Asheville Postal Credit Union v. Terra Firma Information Technology, LLC

Filing 11

ORDER denying without prejudice 8 Motion to Stay; denying without prejudice 9 Motion for Preliminary Injunction. Signed by District Judge Martin Reidinger on November 4, 2010. (jhg)

-DLH Asheville Postal Credit Union v. Terra Firma Information Technology, LLC

Doc. 11

IN THE DISTRICT COURT OF THE UNITED STATES F O R THE WESTERN DISTRICT OF NORTH CAROLINA ASHEVILLE DIVISION C IV IL CASE NO. 1:10cv249

AS H E V IL L E POSTAL CREDIT UNION, P l a i n t if f , vs . TE R R A FIRMA INFORMATION TE C H N O L O G Y , LLC., D e fen d a n t.

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ORDER

TH IS MATTER is before the Court on the Defendant Terra Firma In fo rm a tio n Technology, LLC's (Terra Firma) Motion to Stay the Proceedings a n d to Compel Arbitration [Doc. 8] and Motion for Preliminary Injunction and E xp e d ite d Discovery [Doc. 9]. P R O C E D U R AL HISTORY O n October 22, 2010, the Defendant Terra Firma removed this action fro m state court based on diversity jurisdiction. [Doc. 1]. In the Notice of R e m o va l, Terra Firma stated that it is "a limited liability corporation [sic] o rg a n iz e d and existing pursuant to the laws of South Carolina" having its
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p rin c ip le place of business in "Horry County, South Carolina." [Id., at 2]. In the Complaint the Plaintiff alleges that it is a credit union organized u n d e r North Carolina law which is "federally insured." [Doc. 1-1, at 3]. The D e fe n d a n t is alleged to be a South Carolina corporation transacting business in North Carolina. [Id.]. The parties had a business relationship pursuant to wh ic h the Defendant was to provide information technology services including s o ftwa re , site and hardware maintenance, data processing and "disaster re c o ve ry" services. [Id.]. The parties entered into two separate agreements: a Data Processing Agreement and a Disaster Backup Recovery Service A g re e m e n t. [Doc. 1]. In the Complaint, the Plaintiff alleges claims for breach o f contract, unfair and deceptive trade practices, breach of warranty, and c o n ve rs io n . [Id., at 2-6]. O n October 28, 2010, the Defendant filed its Answer with counterclaims. [D o c . 4]. The Defendant asserted counterclaims for breach of contract,

in te rfe re n c e with contractual relations, interference with prospective c o n tr a c tu a l relations, and unfair and deceptive trade practices pursuant to b o th North Carolina and South Carolina law. [Id., at 8-16]. The Defendant d e s c rib e d itself as "a South Carolina Limited Liability Corporation [sic] o rg a n iz e d and existing pursuant to laws of South Carolina." [Id., at 2].

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D I S C U S S IO N In the motion to stay and compel arbitration, the Defendant claims that th e parties entered into an agreement to submit to binding arbitration in their D is a s te r Backup Recovery Service Agreement. The Defendant claims,

h o we ve r, that the Plaintiff's breach of contract cause of action relates solely to the Data Processing Agreement, and thus arbitration should not be c o m p e lle d as to that claim. s u b m itte d to arbitration. In the motion seeking a preliminary injunction, the Defendant claims that wh e n the Plaintiff terminated its Data Processing Agreement, it somehow o b ta in e d confidential information concerning another customer of the D e fe n d a n t during the process of switching to another data processing service p ro vid e r. Despite acknowledging that the Plaintiff notified that customer, the D e fe n d a n t claims that an injunction is necessary to prevent irreparable harm. D e fe n s e counsel has not cited a single case in support of its position that it h a s been irreparably harmed.1 R u le 7.1(B) of the Rules of Practice and Procedure of the United States D is tric t Court for the Western District of North Carolina requires that any
Counsel cited cases in support of the standard to be applied to motions for preliminary injunction. The cases cited in support of the preliminary injunction analysis have been abrogated. Moreover, counsel failed to cite any cases specific to the facts of this case. 3
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The remaining claims, it submits, must be

m o tio n "other than for dismissal, summary judgment, or default judgment shall s h o w that counsel have conferred or attempted to confer and have attempted in good faith to resolve areas of disagreement and set forth which issues re m a in unresolved." Neither of the motions filed by the Defendant contain a c e rtific a tio n that counsel conferred or attempted to confer on the issues raised in these motions. Indeed, it is quite possible that the issues raised in these m o tio n s may be amicably resolved by communication between counsel with o u t court intervention. Because the Defendant has failed to comply with th e Local Rule, the motions will be denied. The Court also notes that Terra Firma is a limited liability company. C o u rts have an affirmative duty to question subject matter jurisdiction even wh e n the parties have not done so. Interstate Petroleum Corp. v. Morgan, 2 4 9 F.3d 215 (4 th Cir. 2001); Plyer v. Moore, 129 F.3d 728, 732 n.6 (4th Cir. 1 9 9 7 ) ,c e rtio ra ri denied 524 U.S. 945, 118 S.Ct. 2359, 141 L.Ed.2d 727 (1 9 9 8 ); 28 U.S.C. §1447(c)("If at any time before final judgment it appears that th e district court lacks subject matter jurisdiction, the case shall be re m a n d e d ." ) . A limited liability company is a citizen of all states in which its c o n s titu e n t members are citizens. Carden v. Arkoma Associates, 494 U.S. 1 8 5 , 110 S.Ct. 1015, 108 L.Ed.2d 157 (1990). The Defendant has not

d is c lo s e d in the notice of removal the citizenship of its constituent members
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a n d therefore will be required to do so. O RD ER IT IS, THEREFORE, ORDERED that the Defendant Terra Firma In fo rm a tio n Technology, LLC's Motion to Stay the Proceedings and to Compel A rb itra tio n [Doc. 8] is hereby DENIED without prejudice. IT IS FURTHER ORDERED that the Defendant Terra Firma Information T e c h n o lo g y, LLC's Motion for Preliminary Injunction and Expedited Discovery [D o c . 9] is hereby DENIED without prejudice. IT IS FURTHER ORDERED that on or before ten business days from e n try of this Order, the Defendant Terra Firma Information Technology, LLC s h a ll file response disclosing the names and citizenships of all its constituent m e m b e rs , and for such constituent members that are limited liability c o m p a n ie s or partnerships, to identify the citizenships of the respective c o n s titu e n t members or partners until all such constituents are fully identified.

Signed: November 4, 2010

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