Stigleman v. Wal-Mart Stores, Inc.
Filing
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OPINION: Stigleman's Response and Objections to Wal-Mart's Notice of Removal 5 is GRANTED. This cause is remanded to the Circuit Court of Sangamon County pursuant to 28 U.S.C. § 1447(c). (SEE WRITTEN OPINION) Entered by Judge Sue E. Myerscough on 4/20/2016. (GL, ilcd)
E-FILED
Friday, 22 April, 2016 11:12:46 AM
Clerk, U.S. District Court, ILCD
IN THE UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF ILLINOIS
SPRINGFIELD DIVISION
DIANE STIGLEMAN, as Special
Administrator of the Estate of
Matthew McClain, deceased,
Plaintiff,
v.
WAL-MART STORES, INC. and
WOOLPERT, INC.,
Defendants.
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No. 16-1060
OPINION
SUE E. MYERSCOUGH, U.S. District Judge.
This cause is before the Court on the Response and
Objections to Defendant’s Notice of Removal (d/e 5) filed by
Plaintiff Diane Stigleman, as Special Administrator of the Estate of
Matthew McClain, deceased. Because removal was untimely under
28 U.S.C. § 1446(c)(1), Plaintiff’s motion to remand is GRANTED.
I. BACKGROUND
In September 2013, Stigleman filed a Complaint in the Circuit
Court for the Seventh Judicial Circuit, Sangamon County,
Springfield, Illinois against Defendant Wal-Mart Stores, Inc. (WalMart). The Complaint alleged negligence and willful and wanton
misconduct in Wal-Mart’s provision and maintenance of a private
drive as a means of ingress and egress to its business invitees. See
Case No. 13-3370, Compl. (d/e 1-1). Stigleman alleged that, as a
direct and proximate result of Wal-Mart’s allegedly defective private
drive, McClain was killed on May 24, 2013 when William Davis
exited the Wal-Mart store via the private drive and his vehicle
collided with McClain’s motorcycle on North Dirksen Parkway in
Springfield, Illinois.
On October 30, 2013, Wal-Mart filed a Notice of Removal
asserting that this Court had jurisdiction over the litigation
pursuant to 28 U.S.C § 1332 because the parties were diverse and
the amount in controversy exceeded $75,000. See Case No. 133370, Notice of Removal (d/e 1). The case was assigned case
number 13-3370.
Stigleman sought a remand (Case No. 13-3370 ( d/e 5)) on
the basis that the removal notice failed to establish diversity and
failed to attach the summons served upon Wal-Mart. The Court
denied Stigleman’s motion for remand and directed Wal-Mart to file
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an amended notice of removal. See Case No. 13-3370, December
2, 2013 Text Order.
In November 2013, Wal-Mart filed a Motion to Dismiss on the
basis that the Complaint failed to state a claim upon which relief
may be granted. See Case No. 13-3370, Mot. (d/e 4). In April
2014, United States Magistrate Judge Jonathan E. Hawley entered
a Report and Recommendation (d/e 12) recommending that the
Motion to Dismiss be denied. Wal-Mart filed objections (d/e 13).
In September 2014, this Court rejected the Report and
Recommendation, with the exception of the statement of facts in
Part I, granted Wal-Mart’s Motion to Dismiss, and dismissed the
Complaint without prejudice and with leave to replead. Case No.
13-3370, Opinion (d/e 15).
On October 14, 2014, Stigleman filed an Amended Complaint.
Case No. 13-3370 (d/e 16). On the same day Stigleman filed the
Amended Complaint, Stigleman filed the Motion for Leave to File
an Amended Complaint Naming Additional Parties and to Remand.
Case No. 13-3370 (d/e 17). In the Motion for Leave to File An
Amended Complaint Naming Additional Parties and to Remand,
Stigleman sought to file a Second Amended Complaint adding as
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additional parties Woolpert, Inc. (Woolpert) and Truman L. Flatt &
Sons Company, Inc. (Truman), the contractor for the project.
Because Truman was a citizen of Illinois, the addition of Truman to
the case would destroy complete diversity.
On February 11, 2015, this Court found that the relevant
factors favored granting Stigleman leave to amend. Case No. 133370, Opinion (d/e 21). Therefore, the Court granted Stigleman’s
motion to amend and remanded the cause to State court pursuant
to 28 U.S.C. § 1447(e). Id.
