CSDVRS, LLC v. Purple Communications, Inc. et al

Filing 48

ORDER: Plaintiff's Motion to Remand 21 is granted in part and denied in part. The Clerk is directed to remand this case to the Circuit Court for the Sixth Judicial Circuit in and for Pinellas County, Florida. The Clerk is also directed to forward a certified copy of this Order to that Court. Plaintiff's request for costs and attorney's fees is denied. CSDVRS, LLC's Motion for Leave to Reply to Defendant Purple Communications' Opposition to Plaintiff's Motion to Remand 46 is denied as moot. All pending motions are denied as moot and the clerk is directed to close the file. Signed by Judge James S. Moody, Jr on 10/28/2013. (LN)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION

CSDVRS, LLC,
Plaintiff,
v.

Case No: 8:13-cv-1811-T-30AEP

PURPLE COMMUNICATIONS, INC.
and AUPIX, LTD.,
Defendants.

ORDER
THIS CAUSE comes before the Court upon the Plaintiff CSDVRS, LLC’s Motion
to Remand (Dkt. #21) and Defendant Purple Communications, Inc.’s Opposition to
Plaintiff’s Motion to Remand (Dkt. #45) and CSDVRS, LLC’s Motion for Leave to
Reply to Defendant Purple Communications’ Opposition to Plaintiff’s Motion to Remand
(Dkt. #46). Upon review and consideration, it is the Court’s conclusion that the case
should be remanded to state court.
Background
Plaintiff CSDVRS, LLC (“CSDVRS”) filed a complaint in state court alleging
breach of contract, tortious interference, fraudulent inducement and promissory estoppel.
Defendant, Purple Communications, Inc. (“Purple”) removed this action to federal court
based on diversity of citizenship. In its Amended Notice of Removal, Purple alleged that
CSDVRS is a limited liability company with seven members who are not citizens of

Delaware or California. Purple made these allegations because CSDVRS previously filed
a similar complaint against the same parties in federal court based on diversity of
citizenship, which it voluntarily dismissed. See CSDVRS, LLC v. Aupix, Ltd., et. al., Case
No. 8:13-CV-649-T-30MAP (the “Prior Action”).
CSDVRS filed a Motion to Remand the case objecting to Purple’s allegations of
complete diversity of citizenship. In support of its Motion to Remand Plaintiff attached
three affidavits which identified nine members or partners of CSDVRS who “resided” in
California. Plaintiff then filed a supplemental affidavit stating that CSDVRS has a
member, M/C Venture Investors, LLC, which has three members who are “citizens of the
United States, domiciled in and citizens of Kentfield, California, Tiburon, California, and
San Francisco, California” at the time of removal. The supplemental affidavit does not
identify whether these three members are individuals or corporate entities.
In response to the Motion for Remand, Purple filed a Motion to Engage in Limited
Expedited Discovery to Adequately Respond to Plaintiff’s Pending Motion to Remand
(Dkt. #26). The Motion requested leave to conduct interrogatories, serve requests for
production and set depositions, if necessary, to determine whether complete diversity
exists. This Court granted the Motion. Purple served CSDVRS with interrogatories
requesting that CSDVRS identify any member who is a citizen of California or Delaware.
Plaintiff responded with “unknown” but re-iterated the statements made in its
supplemental affidavit regarding M/C Venture Investors, LLC and adding that “[o]n
information and belief, these three (3) citizens are all individuals.”

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I.

