Harbor Communications, LLC et al v. Southern Light, LLC et al

Filing 28

ORDER granting 10 Motion to Remand. This action is hereby REMANDED to the Circuit Court of Baldwin County, Alabama. Signed by Senior Judge Charles R. Butler, Jr on 2/2/2015. copies to parties. (sdb)

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IN  THE  UNITED  STATES  DISTRICT  COURT  FOR  THE   SOUTHERN  DISTRICT  OF  ALABAMA   SOUTHERN  DIVISION     HARBOR   COMMUNICATIONS,  LLC   BOIHEM  INVESTMENT   COMPANY,  LLC,  and  J  &  L,   LLC,     Plaintiffs,     v.     SOUTHERN  LIGHT,  LLC,   ANDREW  M.  NEWTON  and   EDWARD  W.  FORBESS,     Defendants,         )   )   )   )   )   )   )   )   )   )   )   )   )   )   )                 CIVIL  ACTION  NO.   14-­‐00403-­‐CB-­‐B        ORDER   This  matter  is  before  the  Court  on  Plaintiffs’  motion  to  remand  this  action  to   state  court.    After  due  consideration  of  the  motion  (Doc.  10),  Defendants  response   (Doc.  18)  and  Plaintiffs’  reply  (Doc.  19),  the  Court  finds  that  remand  is  required   because  removal  was  untimely.   Background     This  action  was  filed  in  the  Circuit  Court  of  Baldwin  County,  Alabama  on   March  29,  2013  by  Plaintiffs  Harbor  Communications,  LLC,  (Harbor),  Boihem   Investment  Company,  LLC  and  J  &  L,  LLC.    The  complaint  alleged  only  state  law   causes  of  action  against  Defendants  Southern  Light,  LLC,  Andrew  M.  Newton  and   Edward  W.  Forbess,  arising  from  the  alleged  unauthorized  conveyance  of  Harbor’s   facilities  and  equipment  to  Southern  Light.1    According  to  the  Complaint,  the                                                                                                                   1  All  of  the  parties  are  Alabama  citizens.   ultimate  result  of  this  wrongful  conveyance  was  that  Southern  Light  charged  Harbor   approximately  $700,000  per  year  to  use  equipment  that  Harbor  rightfully  owned.         After  the  state  court  litigation  was  commenced,  Southern  light  began  refusing   to  allow  Harbor’s  new  customers  to  interconnect  to  Southern  Lights  fiber  optic  lines   and  facilities.      On  June  24,  2014,  Plaintiffs  filed  a  Motion  for  Temporary  Restraining   Order  (TRO)  and  Preliminary  Injunction  in  the  state  court  action  requesting  an   order  “prohibiting  Southern  Light  from  refusing  interconnection  requests  from   Harbor  and/or  allowing  Harbor  the  type  of  access  to  its  equipment  that  would  allow   Harbor  to  interconnect  through  an  alternate  network  service  provider.”    (Pls.’  Br.,  Ex   2,  Doc.  1-­‐1,  p.  49.)         In  its  brief  in  support  of  the  motion,  Harbor  argued  that  it  met  the   requirements  for  obtaining  preliminary  injunctive  relief  under  state  law.    Among   those  requirements  was  the  proof  that  the  movant  “’has  at  least  a  reasonable  chance   of  success  on  the  ultimate  merits  of  his  case.’”    (Id.  Ex.  3  )(quoting  Holiday  Isle,  LLC  v.   Adkins,  12  So.  3d  1173,  1176  (Ala.  2008)).    Because  the  basis  of  Plaintiffs’  success-­‐ on-­‐the-­‐merits  arguments  is  key  to  the  removal  issue,  it  is  quoted  verbatim:     First,  federal  statutes  and  their  supporting  regulations  clearly   demonstrate  that  Southern  Light  has  a  duty  to  interconnect  with   Harbor.    The  controlling  statutory  authority  is  the   Telecommunications  Act  of  1996.    The  Act  states  that  “Each   telecommunications  carrier  has  the  duty…to  interconnect  directly  or   indirectly  with  the  facilities  or  equipment  of  other   telecommunications  carriers.”    47  U.S.C.  §  251(a).    The  regulations   implementing  that  federal  statute  are  equally  clear  on  this  duty.    The   regulations  define  a  “Telecommunications  Carrier”  as  “any  provider  of   telecommunications  services.”    