Sky Global LLC v. Noble et al
Filing
11
DECISION AND ORDER. The case is remanded to the New York State Supreme Court, County of Erie. The Clerk of Court is instructed to mail a certified copy of this Decision and Order, with a clear reference to Supreme Court, County of Erie, Index No. 806234/2018 to the clerk of the state court, and then to close the case. Signed by Hon. Elizabeth A. Wolford on 12/17/2018. (DPS)-CLERK TO FOLLOW UP-
gr^ES PIS
F'LED
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
E^Bvenguth
district
SKY GEOBAL, LLC,
DECISION AND ORDER
Plaintiff,
l:18-CV-00629 LAW
V.
WILLIAM NOBLE and WILLIAM NOBLE
RARE JEWELS, LP,
Defendants.
INTRODUCTION
Plaintiff Sky Global LLC ("Plaintiff) commeneed this aetion in New York State
Supreme Court, Erie County, by filing a Summons and Complaint, both dated April 19,
2018, alleging that defendants William Noble ("Noble") and William Noble Rare Jewels
LP("Rare Jewels")(eolleetively,"Defendants") breached a contract to purchase goods and
merchandise from Plaintiff. (Dkt. 1-2; Dkt. 1-3). Defendants removed the action to federal
court on June I, 2018. (See Dkt. I). However, Defendants failed to set forth "a short and
plain statement of the grounds for removal" within their notice of removal. 28 U.S.C.
§ 1446(a);(see Dkt. 1-7). Indeed, Defendants' notice of removal is absent any allegations
supporting federal jurisdiction.
On June 8, 2018, Defendants moved to dismiss the aetion for lack of personal
jurisdiction. (Dkt. 3). Plaintiff opposed the motion. (Dkt. 7; Dkt. 8). This ease was
transferred to the undersigned on July 16, 2018. (Dkt. 9). Although a motion hearing is
currently scheduled for January 11, 2019, at 10:00 a.m. at the United States Courthouse in
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Rochester, New York(Dkt. 10), upon further consideration ofthe parties' filings, the Court
concludes that the matter must be remanded to New York State Supreme Court, Erie
County, for lack of federal subject matter jurisdiction.
BACKGROUND
The following facts are taken from Plaintiffs Complaint (Dkt. 1-3), Noble's
declaration (Dkt. 4-1), and the declaration of Ryan Rich ("Rich"), Plaintiffs owner (Dkt.
7). Plaintiff is a foreign limited liability company that is authorized to do business in New
York State, and which maintains a principal place of business in Erie County, New York.
(Dkt. 1-3 at ]| 1). Noble is a resident of the State of Texas who transacts business in New
York State. {See id. at
2-3). Rare Jewels is a limited partnership, which maintains its
principal place of business in Texas, and transacts business in New York State as well.
{See id. at
4-5). Noble is the "founder and managing partner" ofRare Jewels. {See Dkt.
4-1 at ^3).
According to Rich, Plaintiff has "sold Defendants various jewelry and watches for
many years." (Dkt. 7 at ^ 5). Since 2014, "Defendants have approached [Plaintiff] on
multiple occasions to sell or purchase luxury jewelry and watches," and have "requested
that [Plaintiff] provide its expert advice on pricing for various pieces owed [sic] or
marketed by the Defendants." {Id. at ^ 6). In addition. Defendants have asked Plaintiff to
"'loan' out some of its jewelry and watches so Defendants could show them to potential
customers." {Id. at ^ 7). For example. Plaintiff previously sent two watches and a Van
Cleef necklace from New York to Texas so that Defendants could display them to potential
customers. {Id. at ^ 8). When the prospective buyers did not purchase the items,
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Defendants returned the goods to Plaintiff in New York. {Id.). Defendants have also
"regularly sentjewelry, photographs, and descriptions ofjewelry and/or precious stones to
[Plaintiff] in New York," seeking Plaintiffs assistance in finding buyers for those items.
{Id. at ^9).
Between October 2017 and February 2018, Plaintiff delivered goods and
merchandise purchased by Defendants. (Dkt. 1-3 at ^ 6).
Plaintiff has attached
"statements/invoices sent to Defendants confirming delivery, costs, and payments of the
good and/or merchandise" to its Complaint. {Id. at ^ 9; see Dkt. 1-4). Defendants
"contacted [Plaintiff] in New York to purchase these items," which were then shipped to
Texas. (Dkt. 7 at ^ 13). Defendants "agreed to remit payment to [Plaintiff] in New York."
