Romano et al v. Northrop Grumman Corporation et al

Filing 27

ORDER denying 22 Motion to Remand to State Court: Plaintiffs' motion to remand is denied. See attached Memorandum & Order. Ordered by Judge Denis R. Hurley on 12/15/2017. (Gapinski, Michele)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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ROSALIE ROMANO, PATRICIA GLUECKERT,
WILLIAM P. GLUECKERT, FRANCISCO
PASTOLERO, MARIA SPICER, JOHN
VARGHESE, JAYNE MANN, DENISE FLORIO,
ROSS MEADOW, ARLENE MEADOW, JACOB
KHOLODNY, BELLA KHOLODNY, FLO
RAUCCI, DANIEL GALLANTE and
JENNIFER GALLANTE, individually and
on behalf of all others similarly situated,
Plaintiffs,
-againstNORTHROP GRUMMAN CORPORATION,
NORTHROP GRUMMAN SYSTEMS
CORPORATION, and TOWN OF OYSTER
BAY,
Defendants.
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APPEARANCES:
For Plaintiffs:
Napoli Shkolnik PLLC
360 Lexington Ave., 1st Floor
New York, New York 10017
By: Hunter Shkolnik, Esq.
Paul J. Napoli, Esq.
Imbesi Law P.C.
450 Seventh Avenue, 14th Floor
New York, New York 10123
By: Brittany Weiner, Esq.
Vincent Imbesi, Esq.

MEMORANDUM & ORDER
Civil Action No 16-5760(DRH)

For Defendants Northrop Grumman Corp. and Northrop Grumman Sys.
Corp.:
Hollingsworth LLP
1350 I Street, N.W.
Washington, D.C. 20005
By: Frank Leone, Esq.
Donald W. Fowler, Esq.
Morrison & Foerster LLP
250 West 55th Street
New York, New York 10019
By: Grant Esposito, Esq.
Jessica Kaufman, Esq.
For Defendant Town of Oyster Bay:
Milber Makris Plousadis & Seiden LLP
1000 Woodbury Road, Suite 402
Woodbury, New York, 11797
By: Peter Tamigi, Esq.

HURLEY, Senior District Judge:
The purpose of this memorandum is to address the motion of plaintiffs to
remand this case back to state court.
BACKGROUND
This putative class action was filed on September 13, 2016, in Nassau County
Supreme Court on behalf of current and former residents and property owners of
Bethpage, New York (“Plaintiffs” or the “Class”) asserting various state law causes
of action against defendants Northrop Grumman Corporation (“NG”) and Northrop
Grumman Systems Corporation (“NGSC”) (collectively “Northrop”) for injuries and
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damages allegedly suffered as a result of the release of hazardous substances from
its former site of approximately 635 acres in East-Central Nassau County, formerly
known as the Grumman-Aerospace-Bethpage Facility Site (“the Site”)1, as well as
18 acres of land donated by Grumman to the Town of Oyster Bay and currently
known as Bethpage Community Park (the “Park”).2 The Site includes the Northrop
Grumman-Bethpage Facility, the Naval Weapons Industrial Reserve Plant Bethpage (“NWIRP”), and the Grumman Steel Lose Site. (See Compl. ¶¶ 1-66.)
According to the Complaint, “[o]ver its almost six decade existence, Grumman, an
airplane, weapons and satellite manufacturer with significant U.S. Department of
Defense contracts, generated, stored, and disposed of toxic contaminants and
manufacturing byproducts . . . at its facilities and at landfills . . . . These practices
resulted in extensive pollution at or emanating from Grumman Facilities identified
in [the] Complaint.” (Compl. ¶ 3.)
On October 14, 2016, Northrop filed a Notice of Removal, setting forth the
following bases for removal: (1) there exists complete diversity under 28 U.S.C. §
1332(a); (2) the Class Action Fairness Act (“CAFA”), 28 U.S.C. §§ 1332(d), 1453,
1

Grumman Corporation, f/k/a Grumman Aeronautical Engineering Inc., was
incorporated in New York in 1929. Grumman Corporation and its subsidiary
Grumman Aerospace Corporation (collectively “Grumman”) were headquartered in
Bethpage, New York. In 1994, Grumman was acquired by Northrop Corporation;
the two corporations merged in 1995 to become NG. (Compl. ¶¶ 2-3.)
2

