Nguyen et al v. American Express Company et al

Filing 19

OPINION: re: 4 MOTION to Remand to State Court New York Supreme, New York County. filed by Pierre-Jean Nguyen, SCCSS, LP, Huracan Capital, LLC. The Plaintiffs' motion to remand the case to State Court is granted in light of AmEx's failure to timely file the Notice of Removal pursuant to 28 U.S.C. § 1446 and to obtain consent from all defendants party to the action, as required by § 1446(b)(2)(A). (Signed by Judge Robert W. Sweet on 10/13/2017) (js)

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

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PIE RRE -JEAN NGUYEN, HURACAN CAP I TAL , LLC,
and SCCSS , LP
Plaintiffs,

I

1 7 Civ. 4153
OPINI ON

-againstAMERICAN EXPRESS COMPANY ,
AMERICAN EXPRESS CENT UR I ON BANK,
STUDIO OTTO NYC , INC., and PASQUALE
DE ST EFANO ,
Defendants.

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A P P E A RA N C E S :

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Attorneys for Plaintiffs
ROBINSON McDONALD & CANNA LLP
61 Broadway, Suite 1415
New York, NY 10006
By:
Brett G. Canna , Esq.
Attorneys for Defendants
STROOCK & STROOCK & LAVAN LLP
180 Maiden Lane
New York, NY 10038
By:
Raymond A. Garcia, Esq.

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ELECI'RONICALLY FILED\

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DOC#:

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DATE FILED: 161

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Sweet , D . J .

Plaintiffs Pierre - Jean Nguyen ("Nguyen"), Huracan
Capital, LLC ("Huracan" ) , and SCCS , LP ("SCCS")

(co llectively

the "Plaintiffs" ) have moved pursuant to 28 U. S . C. § 1447(c) to
remand this action against American Express Company and American
Express Centurion Bank (collectively "AmEx" or the "Defendants")
to the Supreme Court of the State of New York , New York County
(the "State Court"). Plaintiffs also seek an award for costs ,
expenses , and attorneys '

fees incurred because of removal . Based

on the facts and conclusions set forth below, the motion of the
Plaintiff is granted, and the acti on is remanded to the State
Court . The Plaintiffs' motion f o r costs , expenses , and
attorneys '

I.

fees is denied .

Prior Proceedings

Plaintiff initiated this action by

~ iling

a Summons

and Verified Complaint with the State Court on April 14 , 2017 ,
bringing claims against Studio Otto NYC , Inc. and Pasquale De
Stefano (the "Other Defendants " ) and AmEx invo lving a series of
transactions f o r the sale of luxury leather goods t o taling
$785 , 000.

1

On April 21, 2017, after filing the Summons and
Verified Complaint with the State Court , Plaintiffs' counsel
forwarded by email a copy of the Summons and Verified Complaint
to AmEx's in-house counsel . See Pls .' Br. Ex. 2 . The email
provided in relevant part:
. I have attached a copy of the Summons and
Complaint that were filed in connection with Mr.
Nguyen's claims . Please l et me know if you will accept
service on behalf of the AmEx Defendants. I will not
take any further action on the matter, including
service of process , until I hear back from you .
Id.,

at 1 . Plaintiffs ' counsel did not receive a reply

to this email . On April 26 , 20 1 7 , Plaintiffs' counsel sent a
follow-up email to AmEx's in-house counsel , stating in relevant
part :
I am following up on my last emai l regarding accepting
service of process .
. Please let me know if you
will accept service of process on behalf of the AmEx
defendants by the end of the week . If I do not hear
from you , I will being [sic] the process of serving
the documents on all defendants next week .
Id. Ex . 3 , at 1. W hin one hour , AmEx's in - house
it

counsel replied with the following:
I am authorized to accept service on behalf of
American Express pursuant to a 60 day waiver of
service . Please let me know if you are amenable to the
waiver of service and I will have it signed when I
return to the office tomorrow.
Id . Ex. 4, at 1. Plaintiff's counsel responded to this

email within one hour , providing:

2

You can send me a copy of the form of waiver tomorrow
when you get back for me to look at. But, this is in
NY State Court , so we may want to do a stipulation . I
assume you are asking for 60 days to respond to the
Complaint (wh i ch I do not see as a problem) . We can
discuss further when you are back in the off ice
tomorrow .

Id. A f ormal stipulation (the "Stipu lation" )

memorializing the agreement concerning acceptance of service and
AmEx's two-month time period to respond to the Verified
Complaint was electronically filed by counsel for AmEx in State
Court on May 3 , 2017 . Id. Ex. 5. The Stipulation provides that
AmEx "her eby accept service of the Summons and Verified
Complaint in [this case ] and waive any defense based upon
service of process." Id. The Stipulation also provides that
"Defendants[ ']

time to respond with respect to the Summons

and Verified Complaint has been extended up to and including
June 27 , 2017." Id.