47  C.F.R.  §  515.    The  regulations  echo   the  statutory  text  by  stating,  “Each  telecommunications  carrier  has   the  duty…to  interconnect  directly  or  indirectly  with  the  facilities  and   equipment  of  other  telecommunications  carriers.”    Id.  at  §  51.100.    As   a  “Telecommunications  carrier,”  Southern  Light  has  an  unambiguous     2   duty  to  interconnect  with  Harbor,  just  as  AT&T  has  a  duty  to   interconnect  with  Harbor  and  Southern  Light.     Second,  Southern  Light  has  repudiated  its  agreement  with   Boihem  that  it  would  accept  new  orders  from  Harbor  in  exchange  for   its  infrastructure’s  presence  on  Boihem’s  tower  sites.     Third,  Southern  Light  has  taken  the  position  in  this  litigation   that  the  MSA  is  valid  and  enforceable.    Southern  Light  should  not  be   permitted  to  take  this  position,  yet  simultaneously  deny  Harbor  the   basic  service  connections  inherent  in  that  agreement.    Southern  Light   has  stated  that  it  will  not  connect  Harbor  “as  long  as  there’s  pending   litigation.”    Because  the  MSA  obligates  Southern  Light  to  interconnect   with  Harbor,  Southern  Light  will  carry  a  duty  of  interconnection  even   if  it  prevails  in  the  underlying  lawsuit  and  proves  that  the  MSA  is  valid   and  enforceable.     (Id.)             In  their  August  25,  2014  response  to  Plaintiffs’  motion,  Defendants   addressed  Plaintiffs’  first  success-­‐on-­‐the-­‐merits  argument  under  the  heading   “Southern  Light  has  no  statutory  duty  to  provide  service  to  Harbor  [under  47  U.S.C.   §  251(a)].”  (Id.)      On  the  same  day,  Plaintiffs  filed  an  amended  motion  for  TRO  and   preliminary  injunction  “to  request  that  the  Court  award,  in  addition  to  all  other   relief  to  which  Plaintiff  is  entitled,  a  reasonable  attorney’s  fee  and  costs  of  litigation   pursuant  to  47  U.S.C.  §  207.”    (Id.  Ex.  4.)    A  hearing  was  held  on  August  26,  2014.    On   August  28,  2014,  Defendants  filed  a  “Motion  to  Dismiss  or  Strike  Plaintiffs’  Federal   Telecommunications  Act  Claim.”    (Doc.  1-­‐5,  58.)    The  state  court  denied  that  motion   on  August  29,  2014.2    That  same  day,  Defendants  filed  a  Notice  of  Removal  in  this   Court.     Defendants  invoke  removal  jurisdiction  under  28  U.S.C  1441(a)  based  on   original  jurisdiction  under  28  U.S.C.  §  1331,  which  gives  federal  court  original                                                                                                                   2  The  state  court  record  attached  to  the  Notice  of  Removal  does  not  contain   an  order  or  notice  of  ruling  on  the  motion  to  dismiss  or  strike.    However,  Defendants   state  in  their  Notice  of  Removal  that  the  motion  was  denied  on  August  29,  2014.     3   jurisdiction  over  civil  actions  arising  under  federal  laws.    The  federal  question  claim   or  claims  giving  rise  to  jurisdiction,  according  to  the  Notice  of  Removal,  are  found  in   the  Amended  Motion  for  TRO  wherein  “Harbor  is  pursuing  claims  under  the   Telecommunications  Act  of  1996,”  which  include  attorney’s  fees  and  costs  pursuant   to  47  U.S.C.  §  207  and  allegations  that  Southern  Light  violated  47  U.S.C.  §§  251,  201   and  202.”    (Doc.  1  ¶  15.)   Legal  Analysis     The  question  before  the  Court  is  whether  the  notice  of  removal  was  timely.     The  procedure  for  removal  is  governed  by  28  U.S.C.  §  1446,  which  sets  a  30-­‐day   removal  window.    If  the  case  was  not  initially  removable,  “a  notice  of  removal  may   be  filed  within  30  days  after  [the  defendant’s  receipt]  .  .  .  