Defendant NGCS “remains the current owner of the Grumman Access
Road, a closed private road in the vicinity of the Park associated with the former
Plant.” (See Compl. ¶ 66.)
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1711-15, confers original jurisdiction and (3) actions taken by Northrop Grumman
satisfy the federal-officer removal statute under 28 U.S.C. § 1442(a)(B). That same
day Northrop also filed its answer.
On November 4, 2016, Plaintiffs filed an amended complaint (“AC”). As
relevant to the current motion, the amended complaint added the Town of Oyster
Bay (“Town” or “Oyster Bay”) as a Defendant. With respect to the Town, the
amended complaint alleges that the Town is the current owner and operator of the
Park, within which is an area of approximately 3.75 acres which formerly contained
“Grumman Settling Ponds” which was used to dispose of various wastes generated
by industrial operations at the Site resulting in the releases of PCBs into the
surrounding soil. (AC ¶¶ 59-62.) Pursuant to a March 18, 2005 Administrative
Consent Order with the New York State Department of Environmental
Conservation (“NYDEC”), the Town was “required and obligated to develop and
implement a remedial program to undertake a clean-up of Park property because of
the presence of hazardous waste and contamination” at the Park. (AC ¶ 64.) In
July 2005 the Town entered into an order for an interim remedial measure to
investigate and remediate 7 acres of the Park. Thereafter the Town “was formally
identified as a potential responsible party (PRP) and has been responsible for
continued contamination emanating from the Park . . . .” (AC ¶ 65.) It is alleged
that despite the foregoing orders, the groundwater from the Park has continued to
migrate resulting in volatile organic compounds (“VOCS”) seeping into the
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groundwater and have moved into the soil vapor of Plaintiffs, affecting the indoor
air quality. (AC ¶ 66.)
The allegations in the amended complaint against Northrop are essentially
unchanged from those in the complaint.
After the filing of the amended complaint, Plaintiffs filed the instant motion
to remand, arguing that (1) removal is not appropriate because the adverse parties
are not completely diverse; (2) the Home State and Local Controversy exceptions to
CAFA mandate that this Court abstain from exercising jurisdiction; and (3)
Northrop does not satisfy the requirements of the Federal Officer Removal Statute.
Both Northrop and the Town oppose the motion. Because, as discussed below, the
Court finds jurisdiction exists under CAFA, it need not address the other bases
asserted for jurisdiction.
DISCUSSION
I.

Governing Standard
Federal courts are courts of limited jurisdiction, and “removal jurisdiction

exists in a given case only when that jurisdiction is expressly conferred on the
courts by Congress.” Bedminster Fin. Grp., Ltd. v. Umami Sustainable Seafood,
Inc., 2013 WL 1234958, at *2 (S.D.N.Y. Mar. 26, 2013) (quoting Fed. Ins. Co. v. Tyco
Int'l Ltd., 422 F. Supp. 2d 357, 367 (S.D.N.Y. 2006)). Under 28 U.S.C. § 1441,
removal is permitted for any civil action, commenced in a state court, over which a
federal court has original jurisdiction. 28 U.S.C. § 1441(a); Bounds v. Pine Belt
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Mental Health Care Res., 593 F.3d 209, 215 (2d Cir. 2010). Where, as here,
jurisdiction is asserted by a defendant in a removal petition, the defendant bears
the burden of establishing that removal is proper. See Cal. Pub. Emp. Ret. Sys. v.
WorldCom, Inc., 368 F.3d 86, 100 (2d Cir. 2004) (citations omitted).
In 2005, Congress enacted CAFA to “curb class action abuses stemming
largely from state and local courts ‘keeping cases of national importance out of
Federal court,’ often demonstrating bias against out-of-state defendants, and
‘making judgments that impose their view of the law on other States and bind the
rights of the residents of those States.’” Mattera v. Clear Channel Commc’ns, Inc.,
239 F.R.D. 70, 77 (S.D.N.Y. 2006) (quoting Pub. L. No. 109-2 §2(a)(4), 119 Stat. 4).
Among other things, CAFA amended the federal diversity jurisdiction statute by
relaxing the complete diversity rule for otherwise eligible class actions. It also
contains certain exceptions to its application.
Under CAFA, as in general, “the party asserting federal jurisdiction [bears]
the burden of proving that the case [is] properly in federal court.” DiTolla v. Doral
Dental IPA of New York, 469 F.3d 271, 275 (2d Cir. 2006) (citation omitted). Once
CAFA jurisdiction is established, the burden of proof to establish an exception to
such jurisdiction rests with the party opposing the exercise of the Court's
established jurisdiction. See, e.g., Greenwich Fin. Servs. Distressed Mortgage Fund 3
LLC v. Countrywide Fin. Corp., 603 F.3d 23, 26 (2d Cir. 2010) (“[O]nce the general
requirements of CAFA jurisdiction are established, plaintiffs have the burden of
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demonstrating that remand is warranted on the basis of one of the enumerated
exceptions.”) (citations omitted).
II.

