HUBBARD et al v. DIAZ et al

Filing 12

OPINION. Signed by Judge Claire C. Cecchi on 1/31/17. (DD, )

NOT FOR PUBLICATION

CLOSED

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

ROBERT HUBBARD, et al.,

Civil Action No. 16-3006 (CCC-JBC)

Plaintiffs,

OPINION

V.

ADONIS DIAZ, et al.,
Defendants.
CECCHI, District Judge.
I.

INTRODUCTION

This matter comes before the Court upon the objections of defendants Adonis Diaz
(“Diaz”) and Miguel Lopez (“Lopez”) (collectively, “Defendants”) to Magistrate Judge James B.
Clark’s Report and Recommendation (“R&R”) on the motion of Plaintiffs Robert Hubbard and
Kathleen Hubbard (collectively, “Plaintiffs”) to remand this matter to state court. ECF No. 10.
The Court decides this matter without oral argument pursuant to Federal Rule of Civil Procedure
78. For the reasons set forth below, the Court adopts Judge Clark’s R&R granting Plaintiffs’
motion to remand.
II.

BACKGROUND

The Court refers to and incorporates here the background set forth in Judge Clark’s R&R.
This Court referred Defendants’ motion to Judge Clark pursuant to 28 U.S.C.

§ 636(b)(1)(B). On December 2, 2016, Judge Clark issued his R&R recommending the Motion to
Remand be granted. ECF No. 9. On December 15, 2016, Defendants objected to Judge Clark’s
R&R. ECF No. 10. On December 28, 2016, Plaintiffs filed a letter response to Defendants’
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objections. ECF No. 11. Currently before the Court is Judge Clark’s R&R, as well as Defendants’
objections thereto.
III.

LEGAL STANDARD

When a Magistrate Judge addresses motions that are considered dispositive, such as a
motion to remand, the Magistrate Judge submits a Report and Recommendation to the district
court. 28 U.S.C.

§ 636(b)(1)(A); fed. R. Civ. P. 72; L. Civ. R. 72.1(a)(2). The district court may

then “accept, reject or modify, in whole or in part, the findings or recommendations made by the
Magistrate Judge.” 28 U.S.C.

§ 636(b)(1)(C); see also L. Civ. R. 72.1(c)(2). On dispositive

motions, the district court must make a de novo determination of those portions of the Magistrate
Judge’s Report and Recommendation to which a litigant has filed objections.

28 U.S.C.

§ 636(b)(1)(c); fed. R. Civ. P.72(b); L. Civ. R. 72.1(c)(2);seealsoStatefarmlndem. v. fornaro,
227 F. Supp. 2d 229, 231 (D.N.J. 2002). A Report and Recommendation does not have force of
law unless and until the district court enters an order accepting or rejecting it. United Steelworkers
ofAm. v. N.J Zinc Co., Inc., 828 F.2d 1001, 1005 (3d Cir. 1987).
IV.

DISCUSSION

Judge Clark correctly concluded, and neither party disputes, that Defendants removed the
instant action on the basis of diversity jurisdiction after the statutory one-year limit had expired.
Similarly, neither party disputes that the time-bar can only be excused if plaintiffs acted in bad
faith in order to prevent removal. See 28 U.S.C.A.

§ 1446(c)(1). “If the notice of removal is filed

more than 1 year after commencement of the action and the district court finds that the plaintiff
deliberately failed to disclose the actual amount in controversy to prevent removal, that finding
shall be deemed bad faith under paragraph (1).” 28 U.S.C.A.

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§ 1446(c)(2)(B). Further, as Judge

Clark correctly stated, Defendants bear the burden of proving bad faith. “[T]he party asserting
federal jurisdiction in a removal case bears the burden of showing, at all stages of the litigation,
that the case is properly before the federal court.” Frederico v. Home Depot, 507 f.3d 188, 193
(3d Cir. 2007). Removal is strictly construed and all doubts are resolved in favor of remand. $ee
Samuel-Bassett v. Kia Motors Am., Inc., 357 f.3d 392, 396 (3d Cir. 2004). The Court “must
assume as true all factual allegations of the complaint” when considering a motion for remand.
Steel Valley Auth. v. Union Switch & Signal Div., 809 F.2d 1006, 1010 (3d Cir. 1987).
For the “bad faith” exception to the statutory one-year removal period to apply, Defendants
bear the burden of proving that Plaintiffs acted in “bad faith” such that they “deliberately failed to
disclose the actual amount in controversy to prevent removal.” 28 U.S.C.A.

§ 1446(c)(2)(B); see

Frederico, 507 F.3d at 193. Applying this law, Judge Clark rightly concluded that Defendants
failed to meet their burden of proving Plaintiffs’ bad faith for purposes of removal. As Judge Clark
correctly found, Defendants merely cite to the record of Plaintiffs’ failure to timely serve a
statement of damages and discovery responses, and delay in serving discovery responses certified
by the client on March 21, 2016 until May 23, 2016. ECF No. 9 at 4. As Judge Clark noted,
Defendants had served discovery requests, but the record shows no repeated attempts to secure the
requested discovery. Id. This Court agrees with Judge Clark that Defendants failed to present
evidence that Plaintiffs’ delay in responding to discovery requests was deliberately done to prevent
removal. Id.
Defendants challenge Judge Clark’s R&R, arguing that Judge Clark erroneously
interpreted the statutory bad faith threshold. ECF No. 10 at 6. Specifically, Defendants argue that
requiring Defendants to provide “direct evidence of Plaintiffs’ deliberate misconduct to prevent
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removal imposes an impossible prerequisite{,]” and that “the appropriate standard is whether
circumstantial evidence implicates a deliberate failure to disclose the amount in controversy.”
ECF No. 10 at 7. Defendants allege that the procedural history “impels a circumstantial inference
of bad faith.” Id. at 8. The Court disagrees.
In support of their argument, Defendants first argue that the statutory standard for bad faith
is unclear. The statute defines bad faith as plaintiffs deliberate failure to disclose the actual
amount in controversy, 28 U.S.C.

