Cruz et al v. Spec Personnel LLC et al.

Filing 34

ORDER granting 27 Motion to Remand to State Court. See attached Memorandum of Decision. The Clerk of the Court is directed to 1) remand this matter to the Superior Court of Connecticut, Judicial District of Waterbury, Complex Litigation Docket and 2) close this case. Signed by Judge Kari A. Dooley on 8/30/2024. (Haider, S)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
CRUZ et al.,
Plaintiffs,
v.
SPEC PERSONNEL LLC et al.,
Defendants.

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3:24-CV-00058 (KAD)

AUGUST 30, 2024

MEMORANDUM OF DECISION
RE: MOTION TO REMAND TO STATE COURT BY SIGNIFY NORTH AMERICA
CORPORATION (ECF NO. 27)
Kari A. Dooley, United States District Judge:
This personal injury action arises from an accident in which plaintiff Juan Cruz (“Cruz”)
suffered injury while at work when a pallet of lighting products made by Defendant Signify North
America Corporation (f/k/a Philips Lightning Corporation) (“Signify”) fell on him. Cruz worked
for Rexel USA, LLC (“Rexel”). When Cruz sued Signify in the Superior Court of Connecticut,
Rexel intervened in the action as a co-plaintiff in an effort to recoup workers’ compensation
payments made to Cruz. Ultimately, Cruz won a multimillion-dollar judgment against Signify at
trial. 1 During the state court proceedings, Signify and Rexel filed counterclaims against each other,
each alleging that the other breached its obligations under various commercial agreements. While
Signify’s appeal of Cruz’s judgment was pending, Rexel removed the case to this Court ostensibly
pursuant to 9 U.S.C. § 205 (the Federal Arbitration Act, or “FAA”) and 28 U.S.C. § 1441 and
immediately moved to compel arbitration under the Convention on the Recognition and
Enforcement of Foreign Arbitral Awards (“the New York Convention”). Signify subsequently
moved to remand the case, arguing, inter alia, that Rexel could not properly invoke either statute

The claims between Signify and Rexel were bifurcated from Cruz’ claims against Signify. Therefore, the trial did
not resolve the counterclaims between Rexel and Signify.

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as a basis for removal and in the alternative, opposed its request for an order compelling arbitration.
For the reasons that follow, the motion to remand is GRANTED.
Facts and Procedural History 2
Cruz was injured at his warehouse job on September 19, 2017, when a 1300-pound load of
Signify’s lightbulbs fell from a rack, broke his spine, and paralyzed him from the waist down.
Cruz, 2023 WL 8888666 at 1. Cruz sued Signify and other defendants, alleging negligence by
Signify for failing to ensure that the pallets containing the lighting products were packaged safely
and securely. Id. After a three-week jury trial, the jury returned a $100 million verdict in favor of
Cruz, holding Signify liable for $90 million (based upon an apportionment of liability of 90%). Id.
This amount was later reduced on remittitur to approximately $43 million. Notice of Removal,
ECF No. 1, at 2. Signify’s appeal of the damage judgment is currently pending before the
Connecticut Appellate Court. See Cruz v. Spec Personnel, LLC, et al., AC 46515 (Conn. App. filed
May 15, 2023).
Soon after Cruz commenced the action, Rexel moved to intervene in the case as a plaintiff
to seek reimbursement from Cruz’s damage recovery of the amounts Rexel had paid to him under
the Connecticut Workers’ Compensation Act. Cruz, 2023 WL 8888666 at 1. The court granted
Rexel’s motion to intervene, and Signify subsequently filed a counterclaim against Rexel for
common law indemnification. Id. Before trial, the court also granted Rexel’s motion to bifurcate
Cruz’s personal injury claims from the other claims in the case, including Signify’s counterclaims
against Rexel. Id. On June 6, 2023, Signify filed a third amended counterclaim, alleging common
The Court takes the facts in the underlying state action from the parties’ papers and the Superior Court of
Connecticut’s ruling denying Rexel’s motion to strike certain portions of Signify’s third amended counterclaim,
available on WestLaw as Cruz v. Spec Pers., LLC, No. X10UWYCV185032358S, 2023 WL 8888666 (Conn. Super.
Ct. Dec. 18, 2023) and attached to Rexel’s Notice of Removal at ECF No. 1. The ruling is the last substantive order
in the case prior to Rexel’s removal to federal court. See Cruz v. Spec Pers., LLC, No. UWY-CV18-5032358-S,
Civil Case Docket at
https://civilinquiry.jud.ct.gov/CaseDetail/PublicCaseDetail.aspx?DocketNo=UWYCV185032358S.
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law indemnification, contractual indemnification, and breach of contract under an “International
and Services Agreement.” Id. at 2. After the court denied Rexel’s motion to strike certain counts
of the counterclaim, Rexel sought leave to appeal the decision directly to the Connecticut Supreme
Court, which request was denied. See Order, filed January 5, 2024, in Cruz v. Spec Personnel,
LLC, et al., SC 230141 (Conn.). On January 17, 2024, Rexel removed the case to this Court
pursuant to § 1441 and § 205, arguing that § 205 authorized removal of any action “relating to” an
arbitration agreement, which included the parties’ International Agreement. In seeking remand,
Signify argues that Rexel was not a “defendant” for purposes of either § 1441 or § 205 and
therefore could not properly remove the action to this Court. 3
Discussion
The generally applicable removal statute provides that “any civil action” over which a
federal court would have original jurisdiction may be removed to federal court by “the defendant
or the defendants.” 28 U.S.C. § 1441(a). The FAA removal provision provides that where the
subject matter of an action pending in state court “relates to an arbitration agreement or award
falling under the [New York] Convention, the defendant or the defendants may, at any time before
the trial thereof, remove such action” to federal district court. 9 U.S.C. § 205. “In light of the
congressional intent to restrict federal court jurisdiction, as well as the importance of preserving
the independence of state governments, federal courts construe [§ 1441] narrowly, resolving any
doubts against removability.” Mihok v. Medtronic, Inc., 119 F. Supp. 3d 22, 26 (D. Conn. 2015)
(quoting Purdue Pharma L.P. v. Kentucky, 704 F.3d 208, 213 (2d Cir. 2013)). While § 205 has
been construed as a broader removal statute than § 1441, see Goel v. Ramachandran, 823 F. Supp.
2d 206, 209 (S.D.N.Y. 2011), “[t]he party asserting federal jurisdiction generally bears the burden

