Cameron et al v. Tonawanda Coke Corporation et al
Filing
28
DECISION AND ORDER GRANTING Plaintiffs' 10 Motion to Remand; DENYING Plaintiffs' 12 request for attorneys fees; DIRECTING the Clerk of the Court to transfer this case to the New York State Supreme Court, County of Erie; DIRECTING the Cl erk of the Court to close this case upon transfer to the New York State Supreme Court, County of Erie; DENYING without prejudice Defendants Crane and Kamholz's 3 Motion to Dismiss; DENYING without prejudice Defendant Tonawanda Coke's 4 Motion to Dismiss. Signed by William M. Skretny, Chief Judge U.S.D.C. on 8/25/2011. (MEAL) (Attachments: # 1 DeLuca Decision and Order)
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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
FRANK DELUCA and MARY DELUCA, Individually
and as Class Representative Plaintiffs; MORGAN
GREENE, Individually and as Class Representative
Plaintiff; COLLEEN BRIGANTE, Individually and
as Class Representative Plaintiff,
Plaintiffs,
v.
DECISION AND ORDER
10-CV-859S
TONAWANDA COKE CORPORATION; JAMES
DONALD CRANE; MARK KAMHOLZ; ABC
CORPORATIONS 1 through 20 (Fictitious Defendants);
DEF CORPORATIONS 1 through 20 (Fictitious
Defendants); JOHN DOES 1 through 20 (Fictitious
Defendants),
Defendants.
I. INTRODUCTION
Plaintiffs are representative members of a putative class consisting of residents of
Tonawanda, New York. (Notice of Removal (Docket No. 1), Ex. A (Class Action Complaint
(“Compl.”) ¶¶ 1-4).)
The named Defendants are Tonawanda Coke Corporation
(“Tonawanda Coke”), James Donald Crane, and Mark Kamholz. (Compl. ¶¶ 5-7).) This
case originally was filed in the New York State Supreme Court, County of Erie, but was
removed by Defendants to this Court. (Notice of Removal at 1.)
Pending before this Court is Plaintiffs’ Motion to Remand this action back to the
state court, along with a request for attorneys’ fees.1 (Docket No. 9.) Also pending is
1
In support of their m otion, Plaintiffs have filed the following: the affidavit of Charles H. Cobb, Esq.
(Docket No. 9) (“Cobb Aff.”); a copy of the Com plaint and supporting exhibits thereof (Docket No. 9, Ex. A
and attachm ents thereto); a copy of Defendants’ Notice of Rem oval and a proposed order rem anding the
case to the New York state court (Docket No. 9, Ex. B); a m em orandum of law (Docket No. 9) (“Pls.’
1
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Defendant Tonawanda Coke’s motion to dismiss several counts of the Complaint and to
strike several allegations within the Complaint (Docket No. 4)2, and a motion by Defendants
Crane and Kamholz to dismiss the Complaint for failure to state a claim under Federal Rule
of Civil Procedure 12(b)(6).3 (Docket No. 3.)
For the reasons that follow, this Court finds that it lacks subject matter jurisdiction
over this case. Accordingly, this Court will grant Plaintiffs’ motion to remand. This Court
declines to award attorneys’ fees to Plaintiffs.
Because this Court finds it lacks subject matter jurisdiction, it is not permitted to
address the merits of Defendants’ motions. Accordingly, those motions are denied without
prejudice.
II. BACKGROUND
A. Factual Background
In deciding either a motion to remand or a motion to dismiss under Federal Rule of
Civil Procedure 12(b)(6), a court must assume as true all factual allegations set forth in the
complaint. See Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002);
Rosenberg v. GWV Travel, Inc., 480 F.Supp. 95, 96 (S.D.N.Y. 1979).
Mem .); and a reply m em orandum (Docket No. 21). Defendants have filed a m em orandum in opposition to
Plaintiffs’ m otion (Docket No. 18 (“Defs.’ Mem .”)).