of  a  copy  of  an  amended   pleading,  motion  order,  or  other  paper  from  which  it  may  first  be  ascertained  that   the  case  is  one  which  is  or  has  become  removable.”    28  U.S.C.  §  1446(b)(3).    Because   removal  jurisdiction  raises  significant  federalism  concerns,  federal  courts  are   directed  to  construe  removal  statutes  strictly.    Univ.  of  S.  Alabama  v.  Am.  Tobacco  Co.,   168  F.3d  405,  411  (11th  Cir.  1999).    Though  not  jurisdictional,  the  30-­‐day  removal   period  is  “a  strictly  applied  rule  of  procedure  that  may  not  be  extended  by  the   court.”    BBC  Apartments,  Ltd.  v.  Browning,  994  F.  Supp.  1440,  1442  (S.D.  Fla.  1997).     The  removing  party  has  the  burden  of  demonstrating  that  removal  was  proper.    Id.     “[F]ederal-­‐question  jurisdiction  is  invoked  by  and  large  by  plaintiffs  pleading   a  cause  of  action  created  by  federal  law.”    Grable  &  Sons  Metal  Prods.,  Inc.  v.  Darue   Eng'g  &  Mfg.,  545  U.S.  308,  312  (2005).    Plaintiffs  argue  that  notice  of  the   Telecommunications  Act  claim  was  contained  in  the  original  Motion  for     4   TRO/Preliminary  Injunction  (“the  Motion”)  which  Defendants  received  more  than   30  days  prior  to  removal.    Defendants  counter  that  they  did  not  receive  notice  of  a   cause  of  action  made  under  the  Telecommunications  Act  until  Plaintiffs  filed  their   Amended  Motion  for  TRO/Preliminary  Injunction  (“the  Amended  Motion”)  adding  a   claim  for  attorney’s  fees  under  the  Act.  More  specifically,  Defendants  contend  the   Motion  did  not  assert  a  cause  of  action  at  all,  and,  if  it  did,  the  cause  of  action  was   actually  a  state  law  claim  for  preliminary  injunctive  relief.    These  arguments  twist   the  traditional  definition  of  a  motion  for  preliminary  injunction.         A  motion  for  preliminary  injunction  is  a  pleading  by  which  a  party  seeks  “an   extraordinary  and  drastic  remedy”  when  “drastic  relief  is  necessary  to  preserve  the   status  quo.”    All  Care  Nursing  Serv.,  Inc.  v.  Bethesda  Mem.  Hosp.,  Inc.,  887  F.2d  1536,   1537  (11th  Cir.  1989);  see  also  Spinks  v.  Automation  Personnel  Servs.,  Inc.,  49  So.3d   186  (Ala.  2010).    Whether  a  motion  for  preliminary  injunction  is  brought  in  state  or   federal  court,  relief  will  be  granted  only  if  the  movant  shows,  inter  alia,  a  substantial   likelihood  of  success  on  the  merits  of  his  underlying  claim.    Siegel  v.  LaPore,  234  F.3d   1163,  1176  (11th  Cir.  2000)  (per  curiam)  (en  banc);    Barber  v.  Cornerstone   Community  Outreach,  Inc.,  42  So.3d  65,  78  (11th  Cir.  2009).    “[A]ny  motion  or  suit  for   a  traditional  injunction  must  be  predicated  upon  a  cause  of  action.  .  .  .  regarding   which  a  plaintiff  must  show  a  likelihood  or  actuality  of  success  on  the  merits.”   Klay  v.  United  Healthgroup,  Inc.,  376  F.3d  1092,  1097  (11th  Cir.  2004).       5     Plaintiffs’  Motion  was  not  tied  to  any  cause  of  action  asserted  in  the   complaint,  but  that  does  not  mean  there  was  no  underlying  cause  of  action.3    The   Motion  cited  three  claims  that  allegedly  entitled  Plaintiffs  to  preliminary  injunctive   relief:    a  cause  of  action  arising  from  the  Telecommunications  Act  and  two  state-­‐law   causes  of  action.4         Defendants,  however,  do  not  concede  that  Plaintiffs’  reliance  on  federal  law   as  a  basis  for  success  on  the  merits  is  the  same  as  alleging  a  cause  of  action  under   federal  law.    Instead,  they  point  out  that  “asserting  the  violation  of  a  federal  statute   in  connection  with  a  state  law  claim  is  not  the  same  thing  as  alleging  a  cause  of   action  created  by  federal  law.”    (Defs.’  Rsp.  8,  Doc.  18  (emphasis  omitted)).    