Phillips Constr., LLC v. Daniels Law Firm, PLLC

93 F.Supp.3d 544

PHILLIPS CONSTRUCTION, LLC, Plaintiff

v.DANIELS LAW FIRM, PLLC, et al., Defendants.

Civil Action No. 2:14–cv–23809.

United States District Court, S.D. West Virginia.

Signed March 19, 2015.

James R. Fox, Fox Law Office, Hurricane, WV, for Plaintiff.

Marc E. Williams, Marvin Chip Capehart, II, S. Taylor Hood, Sarah B. Massey, Nelson Mullins Riley & Scarborough, Huntington, WV, for Defendants.

MEMORANDUM OPINION AND ORDER

THOMAS E. JOHNSTON, District Judge.

Pending before the Court are Plaintiff's Motion to Remand, (ECF 5), and Defendants' Motion to Dismiss, (ECF 3). For the reasons discussed herein, the Court GRANTS the Motion to Remand.

I. Background

This case arises out of alleged professional malpractice relating to Defendants' prior representation of Plaintiff in another matter. Plaintiff “is a Kentucky Corporation which performs excavation, site work and construction services in several states including West Virginia.” (ECF 1, Ex. A (Compl.) ¶ 1.) Defendant Daniels Law Firm, PLLC is a professional limited liability company organized under the laws of West Virginia and Defendant Normal Daniels, Jr. is a resident of West Virginia. (Id. ¶ 2; see ECF 1 at 3 (“Defendants Daniels Law Firm and Mr. Daniels are citizens of West Virginia.”).)

On May 16, 2014, Plaintiff filed the complaint against Defendants in the Circuit Court of Kanawha County, West Virginia. (ECF 1, Ex. A.) The complaint includes state-law claims for negligence and breach of contract. (Id. )

On July 17, 2014, Defendants removed this action to this Court solely on the basis of diversity jurisdiction. (ECF 1.) On July 24, 2014, Defendants filed the Motion to Dismiss. (ECF 3.) This motion was fully briefed as of August 11, 2014. (See ECF 8.)

In addition to filing an opposition to the Motion to Dismiss, Plaintiff timely filed the Motion to Remand on August 4, 2014. (ECF 5.) Defendants filed their opposition on August 18, 2014, (ECF 10), and Plaintiff filed its reply briefing on August 25, 2014, (ECF 11). As such, both Plaintiff's Motion to Remand and Defendants' Motion to Dismiss are fully briefed and ready for disposition.

II. Legal Standard

Article III of the United States Constitution provides, in pertinent part, that “[t]he judicial Power shall extend ... to Controversies ... between Citizens of different States.” U.S. Const., art. III, § 2. “The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between ... citizens of different States.” 28 U.S.C. § 1332(a)(1).

Congress provided a right to remove a case from state to federal court under 28 U.S.C. § 1441. This statute states, in relevant part:

Except as otherwise expressly provided by Act of Congress, any civil action brought in a state court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.

28 U.S.C. § 1441(a). “[F]ederal jurisdiction ... is fixed at the time the ... notice of removal is filed.” Dennison v. Carolina Payday Loans, Inc., 549 F.3d 941, 943 (4th Cir.2008) (citing Mollan v. Torrance, 22 U.S. (9 Wheat) 537, 539, 6 L.Ed. 154 (1824) ). “The burden of establishing federal jurisdiction is placed upon the party seeking removal,” Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir.1994) (citation omitted), and defendants have the burden to show the existence of federal jurisdiction by a preponderance of the evidence, Johnson v. Nutrex Research, Inc., 429 F.Supp.2d 723, 726 (D.Md.2006) (citing Schwenk v. Cobra Mfg. Co., 322 F.Supp.2d 676, 678 (E.D.Va.2004) ).

Section 1447, in turn, governs the remand procedure and provides, in relevant part:

A motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction must be made within 30 days after the filing of the notice of removal under section 1446(a).

28 U.S.C. § 1447(c). Because removal of civil cases from state to federal court infringes state sovereignty, courts strictly construe the removal statute and resolve all doubts in favor of remanding the case to state court. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 61 S.Ct. 868, 85 L.Ed. 1214 (1941) (“Due regard for the rightful independence of state governments, which should actuate federal courts, requires that they scrupulously confine their own jurisdiction to the precise limits which the [removal] statute has defined.”); Mulcahey, 29 F.3d at 151 (“Because removal jurisdiction raises significant federalism concerns, we must strictly construe removal jurisdiction.”) (citation omitted); Marshall v. Manville Sales Corp., 6 F.3d 229, 232 (4th Cir.1993) (noting “Congress' clear intention to restrict removal and to resolve all doubts about the propriety of removal in favor of retained state court jurisdiction”) (citation omitted).