On June 2 , 2017 , AmEx filed a Notice of Removal

(the

"Notice of Removal") pursuant to 28 U.S.C. §§ 1331, 1441, and
1446 and the action was removed to this Court. See Notice of
Removal, ECF No. 1.

The instant motion to remand was heard and marked
fully submitted on December June 30 , 2017 .

3

II.

The Motion to Remand is Granted

The Plaintiffs' motion to remand the case to State
Court is granted in light of AmEx's failure to timely file the
Notice of Removal pursuant to 28 U.S.C .

§

1446 and to obtain

consent from all defendants party to the action, as required by
§

1446(b)(2)(A) .

a. AmEx Failed to Timely File the Notioe of Removal

The parties dispute whether AmEx filed its notice of
removal in a timely fashion. Under 28 U. S . C .

~

1446(b) (1) , a

"notice of removal of a civil action or proceeding shall be
filed within 30 days after the receipt by the defendant , through
service or otherwise , of a copy of the initial pleading setting
forth the claim for relief upon which such action or proceeding
is based ." The defendants shoulder the burden of establishing
whether removal was proper, see Hodges v. Demchuk , 866 F. Supp .
730, 732

(S . D. N.Y . 1994); see also R . G. Barry Corp . v. Mushroom

Makers , Inc . , 612 F . 2d 651 , 655 (2d Cir . 1979)

("the burden

falls squarely upon the removing party to establish its right to
a federal forum by competent proof") , and the 30 - day deadline to
4

file removal is "rigorously" enforced. See Somlyo v. J. Lu - Rob

Enters . , Inc ., 932 F.2d 1043 , 1046 (2d Cir . 1991). A defendant ' s
failure to file within this 30 day period requires remand back
to state court . See Brooklyn Hosp . Center v. Diversified Info .

Techs ., 133 F . Supp . 2d 197 , 200 (E . D. N. Y. 2001) . As a genera l
matter , district courts must "construe t he removal statute
narrowly , resolving any doubts against removability . " Lupo v .

Human Affairs Int ' l Inc ., 28 F . 3d 269 , 274

(2d Cir . 1994).

ArnEx filed its Notice of Removal on uune 2 , 2017 , less
than thirty days following the entrance of the Stipulation on
May 3 , 2017 , but more than thirty days after the parties engaged
in email correspondence on Apr il 26 , 2017 . The Pla i ntiffs
contend that the Apr i l 26 , 2017 email agreement between counsels
was a valid stipulation in which ArnEx acknowledged and accepted
the April 26 , 2017 serv i ce of the Summons and Verified
Complaint . Pls. '

Reply Br. 3 . Plaintiffs further argue that ArnEx

accepted service on April 26 , 2017 " as no later service was made
or attempted on ArnEx ." Id . ArnEx argues that the April 26, 2017
email communications did not constitute a final binding
agreement because the part i es had no intention of being bound
pr i or to the execution of t h e St i pulation on May 3 , 2017 . Defs .'
Br . 4 - 6 . Interestingly , ArnEx apparently asserts that the
Stipulation was effective as of April 26 , 2017 with regard to
5

their requested 60 day waiver of service (as evidenced by the
language that "Defendants[']

. time to respond with respect

to the Summons and Verified Complaint has been extended up to
and including June 27, 2017," Pls.' Br. Ex. 5 ) , but as of May 3,
2017 with regard to the date of service at issue here.

Accordingly, in this case, the parties disagree as to
I

whether a binding contract was formed by the April 26, 2017
emails between counsels for Plaintiffs and AmEx. This Court
therefore must determine, under New York law, whether a contract
was formed by way of the April 26, 2017 email exchange, and if
so, whether that contract is enforceable.

Under New York law, courts distinguish "between a
'preliminary agreement contingent on and not intended to be
binding absent formal documentation,' which is not enforceable,
and a

'binding agreement that is nevertheless to be further

documented,' which is enforceable with or with o ut the formal
documentation." Kowalchuk v. Stroup,
Dep' t 2009)

61 A.D.3d 118, 123 (1st

(quoting Hostcentric Tech., Inc. v. Republic

Thunderbolt, LLC, 2005 WL 1377853, at *5

(S.D.N.Y. 2005)). "The

former is established by a showing that a party made an explicit
reservation that there would be no contract un J il the full
formal document is completed and executed." Id. However, "the
6

mere fact that the parties intended to draft

f~rmal

[] papers is

not alone enough to imply an intent not to be mound except by a

fully executed document." Id.
Trolman v.

(emphasis in

ori~inal);

see also

Trolman, Glaser & Lichtman, P.C., 114 A.D.3d 617,

(1st Dep't. 2014)
simply because
execute formal

618

(An "agreement [is] not rendered ineffective
. it stated that the parties would promptly

[] papers.")