§ 1446(c), and this Court agrees with Judge Clark’s finding that

Defendants failed to show that Plaintiffs were intentionally deceptive regarding alleged damages.
Next, Defendants argue that Judge clark erred in analogizing the instant action to Bader v.
Schmidt Baking Co., Civil No. 13-5697, 2014 U.S. Dist. LEXIS 3171 (Jan. 10, 2014), a case where
the New Jersey District Court did not find bad faith. Defendants argue Bader is distinguishable
because the defendants in Bader were served with discovery responses within one year of the
Complaint being filed, and had sufficient information from which they could determine the likely
amount in controversy. ECF No. 10 at 6. In Bader, the statement of damages was not sent, even
after a follow-up request, until after the one-year time limit. The court in Bader nonetheless found
that an untimely statement of damages was insufficient evidence of bad faith. The court in Bader
looked to the information plaintiffs had provided within the one-year limit, and found plaintiffs
had provided a “wealth of information” from which to “extrapolate data points” to calculate
damages as likely to exceed the jurisdictional threshold. Id. at 7 (citing to Bader, 2014 U.S. Dist.
LEXIS 3171, at *6..11).
Here, as in Bader, Plaintiffs appear to have provided information from which it could be
extrapolated that the amount in controversy likely exceeded the jurisdictional threshold amount

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within the one-year timeframe. In their Complaint, Plaintiffs demand “large sums of money” for
medical expenses for permanent injuries and damages for loss of consortium, punitive damages,
interest, costs of the suit, and a complete copy of applicable liability insurance policies. ECF No.
1-1 at 9-12. Plaintiffs allege in their Complaint that that Mr. Hubbard “sustained severe and
permanent injuries; and was required to expend large sums of money for medical, doctor and
hospital expenses in order to effect a cure of his injuries[,]” and that Mrs. Hubbard “has been and
will in the future be deprived of his support, society, companionship, love, solace, consortium,
services and more and has been compelled to and did expend various sums of money and sustained
loss of various income[.]” Id. at 9, 11. Plaintiffs’ response to Defendants’ objections to Judge
Clark’s R&R reiterate that Defendants by and through counsel were or should have been aware of
the nature of the injuries and the worker’s compensation lien of over $75,000 within the one-year
timeframe. ECF No. 11. further, Plaintiffs served the Complaint within the one-year time limit
and have not moved to amend or in any way alter their complaint. Therefore, based upon the
assertions in the Complaint, this Court is unpersuaded that Plaintiffs were deliberately preventing
removal, regardless of the timeliness of the discovery responses.
In further support of their argument, Defendants cite two cases from other districts. This
Court is unpersuaded that either case supports Defendants’ argument. See Kinabrew v. Emco
Wheaton, Inc., 936 F. Supp. 351 (M.D. La. 1996) (The Louisiana District Court granted an
exception to the one-year limit when neither defendant had been served with the initial pleading
until after the one-year limit expired, finding plaintiff intentionally delayed service of process; the
court characterized plaintiffs actions as “flagrant forum manipulation.”);’ Ehrenreich v. Black,
Kinabrew was decided before the statutory one-year limit was amended to reflect the
statutory exception for bad faith.
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994 F. Supp. 2d 284 (E.D.N.Y. 2014) (The District Court for the Eastern District of New York
held that the joinder of a non-diverse defendant was not in “bad faith” such as to waive the oneyear removal limit.). Here, Defendants have not alleged that the Complaint was in any way
changed or amended at all, including for the entirety of the removal period. Plaintiffs have not
altered the parties involved, and there is no dispute that diversity of citizenship has existed since
the inception of the lawsuit through the entirety of the removal period. Plaintiffs do not appear to
have taken any actions specifically to defeat removal. Absent a showing of such “bad faith,” the
one-year limit on removal of diversity cases requires remand.2
V.

CONCLUSION

Having thoroughly reviewed Magistrate Judge Clark’s R&R and Defendant’s objections
thereto, and having found no error, this Court hereby adopts Judge Clark’s R&R in full, and thus
grants Plaintiffs motion to remand. An appropriate Order accompanies this Opinion.

Dated:

“(

,2017

CLAIRE C. CECCHI, U.$.D.J.

In their conclusion, Defendants identify an unrelated and entirely separate case where
Plaintiffs’ counsel represents separate plaintiffs and in which separate defendants removed the
case. ECF No. 10 at 9. Defendants also state that Plaintiffs’ counsel “knows that trucking
defendants generally favor removal whenever possible.” Id. This Court does not see how either
assertion indicates Plaintiffs’ counsel deliberately prevented removal here.
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