Pathmanathan v. Jackson National Life Insurance Company et al
MEMORANDUM OPINION AND ORDER: ORDERED that the Motions to Remand filed by the Plaintiff (Doc. # 7 ) and Defendant Lonnie Correll Insurance Agency, Inc. (Doc. # 10 ) are DENIED. Signed by Honorable Judge W. Harold Albritton, III on 7/30/2015. (kh, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
SIVA PATHMANATHAN, M.D.,
JACKSON NATIONAL LIFE
INSURANCE COMPANY, et al.,
CIVIL ACTION NO. 3:15-cv-347-WHA
MEMORANDUM OPINION AND ORDER
This cause is before the court on Plaintiff Siva Pathmanathan, M.D.’s (“Plaintiff”)
Motion to Remand (Doc. # 7). Also before the court are Defendant Jackson National Life
Insurance Company’s (“Jackson National”) Response to the Motion (Doc. # 9) and the Plaintiff’s
Reply thereto (Doc. # 11). On July 14, 2015, Defendant Lonnie Correll d/b/a Lonnie Correll
Insurance Agency (“Lonnie Correll”) joined in the Plaintiff’s motion by filing its own Motion to
Remand (Doc. # 10).
The Plaintiff contends that remand is proper because some of the later-served Defendants
in this case are citizens of Alabama, and their residency in this forum requires remand pursuant
to 28 U.S.C. § 1441(b). Jackson National responds that because the resident Defendants were
served after removal, § 1441(b), by its plain language, does not require remand and removal
remains proper. For the reasons to be discussed below, the Motions to Remand are due to be
II. Motion to Remand Standard
Federal courts are courts of limited jurisdiction. See Kokkonen v. Guardian Life Ins. Co.
of Am., 511 U.S. 375 (1994); Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (1994); Wymbs v.
Republican State Exec. Comm., 719 F.2d 1072, 1076 (11th Cir. 1983), cert. denied, 465 U.S.
1103 (1984). As such, federal courts only have the power to hear cases that they have been
authorized to hear by the Constitution or the Congress of the United States. See Kokkonen, 511
U.S. at 377. Because federal court jurisdiction is limited, the Eleventh Circuit favors remand of
removed cases where federal jurisdiction is not absolutely clear. See Burns, 31 F.3d at 1095.
Because this case was originally filed in state court and removed to federal court, Jackson
National bears the burden of proving that federal jurisdiction exists. Williams v. Best Buy Co.,
Inc., 269 F.3d 1316, 1319 (11th Cir. 2001).
III. Facts and Procedural Background
This action was first filed in the Circuit Court of Tallapoosa County, Alabama on January
17, 2015. The original Complaint alleged breach of contract on an insurance policy. The
Plaintiff has amended the state court complaint a total of five times. Jackson National has
alleged that it filed its Notice of Removal within thirty days of the Third Amended Complaint,
which claimed damages for mental and emotional distress and for punitive damages for the first
time. Jackson National contends that it was the request for these damages that put it on notice
that the amount in controversy in the case exceeds $75,000. The Plaintiff has not challenged the
timeliness of removal.
Plaintiff’s Motion to Remand is based upon the presence of forum Defendants in this
case. Plaintiff’s Fourth and Fifth Amended Complaints allege that Defendants Dark Insurance
Agency, Inc. (“Dark Insurance Agency”) and Lonnie Correll are both domestic corporations in
Alabama. The Plaintiff concedes in the Motion to Remand that Lonnie Correll was served after
removal. (See Doc. # 7 at 1 (“[R]emoval was done before service could be perfected on . . .
Lonnie Correll Insurance Agency.”)). The Plaintiff has not stated whether Dark Insurance
Agency has been properly served, but Jackson National alleges that Dark Insurance Agency had
also not been served when it filed its Notice of Removal.
A. The “Forum Defendant Rule”
Federal diversity jurisdiction exists when the parties have complete diversity of
citizenship and the amount in controversy exceeds $75,000. 28 U.S.C. § 1332(a). In addition,
under § 1441(b) a federal court may not exercise diversity jurisdiction if one or more defendants
are citizens of the state where the action is brought. Specifically, the statute states that an action
may not be removed on the basis of diversity jurisdiction “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.” 28 U.S.C. § 1441(b)(2) (emphasis added). The Eleventh Circuit has noted that this
“forum defendant rule” is a procedural requirement that can be waived. See Pacheco de Perez v.
AT&T Co., 139 F.3d 1368, 1372 n.4 (11th Cir. 1998).
The issue in this case is whether the failure of the Plaintiff to serve either of the Alabama
citizen Defendants1 before the case was removed precludes remand in this instance.
As a threshold matter, the court notes that the parties do not dispute whether the amount
in controversy requirement has been met. The Plaintiff has implicitly conceded that the amount
in controversy exceeds $75,000. (Doc. # 11 at 2.)
