Klima Well Service, Inc. v. Hurley et al

Filing 22

MEMORANDUM AND ORDER denying 16 Motion to Remand to State Court. Signed by U.S. District Senior Judge Sam A. Crow on 12/2/14. (msb)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
KLIMA WELL SERVICE, INC.,
Plaintiff,
vs.

Case No. 14-1250-SAC

HARRY HURLEY, et al,
Defendants.
MEMORANDUM AND ORDER
This case, removed from state court, comes before the Court on
Plaintiff’s motion to remand. Plaintiff contends that Defendant Miles Hirson1
failed to timely join in or consent to the removal, rendering the removal
defective.
The relevant facts are undisputed. On July 11, 2014, Plaintiff filed its
petition against defendants Scott Scammell (“Scammell”), Harry Hurley
(“Hurley”), and Miles Hirson (“Hirson”) in the District Court of Kingman
County, Kansas (“State Court Action”). The petition alleged that all
defendants were domiciled outside the state of Kansas and had failed to pay
the operating expenses incurred from the working interests each held in oil
and gas leases located in Kingman County, Kansas.

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Plaintiff’s motion alleges that Defendant Scott Scammel III failed to comply with the
removal statute, but the motion elsewhere alleges, as does the memorandum, that
Defendant Hirson has failed to join.

Defendant Scammell was served on July 16, 2014, and Defendant
Hurley was served by certified mail on July 17, 2014, but Defendant Hirson
did not receive personal service of process. Plaintiff published notice in a
paper of general circulation in Kingman County, Kansas for three consecutive
weeks - on August 7th, 14th, and 21st of 2014. The parties agree that
Hinson was served by publication on August 21, 2014.
On August 8, 2014, defendant Scammell filed a Notice of Removal
pursuant to 28 U.S.C. §§ 1332 and 1446. Defendant Hurley consented to
and joined the removal on August 14, 2014, but Defendant Hinson has not
consented to or joined the removal. Plaintiff contends that Defendant Hinson
had 30 days after service on the first-served defendant to join in the
removal, and that his failure to do so warrants remand.
Having limited jurisdiction, federal courts employ a presumption
“against removal jurisdiction.” Laughlin v. Kmart Corp., 50 F.3d 871, 873
(10th Cir.), cert. denied, 516 U.S. 863, 116 S.Ct. 174, 133 L.Ed.2d 114
(1995). The party seeking removal has the burden to show the propriety of
removal and the existence of removal jurisdiction. Ortiz v. Biscanin, 190
F.Supp.2d 1237, 1241 (D.Kan. 2002); see McNutt v. General Motors
Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135 (1936);
Baby C v. Price, 138 Fed.Appx. 81, 83–84 (10th Cir. 2005). Federal courts
strictly construe removal statutes and resolve all doubts in favor of remand.
See Ortiz, 190 F.Supp.2d at 1241.
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Where, as here, removal is based on diversity jurisdiction, 29 USC §
1446 applies. That statute provides:
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.
28 U.S.C. § 1446(b)(2)(a). This case was removed solely under § 1441(a)
(providing for removal of cases in which the district courts of the United
States have original jurisdiction). Compare § 1444 (permitting the U.S. or its
agencies to remove certain cases without consent from all defendants and
without showing diversity or federal question jurisdiction). Accordingly, §
1446 applies. This statute has been interpreted to mean that those
defendants who have been properly joined and served at the time the action
is removed must join in or consent to the removal.
In December of 2011, Section 1446 was amended as part of the
Federal Courts Jurisdiction and Venue Clarification Act of 2011 (“JVCA”).
Pub.L. No. 112–63, § 103(b), 125 Stat. 758, 760–61 (Dec. 7, 2011). The
amended version of § 1446 is stated above.
Prior the JVCA, 28 U.S.C. § 1446(a), provided in pertinent part:
(a) A defendant or defendants desiring to remove any civil action or
criminal prosecution from a State court shall file in the district court of
the United States for the district and division within which such action
is pending a verified petition containing a short and plain statement of
the facts which entitle him or them to removal together with a copy of
all process, pleadings and order served upon him or them in such
action.

