Nordin v. PB&J Resorts, LLC et al
Filing
29
ORDER granting 5 Motion to Remand to State Court; denying 9 Motion to Amend Notice of Removal; denying without prejudice 11 Motion to Dismiss for Lack of Personal Jurisdiction and Pursuant to the Doctrine of Forum Non Conveniens; denying without prejudice 13 Motion to Dismiss for Failure to State a Claim. CASE REMANDED to Hillsborough County Superior Court County Superior Court. (Case Closed). So Ordered by Chief Judge Joseph N. Laplante.(jb)
UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
Suriana Nordin
v.
Civil No. 15-cv-509-JL
Opinion No. 2016 DNH 193
PB&J Resorts, LLC, et al.
MEMORANDUM ORDER
This negligence action implicates removal from state court,
the forum defendant rule, and joinder.
The interplay between
these procedures and rules, however, makes the case sound more
complicated than it is.
Plaintiff Suriana Nordin suffered severe injuries at a
resort in Jamaica.
She brought suit in Hillsborough County
Superior Court, alleging two counts of negligence.
The
defendants removed the case to this court, alleging diversity of
the parties.
See 28 U.S.C. § 1332(a).
Invoking the forum
defendant rule, see 28 U.S.C. § 1441(b)(2), Nordin moves to
remand the case because one of the defendants, PB&J Resorts,
LLC, is a citizen of New Hampshire.
Defendants cross-move for
leave to amend their notice of removal and also to dismiss the
action as against PB&J Resorts, LLC.
See Fed. R. Civ.
P. 12(b)(6).
After a careful review of the parties’ filings and hearing
oral argument, the court concludes that removal was improper
because PB&J Resorts, LLC is a citizen of New Hampshire.
Accordingly, Nordin’s motion for remand is granted.
The court
further concludes that the defendants’ proposed amendments to
the notice of removal would be futile and, accordingly, denies
that motion.
Applicable legal standard
“[A] motion to remand a removed case to the state court
involves a question of federal subject matter jurisdiction . . .
.”
BIW Deceived v. Local S6, Indus. Union of Marine &
Shipbuilding Workers, 132 F.3d 824, 830 (1st Cir. 1997).
“In
the course of this inquiry, the removing party bears the burden
of persuasion vis-à-vis the existence of federal jurisdiction.”
Id. at 831.
Where the defendants have raised fraudulent joinder
as the basis for diversity jurisdiction, that burden is a heavy
one.
Rosbeck v. Corin Grp., PLC, No. 15-12954-LTS, 2015 WL
6472249, at *3 (D. Mass. Oct. 27, 2015).
Any legal ambiguities
“in the controlling state law” are resolved “in favor of the
non-removing party,” id. (quoting Burden v. Gen. Dynamics Corp.,
60 F.3d 213, 217 (5th Cir.1995)), and “[a]ll contested factual
issues and any doubt as to the propriety of the removal must be
resolved in favor of remand,” Renaissance Mktg., Inc. v.
Monitronics Int'l, Inc., 606 F. Supp. 2d 201, 208 (D.P.R. 2009).
2
Background
In the summer of 2014, Nordin and her fiancé vacationed at
the Hedonism II resort in Jamaica.
While there, Nordin was
permanently paralyzed in an accident on an inflatable water
slide erected by the resort or its staff.
Nordin sued the four defendants in Hillsborough County
Superior Court, alleging one count of negligence and one of
negligent hiring, training, and supervision of the staff who
encouraged and participated in the sliding activity.
The
complaint does not distinguish among the defendants, alleging
that they “have maintained interrelated management, officers,
directors and ownerships of each respective company for purpose
of owning, operating, marketing and advertising the resort,” and
that they “collectively control the operation” of the resort.
Compl. ¶ 8.
The defendants timely removed the case to this court,
invoking diversity jurisdiction.
See 28 U.S.C. § 1332.