CAFA Jurisdiction
CAFA expanded federal diversity jurisdiction over state-law class claims, see

Weisblum v. Prophase Labs, Inc., 88 F. Supp.3d 283, 294 (S.D.N.Y. 2015). It
“confer[s] federal jurisdiction over any class action involving: (1) 100 or more class
members, (2) an aggregate amount in controversy of at least $5,000,000, exclusive
of interest and costs, and (3) minimal diversity, i.e., where at least one plaintiff and
one defendant are citizens of different states.” Cutrone v. Mortgage Elec.
Registration Sys., Inc., 749 F.3d 137, 142 (2d Cir. 2014).
CAFA also provides for a certain mandatory exceptions to jurisdiction. One
such exception is for matters that are “local controversies.” See 28 U.S.C. §
1332(d)(4)(A). This exception is “designed to draw a delicate balance between
making a federal forum available to genuinely national litigation and allowing the
state courts to retain cases when the controversy is strongly linked to that state.”
Brook v. UnitedHealth Grp., Inc., 2007 WL 2827808, at *3 (S.D.N.Y. Sept. 27, 2007)
(citation omitted). In other words, this exception is “intended to keep purely local
matters and issues of particular state concern in the state courts.” Id. (citation
omitted). It provides that a district court shall decline to exercise jurisdiction over a
class action in which these conditions are met: (1) “greater than two-thirds of the
members of all proposed plaintiff classes in the aggregate are citizens of the State in
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which the action was originally filed;” (2) at least 1 defendant is a defendant (a)
“from whom significant relief is sought by members of the plaintiff class”; (b) “whose
alleged conduct forms a significant basis for the claims asserted by the proposed
plaintiff class”; and (c) “who is a citizen of the State in which the action was
originally filed;” (3) “principal injuries resulting from the alleged conduct or any
related conduct of each defendant were incurred in the State in which the action
was originally filed; and (4) “during the 3–year period preceding the filing of that
class action, no other class action has been filed asserting the same or similar
factual allegations against any of the defendants on behalf of the same or other
persons.” 28 U.S.C. § 1332(d)(4)(A).
A.

The Parties’ Contentions

Plaintiffs maintain that the local controversy exception3 is applicable and
therefore under CAFA remand is required. Defendants’ response is threefold: first,
CAFA jurisdiction is determined at the time the original complaint is filed; second,
Plaintiffs cannot circumvent CAFA by belatedly relying on the local-controversy
exception; and finally, the Town is not a “significant” defendant for purposes of the
local controversy exception.

3

As Northrop aptly states, “Plaintiffs’ [remand] motion refers in passing to
the ‘home state exception’ . . . but does not explain how it could apply here. It
clearly does not apply, because that exception requires that all ‘primary defendants’
be citizens of the state where the action was originally filed, 28 U.S.C. §
1332(d)(4)(B), and Northrop . . . [is] not [a] citizen[] of New York.” (Northrop Opp.
Mem. at 7.)
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B.

Absent Application of the Local Controversy
Exception Jurisdiction Exists Under CAFA

Preliminarily, the Court notes that there appears to be no dispute that the
requirements of 28 U.S.C. § 1332(d)(2) are met whether viewed against the
complaint or the amended complaint. Indeed, both the complaint and the amended
complaint allege that while the exact number of class members is unknown, “the
amount of affected property owner residents in Bethpage . . . has reached the
thousands.” (Compl. ¶ 109; AC ¶ 213.) Further, damages are sought in an amount of
not less than one hundred million ($100,000,000.00) dollars for each asserted cause
of action. (Compl. at p. 55-57 (“Wherefore Clause); AC at p. 55-56 (“Wherefore
Clause”).) Finally, minimal diversity exists in that at least one of the plaintiffs is a
citizen of New York and NG and NGSC are not citizens of New York. (See, e.g.,
Notice of Removal ¶¶ 30-31.) Thus, removal was proper and federal jurisdiction
exists under CAFA absent an exception.
However, as discussed in the next section, CAFA jurisdiction is determined at
the time of the filing of the original complaint and plaintiff cannot circumvent
CAFA by amending its complaint to add the Town.
C.