Standard for Removal

A civil case filed in a state court may be removed to federal court by a defendant if
the case could have originally been brought in federal court. 28 U.S.C. § 1441(a).
Federal courts have diversity jurisdiction over civil actions when the amount in
controversy exceeds $75,000 and the action is between citizens of different states. 28
U.S.C. § 1332(a). Diversity jurisdiction requires complete diversity; every plaintiff must
be diverse from every defendant. Flintlock Const. Services, LLC v. Well-Come Holdings,
LLC, 710 F.3d 1221 (11th Cir. 2013).
A defendant may remove any civil action by filing a notice of removal, signed
pursuant to the good faith requirements of Rule 11, which contains “a short and plain
statement of the grounds for removal.” 28 U.S.C. § 1446(a). Section 1446(b) then
establishes the prerequisites for removal in two types of cases: (1) those removable on the
basis of an initial pleading; and (2) those that later become removable on the basis of “a
copy of an amended pleading, motion, order or other paper.” 28 U.S.C. § 1446(b).
Regardless of the type of case, a defendant must remove within thirty days of receiving
the document that provides the basis for removal. Id.
When a defendant removes an action to federal court on diversity grounds, a court
must remand the matter to state court if complete diversity is lacking between the parties
or if any of the properly served defendants are citizens of the state in which the suit was
filed. Florence v. Crescent Res., LLC, 484 F.3d 1293, 1297 (11th Cir. 2007). Federal
courts are directed to construe removal statutes strictly, resolve all doubts about

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jurisdiction in favor of remand, and employ a presumption in favor of remand. Univ. of S.
Alabama v. Am. Tobacco Co., 168 F.3d 405, 411 (11th Cir. 1999). The removing party
bears the burden of demonstrating that removal is proper. Williams v. Best Buy Co., 269
F.3d 1316, 1319 (11th Cir. 2001).
The Eleventh Circuit has held that “while it is best to include all relevant evidence
in a petition for removal and motion to remand, a district court may, when necessary,
consider post-removal evidence in assessing removal jurisdiction. Sierminski v.
Transouth Fin. Corp., 216 F.3d 945, 949 (11th Cir. 2000). Further, “the jurisdictional
facts that support removal must be judged at the time of the removal, and any postpetition affidavits are allowable only if relevant to that period of time.” Id. at 949 (citing
Allen v. R&H Oil Co., 63 F.3d 1326, 1335 (5th Cir. 1995)).
Discussion
Purple removed this action within thirty days of receiving the complaint. In its
Amended Notice of Removal Purple asserted complete diversity of citizenship between
Plaintiff and Defendants. The Amended Notice of Removal also alleged that Plaintiff
CSDVRS is a limited liability company with seven members, as follows: 1)
Communication Services for the Deaf, Inc.; 2) Sean Belanger, an individual; 3) M/C
Venture Partners V, L.P.; 4) M/C Venture Partners VI, L.P.; 5) M/C Venture Investors,
LLC; 6) Providence Growth Investors, L.P.; and 7) Providence Growth Entrepreneurs
Funds, L.P. These were the seven members identified by CSDVRS in the Prior Action.
The Amended Complaint in the Prior Action did not specifically allege the names or

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citizenship of the partners of the limited partnerships or the members of the limited
liability companies that were members of CSDVRS.
To sufficiently allege the citizenship of unincorporated business entities, a party
must list the citizenships of all the members of the limited liability company and all the
partners of the limited partnership. Rolling Greens MHP, LP v. Comcast SCH Holdings,
LLC 374 F. 3d 1020, 1022 (11th Cir. 2004). Further, for purposes of determining
diversity of citizenship, a limited liability company is deemed to be a citizen of each state
in which any of its members is a citizen. A limited partnership is deemed to be a citizen
of each state in which any of its partners, limited or general, is a citizen. Id.
The Amended Notice of Removal filed by Purple did not affirmatively allege the
identity or citizenship of the members of M/C Venture Investors, LLC; M/C Venture
Partners V, L.P.; M/C Venture Partners VI, L.P.; Providence Growth Investors, L.P; or
Providence Growth Entrepreneurs Funds, L.P. The Amended Notice of Removal instead
alleged that each of these entities did not have any member or general or limited partner
that is a citizen of Delaware or California. Based on these allegations about the lack of
citizenship in either Delaware or California, Purple represented that there is complete
diversity of citizenship between the parties.
However, Purple did not have evidence of complete diversity at the time that it
filed its Amended Notice of Removal. The complaint did not contain this information,
and therefore, there was no basis for removal based on complete diversity on the face of
the complaint. Purple claims that “Plaintiff’s certification in the Prior Action provides the
factual basis for establishing complete diversity between the parties.” However, once