{Id.).
Despite Plaintiffs request for the payment due on the goods and merchandise sold
to Defendants, Defendants have not paid the balance currently owed. {See Dkt. 1-3 at
10-11, 13). As a result. Defendants currently owe Plaintiff $488,331.84. {Id. at^j 12).
Plaintiff commenced this action in state court to recover the amount allegedly owed. {See
id. at 4-5).
DISCUSSION
1.
Subject Matter Jurisdiction
A.
General Principles
"Federal courts have a duty to inquire into their subject matter jurisdiction sua
sponte, even when the parties do not contest the issue." D'Amico Dry Ltd. v. Primera Mar.
(Hellas) Ltd., 756 F.3d 151, 161 (2d Cir. 2014). "It is well-settled that the party asserting
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federal jurisdiction bears the burden of establishing jurisdiction." Blockbuster, Inc. v.
Galena, 472 F.3d 53, 57 (2d Cir. 2006). "In a case removed to federal court from state
court, the removal statute is to be interpreted narrowly, and the burden is on the removing
party to show that subject matter jurisdiction exists and that removal was timely and
proper." Winter v. Novartis Pharm. Corp.,39 F. Supp.3d 348,350(E.D.N.Y.2014)(citing
Lupo V. Human Affairs Int 7, Inc.,28 F.3d 269,274(2d Cir. 1994)). "Ifthe court determines
at any time that it lacks subject-matterjurisdiction, the court must dismiss the action." Fed.
R. Civ. P. 12(h)(3).
B.
Diversity Jurisdiction
"Diversity jurisdiction exists where the parties are citizens of different states and
the amount in controversy exceeds $75,000." Ceglia v. Zuckerberg, 772 F. Supp. 2d 453,
455(W.D.N.Y. 2011). '"[Cjitizens of different States' means that there must be complete
diversity, i.e., that each plaintiffs citizenship must be different from the citizenship ofeach
defendant." Hallingby v. Hallingby, 574 F.3d 51,56(2d Cir. 2009);see Doctor's Assocs.,
Inc. V. Distajo, 66 F.3d 438, 445 (2d Cir. 1995)("It is a long-settled rule that in order to
invoke diversity jurisdiction, the petitioner must show 'complete diversity'—^that is, that it
does not share citizenship with any defendant."). "A person's citizenship for purposes of
diversity is based upon his domicile." Ceglia, 772 F. Supp. 2d at 455.
"It is an 'oft-repeated rule that diversity jurisdiction in a suit by or against [an
artificial] entity depends on the citizenship of all the members' of the entity." Quantlab
Fin., LLC, Quantlab Techs. Ltd. (BVI) v. Tower Research Capital, LLC,715 F. Supp. 2d
542, 546 (S.D.N.Y. 2010) (quoting Carden v. Arkoma Assocs., 494 U.S. 185, 195-96
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(1990)). "A limited liability company takes the citizenship ofits members." Avant Capital
Partners. LLC v. W108 Dev. LLC, No. 16 CIV. 3359 (LLS), 2016 WL 3660756, at *1
(S.D.N.Y. June 30, 2016)(citing Bayerische Landesbank, N.Y. Branch v. Aladdin Capital
Mgmt. LLC,692 F.3d 42,49(2d Cir. 2012)); see Handelsman v. Bedford Vill. Assocs. Ltd.
P'ship, 213 F.3d 48, 51-52 (2d Cir. 2000)("[F]or purposes of diversity jurisdiction, a
limited liability company has the citizenship of its membership." (citation omitted)). In
addition, "for purposes of diversity jurisdiction, limited partnerships have the citizenship
of each of its general and limited partners." Handelsman, 213 F.3d at 52(citing Carden,
494 U.S. at 195-96).
C.
The Notice of Removal is Substantively Defective
Defendants' barebones notice of removal does not comply with the requirements
for proper removal to federal court. A notice of removal must contain "a short and plain
statement of the grounds for removal, together with a copy of all process, pleadings, and
orders served upon such defendant or defendants in such action." 28 U.S.C. § 1446(a).