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Because the Court grants Signify’s motion to remand, it declines to take up Rexel’s motion to compel arbitration.

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of proving that the case is properly in federal court.” Id. at 210; see also United Food &
Commercial Workers Union, Local 919 v. CenterMark Props. Meriden Square, Inc., 30 F.3d 298,
301 (2d Cir.1994) (“Where, as here, jurisdiction is asserted by a defendant in a removal petition,
it follows that the defendant has the burden of establishing that removal is proper”).
Section 1441(a) Removal
Signify first argues that Home Depot U. S. A., Inc. v. Jackson, 587 U.S. 435, 441 (2019),
firmly establishes that Rexel is not “the defendant” under 28 U.S.C. § 1441(a) and therefore cannot
remove this case under that statute. Indeed, Home Depot unequivocally held “that § 1441(a) does
not permit removal by any counterclaim defendant, including parties brought into the lawsuit for
the first time by the counterclaim.” 587 U.S. at 441. As there is no dispute that Rexel is a
counterclaim defendant in Signify’s operative counterclaim, Home Depot, if applicable, precludes
removal under § 1441(a). Rexel does not argue otherwise and appears to have abandoned any
argument that Home Depot is inapplicable or distinguishable as a means of saving the attempted
removal under § 1441. See Rexel’s Opp. to Signify’s Mot. to Remand (“Rexel Opp.”) at 2, n.1,
ECF No. 31 (“[Rexel] cited Section 1441 in its Notice of Removal only to the extent it may have
relevance to matters not expressly or impliedly addressed by FAA Section 205. This Response
therefore focuses on Signify’s FAA Section 205 arguments.”). 4
FAA § 205 Removal
In opposing remand, Rexel argues that § 205 is not subject to Home Depot’s holding
because it “did not discuss and therefore does not govern removals under § 205.” Rexel Opp. at 2.
Nor does Rexel address Shamrock Oil & Gas Corp. v. Sheets, in which the Supreme Court held that a counterclaim
defendant who is also the original plaintiff may not remove under § 1441(a)’s predecessor statute. 313 U.S. 100, 107
(1941) (emphasis added). As Rexel entered the case as an intervening plaintiff before being named as a counterclaim
defendant, Shamrock Oil also appears to bar removal under § 1441(a). As the Home Depot Court noted when
discussing Shamrock Oil, “[i]f a counterclaim defendant who was the original plaintiff is not one of ‘the defendants,’
we see no textual reason to reach a different conclusion for a counterclaim defendant who was not originally part of
the lawsuit.” Home Depot, 587 U.S. at 443.

