CMC CONSTRUCTION SERVICES, INC. v. DDR CORP. et al
CLOSED REMANDED - Pursuant to Thomas, the Court REMANDS this action to Marion Superior Court under 28 U.S.C. § 1447(c). The Court directs the Clerk to terminate all pending motions, vacate all pending deadlines, and close this case in CM/ECF. Additionally, the Clerk shall mail a certified copy of this order of remand to the clerk of the Marion Superior Court pursuant to 28 U.S.C. § 1447(c). Judgment will not issue because the Court has not adjudicated the merits of this action. Signed by Judge Jane Magnus-Stinson on 6/20/2013. (JKS)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
CMC CONSTRUCTION SERVICES, INC.,
DDR CORP. and DDR-SAU INDIANAPOLIS
DDR CORP. and DDR-SAU INDIANAPOLIS
CONTROL BUILDING SERVICES, INC., CONTROL EQUITY GROUP, INC., EDWARD TUREN,
and NEAL TUREN,
Third-Party Defendants Control Building Services, Inc. (“CBS”), Control Equity Group,
Inc. (“CEG”), and Edward Turen (collectively, the “Removing Defendants”) filed a Notice of
Removal on June 19, 2013.1 [Dkt. 1.] In the Notice, the Removing Defendants state that this
Court has diversity jurisdiction under 28 U.S.C. § 1332, [id. at 2-4, ¶¶ 3-14], and original jurisdiction under 28 U.S.C. §§ 1334(b) and 1452(a) due to a pending, related Chapter 11 bankruptcy,
[id. at 4-6, ¶¶ 15-21]. For the following reasons, the Court concludes that it must remand this
action to state court.
Third-Party Defendant Neal Turen has not yet entered an appearance, but the Removing Defendants state that he consents to the removal. [Dkt. 1 at 6, ¶ 26.]
The Seventh Circuit Court of Appeals has held that 28 U.S.C. § 1441(c) does not generally authorize removal by a third party. Thomas v. Shelton, 740 F.2d 478, 488 (7th Cir. 1984); see
also State St. Bank & Trust Co. v. Morderosian, 234 F.3d 1274 (7th Cir. 2000). When a party
has no right to remove an action to federal court, the district court’s judgment would be void, and
the case must be remanded to state court. Thomas, 740 F.2d at 488; State St. Bank, 234 F.3d at
1274 (noting that where a third-party defendant improperly removed a case, the district court
“should have remanded this case promptly”). Because the Court concludes that pursuant to the
Seventh Circuit’s pronouncement in Thomas it was improper for the Removing Defendants to
remove this case to federal court, the Court REMANDS this action to Marion Superior Court
pursuant to 28 U.S.C. § 1447(d).
The Court notes that the Removing Defendants state in their Notice of Removal that they
“intend to file a motion to sever the Third-Party Complaint from the Original Complaint and, if
granted, seek removal of only the Third-Party Complaint.” [Dkt. 1 at 2, n.2.] Unless and until
that occurs and the Third-Party Complaint is, in fact, severed, the Removing Defendants are still
Third-Party Defendants who are not authorized to remove this matter under Thomas.
In the event that the Removing Defendants later seek to remove this case after severance
of the claims against them, the Court notes that the Notice contains several jurisdictional deficiencies as well. The Removing Defendants’ statement that “[u]pon information and belief, the
sole member of DDR-SAU Indianapolis Westlake, L.L.C. [(“DDR”)] is a chain of L.L.C.’s, each
of which is the sole member of the other, whose sole member is DDR Corp., an Ohio corporation[; u]pon information and belief, none of those L.L.C.’s has a member that is a citizen of Indiana, Delaware, or New Jersey for purposes of diversity jurisdiction,” [id. at 2-3, ¶ 5], is problematic in several ways. First, jurisdictional allegations must be made on personal knowledge, not
on information and belief, to invoke the subject-matter jurisdiction of a federal court. See America’s Best Inns, Inc., v. Best Inns of Abilene, L.P., 980 F.2d 1072, 1074 (7th Cir. 1992) (only a
statement about jurisdiction “made on personal knowledge has any value” and a statement made
“‘to the best of my knowledge and belief’ is insufficient” to engage diversity jurisdiction “because it says nothing about citizenship”). Second, while the Removing Defendants are correct
that the citizenship of an LLC is the citizenship of its members, the Removing Defendants have
not provided the requisite specificity regarding the LLC members’ respective citizenships. It is
not enough to – as the Removing Defendants have done – state that the sole member of DDR is
“a chain of L.L.C.’s, each of which is the sole member of the other, whose sole member is DDR
Corp…..” [Dkt. 1 at 2, ¶ 5.] Rather, the Removing Defendants must identify, by name, each
such LLC in that “chain” and trace each one down to its lowest layer. Finally, simply stating that
“none of those L.L.C.’s has a member that is a citizen of Indiana, Delaware, or New Jersey for
purposes of diversity jurisdiction,” [id. at 3, ¶ 5], is also insufficient. See Peters v. Astrazeneca
LP, 224 Fed. Appx., 503, 505 (7th Cir. 2007) (noting the insufficiency of a limited partnership
asserting that none of its partners were citizens destroying diversity “rather than furnishing the
citizenship of all of its partners so that [the court] could determine its citizenship”).
The Court also notes that the Removing Defendants state in the Notice that Defendants
Edward Turen and Neal Turen are “individual[s] residing [in] the state of New Jersey.” [Id. at 3,
¶¶ 8-9.] But residency and citizenship are not the same, and it is the latter that matters for purposes of diversity. Meyerson v. Harrah’s East Chicago Casino, 299 F.3d 616, 617 (7th Cir.
2002). Additionally, the Removing Defendants state that the amount exceeds $75,000, but the
amount in controversy must exceed “$75,000, exclusive of interest and costs.” 28 U.S.C. § 1332
(emphasis added). The Notice contains no such assertion.
Additionally, to the extent that the Removing Defendants seek to remove this action after
severance of the claims against them, the Court notes that their argument that those claims are
related to the pending Chapter 11 bankruptcy involving Oxford Building Services, Inc. (“Oxford”) for purposes of 28 U.S.C. § 1334(b) is somewhat unclear. From the information contained in the Notice, the Court cannot determine how Oxford’s pending bankruptcy relates to the
claims made in this case, nor how it could possibly confer federal question jurisdiction over this
dispute. The Removing Defendants are encouraged to provide more specific information regarding that relationship if they seek to remove the claims against them to this Court in the future.
Pursuant to Thomas, the Court REMANDS this action to Marion Superior Court under
28 U.S.C. § 1447(c). The Court directs the Clerk to terminate all pending motions, vacate all
pending deadlines, and close this case in CM/ECF. Additionally, the Clerk shall mail a certified
copy of this order of remand to the clerk of the Marion Superior Court pursuant to 28 U.S.C. §
1447(c). Judgment will not issue because the Court has not adjudicated the merits of this action.
Hon. Jane Magnus-Stinson, Judge
United States District Court
Southern District of Indiana
Distribution via ECF to all counsel of record
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?