Veritas Insurance Corporation et al v. Peaker Services Incorporated et al

Filing 17

ORDER granting 6 Motion to Remand to Washtenaw County Circuit Court. Signed by District Judge Victoria A. Roberts. (PPau)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
VERITAS INSURANCE CORPORATION
as subrogee of the REGENTS OF THE
UNIVERSITY OF MICHIGAN and the
REGENTS OF THE UNIVERSITY OF
MICHIGAN,
Plaintiffs,

CASE NUMBER: 11-11645
HONORABLE VICTORIA A. ROBERTS

v.
PEAKER SERVICES INCORPORATED,
Defendant.
/
ORDER
On April 1, 2011, Plaintiffs Veritas Insurance Corporation and the Regents of the
University of Michigan filed suit in Washtenaw County Circuit Court against three
defendants, Peaker Services Incorporated (“Peaker”), St. Paul Protective Insurance
Company (“St. Paul”), and Travelers Property Casual Company of America (“Travelers”)
(“the original defendants”).
On April 15, 2011, the original defendants removed the case from Washtenaw
County Circuit Court. (Doc. # 1). They said this Court has diversity jurisdiction under 28
U.S.C. § 1332. The original defendants moved to sever counts one and two into
separate lawsuits. (Doc. # 2). Plaintiffs moved the Court to remand the action to state
court based on lack of subject matter jurisdiction because the parties are not completely
diverse. (Doc. # 6). Subsequently, Plaintiffs voluntarily dismissed St. Paul and
Travelers, leaving Peaker as the sole Defendant and Count I as the sole cause of
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action. (Doc. #s 14 and 15). On June 13, 2011, without the permission or request of
the Court, Plaintiffs filed a Supplemental Reply Brief in Support of Motion to Remand to
State Court. (Doc. # 16). They argued that Peaker, as a Michigan corporation and
“citizen” for the purposes of diversity of citizenship, did not have the right to remove
under 28 U.S.C. § 1441(b).
Plaintiff’s motion to remand is GRANTED. Section 1441(b) bars removal by a
citizen of the forum state regardless of whether there is complete diversity between the
parties. It provides that actions based on diversity of citizenship “shall be removable
only if none of the parties in interest properly joined and served as defendants is a
citizen of the State in which such action is brought.” 28 U.S.C. § 1441(b). The removal
statute is jurisdictional and must be strictly construed. Wilson v. U.S. Dept. Of
Agriculture, Food and Nutrition Serv., 584 F.2d 137, 142 (6th Cir. 1978). As such,
Plaintiffs did not waive their right to challenge jurisdiction by failing to make this
argument in their motion to remand. See Fed. R. Civ. P. 12(h)(3) (“If the court
determines at any time that it lacks subject-matter jurisdiction, the court must dismiss
the action.”); Ashcroft v. Iqbal, 129 S.Ct. 1937, 1945 (2009) (“Subject-matter jurisdiction
cannot be forfeited or waived and should be considered when fairly in doubt.”). The
matter is REMANDED to state court for further proceedings.
IT IS ORDERED.

s/Victoria A. Roberts
Victoria A. Roberts
United States District Judge
Dated: June 14, 2011
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The undersigned certifies that a copy of this
document was served on the attorneys of
record by electronic means or U.S. Mail on
June 14, 2011.
s/Linda Vertriest
Deputy Clerk

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