The
defendants alleged that Nordin, the plaintiff, is a citizen of
Pennsylvania; defendants PB&J Resorts, I (Jamaica) Ltd. and PB&J
Resorts, II, (Jamaica) Ltd. are Jamaican corporations with their
principal places of business in Negril, Jamaica; defendant
Marshmallow (St. Lucia) Ltd. is a St. Lucian corporation with
its principal place of business in St. Lucia; and PB&J Resorts,
LLC, “is a limited liability company incorporated in Delaware
3
with a principal place of business in Manchester, New
Hampshire.”
Notice of Removal (document no. 1) at 2.
Four days
later, Nordin moved to remand the case to the Superior Court.
Analysis
A.
The forum defendant rule
As discussed supra, the sole basis invoked in the notice of
removal for this court’s jurisdiction is diversity of the
parties.
This court generally has original jurisdiction over
civil actions
where the matter in controversy exceeds the sum or
value of $75,000, exclusive of interest and costs, and
is between citizens of different States; citizens of a
State and citizens or subjects of a foreign state;
[and] citizens of different States and in which
citizens or subjects of a foreign state are additional
parties . . . .
28 U.S.C. § 1332(a).
Subject to certain statutory exceptions,
civil actions over which this court would have original
jurisdiction “may be removed by the defendant or the defendants,
to the district court of the United States . . . .”
§ 1441(a).
Id.
One exception to that rule, however, is commonly
known as the forum defendant rule:
“A civil action otherwise
removable solely on the basis of jurisdiction under [28 U.S.C.
§1332(a)] may not be removed if any of the parties in interest
properly joined and served as defendants is a citizen of the
state in which such action is brought.”
4
28 U.S.C. § 1441(b)(2).
Nordin invokes the forum defendant rule here.
She asserts,
and defendants admit, that PB&J Resorts, LLC is a citizen of New
Hampshire because one of its members, Jon Gross, is a citizen of
New Hampshire.
See D.B. Zwirn Special Opportunities Fund, L.P.
v. Mehrotra, 661 F.3d 124, 125 (1st Cir. 2011) (a limited
liability company is deemed to be a citizen of the same states
as each of its members).
Because PB&J Resorts, LLC, is a
citizen of the forum state, removal to this court was improper.
28 U.S.C. §§ 1441(b)(2), 1447(c).
B.
Fraudulent joinder
The defendants attempt to overcome this procedural defect1
by arguing that PB&J Resorts, LLC is not properly joined.
“A
party fraudulently joined to defeat removal . . . is disregarded
in determining diversity of citizenship.”2
Polyplastics, Inc. v.
Transconex, Inc., 713 F.2d 875, 877 (1st Cir. 1983).
Were the
court to disregard PB&J Resorts, LLC’s citizenship, defendants
1The
First Circuit Court of Appeals, like several others,
considers removal by an in-forum defendant a “procedural defect”
rather than a jurisdictional one. Samaan v. St. Joseph Hosp.,
670 F.3d 21, 28 (1st Cir. 2012) (“removal in contravention of
the prohibition against removal by an in-forum defendant creates
a procedural defect”).
2As
Judge McAuliffe has explained, “[i]n the context of
fraudulent joinder, ‘fraudulent’ is a term of art that applies
to the joinder of an in-state defendant against whom plaintiff
simply has no chance of success, whatever the plaintiff's
motives.” Longden v. Philip Morris, Inc., 2003 DNH 140, 7
(internal quotations omitted).
5
point out, there would be complete diversity of the parties
because Nordin is a citizen of Pennsylvania and the remaining
defendants are citizens of foreign countries.
See 28 U.S.C.
§ 1332(a).
The defendants have arguably waived this argument.
Though
the Court of Appeals has not addressed the question squarely,
“many courts in the diversity context have found the claim of
fraudulent joinder waived if not pled in the notice of removal.”
In re Pharm. Indus. Average Wholesale Price Litig., 431 F. Supp.
2d 109, 118 (D. Mass. 2006); see also Phillips v. BJ's Wholesale
Club, Inc., 591 F. Supp. 2d 822, 826 (E.D. Va. 2008) (fraudulent
joinder argument waived when not raised until objection to
remand motion).
This is because “the notice [of removal] must
make the basis for the federal court’s exercise of removal
jurisdiction clear and contain enough information so that the
district judge can determine whether removal jurisdiction
exists.”