On February 17, 2016, Wal-Mart filed a Notice of Removal
pursuant to 28 U.S.C. § 1446(b) and the case was assigned case
number 16-1060 (d/e 1).1 On March 18, 2016, Stigleman filed a
Response and Objections to Wal-Mart’s Notice of Removal (d/e 5).
Stigleman asks that this Court enter an order remanding this
action to the Circuit Court of Sangamon County pursuant to 28
U.S.C. § 1447 because removal was untimely and because remand
is practical and benefits the parties.
Wal-Mart originally removed this action to the Peoria Division. On February
18, 2016, the case was transferred to the Springfield Division. Venue lies in
the Springfield Division because the original action was filed in Sangamon
County, Illinois.
1
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II. LEGAL STANDARD
The removing party bears the burden of demonstrating
removal is proper, and the removal statutes are strictly construed.
Morris v. Nuzzo, 718 F. 3d 660, 668 (7th Cir. 2013) (noting the
“long-established precedent that the removal statutes are to be
strictly construed to preserve the limited jurisdiction of federal
courts”); see also Syngenta Crop Prot., Inc. v. Henson, 537 U.S. 28,
32 (2002) (“These statutory procedures for removal are to be
strictly construed.”). When any doubt exists as to the jurisdiction,
any ambiguities are resolved against removal. Morris, 718 F. 3d at
668; Ford v. Keck, No. 06-cv-667-DRH, 2007 WL 1022003, at *5
(“doubts about compliance with procedural prerequisites for
removal should be resolved in favor of state court”). “The
procedural requirements governing removal are not jurisdictional,
but they are mandatory and strictly applied.” Disher v. Citigroup
Global Markets, Inc., 487 F. Supp. 2d 1009, 1015 (S.D. Ill. 2007)
(citations and quotations omitted).
III. ANALYSIS
A defendant may remove “any civil action brought in a State
court of which the district courts of the United States have original
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jurisdiction[.]” 28 U.S.C. § 1441(a). In this case, Stigleman’s
cause of action is removable based on diversity jurisdiction. 28
U.S.C. § 1332(a) (requiring complete diversity and an amount in
controversy in excess of $75,000, exclusive of interest and costs).
Specifically, Plaintiff Diane Stigleman is now and was at the
commencement of this action in the Seventh Judicial Circuit,
Sangamon County, Illinois, a citizen of the State of Illinois.
Stigleman’s decedent, Matthew McClain, was at all relevant times a
citizen of the State of Illinois. Defendant Wal-Mart is a corporation
organized under the laws of the State of Delaware with its principal
place of business in Arkansas. Co-defendant Woolpert is
incorporated in the State of Ohio and has its principal place of
business in Ohio. Woolpert has consented to removal. See
Consent (d/e 1-4); 28 U.S.C. § 1446(b)(2)(A) (“When a civil action is
removed solely under section 1441(a), all defendants who have
been properly joined and served must join in or consent to the
removal of the action”). The parties are, therefore, completely
diverse for purposes of § 1332.
The Court also finds that the amount in controversy
requirement is met. Courts have regularly held that where
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plaintiffs allege serious permanent injuries and significant medical
expenses, that the plaintiffs’ damages exceed the amount-incontroversy requirement is plain on the face of the complaint. See,
e.g., McCoy v. Gen. Motors Corp., 226 F. Supp. 2d 939, 941 (N.D.
Ill. 2002). In light of the damages Stigleman alleges in this case,
the Court finds that the amount-in-controversy is in excess of
$75,000.
In addition to satisfying the jurisdictional requirement, a
defendant seeking removal must also satisfy the procedural
requirements set forth in 28 U.S.C. § 1446(b), including the timing
requirements. As described in further detail below, the timing
requirements generally require that a notice of removal be filed
within 30 days of service of the initial pleading setting forth a
removable cause of action. 28 U.S.C. § 1446(b)(1). If the initial
pleading is not removable, the notice of removal must be filed
within 30 days of service of a paper from which it can first be
ascertained that the action is removable. 28 U.S.C. § 1446(b)(3).
In addition, a case may not be removed under § 1446(b)(3) on
the basis of diversity jurisdiction more than one year after the
commencement of the action unless the plaintiff acted in bad faith
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to prevent removal. 28 U.S.C. § 1446(c)(1). An action commences
by the filing of the complaint. Mills v. Martin & Bayley, Inc., No.