III. Discussion

Defendants argue—and Plaintiff does not contest—that there is complete diversity between the parties and the amount in controversy exceeds $75,000. (See ECF 1, 6, 10, 11.) There is similarly no dispute that Plaintiff did not serve Defendants with the complaint prior to the removal of this action. (See id. ) The sole issue in dispute is whether the forum-defendant rule exception to the removal statute bars Defendants from removing this action before Plaintiff serves them with the complaint. (See ECF 6, 10, 11.)

A defendant's ability to remove based upon diversity jurisdiction is limited by 28 U.S.C. 1441(b)(2), which provides:

A civil action otherwise removable solely on the basis of the jurisdiction under section 1332(a) of this title may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.

This provision, “commonly known as the ‘forum defendant rule,’ is separate and apart from the statute conferring diversity jurisdiction ... [and] confines removal on the basis of diversity to instances where no defendant is a citizen of the forum state.' ” Councell v. Homer Laughlin China Co., 823 F.Supp.2d 370, 377 (N.D.W.Va.2011) (Stamp, J.) (quoting Lively v. Wild Oats Mkts., Inc., 456 F.3d 933, 939 (9th Cir.2006) ). In Councell, Judge Stamp provided the following description of the purpose behind the forum-defendant rule:

The forum defendant rule exists due to the basic premise behind diversity jurisdiction itself. Section 1332 jurisdiction is designed as a protection for out-of-state litigants from possible bias in favor of in-state litigants in state court. Removal based upon diversity serves this purpose in that an in-state plaintiff may not utilize her position as master of the case to keep an out-of-state defendant in state court in order to take advantage of local bias. However, the protection upon which removal based upon diversity is premised is not an issue when an out-of-state plaintiff chooses to bring[ ] a suit in the state where the defendant is a citizen. Therefore, the forum defendant rule exists to allow the plaintiff to retain a certain amount of control over her case when such concerns about local bias in her favor are not at issue.

Id. at 379 (citation omitted); see also Lively, 456 F.3d at 940 (“The need for such protection is absent, however, in cases where the defendant is a citizen of the state in which the case is brought.”). “Within this contextual framework, the forum defendant rule allows the plaintiff to regain some control over forum selection by requesting that the case be remanded to state court.” Lively, 456 F.3d at 940 ; see also Councell, 823 F.Supp.2d at 379 (“[I]f diversity jurisdiction exists and a defendant removes a case in violation of the forum defendant rule ..., the plaintiff may still exercise control over the case by moving for remand.”)

The present issue is whether the phrase “properly joined and served” requires a plaintiff to serve the resident defendant in order for the forum-defendant rule to bar removal. (See ECF 6, 10, 11.) Defendants contend that the plain meaning of the phrase “properly joined and served” is that a resident defendant may remove an action after the filing of a complaint in state court, but before the plaintiff effectuates service. (See ECF 10.) Plaintiff argues, in response, that the plain meaning of the forum-defendant rule requires service before removal, or, alternatively, that an interpretation of the rule that permits removal before service leads to absurd results and runs contrary to the legislative intent of the provision. (See ECF 11.)

In the Fourth Circuit, “[t]he general rule is that unless there is some ambiguity in the language of a statute, a court's analysis must end with the statute's plain language (the Plain Meaning Rule).” Hillman v. I.R.S., 263 F.3d 338, 342 (4th Cir.2001) (citing Caminetti v. United States, 242 U.S. 470, 485, 37 S.Ct. 192, 61 L.Ed. 442 (1917) ); see also United States v. Morison, 844 F.2d 1057, 1064 (4th Cir.1988) (quoting I.N.S. v. Cardoza–Fonseca, 480 U.S. 421, 453, 107 S.Ct. 1207, 94 L.Ed.2d 434 (1987) (Scalia, J., concurring)) (“[W]hen the terms of a statute are clear, its language is conclusive and courts are ‘not free to replace ... [that clear language] with an unenacted legislative intent.’ ”). “Additionally, the Court must give meaning to every word of the statute, not reading any word out or treating it as surplusage.” Campbell v. Hampton Rds. Bankshares, Inc., 925 F.Supp.2d 800, 809 (E.D.Va.2013) (citing United States v. Pressley, 359 F.3d 347, 350 (4th Cir.2004) ).

There are two exceptions to the Plain Meaning Rule. First, this rule does not apply “when literal application of the statutory language at issue produces an outcome that is demonstrably at odds with clearly expressed congressional intent to the contrary.” Hillman, 263 F.3d at 342 (citing Sigmon Coal Co. v. Apfel, 226...