Next,   they  argue  that  the  motion  for  preliminary  injunction  is,  itself,  the  state  law  cause  of   action  and  imply  that  the  alleged  Telecommunications  Act  violation  is  nothing  more   than  an  element  of  that  claim.    The  fallacy  in  this  argument  is  clear.    A  motion  for   preliminary  injunction  is  not  a  cause  of  action.    It  is  a  procedural  mechanism  by   which  a  party  may  obtain  relief.    In  the  Motion,  Plaintiffs  sought  a  preliminary   injunctive  relief  based  on  both  federal  and  state  law  causes  of  action.    Defendants   should  have  removed  this  action  within  thirty  days  after  receiving  notice  of  the   Motion.                                                                                                                     3  It  would  certainly  have  simplified  matters  if  Plaintiffs  had  amended  their   complain  to  include  the  claims  asserted  in  the  Motion  for  TRO/Preliminary   Injunction.    Nevertheless,  the  Motion  was  sufficient  to  put  Defendants  on  notice  of  a   federal-­‐law  cause  of  action.    Furthermore,  Defendants’  argument  is  undercut  by  the   fact  that  the  Notice  of  Removal  was  based  on  the  Amended  Motion  for  TRO   Preliminary  Injunction,  which  also  is  not  tied  to  any  claim  asserted  in  the  Complaint.       4  Defendants  argue  that  they  were  not  on  notice  of  a  federal  cause  of  action   until  Plaintiffs  amended  the  Motion  to  assert  a  claim  for  attorney’s  fees  under  the   Telecommunications  Act.    This  argument  undermines  Defendants’  argument  that   the  Motion  did  not  plead  a  cause  of  action.     6     Even  if  removal  was  untimely,  Defendants  alternatively  argue,  this  Court   should  ignore  the  30-­‐day  removal  requirement  because  the  state  court  has  no   jurisdiction  over  the  federal  claim.    Defendants  point  out  that  only  federal  district   courts  and  the  Federal  Communications  Commission  have  jurisdiction  over   Telecommunications  Act  claims.    AT&T  Corp.  v.  Coeur  d’Alene  Tribe,  295  F.3d  899,   905  (9th  Cir.  2002).    Defendants  rely  on  three  cases  in  which  district  courts  have   used  exclusive  federal  jurisdiction  as  a  basis  for  ignoring  the  removal  statute’s   procedural  requirements.    In  Barefield  v.  State  Farm  &  Cas.  Co.,  296  F.Supp.2d  741   (S.D.  Tex.  2003),  the  court  concluded  that  timeliness  of  removal  was  irrelevant   because  federal  courts  had  original  exclusive  jurisdiction  over  the  plaintiff’s  claim   under  the  National  Flood  Insurance  Program.    Unfortunately,  Barefield  creates  an   exception  to  the  removal  statute  without  actually  addressing  the  statute  itself.     Section  1446(b)  makes  no  distinction  between  cases  involving  exclusive  jurisdiction   and  those  involving  concurrent  jurisdiction.    It  simply  and  clearly  requires  that  the   notice  of  removal  be  filed  within  30  days  after  receipt  of  the  complaint  or,  as  in  the   instant  case,  the  paper  from  which  the  basis  for  removal  can  be  ascertained.    See  28   U.S.C.  §  1446(b)(1)  and  (b)(3).    The  other  cases  cited  by  Defendant  are  similarly   flawed.    Morris  v.  Simsol  Ins.  Servs.,  2013  WL  6590584  (W.D.  La.  Dec.  16,  2013),   followed  Barefield  without  discussion.    In  Fitzgerald  v.  Bestway  Servs.,  Inc.  284   F.Supp.2d  1311  (N.D.  Ala.  2003),  the  court  actually  found  that  removal  was  timely   under  the  last-­‐served  defendant  rule  but  stated  in  dicta  that  it  “would  be  required  to   exercise  jurisdiction  over  the  explicit  ERISA  claim  even  if  [  ]removal  had  not  been   timely.”  Id.  at  1317.    Like  the  Barefield  decision,  Fitzgerald  does  not  discuss  the     7   removal  statute  or  provide  any  analysis  to  support  this  de  facto  exception  to  the   removal  statute.     