Manney et al v. Intergroove Media GMBH et al
Filing
52
OPINION & ORDER: SO ORDERED that plaintiffs' 8 motion to remand this action to the state court is granted and this action is remanded to the Supreme Court of the State of New York, County of Nassau. Plaintiffs' 35 motion to consolidate this action with Manney I is denied as moot and Intergroove Media's 22 , 44 , and 47 motions to dismiss are denied without prejudice to renewal in the state court. The Clerk of the Court is directed to close this case; to mail a certified co py of this order to the clerk of the Supreme Court of the State of New York, County of Nassau pursuant to 28 U.S.C. § 1447(c); and to serve notice of entry of this Order on all parties in accordance with Rule 77(d)(l) of the Federal Rules of Civil Procedure. CM to pro se plaintiffs. A certified copy mailed to Supreme Court of NY, Nassau County. Ordered by Judge Sandra J. Feuerstein on 8/19/2013. (Florio, Lisa)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
------------------------------------------------------------------)(
STEVEN MANNEY and JOSEPH LEONARDO,
as assignees of Bassline Digital Inc.,
OPINION AND ORDER
13 CV 0053 (SJF)(GRB)
Plaintiffs,
-against-
FILED
INTERGROOVE MEDIA GMBH (formerly known as
Intergroove Tontrager Vertriebs GMBH),
INTERGROOVE U.S. INC., PETER MATTHIAS,
and EVA MATTHIAS,
IN CLERK'S OFFICE
U S DISTRICT COURT E 0 N y
*
AUG 19 2013
*
lONG ISLAND OFFICE
Defendants.
------------------------------------------------------------------)(
FEUERSTEIN, J.
On or about October 10, 2012, plaintiffs Steven Manney and Joseph Leonardo
(collectively, "plaintiffs"), as assignees ofBassline Digital Inc. ("Bassline"), commenced an
action in the Supreme Court of the State of New York, County of Nassau ("the state court")
against defendant Intergroove Media GMBH (formerly known as Intergroove Tontrager Vertriebs
GMBH) ("Intergroove Media"), defendants Peter Matthias and Eva Matthias (collectively, "the
Matthias defendants"), and defendant Intergroove U.S. Inc. ("Intergroove U.S."), alleging claims
for breach of contract; work, labor and services rendered; implied contract; and unjust
enrichment. On January 3, 2013, Intergroove Media filed a notice of removal pursuant to 28
U.S.C. §§ 1441(b) and 1446, removing the action to this Court pursuant to this Court's diversity
jurisdiction under 28 U.S. C.§ 1332. Thereafter, (I) plaintiffs moved (a) pursuant to 28 U.S.C. §
1447(c) to remand this matter to the state court, and (b) to consolidate this action with a
previously filed action against the same parties, Manney v. Intergroove Tontrager Vertriebs
I
GMBH. No. I 0-cv-4493 ("Manney f'), in which a final judgment was entered against plaintiffs
on December 6, 2011; and (2) Intergroove Media filed separate motions (a) to dismiss the action
against it pursuant to Rules 12(b)(2) and 12(b)(6) of the Federal Rules of Civil Procedure for lack
of in personam jurisdiction and failure to state a cause of action, respectively, and (b) to dismiss
the action upon the ground offorum non conveniens. For the reasons stated herein, plaintiffs'
motion to remand this action to the state court is granted; plaintiffs' motion to consolidate this
action with Manney I is denied; and Intergroove Media's motions to dismiss are denied without
prejudice to renewal in the state court.
I.
Background
A.
Factual Allegations
I.
The Parties
Plaintiffs commenced this action as the assignees of Bassline, a Delaware corporation
licensed to do business in the State of New York, which has its principal place of business at 53
East Merrick Road, Freeport, New York. (Compl.,
~
I). Plaintiffs are primarily engaged in the
business of video production. (Compl., ~ 6).
Intergroove Media is a German limited liability company with its principal place of
business in Offenbach am Main, Germany, (Compl.,
~
2; Notice of Removal
("Rem."],~
9),
"engaged in the business of distributing pre-recorded videos (DVD's) [sic] and pre-recorded
music." (Compl.,
~
7). At all relevant times, RalfReichert ("Reichert") was the "Legally
Authorized Business representative" and managing director oflntergroove Media. (Compl.,
~
2).
