, and with the benefit of oral argument, the court concludes that the Motion (Doc. # 4) is due to be denied.

I. Background

This case has taken a circuitous path to reach its current posture and multiple parties have engaged in a number of procedural missteps, dodges, and feints along the way. The court reviews these maneuvers below.

A. The Original Filing in State Court

Plaintiff Brandi Frederick initiated this action in the Circuit Court of Jefferson County, Alabama on June 24, 2013. Plaintiff's initial Complaint asserted claims against Defendants Service Experts Heating & Air Conditioning, LLC, Scott Freeman, and Becky Collins. (Case No. 2:14–cv–00700–RDP, Doc. # at 13–24). The original Complaint asserted state law breach of contract, fraud, suppression, promissory fraud, deceit, and willful deceit claims. (Doc. # 1–1).

B. The First Amended Complaint Filed in State Court

On March 20, 2014, Plaintiff filed an Amended Complaint in state court. (Case No. 2:14–cv–00700–RDP, Doc. # 1–1 at 35–68). In her amended pleadings, Plaintiff added certain claims which were not asserted in the original complaint, including a claim under 18 U.S.C. § 1962, the Racketeer Influenced Corrupt Organizations Act ("RICO"). (Id. ). Plaintiff also added two new defendants—General Electric Capital Corporation d/b/a GE Capital f/k/a GE Money Bank ("GE") and Equiguard, Inc. (Id. ). GE was served with the Amended Complaint on March 31, 2014, before this action was removed. (Case No. 2:14–cv–00700–RDP, Doc. # 1 at 104). Equiguard was also served.

C. The Initial Removal of this Action and the Prior Remand

On April 16, 2014, Service Experts and Freeman filed a Notice of Removal. (Case No. 2:14–cv–00700–RDP, Doc. # 1). The only basis asserted in that petition was federal question jurisdiction based on Plaintiff's RICO claims. The Notice was filed pursuant to 28 U.S.C. 1441(a), and was signed only by counsel for Service Experts and Freeman. (Case No. 2:14–cv–00700–RDP, Doc. # 1). However, Service Experts and Freeman asserted in the Notice that "GE Capital d/b/a GE Money Bank also consents to the removal." (Case No. 2:14–cv–00700–RDP, Doc. # 1 at ¶ 7). There was no indication that Equiguard consented.

On May 14, 2014, Plaintiff moved to remand the action. Plaintiff argued that the removal violated the unanimity rule because all served defendants had not joined in the removal. (Case No. 2:14–cv–00700–RDP, Doc. # 12).

On May 29, 2014, Service Experts shared with GE an affidavit identifying (1) the potential size of the putative class and (2) the potential recovery that the putative class could seek. (Doc. # 8 at 7; Case No. 2:14–cv–00700–RDP, Doc. # 21–2). In that affidavit, Melissa Gulick, Director of Accounting Shared Services at Service Experts, testified that, "[s]ince June 2000, Service Experts has paid over $9 million to Equiguard to purchase extended warranties for over 19,000 customers." ( Case No. 2:14–cv–00700–RDP, Doc. # 21–2). Importantly, GE asserts that this affidavit is the first and only document served in this case that quantifies the potential amount-in-controversy and the size of Plaintiff's putative class. (Doc. # 8 at 7). Obviously, it was served after the case had been initially removed and, therefore, was already pending in this court.

On May 30, 2014, Defendants filed a Joint Opposition to the May 14, 2014 Motion to Remand which, among other things, argued that the notice of removal should be construed to invoke the Class Action Fairness Act of 2005 ("CAFA"). (Case No. 2:14–cv–00700–RDP, Doc. # 21). However, the court refused to consider Defendants' CAFA argument because Defendants' Notice of Removal did not assert CAFA as a basis for removal. (Case No. 2:14–cv–00700–RDP, Doc. # 23, n. 2).¹ As the court noted, a basis for federal jurisdiction asserted in Defendants' response, but not in the Notice of Removal (and, also, not within the thirty day period in which a party could remove the case), may not be relied upon to amend the removal petition or provide another basis for removal. (Case No. 2:14–cv–00700–RDP, Doc. # 23, n. 2). Therefore, the Joint Opposition (and accompanying affidavit of Gulick) did not operate to amend the removal petition. The action was later remanded to the Circuit Court of Jefferson County, Alabama on July 25, 2014 because Equiguard did not consent to the federal question removal petition.² (Case No. 2:14–cv–00700–RDP, Doc. # 33).

