Duke Energy Carolinas, LLC v. Frontier Communications of the Carolinas, LLC

Filing 53

ORDER granting 46 Motion to Remand. Action is hereby remanded to the General Court of Justice for the State of North Carolina, Superior Court Division, Macon County. Signed by District Judge Martin Reidinger on 1/15/2015. (nv)

THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
ASHEVILLE DIVISION
CIVIL CASE NO. 2:13-cv-00040-MR-DLH
DUKE ENERGY CAROLINAS,
LLC,

)
)
)
Plaintiff,
)
)
vs.
)
)
)
FRONTIER COMMUNICATIONS )
OF THE CAROLINAS, LLC,
)
)
Defendant.
)
___________________________ )

MEMORANDUM OF
DECISION AND ORDER

THIS MATTER is before the Court on the Plaintiff’s Motion to
Remand, [Doc. 46], Defendant’s Response to Plaintiff’s Motion for Remand
or in the Alternative for Additional Time to File a Responsive Brief, [Doc.
48], and Plaintiff’s Reply to Frontier’s Response, [Doc. 49].
I.

PROCEDURAL BACKGROUND
The Plaintiff initiated this action in Macon County, North Carolina on

September 23, 2013, seeking damages from the Defendant for claims of
breach of contract and unjust enrichment.

[Doc. 1-1].

The Defendant

removed the action to this Court on October 18, 2013. [Doc. 1]. Magistrate
Judge Howell entered an order on July 15, 2014 to stay this case in order

for the Federal Communications Commission to determine the rate that can
be charged for the Defendant’s use of utility poles. [Doc. 38].
On August 7, 2014, Judge Howell further ordered that the parties
were to file a response disclosing their names and citizenships. [Doc. 42].
The Plaintiff responded as follows:
Duke Energy hereby discloses that it is a North
Carolina limited liability company and that its sole
member is Duke Energy Corporation, a corporation
organized and existing under the laws of the state of
Delaware with its principal place of business in
Charlotte, North Carolina. Accordingly, for the
purposes of 28 U.S.C. §§ 1332 and 1441, Duke
Energy Corporation is a citizen of the states of
Delaware and North Carolina.
[Doc. 44]. The Defendant responded as follows:
Frontier Communications of the Carolinas LLC is a
Delaware limited liability company with a principal
place of business in Connecticut.
The sole
member of Frontier Communications of the
Carolinas LLC is Frontier Communications ILEC
Holdings LLC, which is a Delaware limited liability
company with a principal place of business in
Connecticut.
The sole member of Frontier
Communications ILEC Holdings LLC is Frontier
Communications Corporation, which is a Delaware
corporation with a principal place of business in
Connecticut.
[Doc. 45]. After such responses, the Plaintiff moved to remand the case to
state court due to an alleged lack of subject matter jurisdiction. [Doc. 46].
2

The Defendant responded opposing the Plaintiff’s motion for remand or in
the alternative asking for additional time to file a responsive brief. [Doc.
48]. The Defendant argued that the Plaintiff’s motion for remand was not
proper, in light of the Court’s stay on the case. [Id.]. On November 20,
2014, the Plaintiff replied to the Defendant’s response and additionally
moved to lift the stay on the case. [Docs. 49, 50].
On December 23, 2014, this Court granted the Plaintiff’s Motion to Lift
Stay solely for the purpose of resolving the subject matter jurisdictional
issue. [Doc. 52]. Further, this Court gave the Defendant fourteen days to
provide argument regarding the subject matter jurisdictional issue. [Id.].
Such time has now expired, and the Defendant has not provided any
argument to the Court.
This matter is now ripe for disposition.
II.

DISCUSSION
“Federal courts are not courts of general jurisdiction; they have only

the power that is authorized by Article III of the Constitution and the
statutes enacted by Congress pursuant thereto.” Bender v. Williamsport
Area Sch. Dist., 475 U.S. 534, 541 (1986). “Subject matter jurisdiction
cannot be conferred by the parties, nor can a defect in subject matter
jurisdiction be waived by the parties.”
3

Brickwood Contractors, Inc. v.

Datanet Engineering, Inc., 369 F. 3d 385, 390 (4th Cir. 2004). Issues of
subject matter jurisdiction “may be raised at any point during the
proceedings” by any party, and by the Court itself. Bender, 475 U.S. at
541.
Federal courts have original jurisdiction of civil actions between
citizens of different states, where the amount in controversy exceeds
$75,000 and there exists complete diversity between all plaintiffs and all
defendants.

28 U.S.C. § 1332.

For complete diversity to exist, “the

citizenship of each plaintiff [must be] diverse from the citizenship of each
defendant.” Caterpillar Inc. v. Lewis, 519 U.S. 61, 62 (1996) (citing Carden
v. Arkoma Associates, 494 U.S. 185, 187 (1990)).

“For purposes of

diversity jurisdiction, the citizenship of a limited liability company is
determined by the citizenship of all of its members.” Cent. W. Virginia
Energy Co. v. Mountain State Carbon, LLC, 636 F.3d 101, 103 (4th Cir.
2011) (citing Gen. Tech. Applications, Inc. v. Exro Ltda, 388 F.3d 114, 121
(4th Cir. 2004)).

“The party seeking federal jurisdiction has the burden

generally of proving that subject matter jurisdiction exists.”

Murphy &

Chapman, P.A. v. Metro. Life Ins. Co., No. 3:05-cv-0472-H, 2006 WL
211811, at *2 (W.D.N.C. Jan. 25, 2006) (citing Lovern v. Edwards, 190
F.3d 648, 654 (4th Cir. 1999); Richmond, Fredericksburg & Potomac R. Co.
4

v. United States, 945 F.2d 765, 768 (4th Cir. 1991); and Norfolk Southern
Ry. Co. v. Energy Development Corp., 312 F.Supp.2d 833, 835 (S.D.W.Va.
2004)).
A defendant may remove a civil action from state court where the
action is one “of which the district courts of the United States have original
jurisdiction.” 28 U.S.C. § 1441(a). Since the “existence of subject matter
jurisdiction is a threshold issue . . . any removed case lacking a proper
basis for subject matter jurisdiction must be remanded.” UMLIC Consol.,
Inc. v. Spectrum Fin. Servs. Corp., 665 F. Supp. 2d 528, 532 (W.D.N.C.
2009).
Here, this Court does not have subject matter jurisdiction over this
case because the parties are not completely diverse. The sole member of
Duke Energy is Duke Energy Corporation, which is organized and existing
under the laws of the state of Delaware. [Doc. 44]. Thus, Duke Energy is a
citizen of Delaware. The sole member of Frontier Communications of the
Carolinas LLC is Frontier Communications ILEC Holdings LLC, which is a
Delaware limited liability company. [Doc. 45]. In addition, ILEC Holdings
LLC is owned by another LLC which is owned by a Delaware corporation.
Hence, the citizenship of Frontier Communications of the Carolinas LLC is
clearly in Delaware. Therefore, complete diversity of citizenship does not
5

exist between the parties, and this Court does not have subject matter
jurisdiction over this case pursuant to 28 U.S.C. § 1332.
Thus, this case must be remanded to the General Court of Justice for
the State Court of North Carolina, Superior Court Division, Macon County.

ORDER
IT IS, THEREFORE, ORDERED that the Plaintiff’s Motion to Remand
[Doc. 46] be GRANTED and this action is hereby REMANDED to the
General Court of Justice for the State of North Carolina, Superior Court
Division, Macon County.
IT IS SO ORDERED.

6