2
In support of its m otion, Defendant Tonawanda Coke has subm itted a m em orandum of law
(Docket No. 4); the declaration of Rick Kennedy (Docket No. 5. (“Kennedy Decl.”)), with an attached copy
of the Com plaint and an exhibit thereto (Docket No. 5, Ex. A); and a reply m em orandum (Docket No. 19).
Plaintiffs have filed a m em orandum in opposition to Tonawanda Coke’s m otion (Docket No. 11) and an
affidavit in opposition to the m otion (Docket No. 13).
3
In support of their m otion, Defendants Crane and Kam holz have subm itted a m em orandum of
law (Docket No. 3); the declaration of Rick Kennedy (Docket No. 5. (“Kennedy Decl.”)), with an attached
copy of the Com plaint and an exhibit thereto (Docket No. 5, Ex. A); and a reply m em orandum (Docket No.
20). Plaintiffs have filed a m em orandum in opposition to Crane and Kam holz’s m otion (Docket No. 15)
and an affidavit in opposition to the m otion (Docket No. 13).
2
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Plaintiffs are residents of Tonawanda, New York. (Compl. ¶¶ 1-3.) Defendant
Tonawanda Coke manufactures foundry coke and other products in Tonawanda. (Compl.
¶ 5.) Defendant Crane is the owner and CEO of Tonawanda Coke. (Compl. ¶ 6.)
Defendant Kamholz is or was the Environmental Control Manager for Tonawanda Coke.
(Compl. ¶ 7.)
The Tonawanda Coke facility has been in operation since 1917. (Compl. ¶ 12.) The
site has been owned by Defendant Crane since 1978.
(Compl. ¶ 16.) The facility
continues to operate as a merchant producer of foundry coke twenty-four hours per day,
seven days per week. (Compl. ¶ 17.)
In 2007, the New York State Department of Environmental Conservation
(“NYSDEC”) conducted a year-long air quality study in Tonawanda. (Compl. ¶ 34.) The
NYSDEC study involved installing air quality monitors at various locations throughout the
community to measure concentrations of various toxic pollutants. (Compl. ¶¶ 35-38.) A
report was issued by NYSDEC in October 2009. (Compl. ¶ 40.) The study found that the
concentrations of benzene and formaldehyde were higher in the study area than in other
areas of New York State. (Compl. ¶ 40.) In particular, the benzene concentrations in the
Town of Tonawanda were found to be up to 75 times higher than the levels recommended
by state guidelines. (Compl. ¶ 45.) Tonawanda Coke was the largest known point source
of benzene in the study area. (Compl. ¶ 42.)
In June and September 2009, the United States Environmental Protection Agency
(“EPA”) conducted two compliance inspections of Tonawanda Coke’s facility under the
Resource Conservation and Recovery Act of 1976, 42 U.S.C. §§ 6901 et seq. (“RCRA”).
(Compl. ¶ 21.) The inspections revealed Tonawanda Coke had recycled decanter tank tar
3
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sludge by using it as feedstock to produce its foundry coke. (Compl. ¶ 22.) Additionally,
the EPA found tar storage tank residue in and around the remains of two abandoned tar
storage tanks that had burned during a failed decommissioning attempt in 2007. (Compl.
¶ 23.) Analysis of the tar storage tank residue indicated the presence of hazardous waste
in and around the burnt tanks. (Compl. ¶ 24.)
Following the inspections, the EPA issued an Information Request Letter to
Tonawanda Coke under RCRA. (Compl. ¶ 28.) The EPA determined that Tonawanda
Coke’s practices had generated “solid waste” and “hazardous waste” and had created a
situation under which hazardous waste and other materials had entered the environment
and might continue to do so. (Compl. ¶¶ 31-32.)
On October 30, 2009, the EPA issued a letter to Tonawanda Coke, stating that the
data collected in the EPA’s inspection and in the NYSDEC study indicated that Tonawanda
Coke’s benzene emissions were causing or contributing to elevated benzene
concentrations in the local environment. (Compl. ¶ 46.)
