Bennett v. Segway, Inc. et al
Filing
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ORDER denying 6 Motion to Remand to the Buncombe County Superior Court. Signed by District Judge Martin Reidinger on 8/20/2011. (pdf)
THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
ASHEVILLE DIVISION
CIVIL CASE NO. 1:11cv09
MAY K. BENNETT,
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Plaintiff,
vs.
SEGWAY, INC. and ELECTRIC AVENUE, INC.,
Defendants.
ORDER
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THIS MATTER is before the Court on the Plaintiff’s Motion to Remand
to Buncombe County Superior Court [Doc. 6].
PROCEDURAL HISTORY
On January 20, 2011, the Defendant Segway, Inc. (Segway) removed
this action from state court based on diversity jurisdiction. [Doc. 1]. Segway
attached as an exhibit to the Notice of Removal a Consent to Removal signed
by counsel for Defendant Electric Avenue, Inc. (Electric). [Doc. 1-10]. The
underlying state court action was filed on October 25, 2010 and the summons
issued on that same date. [Doc. 1-1]. Electric was served on November 4,
2010 and Segway was served on November 22, 2010. [Doc. 1-2; Doc. 1-4].
In the Complaint, the Plaintiff seeks monetary damages in connection with a
personal injury sustained while using a product manufactured by Segway and
distributed by Electric. Electric filed Answer in the state court action. [Doc.
1-7]. Segway filed Answer after removal to this Court. [Doc. 4].
On June 6, 2011, Electric was granted leave to file a Third-Party
Complaint against the North Carolina Arboretum Society (Arboretum), a North
Carolina non-profit corporation. [Doc. 24]. Arboretum filed Answer to the Third
Party Complaint but did not state any claim directly adverse to the Plaintiff.
[Doc. 28].
The Plaintiff moved to remand the case to state court. Segway opposes
the motion but Electric has not filed a response.
DISCUSSION
A notice of removal of a civil action “shall be filed” within thirty days of
receipt by the defendant of the initial pleading. 28 U.S.C. §1466(b). Electric
was served on November 4, 2010 and Segway was served on November 22,
2010. The case was not removed, however, until January 20, 2011, more
than thirty days after service on the Defendants. The Plaintiff’s motion to
remand is based on the fact that the removal was filed out of time. The
Plaintiff also cites the initiation of discovery and other pre-trial filings in the
state court action in support of remand. In addition, she argues that Electric
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has not properly consented to the removal because its written consent was
only attached as an exhibit to Segway’s Notice of Removal, [Doc. 1-10], but
was not separately filed by Electric.
Segway has responded that it was not initially obvious from the
Complaint that the jurisdictional threshold amount of $75,000.00 was in
controversy in this case. It cites §1446(b) which provides that if the case
“stated by the initial pleading is not removable, a notice of removal may be
filed within thirty days after receipt by the defendant” of a pleading showing
the case is removable. That pleading, Segway claims, was the Plaintiff’s
response in the state court action to Segway’s Request for Statement of
Monetary Relief Sought which disclosed that her claim exceeded $75,000.00.
[Doc. 1-9]. Segway also points out that Plaintiff’s response was not received
until January 3, 2011. Thus, the Notice of Removal filed on January 20, 2011
was timely.
The Court first addresses the issue of whether the joinder of Arboretum,
a North Carolina corporation, as a third-party defendant destroys diversity
jurisdiction.
“[A] third-party defendant joined under Federal Rule of Civil
Procedure 14 does not become a defendant as against the original plaintiff,
so that federal jurisdiction is not destroyed where those parties are citizens of
the same state.” Spring City Corp. v. American Bldgs. Co., 193 F.3d 165, 169
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(3 rd Cir. 1999); Caterpillar Inc. v. Lewis, 519 U.S. 61, 67 n.1, 117 S.Ct. 467,
136 L.Ed.2d 437 (1996) (“The fact that [plaintiff] and [third-party defendant]
may be co-citizens is completely irrelevant. Unless [plaintiff] chooses to
amend his complaint to assert a claim against [third-party defendant], [plaintiff]
and [third-party defendant] are simply not adverse, and there need be no
basis of jurisdiction between them.”); Claudio v. MGS Machines Corp., 2011
WL 1642469 (E.D.Pa. 2011) (federal subject matter jurisdiction does not
require diversity between plaintiff and third-party defendant when there are no
direct claims between them).