Jackson National has also alleged that these Defendants were fraudulently joined. Because the court concludes
that the Motion to Remand should be denied on the basis of post-removal service, it does not reach the issue of
The Plaintiff and Lonnie Correll do not dispute that complete diversity of citizenship
exists in this case. The Plaintiff is a citizen of Texas and Jackson National is a citizen of
Michigan. According to Jackson National, no other Defendant had been served at the time of
removal. The court assumes from the Fourth and Fifth Amended Complaints that both Dark
Insurance Agency and Lonnie Correll are citizens of Alabama. The citizenship of Defendant
Swiss Reinsurance America Corporation is unclear from the record.2 At any rate, neither the
Plaintiff nor Lonnie Correll has alleged that any Defendant is a citizen of Texas. Therefore,
complete diversity of citizenship is not in dispute. Since complete diversity and amount in
controversy are conceded, federal court jurisdiction exists unless, as contended by the Plaintiff,
the Forum Defendant Rule applies under the facts of this case.
Jackson National argues that removal is proper in this case because the plain language of
§ 1441(b) precludes jurisdiction only when “parties in interest joined and served as defendants”
are forum defendants. Jackson National argues that because the case was removed before either
Lonnie Correll or Dark Insurance Agency was served, removal was proper at the time it was
effectuated and diversity jurisdiction exists in this case.
The Plaintiff argues that Jackson National removed this case “for forum shopping
purposes” and did so “before Plaintiff was even allowed a chance to serve the two named
Alabama forum Defendants.” (Doc. # 11 at 4–5.) The Plaintiff argues that despite the language
of the statute, remand is proper under these facts. For support, the Plaintiff cites a decision by
the District Court for the District of New Mexico that found remand to be the correct result under
similar circumstances. See generally Lone Mountain Ranch, LLC v. Santa Fe Gold Corp., 988 F.
The court notes that the headquarters for Swiss Reinsurance America Corporation is listed as being located in
Armonk, New York on the Bloomberg Business website. Company Overview of Swiss Reinsurance America
Corporation, http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=4163117. While this
indication is not as strong as hypothetical evidence submitted by the parties, at this time it does not appear to the
court that Swiss Reinsurance America is a citizen of Texas, leaving complete diversity of citizenship intact in this
Supp. 2d 1263 (D.N.M. 2013). In particular, the Plaintiff cites that court’s decision in Lone
Mountain Ranch for its discussion of the purposes of the forum defendant rule and why allowing
removal in these circumstances contravenes those purposes. The court reasoned in relevant part
“The purpose of diversity jurisdiction is to provide a separate forum for out-ofstate citizens against the prejudices of local courts and local juries by making
available to them the benefits and safeguards of the federal courts.” S.Rep. No.
1830, 85th Cong., 2d Sess., reprinted in 1958 U.S. Code Cong. & Admin. News
3099, 3102. “The forum defendant rule, 28 U.S.C. § 1441(b)(2), recognizes that
the rationale for diversity jurisdiction no longer exists when one of the defendants
is a citizen of the forum state since the likelihood of local bias is reduced, if not
eliminated.” Swindell–Filiaggi v. CSX Corp., 922 F. Supp. 2d 514, 518 (E.D. Pa.
2013) (citation omitted). The Court finds that the reduction of bias generated by a
forum defendant’s participation in a case is present whether the forum defendant
is served before or shortly after the matter is removed. The Court also notes that
the purpose of the “properly joined and served” language in the rule was to
prevent plaintiffs from adding a forum defendant solely to prevent removal, i.e.
fraudulent joinder. Therefore, it would make no sense for Congress to enact the
“properly joined and served” language in order to prevent gamesmanship on the
part of a plaintiff only to have that language allow for a different type of
gamesmanship by a defendant.
Id. at 1266 (emphasis added). Lonnie Correll also cited this language in support of its own
Motion to Remand.
While the court in Lone Mountain Ranch reached the result that the Plaintiff and
Defendant Lonnie Correll seek here for the reasons it described, it also recognized that there is a
split of authority on the proper role of the forum defendant rule in these types of cases. Id. (“The
Court acknowledges that there is a split of authority on whether the forum defendant rule
prohibits a non-forum defendant from removing a case where there are unserved forum
defendants.”). Not surprisingly, Jackson National has cited to cases reaching the opposite
conclusion from Lone Mountain Ranch in arguing that removal was proper in this case. In one
such decision, the District Court for the Middle District of Florida surveyed case law on the issue
and concluded that the “unambiguous text” of the statute gives non-forum defendants the ability
to remove a case when a plaintiff has “joined, but not yet served, a forum defendant.” North v.
Precision Airmotive Corp., 600 F. Supp. 2d 1263, 1268 (M.D. Fla. 2009). The court also found
that “the majority of courts” had concluded likewise as of 2009. See id. (collecting cases). The
North decision also acknowledged the courts on the other side of the debate, stating that they had
relied “putatively on legislative intent.” Id. It further highlighted the fact that many of those
decisions “involved unserved forum defendants that had effected removal—not non-forum
defendants,” and that some of them distinguished between the two different scenarios and
concluded that removal was appropriate in situations where a non-forum defendant removed a
case involving multiple defendants. Id. at 1268–69.