On December 7, 2009, the EPA issued a Notice of Violation to Tonawanda Coke
for violations of the Clean Air Act, 42 U.S.C. §§ 7401 et seq. (Compl. ¶ 47.) On December
17, 2009, the EPA issued a Water Administrative Order to Tonawanda Coke citing
numerous violations. (Compl. ¶ 48.) Also in December 2009, the EPA issued a Complaint,
Compliance Order and Opportunity for a Hearing to Tonawanda Coke, alleging violations
of the Solid Waste Disposal Act4 in relation to its treatment of hazardous waste. (Compl.
¶ 49.)
4
The Solid W aste Disposal Act is a provision within RCRA. See Chicago v. Envtl. Defense Fund,
511 U.S. 328, 330, 114 S.Ct. 1588, 128 L.Ed.2d 302 (1994).
4
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In December 2009, federal investigators, acting under the direction of the United
States Attorney for the Western District of New York, raided Tonawanda Coke’s facility and
later arrested Defendant Kamholz. (Compl. ¶¶ 50-51.) Defendant Kamholz was charged
with numerous counts, including violations of the Comprehensive Environmental Response
Compensation and Liability Act, 42 U.S.C. §§ 9601-9675 (“CERCLA”), RCRA, and the
Clean Air Act.5 (Compl. ¶ 51.) In April 2010, the EPA issued another Notice of Violation
to Tonawanda Coke for additional violations of the Clean Air Act. (Compl. ¶ 52.)
B. Procedural Background
This case originally was filed on September 27, 2010, in the New York State
Supreme Court in Erie County. (Notice of Removal at 1-2.) The Complaint is styled as a
“Class Action Complaint,” and Plaintiffs purport to be representatives of a class of
approximately 38,875 people who reside in the NYSDEC study area and have been
damaged by Defendants’ conduct. (Compl. ¶ 63.) The named Plaintiffs – Frank and Mary
DeLuca, Morgan Greene, and Colleen Brigante – each claim to be representatives of a
subclass within the larger class. (See Compl. ¶¶ 60-61.) Specifically, Frank and Mary
DeLuca hold themselves out as representatives of a class whose property values have
suffered (Compl. ¶ 73); Morgan Greene holds herself out as the representative of a class
that has suffered loss of quality of life (Compl. ¶ 77); and Colleen Brigante holds herself
out as the representative of a class that has the potential to develop medical problems.
(Compl. ¶ 80.)
5
On July 29, 2010, the grand jury returned an indictm ent against Defendants Tonawanda Coke
and Kam holz. That case is currently pending in this Court. (United States v. Tonawanda Coke and
Kam holz, Case No. 1:10-cr-00219.) The indictm ent alleges violations of the Clean Air Act and RCRA,
along with obstruction of justice. (Indictm ent (Docket No. 10) at pp. 9-27.)
5
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The Complaint states ten causes of action: (1) negligence; (2) gross negligence; (3)
negligence per se; (4) strict liability; (5) absolute liability; (6) trespass; (7) nuisance; (8)
unjust enrichment; (9) battery; and (10) “punitive damages.” (Compl. ¶¶ 83-130.) Plaintiffs
seek “compensatory, exemplary, and punitive damages” from Defendants. (Compl. at pp.
26-28.)
On October 29, 2010, the named Defendants6 removed the case to this Court on
the basis that claims in the Complaint arise under federal law. (Notice of Removal at 2.)
Subsequently, Defendants filed motions to dismiss some or all of the claims against them.
(Docket Nos. 3, 4.)
Plaintiffs filed the pending motion to remand the case back to New York state court,
contending that this Court lacks subject matter jurisdiction and that the proper forum is
state court. (Docket No. 9.) Defendants respond that this Court possesses either original
or supplemental subject matter jurisdiction over the entire cause of action.