Defendants' notice ofremoval indicates only that Defendants have filed a notice ofremoval
with the United States District Court for the Western District of New York and have filed
a copy ofthat notice with the Clerk of Court ofthe New York State Supreme Court in Erie
County. (Dkt. 1-7). Thenoticeis wholly absent any jurisdictional allegations that set forth
the grounds for removal.
"The notice of removal generally must be filed within thirty days after the receipt
ofthe initial state court pleading." Wyant v. Nat'I R.R. Passenger Corp., 881 F. Supp.919,
924(S.D.N.Y. 1995). "A petition for removal may be amended freely within the statutory
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30-day period calculated from the date of service of the initial state court pleading.
Thereafter it may be amended to set forth more specifically grounds for removal which
were imperfectly stated in the original petition." CBS Inc. v. Snyder, 762 F. Supp. 71, 73
(S.D.N.Y. 1991). "In construing a removal notice, courts distinguish 'between an
"imperfect" or "defective" allegation and a wholly missing allegation. ..
Rhinehart v.
CSX Transp., Inc., No. 10-CV-0086A(F), 2010 WL 2388859, at *4 (W.D.N.Y. June 9,
2010)(quoting Snyder, 762 F. Supp. at 73). Generally, leave to amend the notice of
removal is granted only when "the proposed amendments are technical in nature or merely
serve to clarify what was contained in the original notice for removal, but not when the
proposed amendment aims to remedy a fundamental defect in the original notice ofremoval
or attempts to add a new ground for removal." Stuart v. Adelphi Univ., No. 94 CIV. 4698
(LMM), 1994 WL 455181, at *1 (S.D.N.Y. Aug. 19, 1994); see Valente v. Garrison From
Harrison LLC,No. 15-CV-6522(DLI)(MDG),2016 WL 126375, at *2(E.D.N.Y. Jan. 11,
2016)
("[W[here, as here,the initial pleading in a state court action is the basis for removal,
the removing party may not amend its notice of removal to correct a substantive defect
unless it does so within thirty days of receipt of the state court pleading.").
As noted above. Defendants' notice ofremoval does not set forth any jurisdictional
basis for the removal of Plaintiffs action to this Court. The failure to provide any
allegations setting forth a basis for removal is a substantive defect and not merely an
imperfect, technical pleading error. See Brown v. Progressive Cas. Ins. Co., No. 18-CV03753(ARR)(SJB), 2018 WL 4404071, at *2(E.D.N.Y. Sept. 17, 2018)("The failure to
allege diversity or federal question jurisdiction constitutes a substantive defect.");
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Briarpatch Ltd., L.P. v. Pate, 81 F. Supp. 2d 509, 517(S.D.N.Y. 2000)("Failure to assert
federal question jurisdiction as a basis for removal is a substantive defect."); Wyant, 881
F. Supp. at 925 ("Amtrak did not assert its federal question basis for removal in its notice
of removal in any way. This Court cannot now, six months after the filing of the notice of
removal and more than seven months after the filing ofthe complaint, permit it to add this
new substantive ground for removal."). The absence of any alleged jurisdictional basis
distinguishes this case from those where the defendants' "jurisdictional allegations in the
Notice of Removal are not absent but are defective, and may be properly clarified by
amendment." Cf. Grow Grp.,Inc. v. Jandernoa,No.94 CIV.5679(RPP), 1995 WL 60025,
at *2(S.D.N.Y. Feb. 10, 1995)(emphasis added).