Intergroove U.S. was incorporated in the State of New York on December 16, 1996 and
2
was dissolved by proclamation of the Secretary of State of the State of New York published on
January 25, 2012 pursuant to New York Tax Law. (Declaration ofRalfReichert, Joachkim Keil,
Alberto Morales, Pascal Amann and William Archer in Support of Defendant Intergroove Media
GMBH's Motion to Dismiss based on Lack of In Personum Jurisdiction and Failure to State a
Cause of Action ["Reichert Dec!."], Ex. 9). Plaintiffs allege, upon information and belief, that
"[Intergroove] U.S. is a wholly owned subsidiary oflntergroove [Media], acts as a mere
instrumentality oflntergroove [Media] and does business as the United States arm oflntergroove
[Media]." (Compl.,
~
8). However, according to Intergroove Media, in 1995, "Under Cover
Music Group New York, Inc." ("USMG-NY") started doing business under the name
"Intergroove U.S.," then formed lntergroove U.S. as its wholly-owned subsidiary in 1996, having
two hundred (200) shares of common stock.
(Rem.,~
14).
Intergroove Media further asserts that in 1996, Intergroove Media purchased from
lntergroove U.S. thirty (30) of the two hundred (200) shares of stock in lntergroove U.S. (Rem.,
~
15). On or about August 27, 2002, Intergroove Media sold those thirty (30) shares to UCMG
Europe AG ("UCMG Europe"). Id. Neither Intergroove Media nor Reichert ever owned any
interest in UCMG Europe, nor have they had any ownership interest in Intergroove U.S. since
August 27, 2002. !d. In or about March 2003, UCMG Europe filed insolvency proceedings in
Germany. !d.
The Matthias defendants are German citizens residing in Kembs, France. (Compl., ~ 4).
Plaintiffs allege, upon information and belief, that the Matthias defendants "acted as private
entrepreneurs, agents, and intermediaries oflntergroove [Media]." (Compl.,
3
~
9).
2.
The Parties' Business Relationship
Plaintiffs allege that Leonardo has known the Matthias defendants "on [a] private level"
for over twenty (20) years. (Compl.,, I 0). Between approximately June 28, 2008 through July
29,2008, Peter Matthias ("Peter") traveled to New York and met with plaintiffs. (Compl.,, 10).
Plaintiffs allege that during that time, it was agreed that Peter would be the plaintiffs' exclusive
agent or representative in Europe to solicit business for plaintiffs' video production service and
Intergroove Media "was discussed as a possible business recipient of the Video Service." !d.
In September 2008, upon his return to Germany, Peter, allegedly acting on plaintiffs'
behalf, negotiated a video production deal with Intergroove Media. (Compl.,, I 0). According
to plaintiffs, pursuant to that deal, Peter was "to share with Plaintiffs in the revenue generated
from Intergroove [Media]." !d.
In November 2008, plaintiffs, Reichert and Peter met in Frankfurt, Germany "in order to
solidify the deal[.]" (Compl.,, II). In or about December 2008, after plaintiffs were contacted
by Peter, they entered into an oral contract ("the December 2008 Contract"), pursuant to which
Bassline agreed to deliver approximately twenty-five (25) to thirty (30) video productions to
Intergroove Media in exchange for Intergroove Media's payment to Bassline of an hourly rate of
six hundred fifty dollars ($650.00) for plaintiffs' services. (Compl.,, 12).
Plaintiffs allege that between approximately January 2009 and July 2009, they delivered
twenty-seven (27) video productions directly to Intergroove Media and sent invoices directly to
Intergroove Media requesting payment for their services. (Compl., ,, 13-14). On or about April
I, 2009, plaintiffs sent Intergroove Media two (2) invoices totaling sixty-six thousand nine
hundred fifty dollars ($66,950.00) for "its services," which remains unpaid. (Compl., ,, 14-15).
4
On or about June 29, 2009, plaintiffs again traveled to Germany and met with Reichert
and Peter to demand payment from Intergroove Media on the balance due of the two (2) invoices.