The Court next addresses the Plaintiff’s claim that the removal did not
occur within thirty days of service on Electric, as the first-served defendant.
The United States Court of Appeals for the Fourth Circuit recently reiterated
its position adopting “the McKinney Intermediate Rule, which requires a notice
of removal to be filed within the first-served defendant’s thirty-day window but
gives later-served defendants thirty days from the date they were served to
join the notice of removal.” Barbour v. Intern. Union, 640 F.3d 599, 607 (4 th
Cir. 2011), citing McKinney v. Board of Trustees of Mayland Community
College, 955 F.2d 924 (4 th Cir. 1992); Cf., Barbour v. Int’l Union, 594 F.3d 315,
326 (4 th Circ. 2010). In this case, neither defendant filed a notice of removal
within thirty days of service. The issue therefore is whether the second
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paragraph of §1446(b) applies; that is, that the defendants first became aware
on January 3, 2011 that the jurisdictional threshold had been reached for
diversity jurisdiction and timely removed thereafter.
“Generally, the amount specified in the complaint will determine whether
the jurisdictional amount is satisfied for purposes of removal.” Bartnikowski
v. NVR, Inc., 307 Fed.Appx. 730, 734 (4 th Cir.2009). “Determining the amount
in controversy becomes more difficult, however, where, as here,” the amount
is not particularly disclosed in a state court complaint. Id. In North Carolina,
“a plaintiff can plead for judgment in excess of a certain dollar amount,
...making it difficult to determine the exact amount in controversy[.]” Id.; Lee
Elec. Const., Inc. v. Eagle Elec., LLC, 2003 WL 21369256 (M.D.N.C. 2003),
citing N.C.R.C.P. 8(a)(2) and 14C Charles Alan Wright, Federal Practice and
Procedure, §3725 at 79 (3d. 1998). Such is the case here where the Plaintiff,
in accord with the ordinary practice in North Carolina state courts, alleged that
her damages are in excess of $10,000.00. Id.
As a result, on December 1, 2010, Segway served on the Plaintiff a
Request for Statement of Monetary Relief Sought pursuant to North Carolina
Rules of Civil Procedure.1 [Doc. 1-8].
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On January 3, 2011, the Plaintiff
It bears noting that Segway did not waste any time, having been served on
November 22, 2010.
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responded that she sought $250,000.00 in monetary relief. [Doc. 1-10]. The
Court finds that the removal of the case from state court on January 20, 2011
was therefore “within thirty days after receipt by the defendant, through
service ..., of a copy of ... other paper from which it may first be ascertained
that the case is one which is or has become removable[.]” 28 U.S.C.
§1446(b); Lovern v. General Motors Corp., 121 F.3d 160, 161 (4 th Cir. 1997)
(defendant timely removed the case on diversity grounds within thirty days
after receipt of answers to interrogatories showing diversity even though filed
eighty-eight days after service of a complaint which did not reveal citizenship);
Boss v. Nissan North America, Inc., 228 Fed.Appx. 331 (4 th Cir.2007)
(documents showing diversity revealed during discovery in state court action
qualify as “other paper” pursuant to §1446(b)); Lee Elec. Const., Inc., 2003
WL 21369256 (response to request for statement of monetary relief suffices
as “other paper”); Hoffman v. Vulcan Materials Co., 19 F.Supp.2d 475
(M.D.N.C. 1998).2
The Plaintiff, however, argues that both Defendants should have been
able to ascertain from the allegations of the originally filed Complaint that the
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The “other paper” which first disclosed the jurisdictional amount was provided in
response to a procedure invoked by Segway. As a result, the Court does not find it
problematic that Segway was the second-served defendant. Segway was, in fact, the
first-served defendant with regard to the “other paper” in which it was first disclosed that
the jurisdictional threshold was met.
