Wallis Petroleum, L.C. v. Creve Coeur Oil and Car Wash, Inc. et al

Filing 20

MEMORANDUM AND ORDER OF REMAND : This action must be remanded to the state circuit court. This court defers to that court the pending motion of defendants to dismiss and the fact that the defendants are no longer represented by counsel. For the r easons stated above, IT IS HEREBY ORDERED that plaintiff's motion to remand this action to the Circuit Court of St. Louis County (Doc. 12 ) is sustained. IT IS FURTHER ORDERED that this action is remanded to the Circuit Court of St. Louis County for all further proceedings. (cc: Circuit Court of the County of St. Louis). Signed by Magistrate Judge David D. Noce on 2/8/16. (KKS)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

WALLIS PETROLEUM, L.C.,
Plaintiff,
v.
CREVE COEUR OIL AND CAR
WASH, INC.,
MIKE NAZEMI,
BETH ANN HINKSON NAZEMI,
Defendants.

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No. 4:15 CV 1692 DDN

MEMORANDUM ANDORDER OF REMAND
TO MISSOURI CIRCUIT COURT
Pending before this court are (a) the motion of defendants Creve Coeur and Car
Wash, Inc. (Creve Coeur), Mike Nazemi, and Beth Ann Hinkson Nazemi to dismiss this
action (Doc. 9); and (b) the motion of plaintiff Wallis Petroleum, L.C., to remand the
action to the Circuit Court of St. Louis County (Doc. 12). All parties have consented to
the exercise of plenary authority by the undersigned United States Magistrate Judge
under 28 U.S.C. § 636(c). The court grants the motion to remand the action to the state
court and defers to the state court the other pending motion.
This action was commenced in the Circuit Court of St. Louis County. In its state
court petition, plaintiff alleges defendant Creve Coeur breached its two contracts with
plaintiff by failing to pay plaintiff for petroleum products supplied by BP Products North
America, Inc. (BP) to Creve Coeur for sale at its two places of business (pursuant to the
“Olive Contract” and the “Pershall Contract”). Plaintiff alleges that Creve Coeur failed
to remove from its premises BP’s proprietary marks as required by the contracts. In its
state court petition, plaintiff describes itself as a “‘franchisor’ as that term is defined in
the Petroleum Marketing Practices Act, 15 U.S.C. § 2801, et seq. (hereinafter the
“PMPA”) and authorizes or permits, under franchise agreements, retailers to use a