The Amendment of the Complaint Did Not
Destroy CAFA Jurisdiction

“[W]hen a plaintiff files a complaint in federal court and then voluntarily
amends the complaint, courts look to the amended complaint to determine
jurisdiction.” Rockwell Int’l Corp. v. United States, 549 U.S. 457, 473, 74 (2007).
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However, removal cases are treated differently. “[W]hen a defendant removes a case
to federal court based on the presence of a federal claim, an amendment eliminating
the original basis for federal jurisdiction generally does not defeat jurisdiction.” Id.
at 474 n.6. Nor is a court deprived of jurisdiction in a case removed on the basis of
diversity when an amended complaint is thereafter filed that reduces the amount in
controversy below the statutory threshold. In Touch Concepts, Inc. v. Cellco
Partnership, 788 F.3d 98, 101 (2015) (citing St. Paul Mercury Indem. Co. v. Red.
Cab Co., 303 U.S.283, 292 (1938)). This difference in treatment arises because
“removal cases raise forum-manipulation concerns that simply do not exist when it
is the plaintiff who chooses a federal forum and then pleads away jurisdiction
through amendment.” Rockwell, 549 U.S. at 474 n.6.
Citing the foregoing precepts, the Second Circuit has held that amending a
complaint after removal to eliminate class allegations does not deprive a court of
jurisdiction under CAFA:
Since a post removal-amendment does not defeat
federal jurisdiction premised on federal question or on
diversity, we cannot see why it would defeat federal
jurisdiction under CAFA. See Blockbuster [Inc. v.
Galenao], 472 F.3d [53,] 56 [(2d Cir. 2006)] (“Congress
enacted CAFA with the purpose of , inter alia, expanding
the availability of diversity jurisdiction for class action
lawsuits.) And CAFA is found in the section of the U.S.
Code that describes diversity jurisdiction.
In Touch, 788 F.3d 101-02. Indeed, the vast majority of courts who have addressed
the issue have held that if removal was proper, post-removal amendments do not
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destroy subject matter jurisdiction under CAFA. See, e.g., Broadway Grill, Inc. v.
Visa Inc., 856 F.3d 1274, 1279 (9th Cir. 2017) (“citizenship of the class for purposes
of minimal diversity is determined as of the operative complaint at the time of
removal” and therefore remand denied where plaintiff amended complaint after
removal to change class definition so as to destroy diversity); Cedar Lodge
Plantation, L.L.C. v. CSHV Fairway View I, L.L.C., (“time of removal rule prevents
post-removal actions from destroying jurisdiction that attached in a federal court
under CAFA”); Louisiana v. Amer. Nat. Prop. Cas. Co., 746 F.3d 633, 639 F.3d (5th
Cir. 2014) (“Every circuit that has addressed the question has held that postremoval amendments do not oust CAFA jurisdiction.”); In re Burlington N. Santa Fe
Ry. Co., 606 F.3d 379, 380-81 (7th Cir. 2010) (“[J]urisdiction under CAFA is secure
even though, after removal, the plaintiffs amended their complaint to eliminate
class allegations. . . [as] allowing plaintiffs to amend away CAFA jurisdiction after
removal would present a significant risk of forum manipulation.”); cf. F5 Capital v.
Pappas, 856 F.3d 61, 77 (2d Cir 2017) (“[B]ecause jurisdictional facts are assessed
at the time of removal and because at the time the complaint here appeared to
plead in good faith the class claim necessary for jurisdiction, the fact that the
[district] court subsequently determined that the case could not proceed as a class
action under CAFA did not deprive it of subject matter jurisdiction.”); Thatcher v.
Hanover Ins. Group, Inc., 659 F.3d 1212, 1215 (8th Cir. 2001) (district court abused
discretion in granting plaintiff’s motion to voluntarily dismiss putative class action
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without considering whether the motion was improper forum-shopping; district
court could have concluded it was such an attempt as plaintiff”s expressed intent
was to amend his complaint in order to avoid federal jurisdiction).
The rule that an amendment of a complaint post-removal does not affect
CAFA jurisdiction has been applied to amendments that could affect an exception to
CAFA jurisdiction. In Cedar Lodge Plantation, supra, a proposed class action was
removed from Louisiana state court to federal court under CAFA. Thereafter, the
plaintiffs amended their complaint to add a Louisiana defendant, purportedly a
“significant local defendant,” and moved to remand. Reversing the district court’s
remand order, the Fifth Circuit rejected the argument that CAFA’s local
controversy exception which requires a court to decline jurisdiction “must occur
whenever, during the litigation and assuming no purposeful forum manipulation,
the class action falls within the parameters laid out by the exception,” 768 F.3d at
428. The court reasoned:
Under [CAFA], the local controversy exception applies to
the district court’s jurisdiction “over a class action.” The
term “class action” has the same definition here as it does
in the portion of the statute that sets the initial
requirements for federal jurisdiction over class action. In
both cases, “class action” refers to the “civil action filed.”
Thus when Congress provided that the district courts are
to decline to entertain jurisdiction over “class actions,” it
meant that the courts are to look at the action when it is
filed in order to determine whether the conditions for
abstention are present.