No. 05-888-GPM, 2007 WL 2789431, at *3 (S.D. Ill. Sept. 21, 2007)
(when an action commences is determined by the law of the state
where the action was originally filed); 735 ILCS 5/2-201(a) (“Every
action, unless otherwise expressly provided by statute, shall be
commenced by the filing of a complaint”). In this case, the cause
of action commenced on September 18, 2013, when Stigleman filed
the complaint in State court. Therefore, if the one-year time
limitation applies, Wal-Mart cannot remove this case without
showing that Stigleman acted in bad faith to prevent removal.
Stigleman objects to removal and seeks remand on two
grounds. First, Stigleman argues that Wal-Mart’s Notice of
Removal violates the one-year time limit for removal contained in
28 U.S.C. § 1446(c)(1). Second, Stigleman argues that remand is
practical and beneficial for all parties.
Wal-Mart responds that the one-year time limit does not
apply to cases that were removable based on the initial pleading.
Wal-Mart also argues that federal courts do not have the authority
to decline jurisdiction for the sake of convenience or practicality.
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Wal-Mart does not argue that Stigleman acted in bad faith to
prevent removal. Nonetheless, the Court finds that the removal
was untimely.
To put the parties’ arguments in context, a brief history of §
1446(b) is necessary. Section 1446 of Title 28 United States Code
was amended effective January 6, 2012. Prior to the amendment,
§ 1446(b) provided as follows:
The notice of removal of a civil action or proceeding shall
be filed within thirty days after the receipt by the
defendant, through service or otherwise, of a copy of the
initial pleading setting forth the claim for relief upon
which such action or proceeding is based, or within
thirty days after the service of summons upon the
defendant if such initial pleading has then been filed in
court and is not required to be served on the defendant,
whichever period is shorter.
If the case stated by the initial pleading is not
removable, a notice of removal may be filed within thirty
days after receipt by the defendant, through service or
otherwise, 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, except that a case may not be removed on
the basis of jurisdiction conferred by section 1332 of
this title more than 1 year after commencement of the
action.
28 U.S.C. § 1446(b) (2010). The one-year limitation was added “to
former § 1446 as part of the 1988 Judicial Improvements and
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Access to Justice Act, Pub. L. No. 100-702, § 1016, 102 Stat.
4642, 4669-70 (1988) as ‘a means of reducing the opportunity for
removal after substantial progress has been made in state court.’”
Richfield Hospitality Inc. v. Charter One Hotels & Resorts, Inc.,
978 F. Supp. 2d 1194 (D. Colo. 2013) (quoting H.R. Rep. No. 100889 at 72 (1988), reprinted in 1988 U.S.C.C.A.N. 5982, 6032
(subsequently presented to the Senate, 134 Cong. Rec. S16308-09)
(daily ed. Oct. 14, 1988)); see also H.R. Rep. 112-10 (noting that
the 1988 addition prohibiting removal of diversity cases more than
one year after commencement was “intended to encourage prompt
determination of issues of removal in diversity proceedings, and it
sought to avoid the disruption of state court proceedings that
might occur when changes in the case made it subject to
removal”). Courts interpreting the former version of § 1446(b) held
that the one-year limitation applied only to diversity cases that
were not initially removable. See Price v. Wyeth Holdings Corp.,
505 F.3d 624, 631 n. 6 (7th Cir. 2007) (noting in dicta that “every
circuit to have considered the question . . . has held that the oneyear bar is applicable to cases that are not initially removable”);
but see Caterpillar Inc. v. Lewis, 519 U.S. 61, 69 (1996) (stating in
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dicta that “[n]o case, however, may be removed from state to
federal court based on diversity of citizenship ‘more than 1 year
after commencement of the action’”).
In 2011, Congress amended § 1446 as part of the Federal
Courts Jurisdiction and Venue Clarification Act of 2011, Pub. L.
No. 112-63, 125 Stat. 758 § 103 (2011) (amendment effective
January 6, 2012). Specifically, the amendment numbered the
paragraphs in former § 1446(b) and created a new paragraph
§ 1446(b)(3), which contained essentially the same text of the
second paragraph in the former version, except that the one-year
limitation was made part of a new subsection. See Hesser v. Home
Depot U.S.A., Inc., No. 4:13-CV-227 CAS, 2013 WL 1914435, at *3
(E.D. Mo. May 8, 2013). The relevant portions of § 1446 now read
as follows:
b) Requirements; generally.--(1) The notice of removal of
a civil action or proceeding shall be filed within 30 days
after the receipt by the defendant, through service or
otherwise, of a copy of the initial pleading setting forth
the claim for relief upon which such action or
proceeding is based, or within 30 days after the service
of summons upon the defendant if such initial pleading
has then been filed in court and is not required to be
served on the defendant, whichever period is shorter.