IV. DISCUSSION
A. Plaintiffs’ Motion to Remand
This Court first will address Plaintiffs’ motion to remand, as it concerns the threshold
question of whether this Court possesses subject matter jurisdiction over this case. Steel
Co. v. Citizens for a Better Environment, 523 U.S. 83, 94, 118 S.Ct. 1003, 140 L.Ed.2d 210
(1998).
6
The Com plaint also lists three subgroups of unknown or “fictitious” corporate and individual
defendants. (Com pl. ¶¶ 8-10.)
6
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1. Legal Standards
District courts have original jurisdiction over all civil actions arising under the
Constitution, treaties, or laws of the United States. 28 U.S.C. § 1331. A civil action
brought in state court may be removed by a defendant to a federal district court of original
jurisdiction. 28 U.S.C. § 1441.
Out of respect for states’ rights and in keeping with the limited jurisdiction of federal
courts, removal jurisdiction is “strictly construed,” with all doubts resolved against removal.
Syngenta Crop Prot., Inc. v. Henson, 537 U.S. 28, 32, 123 S.Ct. 366, 154 L.Ed.2d 368
(2002); In re Methyl Tertiary Butyl Ether (“MTBE”) Prods. Liability Litig., 488 F.3d 112, 124
(2d Cir. 2007). The removing party bears the burden of establishing proper jurisdiction.
United Food & Commercial Workers Union v. Centermark Properties Meriden Square,
Inc., 30 F.3d 298, 301 (2d Cir. 1994); Funeral Fin. Sys., Ltd. v. Solex Express, Inc., No. 01CV-6079(JG), 2002 WL 598530, at *3 (E.D.N.Y. Apr. 11, 2002) (noting that in the face of
a motion to remand, the burden falls on the defendant to prove the existence of jurisdiction
and that the case is properly in federal court).
2. “Arising Under” Jurisdiction
Plaintiffs contend that Defendants have failed to meet their burden of establishing
removal jurisdiction because the face of the Complaint does not state any cause “arising
under” federal law. (Pls.’ Mem. at 8.)
In general, a claim arises under federal law if “a well-pleaded complaint establishes
either that federal law creates the cause of action or that the plaintiff’s right to relief
necessarily depends on resolution of a substantial question of federal law.” Franchise Tax
7
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Bd. of California v. Constr. Laborers Vacation Trust, 463 U.S. 1, 27-28, 103 S.Ct. 2841, 77
L.Ed.2d 420 (1983), superseded by statute on other grounds, 28 U.S.C. § 1441(e); Empire
Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677, 690, 126 S.Ct. 2121, 165 L.Ed.2d
131 (2006) (reiterating Franchise Tax standard). Importantly, it is the plaintiff’s complaint
that determines whether the case arises under federal law: “[F]ederal jurisdiction exists
only when a federal question is presented on the face of the plaintiff’s properly pleaded
complaint.” Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318
(1987); Franchise Tax, 463 U.S. at 10; Taylor v. Anderson, 234 U.S. 74, 75-76, 34 S.Ct.
724, 58 L.Ed. 1218 (1914). “[A] right or immunity created by the Constitution or laws of the
United States must be an element, and an essential one, of the plaintiff’s cause of action.”
Gully v. First Nat’l Bank, 299 U.S. 109, 112, 57 S.Ct. 96, 81 L.Ed. 70 (1936). This
preserves the plaintiff’s role as “master of the complaint, free to avoid federal jurisdiction
by pleading only state claims even where a federal claim is also available.” Marcus v.
AT&T Corp., 138 F.3d 46, 52 (2d Cir. 1998).
On the face of the Complaint in this case, the causes of action set forth –
negligence, gross negligence, negligence per se, strict liability, absolute liability, trespass,
nuisance, unjust enrichment, battery, and “punitive damages” – sound in state, not federal,
law. The Complaint does not explicitly state any federal causes of action. (Compl. ¶¶ 83130.) See Merrell Dow Pharm. Inc. v. Thompson, 478 U.S. 804, 808, 106 S.Ct. 3229, 92
L.Ed.2d 650 (1986) (noting that the “vast majority” of cases brought under federal-question
jurisdiction are those in which federal law creates the cause of action).