Although the Court notes that the civil cover sheet indicates that removal would
likely be sought on diversity grounds (Dkt. 1-1), "[t]he civil cover sheet, of course, is
merely an administrative aid to the court clerk, and is therefore not typically considered
part of a litigant's pleading papers," Favors v. Coughlin, 877 F.2d 219,220(2d Cir. 1989);
see Scheibler v. HighmarkBlue Shield,243 F. App'x 691,694 n.3(3d Cir. 2007)
(declining
to consider any "defects in the civil cover sheet the [djefendants filed with the Notice of
Removal" in determining whether the notice ofremoval was proper because the civil cover
sheet is not generally considered part of the pleadings); Ayling v. Crosson, No. 1:17-CV-
04521 (ODE)(AJB), 2017 WL 6419130, at *4 n.4 (N.D. Ga. Nov. 13, 2017)("The Civil
Cover Sheet is not part of the removal petition, and allegations on the Civil Cover Sheet
are not part of the removal petition. Thus, the Court ignores this entry on the Civil Cover
Sheet." (citations omitted)), report and recommendation adopted, 2017 WL 6419292
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(N.D. Ga. Dec. 14, 2017); Firearm Owners Against Crime v. City o/Harrisburg, No. 1:15-
CV-00322, 2015 WL 2095389, at *5 (M.D. Pa. May 5, 2015)("[CJivil cover sheets are
administrative tools with no substantive legal effect."); cf. Pagan v. Bug Runner
Extermination Co., No. 17-CV-06777(SHS),2017 WL 4326075,at *2(S.D.N.Y. Sept. 19,
2017)("assum[ing] that this removal was made on the basis of diversity jurisdiction," in
part, by reference to the civil cover sheet, where the "Notice of Removal alleges facts
relevant to determining the diversity of the parties and includes a section titled 'Diversity
of Citizenship'")- Indeed, while Noble declares that he is the "managing partner" of Rare
Jewels(Dkt. 4-1 at ^ 3), there is nothing in the record that reveals the citizenship of any of
Plaintiffs members, or any other of Rare Jewels' partners.
Defendants have never filed an amended notice of removal, nor have they ever
sought to do so. "Because more than 30 days have passed 'from the date of service ofthe
initial state court pleading,"' Defendants' notice of removal "only 'may be amended to set
forth more specifically grounds for removal which were imperfectly stated in the original
petition,' and 'may not be untimely amended' to correct 'fundamental' defects." Grohs v.
Grohs, No. 3:17-CV-01605 (SRU), 2017 WL 5171845, at *3 (D. Conn. Nov. 8, 2017)
(quoting Snyder, 762 F. Supp. at 73). Since the notice of removal evinces a "total absence
of jurisdictional foundations," Snyder, 762 F. Supp. at 76 (quoting Hendrix v. New
Amsterdam Gas. Co., 390 F.2d 299, 301 (10th Cir. 1968)), these "defects were
'fundamental'—^that is, 'substantive'—and no amendment would have corrected" them,
Grohs, 2017 WL 5171845, at "'3. Accordingly, Defendants may not cure the defects in
their notice ofremoval by seeking leave to amend the notice ofremoval. See, e.g.. Brown,
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2018 WL 4404071, at *2 (denying the defendant's request to file an amended notice of
removal where the defendant's "notice of removal did not allege diversity jurisdiction,"
and the defendant "never filed an amended notice of removal").
It is worth emphasizing that "'[fjederal courts are courts of limited jurisdiction,'
possessing 'only that power authorized by Constitution and statute.'" Gunn v. Minton,568
U.S. 251, 256(2013)(quoting Kokkonen v. Guardian Life Ins. Co. ofAm., 511 U.S. 375,
111(1994)). As such,"[rjemoval jurisdiction must be 'strictly construed.'" Raghavendra
V. Stober, No. 11 CIV. 9251 (PAC)
(HBP), 2012 WL 2324481, at *3 (S.D.N.Y. May 21,
2012)(quoting Syngenta Crop Prot., Inc. v. Henson, 537 U.S. 28, 32(2002)), report and
recommendation adopted, 2012 WL 2334538(S.D.N.Y. June 18, 2012). Any doubts that
a case is properly removed to federal court are "resolved against removability 'out of
respect for the limited jurisdiction of the federal courts and the rights of states.'" Id.
(quoting In re Methyl Tertiary Butyl Ether("MTBE")Prods. Liability Litig.,488 F.3d 112,
124 (2d Cir. 2007)). The federal courthouse doors are not so casually flung open, and it
remains the burden of the party asserting federal jurisdiction to demonstrate the propriety
of a federal court's assumption ofjurisdiction. Blockbuster, All F.3d at 57. Defendants
have utterly failed to carry that burden in this case.
Therefore, the action is remanded to New York State Supreme Court, Erie County
for lack of subject matter jurisdiction.
CONCLUSION
For the foregoing reasons, the case is remanded to the New York State Supreme
Court, County of Erie. The Clerk of Court is instructed to mail a certified copy of this
Decision and Order, with a clear reference to Supreme Court, County of Erie, Index No.
806234/2018 to the clerk of the state court, and then to close the case.
SO ORDERED.
ELIZABETHX WOfeFORD
Unite^tates District Judge
Dated:
December 17, 2018
Rochester, New York
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