(Campi., ~~ 16-17). Plaintiffs allege that Intergroove Media promised to make payment "and
stated that they [sic] had a wholly owned subsidiary corporation in New York which was a
guarantee that they would make payments. The subsidiary corporation being defendant
[Intergroove] U.S., at 622 Broadway, New York 10012."
(Campi.,~
18). According to
plaintiffs, no payments were forthcoming from Intergroove Media. (Compl., ~ 19).
Plaintiffs allege that Intergroove Media and Peter have since "made a new deal to offer
the same services offered by [them] through a newly Incorporated English Limited Liability
Company owned by [the Matthias defendants]." (Compl.,
~
19). According to plaintiffs,
"[u]sing the same exact, original unique creative Video production style and Intellectual Ideas
acquired through the privileged relationship with the Plaintiffs, [the Matthias defendants]
produced videos of almost the same quality as the Plaintiffs and in involvement with the
Defendants." !d.
B.
Procedural History
On January II, 20 I 0, Bass line commenced an action in this Court against Intergroove
Media ("the Bassline action"), alleging claims for breach of contract; goods and services sold and
delivered; implied contract; unjust enrichment; and promissory estoppel, which was assigned to
the Honorable Arthur D. Spatt under docket number 10-cv-0097. On March 26, 2010, Senior
Judge Spatt entered a default judgment against Intergroove Media based upon its failure to
answer the complaint or to otherwise appear in the Bassline action, and referred the matter to
5
United States Magistrate Judge E. Thomas Boyle to hear and determine the amount of damages
to be awarded to Bassline. Magistrate Judge Boyle issued a report and recommendation dated
July 29, 2010 ("the Report"), recommending that the default judgment against Intergroove Media
be vacated for lack of personal jurisdiction since Intergroove Media had never been served with
process in that action. By memorandum of decision and order dated October 7, 2010, Senior
Judge Spatt adopted the Report in its entirety; vacated the default judgment against Intergroove
Media; and dismissed Bassline's complaint against Intergroove Media without prejudice based
upon Bassline's failure to effect proper service upon it. Judgment was entered against Bassline
in the Bassline action on October 13, 2010.
On or about July 12, 2010, plaintiffs, in their capacity as "assignees ofBassline Digital
Inc.," commenced Manney I against Intergroove Media, the Matthias defendants and Intergroove
U.S. ("Marmey I") in the state court, alleging the same claims against Intergroove Media as had
been asserted in the Bassline action, with the exception that they omitted their claim based upon
promissory estoppel and added a claim of fraud. Specifically, the Marmey I complaint asserted
claims for breach of contract; work, labor and services rendered; implied contract; unjust
enrichment; and fraud in the inducement relating to defendants' purported failure to pay invoices
sentto Intergroove Media on February I, 2009, March I, 2009, April!, 2009, May 1, 2009 and
June 1, 2009 in the total amount of seven hundred sixty-four thousand one hundred two dollars
($764, 102.00). On October I, 20 I 0, Intergroove Media removed Manney I to this Court pursuant
to 28 U.S.C. §§ 144l(b) and 1446, based upon this Court's diversity jurisdiction under 28 U.S.C.
§ 1332, and the action was assigned to me. By order dated November 30, 2011, inter alia, the
branches of defendants' respective motions seeking dismissal of Manney I based upon plaintiffs'
6
lack of legal capacity to sue were granted and Manney I was dismissed in its entirety without
prejudice. Judgment was entered against plaintiffs in Manney I on December 6, 2011. By
opinion and order dated September 28, 2012, plaintiffs' motion for reconsideration of the final
judgment was denied.
On or about October 10, 2012, plaintiffs, as assignees ofBassline,1 commenced this
action in the state court against Intergroove Media, the Matthias defendants and Intergroove U.S.,
asserting claims seeking damages in the total amount of sixty-six thousand nine hundred fifty
dollars ($66,950.00), plus interest and costs, for breach of contract; work, labor and services
rendered; implied contract; and unjust enrichment relating to defendants' purported failure to pay
only the two (2) invoices sent to Intergroove Media on April!, 2009? On January 3, 2013,
Intergroove Media removed the action to this Court pursuant to 28 U.S.C. §§ 144l(b) and 1446,
based upon this Court's diversity jurisdiction under 28 U.S.C. § 1332.