D. The Second Removal of this Action

On August 25, 2014³ , the case was again removed. This time, the Notice of Removal asserted CAFA as the basis for removal. (Doc. # 1). Consent of other served defendants is not a requirement for removal under CAFA.

II. Discussion

On September 24, 2014, Plaintiff again moved to remand. (Doc. # 4). Plaintiff's current Motion to Remand presents the following arguments in support of remand: (1) this is GE's second notice of removal and it conflicts with the court's ruling on the prior removal; (2) GE had previously waived its right to remove under CAFA; (3) this case is not re-removable because GE had a duty to investigate removability prior to the thirty day period before it was actually re-removed; (4) GE's second removal is not based on any new facts, and (5) GE's failure to appeal the prior remand bars the current removal pursuant to CAFA. (Doc. # 4). The court addresses these arguments below, sometimes in combination where the analysis overlaps or is similar.

1. Although this is the Second Removal of this Action, it is Not GE's Second Removal and, in Any Event, it Does Not Conflict with the Court's Remand Ruling on the Prior Removal

First, contrary to Plaintiff's arguments otherwise, this is not GE's second notice of removal.⁴ Section 1446(b)(2)(B) provides that "[e]ach defendant shall have 30 days after receipt by or service on that defendant of the initial pleading or summons described in paragraph (1) to file the notice of removal." The first removal of this case was filed by Defendants Service Experts and Scott Freeman, was signed only by counsel for Service Experts and Freeman, but Service Experts and Freeman asserted in the Notice that "GE Capital d/b/a GE Money Bank also consents to the removal." (Case No. 2:14–cv–00700–RDP, Doc. # 1 at ¶ 7). The fact that GE consented to the removal and filed a joint opposition to Plaintiff's Motion to Remand does not permit a finding that GE filed (jointly or otherwise) the initial removal petition.⁵

Second, nothing about this removal conflicts with the court's previous orders. The court simply did not issue any substantive ruling addressing CAFA jurisdiction. "A remand order is conclusive only regarding the matters actually adjudged." S.W.S. Erectors, Inc., 72 F.3d at 492. In its previous order which initially denied the motion to remand, the court stated in a footnote that it would not consider a basis for removal that was not asserted in the removal petition. (Case No. 2:14–cv–00700–RDP, Doc. # 23 at 2, n. 2). The court further noted that Defendants were not entitled to amend their notice of removal to add an entirely new and distinct jurisdictional basis after the thirty day period for filing a notice of removal had elapsed. (Id. ). But, significantly, at that time, the court did not have before it any information about when Defendants, and in particular GE, received information sufficient to put them on notice regarding the potential amount-in-controversy and the size of Plaintiff's putative class for CAFA purposes.

The court takes GE's representation regarding the timing of its receipt of Defendant Service Experts' affidavit at face value (and, to be sure, there is no evidence to the contrary, and Plaintiff has not in any manner called GE's representation into question). And while Plaintiff does not quibble with GE's representation, she claims that GE—upon first learning about the amount in controversy information—nevertheless should have asked for leave to amend its consent and added CAFA as another basis for removal jurisdiction. In fact, subsequent research indicates there are at least some courts (albeit, not in this Circuit) that may have permitted a party like GE to request leave to amend a consent to the removal petition to assert a new ground for removal (such as CAFA) when the new jurisdictional basis only became known to that party after the case was removed, i.e., while the case was already pending in federal court. See Haber v. Massey, 904 F.Supp.2d 136, 141 (D.Mass.2012) ; Wilson v. Int'l Bus. Machs. Corp., 2011 WL 4572019, *2 (S.D.Tex.2011) (noting that "courts have been willing to permit amendments to a notice for removal when the new basis [for federal jurisdiction] did not exist until after the relevant thirty day period" but allowing remand because the defendant's second notice of removal was untimely); In re Pharm. Indus. Average Wholesale Price, 509 F.Supp.2d 82, 95 (D.Mass.2007) (permitting a defendant to assert a supplemental notice of removal when "[t]he new basis for removal arguably did not exist until after the initial thirty-day period" but ultimately finding the supplemental notice untimely); Hawaii v. Abbott Labs., Inc., 469 F.Supp.2d 835, 838...