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CSDVRS dismissed that complaint, it could not serve as a basis for removal, only the
current complaint is at issue. Once CSDVRS disputed the basis for removal in its Motion
to Remand, Purple had the burden to produce evidence proving the allegations in the
Amended Notice of Removal.
Purple has failed to meet its burden of demonstrating that removal is proper. The
Court allowed Purple limited jurisdictional discovery to allow Purple to produce this
evidence, and none is currently in the record. Purple did not sufficiently list the
citizenships of all the members of CSDVRS in its Amended Notice of Removal. Purple
viewed Plaintiff’s allegations in the original complaint as a “certification” that complete
diversity existed. However, the original complaint was not verified and Purple has not
cited to any authority to support the theory that CSDVRS should be bound by the
allegations in the Prior Action which it voluntarily dismissed. There is doubt as to
whether there is complete diversity among the Plaintiff and Defendants. Since the Court
must resolve all doubts in favor of remand; the case is remanded to state court. Williams,
269 F.3d at 1319.
II.

Plaintiff’s Request for Attorney’s Fees

CSDVRS requests that

Purple pay Plaintiff’s costs and expenses, including

attorney’s fees, incurred as a result of improper removal of this action pursuant to 28
U.S.C. §1447(c). It alleges that Purple did not in any way seek to verify the statements
made in its Amended Notice of Removal regarding the citizenship of the members of
Plaintiff’s members. CSDVRS argues that Purple should have been on notice of the lack
of diversity due to the dismissal of the prior complaint after Defendant Aupix, Ltd.

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challenged the Court’s personal jurisdiction. Purple argues that the allegations in the
Prior Action provided the basis for removal.
Courts use their discretion under 28 U.S.C. §1447(c) to award costs and fees.
Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005). The “standard for awarding
fees should turn on the reasonableness of the removal.” Id. Further, “[a]bsent unusual
circumstances, courts may award attorney’s fees under § 1447(c) only where the
removing party lacked an objectively reasonable basis for seeking removal. Conversely
when an objectively reasonable basis exists, fees should be denied.” Id.
Purple had an objectively reasonable basis for removal based on the allegations in
the Prior Action. The court disagrees with Purple’s characterization of the allegations in
the Prior Action as a “certification of complete diversity,” however, it certainly provided
a basis for Purple to believe that diversity existed. Defendant Aupix’s Motion to Dismiss
in the Prior Action centered on challenging personal jurisdiction, not diversity.
Therefore, when CSDVRS dismissed its case in response, it did not necessarily put
Purple “on notice” that there was no diversity. Further, Purple did assert on numerous
occasions that it would not oppose the Motion to Remand if CSDVRS produced
satisfactory evidence that any of its members was a citizen of California or Delaware.
CSDVRS’ declarations and affidavits lacked the minimal factual statements to establish a
lack of diversity.

Therefore, the court denies the Plaintiff’s request for costs and

attorney’s fees.
It is ORDERED AND ADJUDGED that:

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1.

Plaintiff, CSDVRS, LLC’s Motion to Remand (Dkt. # 21) is granted in part

and denied in part.
2.

The Clerk is directed to remand this case to the Circuit Court for the Sixth

Judicial Circuit in and for Pinellas County, Florida. The Clerk is also directed to forward
a certified copy of this Order to that Court.
3.

Plaintiff, CSDVRS, LLC’s request for costs and attorney’s fees is denied.

4.

CSDVRS, LLC’s Motion for Leave to Reply to Defendant Purple

Communications’ Opposition to Plaintiff’s Motion to Remand (Dkt. #46) is denied as
moot.
5.

All pending motions are denied as moot and the clerk is directed to close

the file.
DONE and ORDERED in Tampa, Florida, this 28th day of October, 2013.

Copies furnished to:
Counsel/Parties of Record
S:\Odd\2013\13-cv-1811-remand.docx

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