Defendants argue, however, that “arising under” federal jurisdiction exists in this
case because there are substantial issues of federal law embedded within Plaintiffs’ state8
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law causes of action. For example, Defendants point out that the Complaint refers to
determinations by the EPA that Defendants were in violation of several federal statutes,
including RCRA, the Clean Air Act, and the Clean Water Act. (Defs.’ Resp. at 2-3.)
Defendants also note that the EPA and the U.S. Attorney have instituted federal
administrative and criminal proceedings based on the same conduct underlying Plaintiffs’
claims. (Id. at 2.) Defendants assert that Plaintiffs’ claims are “fundamentally premised”
on alleged federal violations, and therefore arise under federal law. (Id. at 3.)
Defendants rely on Grable & Sons Metal Products, Inc. v. Darue Engineering and
Manufacturing, 545 U.S. 308, 125 S.Ct. 2363, 162 L.Ed.2d 257 (2005), in support of the
application of “arising under” jurisdiction here. In Grable, the plaintiff (Grable) brought suit
in state court to quiet title to a property that the IRS had seized from Grable and
subsequently sold to the defendant, Darue. 545 U.S. at 310-11. In the state action, Grable
argued that Darue did not have title to the property because the IRS, in seizing the property
from Grable, had failed to give proper notice to Grable in the manner required by federal
statute. Id. at 311. The IRS had given notice by certified mail instead of in person. Id. at
310. Darue removed the case to federal court on the basis of “arising under” jurisdiction,
because resolution of the state cause of action required a determination of whether the
federal statute governing IRS seizure notice permitted notice by certified mail. Id.
The Supreme Court of the United States stated that the relevant question in
determining the propriety of exercising jurisdiction is:
[D]oes a state-law claim necessarily raise a stated federal
issue, actually disputed and substantial, which a federal forum
may entertain without disturbing any congressionally approved
balance of federal and state judicial responsibilities.
9
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Id. at 314.
The Court determined that federal jurisdiction was warranted in that case. Id. at
314. First, the issue of whether Grable had been given notice within the meaning of the
federal statute was an “essential element” of its quiet title claim, and the meaning of the
federal requirement actually was in dispute. Id. at 315. Second, the federal government
and other affected parties had a direct interest in the availability of a federal forum to
provide expertise in determining what constituted proper IRS notice under federal tax law.
Id. Third, because quiet title cases only rarely included a disputed question of federal law,
allowing federal jurisdiction would have only a “microscopic effect” on the federal-state
division of labor in such cases.7 Id.
Contrary to Defendants’ contention, the Complaint in this case is distinct from that
in Grable, and it fails the test for establishing “arising under” jurisdiction set forth in Grable.
Grable’s quiet title action necessarily turned on the contention that the IRS had failed to
comply with federal notice provisions. Id. at 315. By contrast, all but one of the causes of
action in this case turn entirely on questions of state law, including traditional tort law
questions of duty, breach, causation, and damages. (Compl. ¶¶ 83-130.)
The sole reliance by Plaintiffs on an alleged violation of federal law is in the cause
of action entitled “negligence per se.” (Compl. ¶¶ 95-98.) Plaintiffs allege that Defendants’
conduct violated “State and Federal law” and therefore constituted negligence per se.
(Compl. ¶ 97.) This does not create a “necessary” federal-law question, however.
Plaintiffs’ negligence per se count relies on alternative grounds for finding the presumption
7
The Grable Court also noted that there was a long history of exercising federal jurisdiction in
quiet title cases where it was necessary to apply federal law to determ ine title. Id. at 315-16.
10
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of negligence – i.e., violations of either state or federal law. Thus, a fact finder could find
negligence per se without determining whether Defendants violated federal law.