Plaintiffs now move (a) to remand this matter to the state court pursuant to 28 U.S.C. §
144 7(c), and (b) to consolidate this action with Manney I, and Intergroove Media moves to
dismiss this action (a) pursuant to Rules 12(b)(2) and 12(b)(6) of the Federal Rules of Civil
Procedure for lack of in personam jurisdiction and failure to state a cause of action, respectively,
and (b) upon the ground offorum non conveniens.
1
Plaintiffs have submitted evidence:(!) that on March 29, 2012, Bassline filed an application
for authority to do business in the State of New York; (2) that as of October 19,2012, Bassline
was still authorized to do business in the State of New York; (3) that a Certificate of Renewal for
Bassline was filed with the Secretary of State of the State of Delaware on December 6, 2011; and
(4) that Bass line is a corporation in good standing and has a legal corporate existence in the State
of Delaware. (Plaintiffs' Memorandum of Law in Support of Motion to Remand ["Plf. Mem."],
Ex. 1). Thus, plaintiffs no longer lack the legal capacity to sue as assignees of Bassline.
2
All of plaintiffs' claims are pled in the alternative.
7
II.
DISCUSSION
A.
Motion to Remand'
Pursuant to the removal statute, 28 U.S.C. § 144l(a), a civil action filed in state court
may only be removed by a defendant to federal court if the district court has origimll subject
matter jurisdiction over the plaintiffs claims. See Montefiore Medical Center v. Teamsters
Local272, 642 F.3d 321,327 (2d Cir. 2011). "Federal courts are courts oflimitedjurisdiction,
possessing only that power authorized by Constitution and statute." Gunn v. Minton, 133 S. Ct.
1059, 1064, 185 L. Ed. 2d 72 (2013) (quotations and citation omitted); see also Purdue Pharma
L.P. v. Kentucky, 704 F.3d 208,213 (2d Cir. 2013) (holding that as courts of limited jurisdiction,
federal courts "lack the power to disregard such limits as have been imposed by the Constitution
or Congress." (quotations and citation omitted)). "Congress has granted district courts original
jurisdiction over cases in which there is a federal question, see 28 U.S.C. § 1331, and certain
cases between citizens of different states, so long as the requirements of complete diversity and
amount in controversy are met, see 28 U.S.C. § 1332." Purdue Pharma, 704 F.3d at 213.
Removal jurisdiction must be "strictly construed," Syngenta Crop Protection, Inc. v. Henso!!, 537
U.S. 28, 32, 123 S.Ct. 366, 154 L.Ed.2d 368 (2002); see also Purdue Pharma, 704 F.3d at 213
("[F]ederal courts construe the removal statute narrowly
* * *." (quotations and citation
omitted)), and any doubts resolved against removability "out of respect for the limited
jurisdiction of the federal courts and the rights of states." In re Methyl Tertiarv Butyl Ether
("MTBE") Products Liability Litigatio!J, 488 F.3d 112, 124 (2d Cir. 2007); see also Purdue
3
Since plaintiffs' motion to remand is based upon the Court's subject matter jurisdiction, it must
necessarily be decided first.
8
Pharma, 704 F.3d at 213. "[J]urisdictional facts, such as the amount in controversy," are
generally evaluated "on the basis of the pleadings, viewed at the time when the defendant files
the notice of removal." Blockbuster. Inc. v. Galeno, 472 F.3d 53, 57 (2d Cir. 2006).
The burden of proving the Court's removal jurisdiction rests upon the party asserting
jurisdiction. See Montefiore Medical Center, 642 F.3d at 327; see also Gilman v. BHC
Securities. Inc., 104 F.3d 1418, 1421 (2d Cir. 1997). Thus, on a motion to remand, "the
defendant bears the burden of demonstrating the propriety of removal." California Public
Employees' Retirement System v. WorldCom. Inc., 368 F.3d 86, 100 (2d Cir. 2004) (quotations
and citation omitted); see also Gilman, 104 F.3d at 1421 (holding that the defendant who
removed the case to federal court on the basis of diversity jurisdiction "must shoulder th[ e]
burden" of proving that the case is properly in federal court).
"A district court must remand a case to state court 'if at any time before final judgment it
appears that the district court lacks subject matter jurisdiction."' Vera v. Saks & Co., 335 F.3d
109, 113 (2d Cir. 2003) (quoting 28 U.S.C. § 1447(c)).
