OLD TOWN UTILITY & TECHNOLOGY PARK LLC et al v. MFGR LLC et al

Filing 25

ORDER ON PLAINTIFFS' MOTION TO REMAND re 18 Motion to Remand to State Court By JUDGE JON D. LEVY. (akr)

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
OLD TOWN UTILITY &
TECHNOLOGY PARK, LLC,
RELENTLESS
CAPITAL COMPANY, LLC,
and SAMUEL EAKIN

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Plaintiffs,
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v.
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MFGR, LLC, WILLIAM
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FIRESTONE, OLD TOWN
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HOLDINGS II, LLC and
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JOSEPH EVERETT DESCHENES )
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Defendants.
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2:17-cv-00342-JDL

ORDER ON PLAINTIFFS’ MOTION TO REMAND
The Plaintiffs, Old Town Utility & Technology Park, LLC; Relentless Capital
Company, LLC; and Samuel Eakin, seek injunctive and other relief in connection
with their effort to purchase the Expera Mill Facility located in Old Town, Maine.
Defendant MFGR LLC owns the Facility. Defendant Old Town Holdings, LLC, whose
sole member is Defendant Joseph Everett Deschenes, was previously a member of
Old Town Utility & Technology Park, LLC. The Plaintiffs filed their complaint in the
Cumberland County Superior Court and the Defendants removed the action to this
Court based on diversity of citizenship jurisdiction, 28 U.S.C.A. § 1332(a) (2017).1
In their Notice of Removal, ECF No. 1, Defendants asserted that the court had diversity jurisdiction
because the amount-in-controversy exceeded $75,000 and complete diversity existed. They argued
that, upon information and belief, Plaintiff Old Town Utility & Technology Park, LLC, had a single
member, Relentless Capital Company, LLC (“Relentless”), and that Relentless, in turn, had only one
member, Maine resident and citizen Samuel Eakin. Because Defendant William Firestone was a
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The Plaintiffs have since amended their complaint, adding two Maine Defendants—
Joseph Everette Deschenes and Old Town Holdings II, LLC—thus ending the
complete diversity required for a Federal Court to exercise diversity of citizenship
jurisdiction. In re: Olympic Mills Co., 477 F.3d 1, 6 (1st Cir. 2007) (“In cases involving
multiple plaintiffs or defendants, the presence of but one nondiverse party divests the
district court of original jurisdiction over the entire action.”). The Plaintiffs now move
to remand the case to the Superior Court and for an award of attorney’s fees and
costs.
The Defendants MFGR, LLC and William Firestone do not oppose remand,
conceding that the Plaintiffs’ addition of Old Town Holdings II, LLC, and William
Deschenes as Defendants in the First Amended Complaint destroys complete
diversity and, with it, the Court’s subject-matter jurisdiction. They do oppose the
Plaintiffs’ request for an award of attorney’s fees and costs.
In support of their request for attorney’s fees and costs, the Plaintiffs argue
that the Defendants failed to adequately investigate the citizenship of Relentless
which, Plaintiffs explain, has four members who are, respectively, citizens of
Massachusetts, California, Maine, and Germany.

The Plaintiffs note that the

original complaint was silent as to whether Relentless had more than one member,
and they contend that it was unreasonable for the Defendants to assume that Samuel
Eakin was Relentless’ sole member because the complaint identified him only as
Relentless’ “Managing Director” and was otherwise silent as to the identity or number

resident and citizen of the state of Massachusetts, and Defendant MFGR was a limited liability
company with members who are citizens of Massachusetts, California, and Illinois, the Defendants
believed there was complete diversity of citizenship.
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of Relentless’ members. They contend that “‘[m]anaging director’ would be at best an
unusual title to give to an individual who was a limited liability company’s sole
member.” ECF No. 18 at 5.
In response, the Defendants argue that during the parties’ course of dealings,
the Defendants never dealt with anyone representing or associated with Relentless
other than Samuel Eakin; that Eakin was the only person identified in the complaint
as being part of Relentless; and that Eakin is listed with the Maine Secretary of State
as Relentless’ registered agent. Thus, the Defendants contend that at the time they
sought removal, the lack of diversity arising from Relentless’ membership was far
from obvious and it was objectively reasonable for them to proceed as they did.
A court may award attorney’s fees and costs under 28 U.S.C. § 1447(c) (2017)
for a case that was improvidently removed to federal court only if it finds that
Defendants “lacked an objectively reasonable basis for seeking removal.” Martin v.
Franklin Capital Corp. 546 U.S. 132, 141 (2005). There is no presumption in favor of
awarding attorney’s fees under § 1447(c); the court is authorized to award costs and
fees “but only when such an award is just.” Id. at 138. Thus, the standard for
awarding fees turns on “the reasonableness of the removal [and] . . . when an
objectively reasonable basis exists, fees should be denied.” Id. at 141.
Here, the Defendants had an objectively reasonable basis to believe removal
was appropriate when they filed their Notice for Removal. Throughout the
Defendants’ business relationship with the Plaintiffs, Samuel Eakin was the only
person associated with Relentless that was known to the Defendants. In addition,
the Plaintiffs’ complaint indicated that Relentless is a Maine company with its
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principal place of business in Maine, and that Eakin resides in Maine. There was no
mention of other members. Because every Limited Liability Company is required to
have a Registered Agent, see 31 M.R.S.A. § 1661 (2017), Eakin’s listing as the
Registered Agent for Relentless did not indicate that the company has more than one
member.
A Defendant’s removal decision must be made at the outset of litigation, before
discovery. It is not unreasonable for a defendant to rely on the information derived
from the parties’ prior dealings and the allegations of the complaint to determine
whether there is a basis for removal. In addition, the Plaintiffs have not suggested
that information about Relentless’ membership was available to the Defendants
through public records, an Internet search, or otherwise.

Thus, based on the

information known to the Defendants here, it was not objectively unreasonable for
them to infer that Samuel Eakin was Relentless’ sole member at the time they filed
the Notice of Removal.
Accordingly, an award of attorney’s fees and costs to the Plaintiffs under
§ 1447(c) is unwarranted.

The Plaintiffs’ Motion to Remand (ECF No. 18) is

GRANTED, except that the Plaintiffs’ request for an award of attorney’s fees and
costs is DENIED.
SO ORDERED.
Dated this 20th day of 2017
/s/ JON D. LEVY
U.S. DISTRICT JUDGE

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