(internal citations omitted).

Here, neither party made any reserva t ion in the email
communication that there would be no agreement until the
Stipulation was formalized.

Indeed, in response to AmEx

counsel's email that she is "authorized to accept service on
behalf of American Express pursuant to a 60 day waiver of
service," Plaintiffs' counsel responded "I ass r me you are asking
for 60 days to respond to the Complaint

(which I do not see as a

problem)." See Pls.' Br. Ex. 4. Absent any language suggesting
that the agreement was contingent on other factors,

the April

26, 2017 email communications demonstrate a binding agreement,
effective as of that date.

Moreover, the language of the Stipulation itself
strongly suggests that AmEx accepted service on April 26, 2017.
Regarding the 60 day waiver of service raised by AmEx's counsel,
the Stipulation provides that AmEx's "time to :rrespond with
7

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respect to the Summons and Verified Complaint

las

been extended

up to and including June 27, 2017." See Pls.' Br. Ex. 5.
Curiously, this date is 60 days from April 26, 2017 - not from
May 3, 2017. AmEx appears to want to have its

~ ake

and eat it

too by suggesting that the dates of acceptance of service and
waiver of service are different, even though b ©th ar o se from the
same email communications.

Thus, in light of this Court's duty to "resolv[e] any
doubts against removability," see Lupo, 28 F.3 i at 274, and
because AmEx did not timely file its notice of removal, this
case is remanded to State Court.

b. AmEx Failed to Obtain Written Consent From All
Defendants for Proper Removal

Additionally, the Plaintiffs' assert that this action
must be remanded due to AmEx's failure to obta l n written consent
for removal from the Other Defendants pursuant to Section
1446 (b) (2) (A)

(the "Unanimity Rule" or the "Rule"). The

Unanimity Rule provides that "when a civil act l on is removed
solely under section 144l(a), all defendants wJ o have been
properly joined and served must join in or con , ent to the
removal of the action." See 28 U.S.C.
8

§

1446(b) (2) (A); see also

Wright & Miller, 14B Fed . Prac . & Proc. Juris. 3d § 3723
cardinal rule is that

. all defendants mus t

("[A]

join in the

notice of removal ." ) . Moreover , a defendant ca f not cure such a
defect by belatedly submitting written consent from co defendants as "the time for consent has l ong passed."
Metropolitan Transp . Authority v . U. S . Fidelity & Guar . Co ., No.
14 Civ. 9059 (PAE), 2015 WL 17300 67 , at *5

(S . D. N.Y. 20 15).

Indeed, "[ c ] ourts have very little discretion -

if any -

to

forgive a failure to comp ly with the rule of unanimity ." Bank of
Am . v . Angona, No . 14 - CV - 1643 (JG) , 20 14 WL 1515559 , at *3
(E . D. N.Y . 2014) .

The Plaintiffs argue that AmEx's fai l ure to obtain
consent from the Other Defendants violates the Unanimity Rule
and requires this Court to remand the case . AmEx contends that
this action is excepted from the Unanimity Rule. Specifically,
AmEx argues that§ 1441(c) creates a carve - out to the Rule by
providing that a defendant need not seek consent to remove where
the action consists of a claim supported by this Court's
original jurisdiction and a state law claim not supported by
supplemental jurisdiction . See id. § 1441(c) (2). AmEx contends
that this Court does not have supplemental jurisdiction ove r the
Plaintiffs' state law claims against the co-defendants, so AmEx

9

was not required to obta i n consent from the co-defendants prior
t o removal .

The parties do not dispute that ArnEx did not obtain
consent from the co - defendants prior to filing for removal.
Thus, whether the law requires this case be remanded turns on
whether there is supplemental jurisdiction over the s tate law
claims. See Caro v . Bank of Am ., N . A ., No . 5 :1 4CV38 , 2014 WL
2818672 , at *3 (N.D . W. Va. June 23 , 2014)

(finding that the

Unanimity Rule continues to hold full force where a state law
claim comes within the court ' s supplemental
also Brooks v . Fogli o , No. 13-2504

*5 ,

(D . N. J . July 2 , 2013)

ju~isdiction);

see

(JEI/JS) , 2 b13 WL 3354430 , at

(holding that when the court has

supp l emental jurisdiction over an action "the exception to the
unanimity rule provided in§ 1441(c) does not apply").

A district court has "supplemental jurisdiction over
all c laims that are so related to claims in the action within
[the court ' s] original jurisdiction that they form part of the
same case or controversy .