***
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(3) Except as provided in subsection (c), if the case
stated by the initial pleading is not removable, a notice
of removal may be filed within 30 days after receipt by
the defendant, through service or otherwise, 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.
(c) Requirements; removal based on diversity of
citizenship.--(1) A case may not be removed under
subsection (b)(3) on the basis of jurisdiction conferred by
section 1332 [diversity jurisdiction] more than 1 year
after commencement of the action, unless the district
court finds that the plaintiff has acted in bad faith in
order to prevent a defendant from removing the action.
28 U.S.C. § 1446(b).
Stigleman argues that the removal was untimely because,
after the 2011 amendments, the one-year limitation applies to all
diversity cases regardless of whether the action was initially
removable. Pl. Opp. at 6. According to Stigleman, Congress is
presumed to be aware of judicial interpretations of a statute and,
when Congress enacts an amendment, it is presumed Congress
intended a change in legal rights. Id. Stigleman asserts that,
because Wal-Mart seeks removal over two years following
commencement of the action, this matter must be remanded.
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Wal-Mart argues that the one-year limitation only applies to
cases that were not initially removable. Wal-Mart asserts that the
2011 amendment did not expand the application of the one-year
bar but merely added an exception to the current one-year
limitation—that the one-year period does not apply if the plaintiff
acted in bad faith to prevent a defendant from removing the action.
Def. Resp. at 2.
The Court finds that a plain reading of § 1446(c)(1)
demonstrates that the one-year limitation only applies to cases
removed under § 1446(b)(3) on the basis of diversity jurisdiction.
28 U.S.C. § 1446(c)(1). And § 1446(b)(3)— allowing a notice of
removal to be filed within 30 days of receipt of a copy of an
amended pleading or other paper from which it can first be
ascertained that the case is or has become removable— only
applies where the case stated by the initial pleading was not
removable. See Ross v. Lee, No. 3:15cv566, 2016 WL 521529, at
*2-3 (E.D. Va. Feb. 5, 2016) (involving case where a defendant
removed the case within 30 days of being served with the initial
pleading but over a year had passed since commencement of the
case and holding that the “the absolute one-year limit on removal
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appears to only apply to cases that are not removable when
commenced” and concluding that “[t]he one year rule does not
apply to this case because the case was removable from the start”);
In re Boston Scientific Corp., 2015 WL 6456528, at *3 (C.D. Cal.
Oct. 26, 2015) (noting, in case involving an action that was not
initially removable, that “[t]he one-year rule, however, does not
apply where the case was initially removable under § 1446(b)(1)”).
Had Congress intended to impose the one-year limitation on all
cases removed on the basis of diversity jurisdiction, Congress
would not have included in § 1446(c)(1) the limiting language that
“[a] case may not be removed under subsection (b)(3)” more than
one year after commencement of the action. See, e.g. Ritchy v.
Upjohn Drug Co., 139 F.3d 1313, 1317 (9th Cir. 1998) (noting
that, under the former version of § 1446(b), where the case stated
in the initial pleading is removable, it will either be removed
promptly or not at all and, therefore, there is no need for the oneyear limitation to apply to the section of the statute providing for
removal within 30 days of the initial pleading).
More troublesome, and not addressed by the parties, is under
which portion of § 1446 Wal-Mart removed this case. The initial
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pleading filed in the state court case was removable under
§ 1446(b)(1), and Wal-Mart removed the cause of action to this
Court (Case No. 13-3370). The case was eventually remanded to
state court—not because the case stated in the initial pleading was
not removable but because the joinder of a non-diverse party
destroyed diversity. When Stigleman settled with the non-diverse
party in state court, Wal-Mart again removed the case. Neither the
procedure set forth in § 1446(b)(1) nor the procedure set forth in
§ 1446(b)(3) appear to apply to such situations.