See Wedlock v. Troncoso, 185 Misc.2d 432, 436, 712 N.Y.S.2d 328 (N.Y. Sup. 2000)
(noting that a violation of a state or federal statute constitutes negligence per se under New
York law). It is clear that where there are alternative, non-federal bases for liability on a
state cause of action, there is no “necessary” federal-law question permitting the exercise
of federal jurisdiction. See Broder v. Cablevision Sys. Corp., 418 F.3d 187, 194 (2d Cir.
2005) (“Where a federal issue is present as only one of multiple theories that could support
a particular claim . . . this is insufficient to create federal jurisdiction.”); Mulcahey v.
Columbia Organic Chem. Co., 29 F.3d 148, 154 (4th Cir. 1994) (no jurisdiction where
“negligence per se under the federal environmental statutes is only one of the Plaintiffs’
numerous theories of recovery”); In re Reserve Fund Sec. and Derivative Litig., 2009 WL
3634085, *4 (S.D.N.Y. Nov. 3, 2009) (no jurisdiction where federal law violation was only
one of several alternate theories on which plaintiff sought to recover for breach of contract
and fiduciary duties; “Courts in this Circuit have made clear that the exercise of federal
jurisdiction is inappropriate where ‘no cause of action . . . necessarily stands or falls based
on a particular interpretation or application of federal law.’”) (quoting Sung v. Wasserstein,
et al., 415 F.Supp.2d 393, 406 (S.D.N.Y. 2006)); Caggiano v. Pfizer, 384 F.Supp.2d 689,
691 (S.D.N.Y. 2005) (jurisdiction was not proper because “violation of federal law is simply
one of multiple theories on which plaintiff may possibly prevail”); cf. Technical Rubber Co.
v. Buckeye Egg Farm, L.P., 2000 WL 782131, *3 (S.D. Ohio June 16, 2000) (no
jurisdiction; although complaint alleged the defendant violated “state and/or federal law”
11
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in causing ground, air and water pollution, the claims sounded in nuisance, and the
plaintiffs specifically disclaimed any intent to assert federal causes of action).
Defendants argue that Plaintiffs have done more than simply assert a single claim
of negligence per se based partially on alleged violations of federal law. Rather, Plaintiffs
have alleged “extensive federal involvement, federal criminal involvement, and significant
parallel federal administrative activity.” (Defs.’ Resp. at 7.)
These allegations do not create a federal law question necessary to the
determination of whether Defendants committed common-law torts against Plaintiffs. As
noted, none of the causes of action asserted by Plaintiffs necessarily depends on a
determination that Defendants violated federal law.
The references to federal law
violations and proceedings are merely contextual allegations and cannot transform this
state case into one appropriate for federal jurisdiction. See Segal v. Varonis Sys., Inc., 601
F.Supp.2d 551, 554-55 (S.D.N.Y. 2009) (no jurisdiction where plaintiff’s wrongful
discharge, tort, and breach of contract complaint contained allegations that the defendant
had failed to pay wages and benefits as required under U.S. Department of Labor rulings;
these were “contextual allegations” that did not themselves assert federal causes of
action); Caggiano, 384 F.Supp.2d at 690 (although the complaint was “peppered” with
allegations that the defendants violated federal law, such “contextual allegations” were not
enough to confer federal question jurisdiction, where there was no federal law question
essential to resolution of the state claims).
Nor does the existence of concurrent federal administrative and criminal
proceedings against Defendants create a federal interest in Plaintiffs’ wholly state-based
claims, so as to warrant federal jurisdiction. Although the issues in the parallel proceedings
12
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might be similar, the Supreme Court has made clear that the question of federal question
jurisdiction is determined from the face of the “well-pleaded complaint,” and that the plaintiff
is the master of the complaint, with the freedom to choose the forum. Merrell Dow, 478
U.S. at 808 (citing Franchise Tax Bd., 463 U.S. at 9-10)); id. at 809 n.6 (“Jurisdiction may
not be sustained on a theory the plaintiff has not advanced.”); Marcus, 138 F.3d at 52.