Pharm. Indus., 431 F. Supp. 2d at 118 (quoting Wright,
Miller & Cooper, Federal Practice & Procedure, § 3733 (3d ed.
1998)).
Failure to include fraudulent joinder as a basis for
federal jurisdiction when the parties are not otherwise diverse
has been considered a failure to include a “substantial and
material” basis for federal jurisdiction.
Castle v. Laurel
Creek Co., 848 F. Supp. 62, 66 (S.D.W. Va. 1994).
The
defendants neither raised their improper joinder argument in the
6
notice of removal nor moved to amend that notice to include it
within the 30-day removal window.3
Accordingly, the defendants
have likely waived their fraudulent joinder argument.
Even if the defendants had raised that argument at the
appropriate time, they have not carried their heavy burden of
proving it.
[I]t is generally recognized that, under the doctrine
of fraudulent joinder, removal is not defeated by the
joinder of a non-diverse defendant where there is no
reasonable possibility that the state's highest court
would find that the complaint states a cause of action
upon which relief may be granted against the nondiverse defendant.
Universal Truck & Equip. Co. v. Southworth-Milton, Inc., 765
F.3d 103, 108 (1st Cir. 2014).
The removing party carries the
“extremely heavy burden,” Renaissance Mktg., 606 F. Supp. 2d at
208, of showing that there is no reasonable possibility of a
cause of action through “clear and convincing evidence,”
Longden, 2003 DNH 140, 7 (quoting Mills v. Allegiance Healthcare
Corp., 178 F.Supp.2d 1, 5 (D.Mass.2001)).
This analysis is not
dissimilar to a Rule 12(b)(6) analysis, see id. at 8-9, though
other jurisdictions have characterized the applicable standard
as one “more lenient than that for a [Rule 12(b)(6)] motion to
As discussed infra Part III.C, defendants did move within that
window to amend their notice of removal -- but only to clarify
the citizenship of PB&J Resorts, LLC’s members which, as also
discussed infra, would at this juncture prove futile.
3
7
dismiss.”
Rosbeck, 2015 WL 6472249, at *3.
In conducting this
analysis, the court “may consider additional evidence beyond the
claims made in the pleadings, including affidavits of the
parties.”
Phillips v. Medtronic, Inc., 754 F. Supp. 2d 211, 215
(D. Mass. 2010).
As mentioned above, Nordin brings two negligence counts
against the defendants.
She alleges that the defendants, inter
alia, violated a duty to operate and manage the resort in a safe
manner, and to hire, train, and supervise the resort’s staff to
do the same.
The New Hampshire Supreme Court recognizes that
“[t]he basis of a claim of negligent employment or supervision
brought against an employer where the employee harms a third
party . . . can encompass direct liability as a result of the
misconduct of the employee.”
N.H. 836, 840 (1985).
Cutter v. Town of Farmington, 126
Defendants contend that PB&J Resorts, LLC
cannot possibly be held liable on these negligence theories
because it does not manage the resort or control its day-to-day
operations.
Obj. (document no. 10) at 6.
But Nordin has
sufficiently pled otherwise.
Nordin alleges that the defendants, including PB&J Resorts,
LLC, “have maintained interrelated management, officers,
directors and ownerships of each respective company for the
purpose of owning, operating, marketing and advertising their
resort, Hedonism II,” and that the defendants “collectively
8
control the [resort’s] operations,” including through PB&J
Resorts, LLC’s office in Manchester, New Hampshire.
Id. ¶ 8.
She further alleges that the defendants’ “agents, officers,
managers, employees, and/or personnel knew of, authorized,
advertised, promoted, participated in, controlled and
supervised” activities such as that in which she injured.
¶¶ 12, 15.
Id.
