Palm Harbor Homes, Inc. v. Walters et al

Filing 22

MEMORANDUM OPINION AND ORDER as follows: (1) The 13 Motion for Remand is granted; (2) All other pending motions are left for disposition by the Circuit Court of Coffee County, AL after remand; and (3)This case is REMANDED to the Circuit Court of Coffee County, AL; and (4) The Clerk of the Court is DIRECTED to take appropriate steps to effect the remand. Signed by Hon. Chief Judge Mark E. Fuller on 3/5/2009. (Attachments: # 1 Civil Appeals Checklist)(cb, )

IN THE UNITED STATES DISTRICT COURT F O R THE MIDDLE DISTRICT OF ALABAMA S O U T H E R N DIVISION P A L M HARBOR HOMES, INC. P L A IN T IF F , v. M IC H A E L AND JENNIFER WALTERS, a n d CHESTER DRISKELL, DEFEN DANTS. ) ) ) ) ) C A S E NO.: 1:08cv196-MEF ) ) ) (WO) ) )

M E M O R A N D U M OPINION AND ORDER T h is cause is before the Court on the Motion for Remand (Doc. # 13) filed on April 1 8 , 2008, by Plaintiff Palm Harbor Homes, Inc. ("Palm Harbor"). Defendants Michael W alters, Jennifer Walters, and Chester Driskell removed this action from the Circuit Court f o r Coffee County, Alabama on March 19, 2008, invoking this Court's subject matter ju ris d ic tio n pursuant to 28 U.S.C. § 1332(d)(2). For several reasons, Plaintiff contends that th e statute does not provide a basis for federal subject matter jurisdiction over this action. F o r the reasons that follow, the Court agrees and finds that the Motion for Remand is due to b e GRANTED. J U R IS D IC T I O N AND REMAND STANDARD F e d e ra l courts are courts of limited jurisdiction. Kokkonen v. Guardian Life Ins. Co. o f Am., 511 U.S. 375 (1994); Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994); W y m b s v. Republican State Executive Comm., 719 F.2d 1072, 1076 (11th Cir. 1983). As s u c h , federal courts only have the power to hear cases that they have been authorized to hear

b y the Constitution or the Congress of the United States. Kokkonen, 511 U.S. at 377. Federal district courts have federal question jurisdiction over civil actions that arise " u n d e r the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331.

A d d it io n a lly, federal district courts have jurisdiction over civil actions in which only state la w claims are alleged if the civil action arises under the federal court's diversity jurisdiction. S e e 28 U.S.C. § 1332(a). The diversity statute confers jurisdiction on the federal courts in c iv i l actions "between citizens of different states," in which the amount in controversy e x c e e d s $75,000. Id. Additionally, President George W. Bush signed the Class Action F a irn e ss Act of 2005 into law on February 18, 2005. The CAFA expands federal jurisdiction o v e r interstate class actions and specifically amended 28 U.S.C. § 1332 to give federal d i s tric t courts diversity jurisdiction over class actions where at least one member of the p lain tiff class is a citizen of a different state from any defendant and the total amount in c o n tro v e rs y exceeds $5,000,000. 28 U.S.C. § 1332(d)(2). Specifically, that provision states th a t [ t ] h e district courts shall have original jurisdiction of any civil a c tio n in which the matter in controversy exceeds the sum or v a lu e of $5,000,000, exclusive of interest and costs, and is a c la s s action in which ­(A) any member of a class of plaintiffs is a citizen of a State different from any defendant; (B) any m e m b e r of a class of plaintiffs is a foreign state and any d e f en d a n t is a citizen of a State; or (C) any member of a class of p la in tif f s is a citizen of a State and any defendant is a foreign s ta te or citizen or subject of a foreign state. Id . (emphasis added). For purposes of this provision, the term "class action" is defined as

2

m e a n in g "any civil action filed under rule 23 of the Federal Rules of Civil Procedure or s im ila r State statute or rule of judicial procedure authorizing an action to be brought by 1 o r more representative persons as a class action." 28 U.S.C. § 1332)(d)(1)(B) (emphasis a d d e d ). When a case is originally filed in state court, a party may remove it if the case o rig in a lly could have been brought in federal court. See 28 U.S.C. § 1441(a). However, the n o n -m o v in g party may move for remand, which will be granted if "it appears that the district c o u rt lacks subject matter jurisdiction." See 28 U.S.C. § 1447(c). D IS C U S S IO N In support of remand, Palm Harbor presents a variety of arguments concerning w h e th e r this case is properly before this Court. In this Court's view, the CAFA does not e x ten d jurisdiction to this action because it is not a Rule 23 class action as that term is d e f in e d in the plain language of the statute. This action was filed by a single plaintiff, Palm B a y against three individual defendants. When filing suit, Palm Bay did not invoke Federal R u le of Civil Procedure 23, or any similar State statute. Moreover, Palm Bay did not invoke a n y procedure authorizing the action to be brought by it in a representative capacity. For this re a so n , the Court cannot find that this case fits the narrow definition of class action provided b y 28 U.S.C. § 1332 (d)(1)(B). Furthermore, even assuming arguendo that this case is a c la s s action, the Court cannot find that it meets the jurisdictional grant provided by 28 U.S.C. § 1332(d)(2). That provision only applies, by its terms, to class actions brought by plaintiffs

3

o n behalf of classes of plaintiffs. It does not extend to class actions brought against classes o f defendants. In opposition to remand, Defendants mischaracterize Plaintiff's argument on this issue a n d expand 28 U.S.C. § 1332(d) far beyond what is textually supportable. Defendants submit th a t because the case "involves" a class action the requirements of 28 U.S.C. § 1332(d). The te x t of the statute provides no support for such a contention. Here, it matters not at all that th is lawsuit is a declaratory judgment that is related to an arbitration between the parties w h e re in class allegations have been made. That does not magically convert this lawsuit into a class action. The statute provides jurisdiction if the case is a class action, not if it is related to a class action. The fact that Courts might consider the amount in controversy in an u n d e rlyin g action is a wholly separate inquiry. This declaratory judgment action cannot be ju d ic ia lly construed to be that which it is not in order to create subject matter jurisdiction w h e re Congress did not intend it to exist. In light of the Court's finding that 28 U.S.C. § 1332(d) provides no subject matter ju ris d ic tio n over this action for the aforementioned reasons, the Court need not, and does not a d d re ss the other arguments advanced in support of the motion for remand. For the f o r e g o in g reasons, it is hereby ORDERED as follows: (1 ) The Motion for Remand (Doc. # 13) is GRANTED. (2 ) All other pending motions are left for disposition by the Circuit Court of Coffee C o u n ty, Alabama after remand.

4

(3 ) This case is REMANDED to the Circuit Court of Coffee County, Alabama. (4 ) The Clerk of the Court is DIRECTED to take appropriate steps to effect the re m a n d . D O N E this the 5th day of March, 2009. /s/ Mark E. Fuller CHIEF UNITED STATES DISTRICT JUDGE

5