The decision by federal authorities to bring parallel proceedings has no bearing on the
plaintiff’s ability to make this choice.8 See Caggiano, 384 F.Supp. at 690 (jurisdiction not
proper even where the complaint referenced a finding by the Department of Health and
Human Services that the defendants violated federal law, along with a federal qui tam suit
brought against the defendants); cf. Caterpillar, 482 U.S. at 398-99 (noting that the plaintiff
has the power to “choose to have the cause heard in state court,” and that this power
would be eviscerated by permitting the defendant to remove the case to federal court
through the assertion of a federal defense).
Defendants also cite D’Alessio v. New York Stock Exchange, Inc., 258 F.3d 93 (2d
Cir. 2001), Nicodemus v. Union Pacific Corp., 440 F.3d 1227 (10th Cir. 2006), and Ormet
Corp. v. Ohio Power Co., 98 F.3d 799 (4th Cir. 1996), in support of the exercise of federal
jurisdiction here. (Defs.’ Resp. at 5-6.)
Each of these cases, however, presented
questions of federal law necessary to the determination of the plaintiffs’ claims. See
D’Alessio, 258 F.3d at 104 (jurisdiction was appropriate because “D’Alessio’s claims
8
Under the “artful pleading” doctrine, a corollary to the well-pleaded com plaint doctrine, a plaintiff
m ay not avoid federal jurisdiction over a cause of action by sim ply failing to state a necessary federal
question in the com plaint. Rivet v. Regions Bank of Louisiana, 522 U.S. 470, 475, 118 S.Ct. 921, 139
L.Ed.2d 912 (1998). Defendants, however, expressly disclaim any invocation of the “artful pleading”
doctrine, instead asserting that the Com plaint on its face avers federal claim s. (Defs.’ Resp. at 5 n.6.)
This assertion, as discussed, is unfounded.
13
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necessarily require[d] a court to construe both the federal law governing securities trading
on a national exchange and the [New York Stock Exchange’s] role, as defined under
federal law, in enforcing and monitoring a member’s compliance with those laws[.]”)
(emphasis in original); Nicodemus, 440 F.3d at 1234-35 (jurisdiction proper where
resolution of plaintiffs’ claims against easement holder required interpretation of the
easement under federal land-grant statutes); Ormet, 98 F.3d at 807 (jurisdiction proper
where “resolution of the dispute require[d] the interpretation and application of the [federal
Clean Air Act] to the contractual arrangement between the parties.”). Defendants’ reliance
on these decisions is misplaced.
Finally, Defendants contend that the exercise of federal jurisdiction here would not
open the door to a flood of litigation from state to federal courts in similar cases. (Defs.’
Resp. at 4.) This Court, however, cannot even undertake to evaluate the congressionallymandated balance between federal and state judicial responsibilities unless there is a
“necessary” question of federal law, which, as discussed, is not present here. Grable, 545
U.S. at 313 (“[F]ederal jurisdiction demands not only a contested federal issue, but a
substantial one, [and then]. . . the federal issue will ultimately qualify for a federal forum
only if federal jurisdiction is consistent with congressional judgment about the sound
division of labor between state and federal courts[.]”).
In sum, this Court is constrained to construe the removal provision narrowly and with
the presumption against removal.
Defendants have failed to meet their burden of
establishing that the “well-pleaded complaint” here states any necessary, disputed question
of federal law. Accordingly, this Court finds it is without subject matter jurisdiction to hear
this case. Plaintiffs’ motion to remand the case back to New York state court will be
14
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granted.
3. Request for Attorneys’ Fees
Plaintiffs seek an award of attorneys’ fees associated with Defendants’ removal of
this case to this Court. (Pls.’ Mem. at 8.) Defendants do not respond to this contention.