B.
Amount in Controversy
Intergroove Media removed this action to this Court based upon the Court's diversity
jurisdiction under 28 U.S.C. § 1332. That statute provides, in relevant part, that "[t]he district
courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds
the sum or value of $75,000, exclusive of interest and costs, and is between-* * * (2) citizens of
a State and citizens or subjects of a foreign state* * *."
It is unnecessary to determine whether diversity of citizenship is present in this case, i.e.,
9
whether Intergroove U.S. is properly named as a defendant, because the amount in controversy
requirement is not satisfied. "[T]he party invoking federal jurisdiction has the burden of proving
that it appears to a reasonable probability that the claim is in excess of the statutory jurisdictional
amount." Gilman, 104 F.3d at 1421 (alterations, quotations and citations omitted); see also
United Food & Commercial Workers Union, Local919. AFL-CIO v. Centermark Properties
Meriden Sguare. Inc., 30 F.3d 298, 304-05 (2d Cir. 1994) (accord); Lupo v. Human Affairs
International, Inc., 28 F .3d 269 (2d Cir. 1994) ("[T]he party asserting diversity jurisdiction in
federal court has the burden of establishing the existence of the jurisdictional amount in
controversy.") "Where* * *jurisdictional facts are challenged, the party asserting jurisdiction
must support those facts with competent proof and justify its allegations by a preponderance of
evidence." United Food, 30 F.3d at 305 (quotations, alteration and citation omitted). Thus,
Intergroove Media must demonstrate by a preponderance of evidence that plaintiffs' complaint
asserts claims exceeding the seventy-five thousand dollars ($75,000.00) jurisdictional amount.
The amount in controversy alleged in the complaint is sixty-six thousand nine hundred
fifty dollars ($66,950.00), "for two invoices (2) [sic] that remain unpaid by the defendants for
goods and services rendered." (Plaintiffs' Memorandum of Law,~ 7). Although plaintiffs also
seek interest and costs, those amounts are expressly excluded from the amount in controversy
requirement under the diversity statute. See 28 U.S.C. § 1332(a).
28 U.S.C. § l446(c)(2) provides, in relevant part, that where removal is sought based
upon this Court's diversity jurisdiction,
"the sum demanded in good faith in the initial pleading shall be deemed to be the
amount in controversy, except that- (A) the notice of removal may assert the
amount in controversy if the initial pleading seeks- (i) nonmonetary relief; or (ii)
10
a money judgment, but the State practice either does not permit demand for a
specific sum or permits recovery of damages in excess of the amount demanded;
and (B) removal of the action is proper on the basis of an amount in controversy
asserted under subparagraph (A) if the district court finds, by the preponderance
of the evidence, that the amount in controversy exceeds the amount specified in
section 1332(a)." (emphasis added).
The "established view" is that the "plaintiff is the master of its claim whose monetary
demand is to be accorded deference." United Food, 30 F.3d at 305 (quotations, alteration and
citation omitted); see also Standard Fire Ins. Co. v. Knowles, 133 S. Ct. 1345, 1350, 185 L. Ed.
2d 439 (2013) ("[F]ederal courts permit individual plaintiffs, who are the masters of their
complaints, to avoid removal to federal court, and to obtain a remand to state court, by stipulating
to amounts at issue that fall below the federal jurisdictional requirement.")
Plaintiffs' complaint does not allege an amount in controversy in excess of the
jurisdictional amount. Although Intergroove Media contends that the sum demanded in the
complaint is not entitled to deference because it was not made in good faith, as required by 28
U.S.C. § 1446(c)(2), it is not for this Court to speculate as to the reason why plaintiff omitted
previously asserted claims in this action. It could just as easily be a legitimate act, e.g., that
plaintiffs chose to omit the claims in order to pursue only their remaining claims in state court,
their obviously preferred venue, as it is an act of bad faith gamesmanship, e.g., plaintiffs chose to
omit the claims in order to prevent removal, but intend to amend their complaint once in state
court to add the omitted claims or assert additional claims that could have been asserted in the
original complaint.
The case upon which Intergroove Media relies in support of its proposition that the sum
demanded in plaintiffs' complaint was not made in good faith is inapposite. In Armstrong v.
