BERGEN COUNTY IMPROVEMENT AUTHORITY v. BERGEN REGIONAL MEDICAL CENTER, L.P. et al

Filing 58

OPINION. Signed by Judge Dennis M. Cavanaugh on 6/7/2012. (nr, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

BERGEN COUNTY IMPROVEMENT:
AUTHORITY,
Horn Dennis M. Cavanaugh
Plaintiff,
OPINION
v.
Civil Action No. 12-768 (DMC)(MF)
BERGEN REGIONAL MEDICAL:
CENTER, LP, SOLOMON HEALTH:
GROUP, LLC, GLOBAL EMPLOYEE:
BENEFITS MANAGEMENT, llC.,:
IC ARE MANAGEMENT LLC, BERGEN:
REGIONAL ANESTHESIOLOGY:
GROUP, PA, BERGEN REGIONAL:
MEDICAL CENTER RADIOLOGY:
ASSOCIATES, PA, LIFE SOURCE:
SERVICES, LP, INTERNATIONAL:
INFORMATION TECHNOLOGIES, LLP,:
JOHN DOES 1-100 and ABC:
COMPANIES 1-100.
Defendants.

DENNIS M. CAVANAUGH, U.S.D.J,:
This matter comes before the Court upon the Motion ofPlaintiffBergen County Improvement Authority
(‘I3CIA” or Plaintiff) for Remand to State Court and for Attorney’s Fees. (ECF No. 9). Pursuant to FF0.
R. Civ. P. 78, no oral argument was heard. After carefully considering the submissions ofthe parties. and based
upon the following, it is the finding ofthis Court that Plaintiffis Motion to Remand is granted. and that Plaintilis
Motion for Attorney’s Fees is denied.

I.

BACKGROUND

This action, brought before this Court on removal from the Superior Court ofNew Jersey, Law Division,
Bergen County, involves various disputes concerning the Bergen Regional Medical Center (the “Medical
Center”). Plaintill is a body corporate and politic ofthe State of New Jersey, and currently holds the operating
license for the Medical Center. Second Am. Compl. ¶. 7. 33, ECF No. 20. Plaintiff essentially names two
groups ofDefendants: the “Medical Center Information Defendants,” against whom Plaintiff seeks injunctive
reliefrequiring the disclosure ofcertain documents and records, and the “Conspirator Defendants,” a group of
entities and individuals that Plaintiff added in the Second Amended Complaint and is suing for monetary
damages. Second Am. Compi. ¶J 8-28. Defendant Bergen Regional Medical Center, LP (“BRMCLP”)
operates the Medical Center pursuant to a lease agreement with Plaintiff, and is included in both groups of
Defendants. Second Am. Compi. ¶ 8. The remaining Medical Center Information Defendants include Solomon,
Solomon Healthcare Group, LLC (“SHG”), Global Employee Benefits Management, Inc. (“Global”), iCare
Management, LLC (“iCare”), Life Source Services, L.P. (“LSS”). International Information Technologies, LP
(International ) Bei gen Regional Anesthesiology Group PA ( Bergen Regional Anesthesiology Gi oup ) and
Bergen Regional Medical Center Radiology Associates PA (“Bergen Regional Radiology Assouates

Second Am. Compi.

¶J 9-18.

)

The Conspirator Defendants include Current Elevator lechnology. Inc.

(‘Current Elevator”), Joseph Glaski (“Glaski”), Herman Lindenbaum (“Lindenbaum”). David Sebbag
(“Sebbag”), and United States Elevator, Inc. (“U.S. Elevator”). Second Am. Compi. ¶ 19-24. Plaintiffhas

also sued certain former BCIA Directors, as well as certain fictitiously named individuals and companies.
Second Am. Compl.

¶ 25-2 8.

The Medical Center at issue is apublic hospital owned by Bergen County located in Paramus. New
-,,-

Jersey. Second Am. Compi.

¶ 29.

On or about December 17, 1997. Bergen County leased the Medical

Center’s real property and assets to Plaintiff for a term of nineteen years, and on March 15, 1998, Bergen
County transferred its operating license for the Medical Center to Plaintiff Second Am. Compl, ¶J 31,32. On
that same date, Plaintiff and Solomon entered into a nineteen year Lease and Operating Agreement (the “LOA”)
pursuant to which Plaintiffretained the operating license and Solomon assumed management. administration.
operation, and maintenance responsibilities. Second Am. Compi. ¶ 33. Again on that same date, Solomon

entered into an Assignment and Guarantor Agreement with BRMCLP, pursuant to which BRMCLP assumed
all of the rights and obligations of Solomon. Second Am. Compi.