trademark in connection with the sale and distribution of motor fuel.” (Doc. 5 at 2.)
Plaintiff alleges it complied with PMPA § 2804 in the manner by which it terminated the
Pershall Contract. Plaintiff alleges that the individual defendants, Mike Nazemi and Beth
Ann Nazemi, personally guaranteed the performance by Creve Coeur of the two contracts
between plaintiff and Creve Coeur. Plaintiff seeks to recover $146,690.45 in actual
damages, attorneys’ fees, costs, specific performance of the defendants’ contractual
obligations to remove the BP proprietary marks, and injunctive relief.
Defendants removed this action to this court, alleging in part:
Plaintiff alleges in its Petition, among other things, that Defendants violated
the Petroleum Marketing Practices Act, 15 U.S.C. § 2801 et seq. (the
“PMPA”) in regard to use of a trademark in connection with the sale and
distribution of motor fuel and the termination of the franchise.
(Doc. 1 at ¶ 2.) See 28 U.S.C. § 1441(a)(1) (providing for removal of any civil action
over which the federal district courts have original jurisdiction).
Plaintiff moves to remand this action to the Missouri circuit court, asserting
defendants’ removal was untimely. 28 U.S.C. § 1446(b) requires that removal occur
within 30 days of defendant’s receipt of the initial pleading. 28 U.S.C. § 1446(b). As
has been recently stated:
“The time limit is mandatory, therefore a timely motion to remand for
failure to observe the 30-day limit will be granted.” Pender v. Bell
Asbestos Mines, Ltd., 145 F. Supp.2d 1107, 1110 (E. D. Mo. 2001) . . .
However, “[t]he § 1446(b) thirty day time limit is not jurisdictional, but
instead establishes the procedure to transfer to federal court a case over
which the federal court would have had original jurisdiction.” Pender, 145
F. Supp.2d at 1110 . . . .
Hinz v. Swisher Hygiene USA Operations, Inc. 2014 WL 531457, at *1 (E. D. Mo. 2014).
Plaintiff argues that it filed its petition in the state circuit court on August 11,
2015; that service was accomplished on all defendants on September 15, 2015; and that
defendants filed their Notice of Removal on November 10, 2015. (Doc. 12, at 1.)
Defendants argue in effect that, while plaintiff’s chronology is accurate, it is not
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complete. They advise that their legal counsel did not enter the state court case until
October 27, 2015; that on October 31, 2015, the circuit court granted them an extension
of time until November 10, 2015 to answer the petition; and that on November 10, 2015,
they filed their notice of removal. Indeed, this court’s records corroborate defendants’
chronology.
Defendants argue that their removal was timely, because the extension of time
granted by the state circuit court to respond to the petition extended the time to remove
the action. They cite 28 U.S.C. § 1441(e)(1)(B), which provides that the Notice of
Removal may be filed “at a later time with leave of the district court.” 28 U.S.C. §
1441(e)(1)(B).
Defendants’ argument does not prevail. As plaintiff argues, an extension of time
under § 1441(e)(1)(B) is limited to actions that could be brought under 28 U.S.C. § 1369,
which grants district courts subject matter jurisdiction over large-scale, multiparty,
multiforum cases supported by diversity of citizenship. 28 U.S.C. § 1369(a). This is not
such a case. And the fact that the state circuit court granted defendants an extension of
time to respond to the state court petition is irrelevant, because a Notice of Removal to
federal court is not a state court pleading in response to a state court petition. Hinz v.
Swisher Hygiene USA Operations, Inc., 2014 WL 520457, at *2.
The court finds, however, there is a more basic reason for remanding the action,
i.e. this court does not have subject matter jurisdiction. As stated, defendants assert
subject matter jurisdiction under the PMPA. However, by its own terms, the PMPA
grants subject matter jurisdiction over civil actions brought by franchisees against
franchisors for a franchisor’s failure to comply with certain requirements of the PMPA.
15 U.S.C. § 2805(a).

Cf. Heisel v. John Deere Const. & Forestry Co., 2008 WL 53232,

at *6 (E. D. Mo. 2008) (ruling the PMPA seeks to protect franchisees from arbitrary and
discriminatory termination of a franchise); Alford’s Service, Inc. v. Sinclair Oil Corp.,
2003 WL 22996911, at * 4 (D. Minn. 2003) (same); Van Diest v. Conoco, Inc., 851 F.
Supp. 1415, 1417 (D. Neb. 1994) (same).

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This is not a case in which, at the time the case was removed, contrary to the clear
language of § 2805(a), a franchisee seeks relief against a franchisor. Plaintiff franchisor
in this case is not seeking relief against defendants for violating the terms of the PMPA.
Plaintiff is seeking relief against defendants, under Missouri law, for breach of contract
and related claims. Therefore, removal was improper, because this court is without
subject matter jurisdiction over plaintiff’s claims.

State Oil Co. v. Khan, 839 F. Supp.

543, 546-47 (N.D. Ill. 1993) (limiting the subject matter jurisdiction granted by PMPA §
2801(a) to claims for relief brought by franchisees, not by franchisors).

Further, this

is not a case in which the plaintiff franchisor seeks a declaration of its rights under the
PMPA in advance of a coercive suit for relief by the defendants. State Oil Co. v.
Alayoubi, 907 F. Supp. 1233 (N.D. Ill. 1995) (ruling court has subject matter jurisdiction
under PMPA where franchisee defendant has a basis for a coercive suit and franchisor
plaintiff brings declaratory judgment action in a defensive posture). Nothing in plaintiff’s
petition indicates it was filed defensively.
This action must be remanded to the state circuit court. This court defers to that
court the pending motion of defendants to dismiss and the fact that the defendants are no
longer represented by counsel.
For the reasons stated above,
IT IS HEREBY ORDERED that plaintiff’s motion to remand this action to the
Circuit Court of St. Louis County (Doc. 12) is sustained.
IT IS FURTHER ORDERED that this action is remanded to the Circuit Court of
St. Louis County for all further proceedings.

/S/ David D. Noce
o
UNITED STATES MAGISTRATE JUDGE

Signed on February 8, 2016.

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