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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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Morgan Stanley Smith Barney LLC, Petitioner, 10 11 12 13 No. CV-11-1183-PHX-DGC ORDER vs. Mark E. Stuart d/b/a Stuart Investments, Respondent. 14 15 On June 2, 2011, Petitioner filed in state court a petition for an order to show 16 cause for Respondent’s failure to comply with an arbitration subpoena. Doc. 1-1 at 5-12. 17 Because the underlying arbitration is scheduled to begin on June 20, 2011, an expedited 18 hearing on the petition was held June 14, 2011. See id. at 21. The next day, before the 19 hearing could be completed, Respondent removed the action to this Court asserting 20 federal question jurisdiction. Doc. 1. 21 Petitioner has filed an emergency motion for remand on the ground that the Court 22 is without subject matter jurisdiction. Doc. 5. In response, Respondent filed a notice of 23 withdrawal of his notice of removal and a notice of settlement. Doc. 8. Respondent 24 states that the parties have settled this matter, including attorneys’ fees and costs, and 25 have agreed to the dismissal of the state court action. 26 Respondent does not state whether he concedes that federal jurisdiction does not 27 exist in this case. Regardless, “the rule [is] that the existence or non-existence of subject 28 matter jurisdiction in a given case does not hinge on the representations of parties to the 1 case.” Weese v. Union Carbide Corp., No. 07-581-GPM, 2007 WL 290814, at *3 (S.D. 2 Ill. Oct. 3, 2007). A federal court “‘has an independent duty to satisfy itself that it has 3 subject-matter jurisdiction.’” Id. (citation omitted). 4 The Court has federal question jurisdiction over cases “arising under” federal law. 5 28 U.S.C. § 1331. The subpoena Petitioner seeks to enforce was issued by the arbitrator, 6 not this Court. The petition seeks enforcement of the subpoena pursuant to Arizona law, 7 that is, A.R.S. § 12-1507(A). In short, this case arises not under federal law, but state 8 law. The Court therefore is without subject matter jurisdiction under 28 U.S.C. § 1331. 9 See Franchise Tax Bd. of State of Cal. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 10 10 (1983) (federal question jurisdiction exists only where the “complaint establishes that the 11 case ‘arises under’ federal law”); Takeda v. Nw. Nat’l Life Ins. Co., 765 F.2d 815, 821 12 (9th Cir. 1985) (“The federal question ‘must be disclosed upon the face of the complaint 13 unaided by the answer or petition for removal.’”) (quoting Gully v. First Nat’l Bank, 299 14 U.S. 109, 113 (1936)). The Court will grant the motion for remand (Doc. 5) and deem 15 moot the notice of withdrawal (Doc. 8). See Weese, 2007 WL 290814, at *3. 16 IT IS ORDERED: 17 1. Petitioner’s emergency motion for remand (Doc. 5) is granted. 18 2. The Clerk is directed to remand this matter to state court. 19 Dated this 17th day of June, 2011. 20 21 22 23 24 25 26 27 28 -2-

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