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Additionally, Rexel argues that § 205 should be broadly construed in keeping with the general
purposes of the FAA, and that the context of the statute authorizes cases to become removable
whenever the subject matter of the action relates to arbitration. Id. Rexel allows that the statute
permits removal only by “the defendant or the defendants,” but argues that determining whether a
party is a “defendant” is a “judgment call dependent on context.” Id. The Court is not persuaded.
As described above, and acknowledged by Rexel, § 205, like § 1441(a) allows removal by
“the defendant or the defendants.” The statutory language as to who may remove the matter is
identical. Notwithstanding, Rexel asserts that the same language has different meanings in each
statute.
The Court does not write on a blank slate. In Home Depot, the Supreme Court examined
not only removal under § 1441(a), but also under § 1453(b) of the Class Action Fairness Act
(“CAFA”). CAFA permits removal by “any” defendant to a class action, and the Home Depot
Court held that this language, while different from “the” defendant as contained in § 1441(a), did
not expand the availability of removal beyond § 1441(a)’s limits. Rather, the Court held that the
statute only amended the rule that all defendants must consent to removal under § 1441(a). Home
Depot, 587 U.S. at 445. “If anything, that the language of § 1453(b) [of the Class Action Fairness
Act] mirrors the language in the statutory provisions it is amending suggests that the term
‘defendant’ is being used consistently across all provisions.” Id. Further, because both § 1453(b)
and § 1441(a) rely on the procedures for removal contained in § 1446, which also used the word
‘defendant,’ “interpreting ‘defendant’ to have different meanings in different sections would
render the removal provisions incoherent.” Id. at 446.
This reasoning forecloses Rexel’s argument that § 205’s removal language should be
interpreted differently from § 1441(a). The two provisions use identical language to describe who

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may remove: “the defendant or the defendants.” Cf. 9 U.S.C. § 205 (providing that “the defendant
or the defendants may . . . remove” certain actions) with 28 U.S.C. § 1441(a) (providing that certain
actions “may be removed by the defendant or the defendants”). Rexel cites no authority that the
language in § 205 should be given different and broader meaning than the language in § 1441(a).
Indeed, existing case law supports the conclusion that § 205, like § 1441(a), does not permit
removal by third-party defendants. See St. Luke #2, LLC v. Hermes Health All., LLC, 644 F. Supp.
3d 289, 293–94 (E.D. La. 2022) (relying on Home Depot to conclude that “defendant” shared the
same meaning in § 205 and § 1441(a) because “when the language in one statute tracks the wording
of another, this is a strong indication that the two statutes should be interpreted similarly”) (citing
Northcross v. Bd. of Educ. of Memphis City Schools, 412 U.S. 427, 428 (1973) (internal quotations
and punctuation omitted)).
Moreover, like the CAFA removal provision in Home Depot, § 205 relies on the same
procedures for removal as § 1446, which the Home Depot Court held to have the same construction
as § 1453(b) and § 1441(a). See In re Ocean Marine Mut. Prot. & Indem. Ass’n, Ltd., 3 F.3d 353,
355-56 (11th Cir. 1993) (“The procedural requirements of § 1446(a) and (b) are generally
applicable to a removal under the New York Convention, because 9 U.S.C. § 205 provides that the
procedure for removal of causes otherwise provided by law shall apply”) (internal quotations
omitted). Accordingly, to afford the term “defendant” a different meaning in § 205 than is afforded
in § 1446 would render the removal statutes “incoherent.” Home Depot, 587 U.S. at 446. The Court

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accordingly finds that Rexel, as an intervening plaintiff and a counterclaim defendant, is not a
“defendant” for purposes of § 205. 5
Conclusion
Because there is no statutory basis for Rexel to have removed this matter, Signify’s Motion
to Remand, ECF No. 27 is GRANTED. 6 The Court takes no position on ECF No. 3, Rexel’s
Motion to Compel Arbitration. The Clerk of the Court is directed to 1) remand this matter to the
Superior Court of Connecticut, Judicial District of Waterbury, Complex Litigation Docket and 2)
close this case.
SO ORDERED at Bridgeport, Connecticut, this 30th day of August 2024.
/s/ Kari A. Dooley
KARI A. DOOLEY
UNITED STATES DISTRICT JUDGE

To the extent that Rexel urges the Court to adopt a “functional” test to determine who would qualify as a defendant
for purposes of § 205 under LGC Holdings, Inc. v. Julius Klein Diamonds, LLC, 238 F. Supp. 3d 452,
460 (S.D.N.Y. 2017), see Notice of Removal at 5, the Court finds that the application of such a test would run
counter to the dictates of Home Depot which postdated LGC Holdings by two years. The Court recognizes that the
“functional” test relied upon in LGC Holdings itself derives from Supreme Court precedent, to include Mason City
& Ft. D.R.R. Co. v. Boynton, 204 U.S. 570, 580 (1907). However, neither Mason City nor the functional assessment
called for therein was cited or discussed by the Supreme Court in Home Depot. And this case, like Home Depot, and
unlike Mason City, involves a straightforward question of statutory interpretation with respect to a party whose
status is abundantly clear. Accordingly, the Court, while not specifically bound by Home Depot, finds no basis upon
which to distinguish its holding regarding CAFA from the question here regarding the FAA. Nor does the Court
decide whether LGC Holdings would survive scrutiny after Home Depot. That said, even if the functional analysis
and alignment of the parties called for in Mason City is a prerequisite to application of the removal statutes, the
Court concludes that such an analysis would not yield a different result, largely for the reasons set forth in Signify’s
Reply memorandum.
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The Court need not reach Signify’s alternative arguments that (1) the removal was untimely or (2) the removal was
an unauthorized effort to remove only a portion of the action pending in the Superior Court.
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