For example, the case could not be removed a second time
under the procedure set forth in § 1446(b)(1) because the second
notice of removal was not filed within 30 days of the filing of the
initial pleading in state court. Section 1446(b)(3) is not a perfect fit
either because that section applies when the initial pleading was
not removable, and in this case, the initial pleading was removable.
Nonetheless, the Court finds that § 1446(b)(3) is the better fit.
As noted above, the removal statutes are strictly construed in
favor of remand. And applying the one-year limitation in this case
is consistent with Congress’ stated reason for imposing a one-year
limitation—to avoid disruption of state court proceedings.
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Although this case was pending in this Court from October 2013
until February 2015, this case was also pending in state court
from February 11, 2015 to February 17, 2016. (The Court
observes, however, that neither court has made substantial
progress in this case.)
Moreover, the Court notes that Wal-Mart’s Notice of Removal
was technically based on § 1446(b)(3). Although Wal-Mart did not
cite § 1446(b)(3), Wal-Mart did state that “[n]otice of removal may
be filed within 30 days after defendant receives a copy of an
amended pleading, motion, order or other paper from which it may
first be ascertain that the case has become removable” and that
Wal-Mart’s removal was filed within 30 days of the dismissal of the
last non-diverse defendant. See Notice of Removal at ¶¶ 17, 18
(d/e 1) (citing §1446). Essentially, Wal-Mart used the language of
§ 1446(b)(3) to justify its removal. Wal-Mart stated that the order
terminating the non-diverse party was the order from which it
could be ascertained that the case had become removable. Id. ¶¶
16, 17. Wal-Mart filed the Notice of Removal within 30 days of that
order. Id. ¶ 18. This suggests that Wal-Mart’s removal of the
action was based on the procedure set forth in § 1446(b)(3).
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Because the one-year limitation contained in § 1446(c)(1)
expressly applies to removals under § 1446(b)(3) based on
diversity, and because it appears that Wal-Mart’s removal was
based on § 1446(b)(3), the one-year limitation applies to Wal-Mart’s
Notice of Removal even though the case stated by the initial
pleading was removable (and eventually remanded).
Any other conclusion would render the one-year limitation
useless in remanded cases that later become removable again.
Wal-Mart does not argue that Plaintiff acted in bad faith to prevent
removal so as to excuse the one-year limitation. Therefore, the
Court finds that removal was untimely, and this case is remanded
to state court. See also, e.g., Rulis v. LA Fitness, No. 13-1582,
2015 WL 1344745, at *2 (E.D. Pa. Mar. 24, 2015) (wherein the
case was originally removed, remanded when a non-diverse party
was added, and removed again after the non-diverse party was
dismissed, the court applied the one-year limitation and focused
on whether the plaintiff acted in bad faith to prevent removal so
that the one-year limitation would not apply).
The Court recognizes that a few similar cases decided before
the 2011 amendments held that the one-year limitation did not
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apply when a case was removed, remanded, and then removed
again. See Darnell v. Hoelscher Inc., No.11-cv-449, 2011 WL
2461951 (S.D. Ill. June 20, 2011) (finding the one-year limitation
did not apply to case initially removed, remanded when an
amendment destroyed diversity, and then removed again after
settlement with the defendant who destroyed diversity); Arrighi v.
Celebration Station Props., Inc., No. 10-105-BAJ-SCR, 2010 WL
4386066 (M.D. La. Sept. 14, 2010) (finding the one-year limitation
did not apply to a case removed, remanded following the addition
of a non-diverse defendant, and then removed again after dismissal
of the non-diverse defendant because the one-year limitation
applies only to those state court cases that are not initially
removable), report & recommendation adopted by 2010 WL
4366060 (2010). However, those cases do not explain the
procedure under which the removal was made—whether under
§ 1446(b)(1) or (b)(3)—but merely assume that a procedure exists
for filing a second notice of removal in such circumstances.
Applying a strict construction of the statute, the Court disagrees
with Darnell and Arrighi and finds that a second removal should
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be addressed under § 1446(b)(3), to which the one-year limitation
clearly applies.
IV. CONCLUSION
For the reasons stated, Stigleman’s Response and Objections
to Wal-Mart’s Notice of Removal (d/e 5) is GRANTED. This cause
is remanded to the Circuit Court of Sangamon County pursuant to
28 U.S.C. § 1447(c).
ENTER: April 20, 2016
FOR THE COURT:
s/Sue E Myerscough
SUE E. MYERSCOUGH
UNITED STATES DISTRICT JUDGE
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