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Id. (internal citations to CAFA omitted)(emphasis in original).4 See generally
Hargett v. RevClaims, LLC, 854 F.3d 962, 967 (8th Cir. 2017) (“[T]he concept of
redefining a class to trigger the local-controversy exception seems to violate §
1332(d)(7), which says that for purposes of the local controversy exception, class
citizenship must be determined as of the date of the pleading giving federal
exception); Doyle v. One West Bank, FSB, 764 F.3d 1097, 1098 (9th Cir. 2014)
(District Court erred in determining citizenship of plaintiff class by considering
class as pleaded in amended complaint filed after removal. “For purposes of
considering the applicability of the exceptions to CAFA jurisdiction, the District
Court should have determined the citizenship of the proposed plaintiff class based
on [the complaint in effect] as of the date the case became removable.”).
Plaintiffs reliance on Benko v. Quality Loan Serv. Corp., 789 F.3d 111 (9th
Cir. 2015), is misplaced. In Benko, the court held that “[w]here a defendant removes
a case to federal court under CAFA, and the plaintiffs amend the complaint to
explain the nature of the action for purposes of our jurisdictional analysis, we may
consider the amended complaint to determine whether remand to the state court is
appropriate.” Benko is limited to consideration of an amendment which “explain[s]
the nature of the action,” a circumstance absent here. The limited nature of Benko’s
holding was recently reinforced by the Ninth Circuit:

4

The Court notes that in F5 Capital, the Second Circuit cited Cedar Lodge
Plantation with approval. See 856 F.3d at 76.
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Benko allowed amendments for purposes of clarifying the
relationship between the parties and the effect of the class
claims on particular defendants. This was permitted in
Benko so that the district court could decide whether
remand to state court was appropriate under the local
controversy exception. Benko did not, however, strike a
new path to permit plaintiffs to amend their class
definition, add or remove defendants, or add or remove
claims in such a way that would alter the essential
jurisdictional analysis. Recognizing such a path in this
circuit would conflict with statutory language and the
decisions of the other circuits.
Broadway Grill, Inc. v. VISA Inc., 856 F.3d 1274, 1279 (9th Cir. 2017) (emphasis
added).
Finally, precluding an amended complaint filed after removal from triggering
one of CAFA’s mandatory exceptions to jurisdiction is particularly appropriate in
this case. As enunciated in the amended complaint, the basis for the claim against
the Town is (1) its ownership and operation of the Park, which contains the “Former
Grumman Settling Ponds” and (2) the NYDEC orders requiring the Town to
remediate the Park, despite which VOCs have seeped into the groundwater. (AC ¶¶
59-66.) However, the Park was identified in the original complaint as (1) having
been donated to the Town in 1962 and (2) containing the “Former Grumman
Setting Ponds” which from 1949 to 1962 were used “to dispose of various wastes
generated by industrial operations at the Site, including chromium, PCBs and
VOCs . . . result[ing] in the release of PCBs into the surrounding soil within the
Park.” (Compl. ¶¶ 62-66.) Against this backdrop, the amendment of the complaint,
after removal of this action, to add the Town as a defendant gives rise to a strong
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suggestion of forum shopping. In other words, it appears that the sole reason for
adding the Town was to assert the local controversy exception.5
III.

Relatedness/Consolidation
One last matter needs to be briefly addressed. In their memorandum,

plaintiffs request, as an alternative to remand, that this matter be reassigned to
Judge Bianco as related to Town of Hempstead v. United States of America, 16-CV3652 (JFB)(SIL). (Pls.’s Mem. at 19-20.) The Town takes the position that this case
and a case pending before Judge Azrack, Town of Oyster Bay v. Northrop Grumman
Corp., 05-CV-1945(JMA)(AKT) are related and should be consolidated. (Town Opp.
Mem. at 4-5.) As the procedure for requesting that cases be related has not been
complied with, see Local Rule 50.3.1(d), such relief is inappropriate at this juncture.
CONCLUSION
Plaintiffs’ motion to remand is denied.
SO ORDERED.
Dated: Central Islip, New York
December 15, 2017

s/ Denis R. Hurley
Denis R. Hurley
United States District Judge

5

The Court also notes that, the according to the amended complaint, two of
specified NYDEC orders regarding the Town and the Park occurred in 2005, more
than a decade before this action was filed.
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