Though pled “on information and belief,” these
inferences are supported by allegations in the complaint and
evidence raised in jurisdictional discovery conducted by the
parties, including:
(1) that the Hedonism II resort has its “US
Office” at PB&J Resorts, LLC’s address in Manchester, New
Hampshire, according to the business card of one of the resort’s
hotel managers, see Compl. ¶¶ 8-10 & Ex. A; (2) that PB&J
Resorts, LLC’s Chief Operating Officer, Jon Gross, is also the
Chief Executive Officer of each of the other three defendants,
see Compl ¶¶ 2-5, a fact the defendants do not deny; and
(3) that the general manager of the resort, who is also a member
of PB&J Resorts, LLC, confers with Gross and others in New
Hampshire concerning the resort’s management and operations, see
Plaintiffs’ Reply Mem. (document no. 22) at 7-9.
Gross’s
testimony that printing PB&J Resorts, LLC’s address on the hotel
manager’s business card was a “mistake” and his categorical
denial that PB&J Resorts, LLC manages, controls, or operates the
resort, see Obj. (document no. 10) at 9-10, do not suffice, in
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this court’s view, to establish “no reasonable possibility” that
the New Hampshire Supreme Court would find that the plaintiff’s
complaint states a cause of action for negligence.
Accordingly, defendants have not carried the heavy burden
of demonstrating that PB&J Resorts, LLC is a fraudulently joined
defendant in this action.
Because PB&J Resorts, LLC is a
citizen of New Hampshire and not fraudulently joined, this
action was improperly removed to this court and must be
remanded.
C.
Motion to amend notice of removal
Defendants also move for leave to amend their notice of
removal, albeit only to recite the citizenship of PB&J Resorts,
LLC’s members.4
Normally, “[d]effective allegations of
jurisdiction may be amended, upon terms, in the trial or
appellate courts.”
28 U.S.C. § 1653.
To avoid exalting form
over substance, this court will generally allow litigants to
amend a notice of removal to cure a technical defect -- such as
to demonstrate the actual existence of diversity -- after the
30-day deadline for doing so.
See Odishelidze v. Aetna Life &
Defendants’ counsel are reminded that, pursuant to Local
Rule 7.1(a)(1), “[o]bjections to pending motions and affirmative
motions for relief shall not be combined in one filing.” While
defendants’ combined motion for leave to amend the notice of
removal and objection to plaintiffs’ motion for remand (document
no. 9) runs afoul of this rule, in the interest of efficiency,
the court has considered both here.
4
10
Cas. Co., 853 F.2d 21, 24 (1st Cir. 1988); Merchants Auto. Grp.
v. Advantage Opco, 2014 DNH 241, 8-9 (granting motion to amend
notice of removal to recite citizenship of limited liability
company members).
In this case, however, such an amendment would be futile.
See Ne. Fed. Credit Union v. Neves, 837 F.2d 531, 536 (1st Cir.
1988) (“Federal courts need not tiptoe through empty formalities
to reach foreordained results.”).
A recitation of the
citizenship of PB&J Resorts, LLC’s members would merely
demonstrate that one of them is a New Hampshire citizen and,
accordingly, subject to the forum defendant rule.
Given the
failure of defendants’ fraudulent joinder argument, for the
reasons discussed supra Parts III.A and III.B, even if the
notice of removal contained that information, remand would still
be appropriate.
Conclusion
For the foregoing reasons, Nordin’s motion for remand5 is
GRANTED and defendants’ motion to amend the removal notice6 is
DENIED.
The case is remanded to Hillsborough County Superior
Court.
5
Document no. 5.
6
Document no. 9.
11
Because the court has determined that this action was
improperly removed, “it is precluded from rendering any
judgments on the merits of the case.”
Christopher v. Stanley–
Bostitch, Inc., 240 F.3d 95, 100 (1st Cir. 2001).
Accordingly,
defendants’ motions to dismiss the action pursuant to Federal
Rules of Civil Procedure 12(b)(2) and 12(b)(6), and under the
doctrine of forum non conveniens,7 are DENIED without prejudice.
SO ORDERED.
____________________________
Joseph N. Laplante
United States District Judge
Dated:
cc:
7
May 12, 2016
Jeremy T. Walker, Esq.
R. David DePuy, Esq.
Amber Racine, Esq.
Henry Klementowicz, Esq.
Mark J. LeWinter, Esq.
Quinn Emmet Kelley, Esq.
Jonathan P. Killeen, Esq.
Michael P. Johnson, Esq.
Document nos. 11 and 13.
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