¶ 34.

Plaintiffis currently in the process ofexploring various alternatives concerning the future ofthe Medical
Center, including a possible divestiture and sale of the property. Second Am. Compl.

¶

1. As part of its

decision making process, Plaintiffhas sought various categories ofinformation from BRMCLP and Solomon.
Plaintiffbelieves that information would enable a proper evaluation of its options with respect to the future of

the Medical Center. Second Am. Compi. ¶ 2. In this suit, Plaintiffalleges that the Medical Center Information
Defendants have failed to provide that information. Second Am. Compi. ¶3. Plaintiff therefore seeks an
injunction requiring the Medical Center Information Defendants to produce that information, Second Am,
Compi. p. 50.
The above discussed allegations formed the initial basis for this lawsuit and were the primary substance
of the First Amended Complaint brought before this Court on removal. çe First Am. Compi.. ECF No. 1 -l
While the present Motion to Remand was pending, Plaintiflfiled the Second Amended Complaint, in which it
provides new allegations regarding an alleged conspiracy offraudulent activity. Second Am. Compi. ¶ 4. These
new allegations center around an elevator construction project. In or about 2005 or 2006. BRMCP

-3-

represented to Plaintiffthat extensive work would have to be performed on elevators in the buildings of the
Medical Center. Second Am. Compi. ¶ 62. Plaintiff states that at some point either prior to or during the
course ofthe elevator project, the Conspiracy Defendants conspired and agreed to defraud PlaintifE “including.
but not limited to, by inducing BCTA to pay for services and equipment that either (i)had already been paid for,
or (ii) had never been provided.” Second Am. Compi.

¶ 64.

Plaintiffinstituted this suit in the Superior Court ofNew Jersey, Law Division. Bergen County, and filed
the First Amended Complaint with that Court on January 24, 2012. Defendants removed the matter to this
Court on February 8,2012, asserting that this Court has diversity jurisdiction. ECF No, 1. Plaintiff filed the
present Motion to Remand on February 23, 2012. asserting that complete diversity between the parties is not
present, and that the amount in controversy is below the statutory threshold. Defendants filed their Opposition

Brief on March 23,2012. ECF No. 19. Plaintifffiled the Second Amended Complaint on March 28,2012,
and filed a Reply Brief on March 3, 2012, arguing that the question of complete diversity was placed beyond
doubt by the Second Amended Complaint. ECFNo. 22. Defendants, with the Court’s permission, filed a Sur

Reply on April 12, 2012. ECF NO. 30. Plaintiff filed a Response on April 17, 2012. ECF No, 31. The
matter is now before this Court.’

IL

STANDARD OF REVIEW

Also currently pending in this matter is the Motion to Intervene filed by Bergen County. ECF
No. 26. The Court need not decide that Motion. Additionally, pursuant to the Order of the Honorable
Mark Falk, U.S.M.J,, a pending motion to dismiss was withdrawn, with the understanding that all
responsive pleadings are to be filed within seven days of the Court’s ruling on the present Motion to
Remand. ECF No. 55.
-4-

Removal of a case to federal court is governed by 28 U.S .C.

§ 1441, Parties seeking removal under

SeLtion 1441 bear the burden of showing that federal subject matter junsdiction exists Samuel-Bassett v KI ‘
Motors Am., Inc., 357 F.3d 392, 396 (3d Cir. 2004). Removal statutes are to be strictly construed against
temoval, however, and courts must ‘resolve any doubts in favor of remand

inc,

Ennekin v Fishu Seintilic

146 F Supp 2d 594, 604 (3d Cir 2001), Batoff v State Farm Ins Co 977 F 2d 848 851 (3d Cir
,

1992). Under Section 1441, an action may be removed from state court only when the federal court would
have had oi iginal jurisdiction o ci the matter Allen

‘

GlaxoSnuthKhne PLC, 2008 l S Dist I FXIS 42491,

2008 WL 2247067, at *2 (E.D. Pa. May 30, 2008). Accordingly, courts considering a motion for remand
“must focus on the plaintiffs complaint at the time the petition for removal was filed” and “must accept as true
all factual allegations in the complaint.” Steel Valley Auth. v. Union Switch & Signal Div., 809 F.2d 1006, 1010
(3d Cir. 1987).