At the core of the North decision’s holding was its reliance on clear statutory text rather
than on inferred legislative intent:
Although Congress may not have anticipated the possibility that defendants could
actively monitor state court dockets to quickly remove a case prior to being
served, on the facts of this case, such a result is not so absurd as to warrant
reliance on “murky” or non-existent legislative history in the face of an otherwise
perfectly clear and unambiguous statute. Nonetheless, if Congress intends a
different result, “it is up to Congress rather than the courts to fix it.” [Exxon
Mobil Corp. v.] Allapattah Servs., Inc., 545 U.S. [546, 565 (2005)].
Id. at 1269–70 (footnote omitted). In 2012, the District Court for the Northern District of
Alabama reached the same result on similar reasoning, and noted that interpreting the statute to
permit removal in this scenario was the consensus result among district courts within the
Eleventh Circuit. See Goodwin v. Reynolds, No. 2:12-cv-0033-SLB, 2012 WL 4732215, at *4
(N.D. Ala. Sept. 28, 2012) (“Turning to the statute itself, the court finds its language clear, and
thus, like other district courts within the Eleventh Circuit, will not stray from its plain and
unambiguous words.”). The Goodwin decision also emphasized that the Eleventh Circuit’s
precedent requires courts to interpret statutes based on their language alone, when it is
unambiguous, and to turn to legislative history only to avoid an “unjust or absurd conclusion.”
Id. (internal quotations and citations omitted).
The court is persuaded by the reasoning in North and Goodwin, and does not see a reason
to deviate from the consensus of district courts in the Eleventh Circuit. The briefing by the
Plaintiff and Lonnie Correll does not engage extensively with this case law. The only
acknowledgement of this line of cases is Lonnie Correll’s argument that “[t]he opinion relied
upon by Jackson National in its Response was issued in the Northern District of Alabama back in
2013, and since then, other federal courts have had the opportunity to analyze it and have
determined the Forum Defendant Rule bars removal where the forum defendant has not yet been
served.”3 (Doc. # 10 at 3.) While it is true that Lone Mountain Ranch was decided after
Goodwin, the courts that issued those opinions do not bind each other, nor does either court bind
this court. Even accepting the dubious premise that Lone Mountain Ranch should be followed
because it came after Goodwin, other courts have considered the issue since Goodwin and agreed
with it. For example, one court in the Eastern District of Missouri noted that “[t]he federal
district courts are profoundly split” on this issue and concluded that removal was permissible “if
at least one defendant—and no forum defendant—has been served,” relying on the “plain,
unambiguous language” of the statute. Rogers v. Boeing Aerospace Operations, Inc., 13 F.
Supp. 3d 972, 975, 978 (E.D. Mo. 2014). The Plaintiff and Lonnie Correll have not provided the
court with any compelling reason to follow Lone Mountain Ranch as opposed to the many other
courts that have reached the opposite conclusion, including many in this Circuit.
While the quoted languages states the opinion cited by Jackson National was issued “back in 2013,” the court
infers this was a typo and the year mentioned should have been 2012, the year that Goodwin v. Reynolds was
decided. Regardless of which year was intended, the court does not consider the difference meaningful in its
The court is further persuaded by the fact that in one of the only decisions by any of the
circuits addressing this issue, the Sixth Circuit held, albeit with limited analysis, that removal is
permissible on these facts. See McCall v. Scott, 239 F.3d 808, 813 n.2 (6th Cir. 2001) (“Where
there is complete diversity of citizenship . . . the inclusion of an unserved resident defendant in
the action does not defeat removal under 28 U.S.C. § 1441(b).” (emphasis in original)).
The Plaintiff does not dispute that neither of the forum defendants in this case had been
served at the time of removal. Because the text of the statute is clear, and the court must give
effect to that text, the court has diversity jurisdiction over this case. The Motions to Remand will
In adopting 28 U.S.C. § 1441(b)(2) Congress chose to except the right of a defendant to
remove a case where complete diversity of citizenship and the requisite jurisdictional amount
exist only in cases where citizens of a forum state are both “joined and served.” These words are
clear and unambiguous. The court joins the numerous others which have held that it is the
prerogative of Congress, if it should so choose, to delete this requirement of service, not the
courts. To hold otherwise would presume either that Congress included the words “and served”
for no reason whatsoever or that it did not know what it was doing.
ORDERED that the Motions to Remand filed by the Plaintiff (Doc. # 7) and Defendant
Lonnie Correll Insurance Agency, Inc. (Doc. # 10) are DENIED.
DONE this 30th day of July, 2015.
/s/ W. Harold Albritton
W. HAROLD ALBRITTON
SENIOR UNITED STATES DISTRICT JUDGE
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