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amount in controversy exceeded $75,000.00 even though the Plaintiff only
demanded damages in excess of $10,000.00.
The allegations of the
Complaint are:
[W]hile Plaintiff was riding the SEGWAY XT in accordance with
the instructions she had received, the device suddenly stopped
and, without warning, threw the Plaintiff ... off the machine,
causing her to strike her leg and hip and body against the
pathway. As a direct and proximate result of Plaintiff’s fall, she
sustained serious, painful, and permanent injuries and fractures
to her hip and leg which has resulted in substantial permanent
disability, loss of earnings, lost earning capacity and substantial
medical and hospital expenses.
[Doc. 1-1, at 5-6].
The Plaintiff is the master of her Complaint but having accepted that
role, she may not “obscure[ ] or omit[ ], or indeed misstate[ ]” the facts therein
in order to make the initial pleading not removable. Lovern, 121 F.3d at 162.
[T]he statute expressly encompasses the case in which the actual
facts supporting federal jurisdiction remain unaltered from the
initial pleading, but their existence has been manifested only by
later papers, revealing the ground for removal for the first time.
It thus appears that the statute does not preclude defendants from
removing a case where their discovery of the grounds of federal
jurisdiction is belated because facts disclosing those grounds
were inadequately or mistakenly stated in the complaint. Given
this interpretation, [the Fourth Circuit] will not require courts to
inquire into the subjective knowledge of the defendant, an inquiry
that could degenerate into a mini-trial regarding who knew what
and when. Rather, [this Circuit] will allow the court to rely on the
face of the initial pleading and on the documents exchanged in
the case by the parties to determine when the defendant had
notice of the grounds for removal, requiring that those grounds be
apparent within the four corners of the initial pleading or other
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subsequent paper.
Id. (emphasis in original).
To accept the Plaintiff’s position would have required defense counsel
to sign and file a Notice of Removal upon service of the original Complaint in
violation of Rule 11 of the Federal Rules of Civil Procedure. Id.; accord, Lee
Elect. Const., Inc., 2003 WL 21369256. The statute was not intended to place
a defendant and his attorney in such a position. Id.; Hoffman, 19 F.Supp.2d
at 479. Moreover, in this case, Segway immediately served the appropriate
procedural device by which to ascertain whether the jurisdictional amount was
met when it served a Request for Statement of Monetary Relief Sought. Id.;
Honeycutt v. Dillard’s Inc., 989 F.Supp. 1375 (D.Kan. 1997). From the four
corners of the original Complaint, it could be determined that it was possible
that the Plaintiff sought damages in excess of $75,000.00 but it could by no
means be ascertained with any clarity or certainty from the face of that
document. This Court will not inquire into the subjective knowledge of the
Defendant. Harris v. Bankers Life and Cas. Co., 425 F.3d 689 (9 th Cir. 2005);
Whitaker v. Am Telecasting, Inc., 261 F.3d 196, 206 (2d Cir. 2001).
The Court has considered the cases cited by the Plaintiff and finds them
inapposite. See, e.g., Roe v. Michelin North America, Inc., 613 F.3d 1058
(11 th Cir. 2010) (complaint in which wrongful death alleged showed claim in
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excess of $75,000.00 and discussing Louisiana cases in which plaintiff is not
allowed to specify amount of damages); Stone v. Nirvana Apts., 2008 WL
4844715 (W.D.Tex. 2008) (complaint contained sufficient detail of injuries,
including severe scalding, scarring, skin grafts, disfigurement, past and future
medical care to show amount); Fire Ins. Exchange v. Target Corp., 2008 WL
3049896 (S.D.Tex. 2008) (complaint alleging wrongful death by fire alleged
showed claim in excess of jurisdictional amount); Richman v. Zimmer, Inc.,
644 F.Supp. 540 (S.D.Fla. 1986) (court looked beyond face of the complaint
to consider settlement amounts in cases involving same product);
Weiderspahn v. Wing Enterprises, Inc., 2009 WL 2070353 (D.N.J. 2009)
(defendant had actual knowledge of extent of injuries); Carroll v. United Air
Lines, Inc., 7 F.Supp.2d 516 (D.N.J. 1998) (plaintiff alleged willful misconduct
pursuant to Warsaw Convention which limits damages to $75,000 unless
wilful misconduct shown). Only Lee v. Altamil Corp., 457 F.Supp. 979 (D.C.