The  cases  cited  above,  which  represent  the  minority  view,  run  contrary  to   the  longstanding  principle  that  “all  rules  governing  removal.  .  .  must  be  strictly   interpreted  and  enforced  because  of  the  significant  federalism  concerns  arising  in   the  context  of  federal  removal  jurisdiction.”    Russell  Corp  v.  American  Home  Assur.   Co.,  264  F.3d  1040,  1049  (11th  Cir.  2001).    Thus,  the  majority  of  courts  that  have   addressed  the  issue  have  concluded  that  “removal  is  permitted  only  if  the  statutory   requirements  have  been  satisfied  and  the  fact  that  the  Court  might  have  exclusive   jurisdiction  does  not  dispense  with  the  necessity  of  complying  with  the  statutory   requirements.”    Bradwell  v.  Silk  Greenhouse,  Inc.,  828  F.Supp.  940,  944  (M.D.  Fla.   1993);  accord  Pix  v.  Alper,  2014  WL  3927536  (W.D.  Wash.  Aug.  12,  2014)  (“courts   have  consistently  rejected  the  argument  that  a  removing  defendant  does  not  have  to   comply  with  the  rule  of  unanimity  simply  because  exclusive  federal  jurisdiction   exists”);  Nichols  v.  HealthSouth  Corp.,  2012  WL  3929797  (N.D.  Ala.  Sept.  10,  2012)   (recognizing  that  “a  claim  providing  for  exclusive  federal  jurisdiction  does  not   exempt  defendants”  from  removal  statute’s  procedural  requirements);  Harbour   Light  Towers  Assoc.  v.  Ameriflood,  LLC,    2011  WL  2517222  (M.D.  Fla.  June  23,  2011)   (granting  motion  to  remand  based  on  defect  in  removal  procedure  even  though   federal  court  had  exclusive  jurisdiction  based  on  National  Flood  Insurance  Act);   Malone  v.  Malone,  2007  WL  789449  (D.  Or.  Mar.  13,  2007)  (“the  court  would  add  this   case  to  the  apparent  majority”  requiring  remand  in  cases  of  defective  removal  even   if  exclusive  ERISA  jurisdiction  existed);  Viala  v.  Owens-­‐Corning  Fibeglas  Corp.,  1994     8   WL  139287,  *2  n.  3  (N.D.  Cal.  Apr.  13,  1994)  (“nothing  in  the  language  of  sections   1441  or  1446  or  in  the  case  law  surrounding  these  sections  lends  credence”  to   defendant’s  claim  that  procedural  removal  requirement  need  not  be  met  if  the   federal  question  is  one  over  which  the  federal  court  has  exclusive  jurisdiction);   Samuel  v.  Langham,  780  F.Supp.  424,  427  (N.D.  Tex  1992)  (remanding  case  based  on   removal  defect  even  if  exclusive  ERISA  jurisdiction  applied);  McCain  v.  Cahoj,  794   F.Supp.  1061  (D.  Kan.  1992)  (assuming  existence  of  exclusive  federal  jurisdiction   over  federal  crop  insurance  claim  and  nevertheless  remanding  for  defect  in  removal   procedures).   While  it  may  seem  counterintuitive  to  remand  a  case  over  which  the  state   court  arguably  has  no  jurisdiction,  a  defendant  in  this  situation  “may  bring  whatever   motions  it  deems  appropriate  in  the  state  court  proceeding.”    Harbor  Light,  2011  WL   2517222  at  *6.    This  Court  has  been  informed  that  the  state  court  denied   Defendants’  motion  to  dismiss  the  Federal  Telecommunications  Act  claim.     Apparently,  only  after  that  order  was  entered  did  the  Defendants  remove  this   action.    However,  this  Court  is  not  a  state  appellate  court,  and  removal  is  not  the   appropriate  method  for  challenging  a  state  court’s  ruling.   Conclusion     For  the  reasons  set  forth  above,  the  motion  to  remand  is  GRANTED.    This   action  is  hereby  REMANDED  to  the  Circuit  Court  of  Baldwin  County,  Alabama.     DONE  and  ORDERED  this  the  2nd  day  of  February,  2015.                               s/Charles  R.  Butler,  Jr.       Senior  United  States  District  Judge   9  

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