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Courts interpreted that subsection as requiring all defendants to join in the
removal petition. Cohen v. Hoard, 696 F.Supp. 564 (D. Kan. 1988) (citing
cases). That requirement was commonly referred to as the unanimity rule.
McShares, Inc. v. Barry, 979 F.Supp. 1338, 1342 (D.Kan. 1997). But an
exception to that unanimity rule provided that “nominal, unknown, unserved
or fraudulently joined defendants” did not need to join or consent to
removal. McShares, 979 F.Supp. at 1342.
Now unanimity is no longer required, as the plain language of the
statute requires joinder or consent for removal by only those defendants
who have been properly joined and served. Thus a defendant who has not
been served with process as of the date of removal is not required to join.
See Pullman Co. v. Jenkins, 305 U.S. 534, 540-41, 59 S.Ct. 347, 83 L.E d.
334 (1939). In Pullman, the Supreme Court explained the reason for this
rule:
Where there is a non-separable controversy with respect to
several non-resident defendants, one of them may remove the cause,
although the other defendants have not been served with process and
have not appeared. (Citations omitted.). In such a case there is
diversity of citizenship, and the reason for the rule is stated to be that
the defendant not served may never be served, or may be served after
the time has expired for the defendant who has been served to apply
for a removal, and unless the latter can make an effective application
alone, his right to removal may be lost. Hunt v. Pearce, 8 Cir., 284 F.
page 324.
Pullman Co., 305 U.S. at 540-541.
Accordingly, the Tenth Circuit has held that a defendant's consent to
removal was not necessary where he had not been served at the time
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another defendant filed its notice of removal. See Sheldon v. Khanal, 502
Fed.Appx. 765 (10th Cir. 2012) (unpublished). In Sheldon, as here, the
plaintiff argued that the case should be remanded to state court because one
of the defendants had not joined the notice of removal. See 502 Fed.Appx.
at 769–71. The Judge disagreed, rejecting the argument as “contrary to the
clear statutory language requiring only served defendants to consent to
removal.” Sheldon, 502 Fed.Appx. at 770. The case found that the
defendant’s consent to removal was not necessary where he had not been
served at the time the other defendant filed the notice of removal.
District courts within the Tenth Circuit have done likewise. See e.g.
Atkins v. Heavy Petroleum Partners, LLC, 2014 WL 4657105, 5 (D. Kan.
2014) (holding that three defendants who had not been served when the
removing defendants filed the notice of removal did not need to consent to
the removal because the clear statutory language of 28 U.S.C. §
1446(b)(2)(A) requires only served defendants to consent to removal); May
v. Board of County Com'rs for Cibola County, 945 F.Supp.2d 1277, 1298
(D.N.M. 2013) (denying motion to remand, “[b]ecause neither the statute
nor the Tenth Circuit require[s] such action, the Defendants need not, to
advance the purpose of the unanimity, account for every Defendant in the
notice of removal if the Defendant has not yet been served.”)
Cases decided prior to the statutory revision are to the same effect.
See e.g., Brady v. Lovelace Health Plan, 504 F.Supp.2d 1170 at 1173
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(D.N.M. 2007) (finding “a defendant who has not yet been served with
process is not required to join”); Cramer v. Devera Management Corp., 2004
WL 1179375, 2 (D.Kan. 2004) (finding it “well settled … that a defendant
who has not been served need not join in or consent to removal.”)
This exception for unserved defendants rests on the “bedrock
principle” that “[a]n individual or entity named as a defendant is not
obliged to engage in litigation unless notified of the action, and
brought under a court's authority, by formal process.” Murphy Bros.,
Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 347, 119 S.Ct.
1322, 143 L.Ed.2d 448 (1999).
Cramer, 2004 WL at 2 (denying motion to remand because consent of
unserved defendant was not required).
Plaintiff erroneously relies on McShares, which, based on the statutory
language in effect at that time, held that a removing defendant must file the
notice of removal within thirty days of service on the first-served defendant.
979 F.Supp. at 1343-44. That statute has since been amended to replace
the first-served rule with the last-served rule, permitting “[e]ach defendant
[to] have 30 days after receipt by or service on that defendant of the initial
pleading or summons of the initial pleading or summons … to file the notice
of removal.” 28 U.S.C. § 1446(b)(2)(B). More importantly, in McShares,
unlike here, all defendants had been served before the notice of removal
was filed. See 979 F.Supp. 1338, 1344, n. 4. (D.Kan. 1997).
Plaintiffs do not contend and provide no support for an argument that
once properly served, Hinson had to consent to the removal after the fact.
No cases supporting that proposition have been found in this jurisdiction,
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and the argument appears contrary to cases in other jurisdictions. The
federal statutes contemplate that in removed cases “in which any one or
more of the defendants has not been served with process…” service may be
completed after removal and the unserved defendant retains a right to
remand the case. 28 USC § 1448. That right does not affect, however, the
plaintiff’s right to remand. See Lewis v. Rego Co., 757 F.2d 66, 69 (3d Cir.
1985) (“the removal statute contemplates that once a case has been
properly removed the subsequent service of additional defendants who do
not specifically consent to removal does not require or permit remand on a
plaintiff's motion”); Paragon Tank Truck Equipment, LLC v. Parish Truck
Sales, Inc., 2014 WL 2739155, 1-2 (W.D.Wis. 2014); Diversey, Inc. v.
Maxwell, 798 F.Supp.2d 1004, 1005–06 (E.D.Wis. 2011) (unserved
defendant does not need to consent after being served and retains the right
to “veto the removal” by moving to remand once he is served with process
and makes an appearance in the case); Smith v. FCM-MTC Medical, LLC,
2011 WL 320978, 1 (E.D.Va. 2011) (finding unserved defendants need not
join the notice of removal - after removal, service may be completed on
defendants who had not been served in the state proceeding, but their
statutory right to move to remand the case confers no rights upon a
plaintiff.)

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IT IS THEREFORE ORDERED that Plaintiff’s motion to remand is denied.
Dated this 2nd day of December, 2014, at Topeka, Kansas.

s/Sam A. Crow
Sam A. Crow, U.S. District Senior Judge

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