11
ADT Services. Inc., No. 06 Civ. 4925,2007 WL 187693, at* I (S.D.N.Y. Jan. 23, 2007),
following removal to federal court, the plaintiff filed an amended complaint reducing the amount
of damages he sought for his claims for sex discrimination, harassment and retaliation to below
the jurisdictional amount and then sought remand of the action to state court. However, the
plaintiff in Armstrong did not also reduce his claims against the defendant. Unlike Armstrong,
plaintiffs here have reduced the number of claims asserted and now seek damages relating to only
two (2) invoices sent to Intergroove Media on April I, 2009. Unlike the plaintiff in Armstrong,
plaintiffs are not concealing the value of their claims, but reducing the number of claims, thus
limiting their recovery in this action to only the value of the two (2) invoices to which the claims
relate.
The other cases in this Circuit upon which Intergroove relies in support of its proposition
that a plaintiff's refusal to stipulate to alleged damages, or to deny information contained in a
pre-suit demand, can demonstrate that the amount in controversy exceeds the jurisdictional
amount are also inapposite. In both Feldman v. Edwab, No. I: 10-cv-0261, 2011 WL 1298717, *
3 (N.D.N.Y. Mar. 3, 2011), and Felipe v. Target Com., 572 F. Supp. 2d 455, 459 (S.D.N.Y.
2008), the complaints did not allege any specific amount of damages. Since both complaints did
not specifY the amounts in controversy, the courts looked beyond the pleadings to other evidence
in the record to determine whether they had subject matter jurisdiction. In Armstrong, supra,
there was evidence that the plaintiff was concealing the value of his claims. In this case,
plaintiffs' complaint is specific as to the amount in controversy and plaintiffs are not concealing
the value of the claims asserted in the complaint.
Plaintiffs are free to choose the claims to assert in their complaint and to omit previously
12
asserted claims in order to limit their recovery to below the jurisdictional amount of this Court,
even though they may be entitled to more.4 See St. Paul Mercurv Indemnitv Co. v. Red Cab Co.,
303 U.S. 283, 294, 58 S. Ct. 586, 82 L. Ed. 2d 845 (1938) ("If [the plaintiff] does not desire to
try his case in the federal court he may resort to the expedient of suing for less than the
jurisdictional amount, and though he would be justly entitled to more, the defendant cannot
remove.") If it turns out that plaintiffs, in fact, omitted the previously asserted claims solely to
prevent the removal of this action to this Court and plaintiffs amend their complaint once in state
court to re-plead the omitted claims, or any other claim which could have been asserted in the
original complaint, thus raising the amount in controversy above the jurisdictional amount,
Intergroove Media may again remove the action to this Court. See 28 U.S.C. §§ 1446(b)(3)
("Except as provided in subsection (c), if the case started by the initial pleading is not removable,
a notice of removal may be filed within 30 days after receipt by the defendant, through service or
otherwise, of a copy of an amended pleading, motion, order or other paper from which it may
first be ascertained that the case is one which is or has become removable") and (c)(!) ("A case
4
In their memorandum oflaw, plaintiffs "do not deny the possibility that there might be
additional monies owed." (Plf. Mem., ~ 7). Nonetheless, the jurisdictional facts must be
ascertained based upon the claims in the complaint at the time the notice of removal was filed,
and the fact that plaintiffs may (or may not) seek leave to amend their complaint at a later date is
insufficient to confer subject matter jurisdiction upon this Court. Although New York courts are
permitted to grant "a motion made by a plaintiff to increase the amount of relief requested in the
ad damnum clause of the complaint * * * in the absence of prejudice to the defendant," Loomis
v. Civetta Corinno Construction Com., 54 N.Y.2d 18, 20, 444 N.Y.S.2d 571, 429 N.E.2d 90
(1981), plaintiffs' complaint only seeks recovery of the amount allegedly due them under two (2)
invoices, albeit under alternative theories of recovery. In order to recover any amounts due under
any other invoice, or otherwise, plaintiffs would have to amend their complaint to assert
additional claims, rather than just filing a motion to increase their ad damnum clause. Thus, 28
U.S.C. § 1446(c)(2)(A)(ii) is inapplicable to this case. It is for the state court in the first instance
to decide whether to permit plaintiffs to amend the complaint in light of the procedural history of
this case.