." 28 U. S . C. § 1367(a). Federal-law

and state-law claims form part of the same case or controversy
where they "'derive from a common nucleus of operative fact ' and
are 'such that [a plaint if f] wou l d ordinarily r e expected to try
them all in one judicial proceeding .'" Carnegie-Mellon Univ . v .
10

Cohill , 484 U. S . 343 , 349 (1988)
Gibbs , 383 U.S. 715 , 725

(1966)

(quoting United Mine Workers v .
(alteration in original)). "This

is so even if the state law c l aim is asserted k gainst a party
different from the one named in the federal claim ." Briarpatch
Ltd ., L . P. v . Phoenix Pictures , Inc ., 373 F . 3d 296 , 308

(2d Cir .

2004) .

Here, the underlying action involves a series of
transactions for the sa l e of goods totaling $785 , 000 . The
Plaintiffs attempted to purchase certain luxury l eather goods
from the Other Defendants us i ng charge cards issued by AmEx .
Once the Plaintiffs did not receive the order J d goods from the
Ot her Defendants , they reported this to AmEx to dispute the
charges . AmEx refused to reverse the disputed charges on the
Plaintiffs ' charge card accounts and in stituted co llecti on
efforts against the Plaintiffs . In light of this , th e Plaint i ffs
brought a federal c l aim aga i nst AmEx for vio l at i on of th e Fair
Credit Billing Act , as wel l as state law claims for breach of
contra ct and violation of New York General Business Law

§

349

against AmEx and breach of contract and fraud claims against the
Other Defendants .

These facts establish that the f ede t al and state
I

claims arise out of the same common nucleus of operative fact 11

--- - - - - - - - - - - - -

the series of underlying transactions. The Plaintiffs'
individual claims against each defendant are b©und to share
I

over lapping facts.

Indeed, if it is determined that the contract

between the Plaintiffs and the Othe r

Defendant ~

was fulfilled

and the goods were delivered, then all c laims t ay be resolved on
this determination. Further, it is reasonable that the
Plaintiffs brought this single action against A.mEx and the Other
Defendants in the name of judicial economy as

l11

the claims

depart fr om the same factual scenario.

Thus, because this Court has original question
jurisdict i on over the Plaintiffs' federal law l laims and
supplemental jurisdiction over all of the

Plai~tiff's

c l a ims, the exception to the Unanimity Rule

dols not

state law
apply. See

I

Bank of Am., 2014 WL 2818672 , at *4. According l y, because AmEx

did not obtain consent from the co -defendants to remove this
action to f ederal cou rt, the case is remanded J o State Court.
I
I

III.

The Plaintiffs' Request for Attorneys'

is Denied

The Plaintiffs seek an award of costs and attorneys'
f ees in curred as a result o f AmEx's improper r J moval of this
action . Under 28 U.S.C.

§

1447(c), a district l ou rt remanding an

action to state court "may iequire payment of just costs and any
12

actual expenses , including attorney fees , i ncurred as a resu l t
of the removal ." 28 U. S . C. § 1447(c) . " Absent unusual
I

circumstances , courts may award attorney ' s fees under§ 1447(c)
only where the removing party lacks an ob j ective l y reasonab l e
basis for seeking removal ." Martin v . Franklin Capital Corp .,
546 U.S . 132 , 141 (2005) . " A basis for removal is ' objective l y
reasonable '

i f the remov in g party had a co l orarole argument that

remova l was proper. " In re Standard & Poor ' s Rating Agency
Litig ., 23 F . Supp . 3d 378 , 407

(S . D. N.Y . 2014 ) . "I n practice ,

if lack of jurisdiction was not obvious f r om the face of the
removal petition and no other unusua l circumstances obtain , a
court ca n not conclude t h a t an objective l y reas l nable basis was
lacking . " Little Rest Twelve , Inc . v. Visan , 829 F . Supp . 2d
242 , 245 (S . D. N.Y . 201 1 )

(citation omitted) .

Although AmEx fa il ed to time l y f il e its not i ce of
removal within the 30 day deadline , it was not objectively
unreasonable for AmEx to believe that the c l ock for filing the
Notice of Removal began to run as of the da t e of the forma l
Stipulation . Moreover , it was not objective l y t nreasonab l e for
AmEx to in fer that t he c l aims against t he Ot h er Defendants were
not supported by supplemental jurisdiction . Accordingly , AmEx
did not lack an "objective l y reasonable " basis for seeking
removal , so an award of costs and attorneys '
13

fees to the

t

'

Plaintiffs' is not appropriate. See Kuperstein v . Hoffman-

Laroche, Inc ., 457 F. Supp . 2d 467 , 472 (S . D.N j Y. 2006)

("The

mere fact that the defendant fails to carry hi$ burden does not
of itself require an award of costs to the pla l ntiff ." ) .

IV.

Conclusion

The Plaintiffs ' motion is granted an! the action is
remanded to the State Court .

It is so ordered.

New York, NY
October /j , 2017

I

ROBERT W. 1WEET
U.S . D .J.

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