Fla. 1978) (allegation of serious permanent injury, substantial medical
expenses, great pain and suffering in case where bulk feed tank injured
plaintiff sufficient to show damages in excess of $10,000) is somewhat
analogous to the present case. In Lee, however, the allegations regarding the
harm befallen the plaintiff much more clearly indicated that the threshold
amount had been reached, as opposed to the vague and ambiguous
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allegations in this matter.
The Plaintiff’s final claim is that Electric did not properly consent to the
removal.
While the failure of one defendant to consent renders the removal
defective, each defendant need not necessarily sign the notice of
removal. There must, however, “be some timely filed written
indication from each served defendant,” or from some person with
authority to act on the defendant’s behalf, indicating that the
defendant “has actually consented” to the removal. ... [Electric’s]
attorney signed [its] written consent in a timely fashion, it was
attached to [Segway’s] notice of removal as an exhibit, not a
stand-alone pleading[.] ... The exhibit sufficiently represented
[Electric’s] consent to removal[.]
Pritchett v. Cottrell, Inc., 512 F.3d 1057, 1062 (8 th Cir. 2008); Esposito v.
Home Depot U.S.A., Inc., 590 F.3d 72, 76 (1 st Cir. 2009) (“the consensus
among courts is that conduct less explicit than joining the notice will suffice”);
Proctor v. Vishay Intertechnology, Inc., 584 F.3d 1208, 1225 (9 th Cir. 2009)
(“one defendant’s timely removal notice containing an averment of the other
defendants’ consent and signed by an attorney of record is sufficient”);
Wolfenden v. Long, 2010 WL 2998804 (E.D.N.C. 2010) (noting that although
the Fourth Circuit has not addressed the issue, district courts require each
defendant to file some document expressing consent); Ammar’s, Inc.
v.Singlesource Roofing Corp., 2010 W L 1961156 (S.D.W.Va. 2010) (although
all defendants not required to sign the same document, each defendant must
officially and unambiguously consent).
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On January 13, 2011, Electric’s attorney signed a Consent to Removal
which was attached as an exhibit to Segway’s Notice of Removal. [Doc. 1-10].
Plaintiff’s counsel acknowledges that this consent was filed. [Doc. 7 at 5].
Plaintiff nonetheless makes the puzzling statement that “Defendant Electric
Avenue has filed nothing with the court joining in or consenting to the removal
of this action.” [Id.]. Apparently, Plaintiff relies on the simple fact that the
consent, though signed by counsel for Electric Avenue, was filed (i.e., entered
into the Court’s electronic filing system) by Defendant Segway as an
attachment to its Notice of Removal. [Doc. 1, 1-10]. For this, Plaintiff relies on
Wolfenden v. Long, 2010 U.S. Dist LEXIS 75073 (E.D.N.C. 2010). That case,
however, does not support Plaintiff’s position.
In Wolfenden certain
defendants did not join in the removal but subsequently filed responses
opposing the plaintiff’s motion for remand.
The Court held that this was
insufficient to have unambiguously manifested consent to the original act of
removal within the requisite time. Id. at *9. The consent in the present case is
in no manner ambiguous. The question of who entered the document into the
Court’s electronic filing system in no way manifests any ambiguity as to
whether Defendant Electric Avenue actually consents - just as the document
unequivocally says it does. The Court finds this document to be sufficient to
consent, officially and unambiguously, to the removal.
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ORDER
IT IS, THEREFORE, ORDERED that the Plaintiff’s Motion to Remand to
the Buncombe County Superior Court [Doc. 6] is hereby DENIED.
Signed: August 20, 2011
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