Morgan Stanley Smith Barney LLC v. Stuart

Filing 9

ORDER - Petitioner's emergency motion for remand (Doc. 5) is granted. The Clerk is directed to remand this matter to state court. Signed by Judge David G Campbell on 6/17/2011.(KMG)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Morgan Stanley Smith Barney LLC,
Petitioner,

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No. CV-11-1183-PHX-DGC
ORDER

vs.
Mark E. Stuart d/b/a Stuart Investments,
Respondent.

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On June 2, 2011, Petitioner filed in state court a petition for an order to show

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cause for Respondent’s failure to comply with an arbitration subpoena. Doc. 1-1 at 5-12.

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Because the underlying arbitration is scheduled to begin on June 20, 2011, an expedited

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hearing on the petition was held June 14, 2011. See id. at 21. The next day, before the

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hearing could be completed, Respondent removed the action to this Court asserting

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federal question jurisdiction. Doc. 1.

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Petitioner has filed an emergency motion for remand on the ground that the Court

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is without subject matter jurisdiction. Doc. 5. In response, Respondent filed a notice of

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withdrawal of his notice of removal and a notice of settlement. Doc. 8. Respondent

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states that the parties have settled this matter, including attorneys’ fees and costs, and

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have agreed to the dismissal of the state court action.

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Respondent does not state whether he concedes that federal jurisdiction does not

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exist in this case. Regardless, “the rule [is] that the existence or non-existence of subject

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matter jurisdiction in a given case does not hinge on the representations of parties to the

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case.” Weese v. Union Carbide Corp., No. 07-581-GPM, 2007 WL 290814, at *3 (S.D.

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Ill. Oct. 3, 2007). A federal court “‘has an independent duty to satisfy itself that it has

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subject-matter jurisdiction.’” Id. (citation omitted).

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The Court has federal question jurisdiction over cases “arising under” federal law.

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28 U.S.C. § 1331. The subpoena Petitioner seeks to enforce was issued by the arbitrator,

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not this Court. The petition seeks enforcement of the subpoena pursuant to Arizona law,

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that is, A.R.S. § 12-1507(A). In short, this case arises not under federal law, but state

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law. The Court therefore is without subject matter jurisdiction under 28 U.S.C. § 1331.

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See Franchise Tax Bd. of State of Cal. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 10

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(1983) (federal question jurisdiction exists only where the “complaint establishes that the

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case ‘arises under’ federal law”); Takeda v. Nw. Nat’l Life Ins. Co., 765 F.2d 815, 821

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(9th Cir. 1985) (“The federal question ‘must be disclosed upon the face of the complaint

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unaided by the answer or petition for removal.’”) (quoting Gully v. First Nat’l Bank, 299

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U.S. 109, 113 (1936)). The Court will grant the motion for remand (Doc. 5) and deem

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moot the notice of withdrawal (Doc. 8). See Weese, 2007 WL 290814, at *3.

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IT IS ORDERED:

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1.

Petitioner’s emergency motion for remand (Doc. 5) is granted.

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2.

The Clerk is directed to remand this matter to state court.

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Dated this 17th day of June, 2011.

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