Kondaur Capital Corp. v. Stroup, CIVIL ACTION NO. 3:19-cv-00424

KONDAUR CAPITAL CORPORATION, Plaintiff, v. SCOTT STROUP, et al., Defendants.

CIVIL ACTION NO. 3:19-cv-00424

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF PENNSYLVANIA

April 3, 2019

(CAPUTO, J.)

(SAPORITO, M.J.)

REPORT AND RECOMMENDATION

This civil action was removed from the Court of Common Pleas of Carbon County, Pennsylvania. The underlying state action is an action in ejectment styled Kondaur Capital Corporation v. Stroup, No. 17-2034 (Carbon Cty. (Pa.) C.C.P. filed Sept. 11, 2017). The removing defendants have been granted leave to proceed in forma pauperis in this action.

The plaintiff has filed a timely motion to remand. (Doc. 3.) That motion is not yet ripe for disposition, but upon review of the parties' filings and the record of a prior removal and remand in this same litigation, we find it appropriate to recommend that the case be remanded sua sponte for lack of jurisdiction without further delay.¹

The underlying state complaint was filed by the plaintiff on September 11, 2017. According to state court records, it was personally served on each of the defendants by the county sheriff on September 18, 2017. The defendants subsequently appeared in the state court action and filed preliminary objections on October 3, 2017, further confirming their receipt of service of process. The defendants' preliminary objections were denied by the state court on December 4, 2017. The defendants then filed an answer and counterclaim on December 26, 2017. The plaintiff, in turn, filed a reply to new matter and answer to counterclaim on January 22, 2018.

On April 12, 2018, the plaintiff filed a motion for summary judgment in the state court action. A hearing on this motion before the state court was scheduled to take place on June 19, 2018. But on June 11, 2018—nearly eight months after their receipt of the complaint and on the eve of the summary judgment motion hearing—the defendants fileda notice of removal to this Court, claiming proper removal jurisdiction because the state court ejectment proceedings had violated their due process rights under the Fourteenth Amendment, made actionable under 42 U.S.C. § 1983. The removed case was docketed as Kondaur Capital Corporation v. Stroup, No. 3:18-cv-01189 (M.D. Pa. filed June 11, 2018).

The plaintiff timely filed a motion to remand. On August, 15, 2018, Magistrate Judge Carlson issued a report recommending that the plaintiff's motion to remand be granted and the case be remanded to state court based on the plaintiff's untimely removal. The defendants objected, and on November 7, 2018, District Judge Mariani overruled their objections, adopted the magistrate judge's recommendation, and remanded the case to state court. See Kondaur Capital Corp. v. Stroup, No. 3:18-CV-1189, 2018 WL 5839089 (M.D. Pa. Nov. 7, 2018). In addition to the procedural defect upon which the the magistrate judge's recommendation relied, however, Judge Mariani also relied on a lack of jurisdiction over the matter, noting that "a review of the Complaint . . . reveals that this action is one solely for ejectment" and that the defendants "failed to carry their burden of demonstrating that this action is properly before the court on the basis of a federal question." Id. at *1n.1.

Following remand, the state court granted summary judgment to the plaintiff on January 25, 2019. The defendants filed a motion for reconsideration, which was denied by the state court on February 28, 2019.

Eleven days later, on March 11, 2019, the defendants filed the instant notice of removal, characterizing this as a "civil rights" action and asserting that we may exercise subject matter jurisdiction on federal question grounds. See 28 U.S.C. § 1331. Specifically, they have cited the Protecting Tenants in Foreclosure Act ("PTFA") and the Fourteenth Amendment's Due Process Clause, seeking to interpose these as defenses to ejectment.

The federal courts have a duty "to examine their subject matter jurisdiction at all stages of litigation sua sponte [even] if the parties fail to raise the issue. That obligation extends to removal cases, as well as to those originally filed in the district courts." U.S. Express Lines Ltd. v. Higgins, 281 F.3d 383, 388-89 (3d Cir. 2002). Moreover, removal jurisdiction must be strictly construed. See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941).

Here, the defendants assert that we have subject matter jurisdiction under 28 U.S.C. § 1331 based on allegations that the plaintiff's ejectment action and the state court's adjudication of it violated their rights under the PTFA and under the Due Process Clause. But "[f]or a suit to be one that arises under the laws of the United States, so as to confer original or removal jurisdiction on the federal courts, it must appear on the face of the complaint that resolution of the case depends upon a federal question." Brough v. United Steelworkers of Am., AFL-CIO, 437 F.2d 748, 749 (1st Cir. 1971); see also Buchanan v. Delaware Valley News, 571 F. Supp. 868, 871 (E.D. Pa. 1983) ("The existence of federal jurisdiction on removal must be determined on the face of the plaintiff's complaint."). Thus, it is well established that "a case may not be removed to federal court on the basis of a federal defense." Caterpillar Inc. v. Williams, 482 U.S. 386, 393 (1987); see also Nielsen v. Archdiocese of Denver, 413 F. Supp. 2d 1181, 1183 (D. Colo. 2006) ("It is now axiomatic that jurisdiction cannot be predicated upon a defense that raises a federal question, no matter that the issue might prove to be dispositive.").

As this very same federal court has previously held with respect to the very same underlying state court action, the plaintiffs have broughta simple action in ejectment, with no federal question apparent on the face of the complaint. See Kondaur Capital Corp., 2018 WL 5839089, at *1 n.1. We are bound by this determination as it is the "law of the case." As our sister court has explained in similar circumstances:

Generally, the first remand, because it establishes the law of the case, may be revisited only when intervening events justify that step. The law of the case doctrine applies to a successive removal by the same party on the same grounds if nothing of significance has changed since the prior removal. A successive removal petition following remand is permissible, however, if subsequent pleadings or conduct of the parties brings a once unremovable case within the grasp of the removal jurisdiction of the federal courts.

Hughes v. Mylan Inc., Civil Action No. 11-5543, 2011 WL 5075133, at *6 (E.D. Pa. Oct. 25, 2011) (cleaned up);² cf. Shelton v. Thomas, 537 Fed. App'x 63, 64 n.1 (3d Cir. 2013) (per curiam) ("Although res judicata doesnot inevitably bar a second action when the first action was dismissed for lack of jurisdiction, a party is precluded from relitigating 'matters actually adjudged' in the first case.") (citations omitted). Here, it is clear that nothing of significance has changed since the defendants' prior attempt at removal—certainly nothing that would now bring this case newly within the grasp of the removal jurisdiction of the federal courts. The case was remanded in November 2018 for untimely removal and for lack of subject matter jurisdiction. The previously pending summary judgment motion by the plaintiff was granted two months later in January 2019. The defendants filed a motion for reconsideration, which was promptly denied by the state court. Then, four months after remand, they initiated this second attempt at removal to federal court, once again relying exclusively on federal defenses as the basis for removal.³ Moreover, the passage of additional time has done nothing to undermine the alternative basis for our prior remand—the untimeliness of removal.

Accordingly, it is recommended that:

1. This action be DISMISSED sua sponte for lack of subject matter jurisdiction and be REMANDED forthwith to the Court of Common Pleas of Carbon County, Pennsylvania; and

2. The Clerk be directed to mark this case as CLOSED.

Dated: April 3, 2019

s/Joseph F. Saporito, Jr.

JOSEPH F. SAPORITO, JR.

United States Magistrate Judge

NOTICE

NOTICE IS HEREBY GIVEN that the undersigned has entered the foregoing Report and Recommendation dated April 3, 2019. Any party may obtain a review of the Report and Recommendation pursuant to Local Rule 72.3, which provides:

Any party may object

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