III.

DISCUSSION

A. Diversity Jurisdiction
Plaintiff’s Second Amended Complaint raises new claims against new defendants for money damages.
These claims may be subject to severance in the future, as suggested by Defendants’ Sur-Replv. but the Court

need not consider whether the claims are properly brought in this lawsuit in order to decide the present. If the
new claims are severed, the Court lacksjurisdiction because the amount in controversy is below the statutory
threshold. Alternatively, if the new claims are not severed, the Court lacks jurisdiction because complete

diversity is not present. Both scenarios are discussed in more detail below,
With respect to the first scenario, the Court’s decision in this matter turns on a determination ofwhether
-5-

the amount in controversy exceeds the jurisdictional amount of$75,000.00. The Third Circuit has indicated that
the amount in controversy requirement is met ifthe defendant can show, to a ‘legal certainty,” that the amount
in controversy exceeds the threshold requirement. Samuel-Bassett. 357 F.3d at 397 (citing St. Paul Mercur
2

Indemnity Co. v. Red Cab Co., 303 U.S. 283, 289 (1938); see also Hodges v. Walgreens, No. 12-i 162.
2012 U.S. Dist. LEXIS 58440, at *6 (ED. PaApril 25,2012) (discussing legal certaintytest). Underthistest,
the Court must be persuaded to a legal certainty from the face ofthe pleadings that PlaintitYcannot recover the
amount claimed, Hodges, 2012 U.S. Dist. LEXIS 58440, at *6.
The Third Circuit further clarified the amount in controversy standard in Frederico v. Home Depot. 507
F.3d 1 88 (3d Cir. 2007). The court held that the rule of Morgan v. Gay. 471 F.3d 469 (3d Cir. 2006) applies

in cases where the complaint expressly limits the amount in controversy to less than the jurisdictional threshold.
Frederico, 507 F.3d at 196-97. In such cases, the removing party has a higher burden and must prove to a
legal certainty that the amount in controversy exceeds thejurisdictional requirement.

a at 197. In contrast,

Samuel-Bassett applies when the plaintiff has not specified that the amount in controversy is less than the
jurisdictional minimum, and in those cases, remand is appropriate when it appears to a legal certainty that the

2

In some instances, disputes over factual matters present a slightly different inquiry. “In many
cases. disputes over factual matters may be involved. In resolving those issues, the.
preponderance of the evidence standard would be appropriate. Once the findings of fact have been
made, the court may determine whether Red Cab’s ‘legal certainty’ test for jurisdiction has been met,”
Samuel-Bassett, 357 F.3d at 398.
.

.

Under Morgan, “(I) the party seeking to establish federal jurisdiction must prove to a legal
certainty that the amount in controversy exceeds the statutory threshold: (2) a plaintiff if permitted by
state law, may limit his or her monetary claims to avoid the amount in controversy threshold: and (3) the
plaintiff’s pleadings that the claims are below the jurisdictional threshold is not dispositive. rather, the
court must analyze the claims to determine the amount really at stake in the case.” I lodges. 201 2 1. ‘.S.
l)ist. LEXIS 58440. at *7 (citing Morgan. 471 F.3d at 474-75).
-6-

plaintiff cannot recover over the jurisdictional requirement.

RI..

In this instance, Plaintiff seeks only injunctive relief and has not expressly stated that the amount in
controversy is less than the jurisdictional amount. The rule of Morgan therefore does not apply, and remand

is only appropriate ifit appears to a legal certainty that Plaintiffcannot recover the jurisdictional amount. “In
actions seeking declaratory or injunctive relief, it is well established that the amount in controversy is measured
b thc