13
may not be removed under subsection (b)(3) on the basis of jurisdiction conferred by section
1332 more than I year after commencement of the action, unless the district court finds that the
plaintiff has acted in bad faith in order to prevent a defendant from removing the action."
(emphasis added)). If such is plaintiffs' intent, the only result to them will be a delay of any
recovery on their claims against defendants. Since this Court lacks original jurisdiction over this
action at this time, plaintiffs' motion to remand this action to the state court pursuant to 28
U.S.C. § 1447(c) is granted. 5
C.
Judicial Estoppel
The doctrine of judicial estoppel, which Intergroove Media contends should preclude
plaintiffs from claiming that the amount in controversy does not exceed the jurisdictional
amount, is inapplicable.
"[J]udicial estoppel is an equitable doctrine invoked by a court at its discretion[,]" New
Hampshire v. Maine, 532 U.S. 742, 750, 121 S. Ct. 1808, 149 L. Ed. 2d 968 (2001), to "prevent[]
a party from asserting a factual position clearly inconsistent with a position previously advanced
by that party and adopted by the court in some manner." Republic of Ecuador v. Chevron Corn.,
638 F.3d 384, 397 (2d Cir. 2011) (quotations, alterations and citation omitted); see also New
Hampshire, 532 U.S. at 749, 121 S. Ct. 1808 ("Where a party assumes a certain position in a
legal proceeding, and succeeds in maintaining that position, he may not thereafter, simply
because his interests have changed, assume a contrary position, especially if it be to the prejudice
5
In light of this determination, plaintiffs' motion to consolidate this action with Manney I is
denied as moot and Intergroove Media's motions to dismiss are denied without prejudice to
renewal in the state court.
14
of the party who has acquiesced in the position formerly taken by him." (quotations and citation
omitted)). Typically, the doctrine will apply if: "l) a party's later position is clearly inconsistent
with its earlier position; 2) the party's former position has been adopted in some way by the court
in the earlier proceeding; and 3) the party asserting the two positions would derive an unfair
advantage against the party seeking estoppel." DeRosa v. National Envelope Com., 595 F.3d 99,
103 (2d Cir. 2010) (internal quotations and citation omitted); see also New Hampshire, 532 U.S.
at 750, 121 S. Ct. 1808; In re Adelphia Recovery Trust 634 F.3d 678, 695-96 (2d Cir. 2011)
(accord). "Because the doctrine is primarily concerned with protecting the judicial process, relief
is granted only when the risk of inconsistent results with its impact on judicial integrity is
certain." Republic of Ecuador, 638 F.3d at 397; see also In re Adelphia Recovery Trust 634
F.3d at 696 (accord); DeRosa, 595 F.3d at I 03 (accord).
According to Intergroove Media, plaintiffs' assertion in the Bassline action that "[t]he
matter in controversy exceeds $75,000, exclusive of interest and costs," which was adopted by
the Court in entering a default against Intergroove Media in that action, precludes plaintiffs from
asserting otherwise in this action. However, since, inter alia, the claims in the two (2) actions
are not the same, plaintiffs' assertion regarding the value of their claims in the Bassline action is
not inconsistent with their position that the value of their claims in this action is less than the
jurisdictional amount. Accordingly, the doctrine of judicial estoppel is inapplicable in this case.
III.
Conclusion
For the reasons stated herein, plaintiffs' motion to remand this action to the state court is
granted and this action is remanded to the Supreme Court of the State of New York, County of
15
Nassau. Plaintiffs' motion to consolidate this action with Manney I is denied as moot and
Intergroove Media's motions to dismiss are denied without prejudice to renewal in the state
court. The Clerk of the Court is directed to close this case; to mail a certified copy of this order
to the clerk of the Supreme Court of the State of New York, County of Nassau pursuant to 28
U.S.C. § 1447(c); and to serve notice of entry of this Order on all parties in accordance with Rule
77(d)(l) of the Federal Rules of Civil Procedure.
SO ORDERED.
s/ Sandra J. Feuerstein
SANDRA J. FEUERSTEIN
United States District Judge
Dated: August 19,2013
Central Islip, N.Y.
16
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