By statute, a court is permitted to award attorneys’ fees when it remands a case to
state court. 28 U.S.C. § 1447(c) (“An order remanding the case may require payment of
just costs and any actual expenses, including attorney fees, incurred as a result of the
removal.”) It may do so, however, only “where the removing party lacked an objectively
reasonable basis for seeking removal.” Martin v. Franklin Capital Corp., 546 U.S. 132,
141, 126 S.Ct. 704, 163 L.Ed.2d 547 (2005). In considering whether to award attorneys’
fees, a court “should recognize the desire to deter removals sought for the purpose of
prolonging litigation and imposing costs on the opposing party, while not undermining
Congress’ basic decision to afford defendants a right to remove as a general matter, when
the statutory criteria are satisfied.” Id. at 140.
This Court finds that an award of attorneys’ fees is not warranted in this case.
Defendants’ argued basis for federal subject matter jurisdiction, while unpersuasive, is not
wholly unreasonable.
Further, Plaintiffs do not assert, and there is no evidence
suggesting, that Defendants sought to remove this case solely to delay the proceedings
or impose litigation costs on Plaintiffs. See, e.g., Elmira Teachers’ Ass’n, et al. v. Elmira
City Sch. Dist., 2006 WL 240552, *7 (W.D.N.Y. Jan. 27, 2006) (“[T]he absence of bad faith,
as well as the existence of a colorable question as to whether removal is proper, weighs
against the award of costs and fees.”) (citing United Mut. Houses, L.P. v. Andujar, 230
15
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F.Supp.2d 349, 354-55 (S.D.N.Y. 2002)). Plaintiffs’ request for attorneys’ fees will be
denied.
B. Defendants’ Motions to Dismiss
Defendant Tonawanda Coke has moved to dismiss several counts of the Complaint
and to strike several allegations in the Complaint.
(Docket No. 4.)
Additionally,
Defendants Crane and Kamholz have moved to dismiss the entire Complaint under Rule
12(b)(6). (Docket No. 3.) Because this Court has determined that it lacks subject matter
jurisdiction over this case, it is not permitted to reach the merits of Defendants’ motions to
dismiss. Steel Co., 523 U.S. at 94 (“Without jurisdiction the court cannot proceed at all in
any cause. Jurisdiction is power to declare the law, and when it ceases to exist, the only
function remaining to the court is that of announcing the fact and dismissing the cause.”)
(quoting Ex Parte McCardle, 7 Wall. 506, 514, 19 L.Ed. 264 (1868)). Accordingly,
Defendants’ motions will be denied without prejudice.
IV. CONCLUSION
For the foregoing reasons, Plaintiffs’ motion to remand this case to the New York
Supreme Court, County of Erie, is granted. Plaintiffs’ request for attorneys’ fees is
denied. Defendants’ motions to dismiss are denied without prejudice.
V. ORDERS
IT IS HEREBY ORDERED, that Plaintiffs’ Motion to Remand (Docket No. 9) is
GRANTED.
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Case 1:10-cv-00859-WMS Document 23
Filed 08/26/11 Page 17 of 17
FURTHER, that Plaintiffs’ request for attorneys’ fees (Docket No. 9 (Cobb Aff. ¶
13)) is DENIED.
FURTHER, that the Clerk of the Court is directed to transfer Case No. 1:10-CV859 to the New York State Supreme Court, County of Erie.
FURTHER, that the Clerk of the Court is directed to close the above-referenced
case upon transfer to the New York State Supreme Court, County of Erie.
FURTHER, that Defendants Crane and Kamholz’s Motion to Dismiss (Docket
No. 3), is DENIED without prejudice.
FURTHER, that Defendant Tonawanda Coke’s Motion to Dismiss (Docket No. 4)
is DENIED without prejudice.
SO ORDERED.
Dated: August 25, 2011
Buffalo, New York
/s/William M. Skretny
WILLIAM M. SKRETNY
Chief Judge
United States District Court
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