IluL of the ObjLct of the litigation

‘

Hunt \ V ashmgton State &pple Advet C omm n 432 U S 333

347 (1977) (citations omitted). Defendants argue that from Plaintiffs perspective, the value ofthe injunctive
relief sought far exceeds the statutory niiniurn requirement. Defendants theorize that the value ofthe relief sought
stems from Plaintiffs interest in selling the medical center, potentially for many millions ofdollars. The problem
with this theory, however, is its highly speculative nature. It is still unknown whether Plaintiffwill even choose

to sell the Medical Center at all, let alone for the amount discussed in the parties’ submissions, In determining
whether the amount in controversy requirement is satisfied, speculative estimates are insufticient. S. e.,
Columbia Gas Transmission Corp. v. Tarbuck. 62 F.3d 538, 543-44 (3d Cir. 1995) (citing Kheel v. Port of
New York Auth., 457 F.2d 46,49 (2d Cir. 1972) (“[Tlhejurisdictional test is applicable to that amount that
flows directly and with a fair degree of probability from the litigation, not from collateral or speculative
sources “)),Kastrirnc v Genworth Life Ins Co No 09-1561,2010 U S Dist LEXIS 8986, at * 5 (W D Pa
,

Feb. 3,2010) (denying as unduly speculative an argument that amount in controversy requirement was satisfied
because plaintiffs [insurance)

policies hac no

coverage limits

) Schuvikill Twp v C it’ Switch LC No

08-5681, 2009 U.S. Dist. LEXIS 59460, at * 16 (E.D. Pa. July 13, 2009) (Since the value ofthis litigation

from Plaintiffs perspective is immeasurable and speculative, the amount in controversy is not satisfied and
remand is required.”). The connection between the reliefsought and the value that Defendants point to is simply
-7-

too attenuated, and requires consideration oftoo many variables, to be anything more than pure speculation.
Accordingly. the Court is unable to find that the amount in controversy for this action exceeds the statutory
4
threshold.
As noted above, a consideration of the new claims in the Second Amended Complaint could alter the
diversity jurisdiction inquiry. Although the parties do not expressly argue so in their briefs, it seems likely that
the money damages sought under the conspiracy counts would exceed the statutory threshold. The issue with
the new claims, however, concerns the existence or non-existence ofcomplete diversity between the parties.
Plaintiff is a citizen of New Jersey. Second Am, Compl.

¶ 7.

Defendant US Elevator is a New Jersey

Corporation with its principal place of business in Fairfield. New Jersey. Second Am. Compl. 23. l)etèndants
Lindenhaurn and Scbbag are also, upon Plaintiffs information and belief residents ofNew Jersey. Second Am.
Compl. ¶J 21,22. Defendants do not refute that the addition ofthese parties would destroy complete diversity.
Instead, Defendants ask this Court to exercise its discretion “to denyjoinder ofthe non-diverse parties added
to the Second Amended Complaint in order to retain jurisdiction.” Defs.’ Sur-Reply 3. As noted above.
however, the Court need not address this issue. Ifthe claims are permitted, complete diversity is destroyed,
while ifthe claims are severed, the amount in controversy is not satisfied. Guided by the principle of comit the
.

Court holds that the issue of whether or not these claims should be severed remains in the sound discretion of
the Superior Court of New Jersey. Accordingly, Plaintiffs Motion to Remand will be granted.

Plaintiffs suit also seeks recovery of attorneys’ fees and costs. While this information is
properly considered as part of the amount in controversy analysis, the Court is not persuaded that the
fees and costs sought would bring the already speculative value of the injunctive relief sought above the
statutory threshold.

-8-

B. Attorney’s Fees
An order to remand a case “may require payment ofjust costs and any actual expenses, including
attorney fees, incurred as a result ofthe removal.” 28 U.S.C.

§ 1447(c).

Generall

.

fees may be awarded if

‘the i emoving party lacked an objectively i easonable basis for seeking i emoval” Martin

Corp.. 546 U.S.

‘

I iankIin capital

1 32, 141(2005). While the Court agrees with Plaintiff that removal in this case was improper.

it does not agree that Defendants’ basis for removal was not ‘objectively reasonable.” Defendants have set thrth
reasonable, albeit insufficient, arguments in favor of removal. Accordingly. the facts ofthis case do not justify
an award of attorney’s fees,

IV.

CONCLUSION
For the foregoing reasons, Plaintiff’s Motion to Remand is granted. and Plainti ITs Motion for Attorney’s

Fees is denied.

Dennis M. Cavanaugh,

Date:
Orig.:
cc:

June, 2012
Clerk
All Counsel of Record
I-Ion. Mark Falk, U.S.M.J.
File

-9-