Merrill Lynch Commercial Finance Corp. v. Hemstreet et al

Filing 21

ORDER Defendants' Motion to Remand to State Court 7 is GRANTED. By this Order, Civil No. 09-1061-HA is remanded to the Circuit Court of the Stateof Oregon for Multnomah County. Accordingly, plaintiffs Motion for Summary Judgment 12 and defendants' Motion to Hold Summary Judgment Proceedings in Abeyance 18 are denied asmoot. This action is closed, and any other pending motions are denied as moot. Signed on 3/1/10 by Judge Ancer L. Haggerty. (jlr)

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UNITED STATES DISTRICT C O U R T F O R T H E D I S T R I C T OF O R E G O N PORTLAND D N I S I O N

MERRILLLYNCHCOMMERC~

F I N A N C E C O R P . , a D e l a w a r e corporation, Plaintiff,

v.
M A R K S. HEMSTREET, an individual; SHILO M A N A G E M E N T C O R P O R A T I O N , an Oregon corporation; JDCK., LLC, an O r e g o n l i m i t e d l i a b i l i t y company; T R O Y L O D G E , LLC, a n O r e g o n l i m i t e d l i a b i l i t y c o m p a n y ; a n d L S S R , LLC, a n O r e g o n l i m i t e d l i a b i l i t y company, Defendants,

ORDER C i v i l No. 0 9 - 1 0 6 1 - H A

v.
MERRILL LY N C R & CO., INC., Counterclaim-Defendant.

H A G G E R T Y , D i s t r i c t Judge: Defendants move for an order remanding this m a t t e r to state court [7]. Oral argument is d e e m e d u n n e c e s s a r y . F o r t h e r e a s o n s o u t l i n e d b e l o w , t h e m o t i o n i s granted.

1 - ORDER

BACKGROUND
T h i s a c t i o n w a s c o m m e n c e d i n t h e Circuit C o u r t o f t h e State o f O r e g o n for M u l t n o m a h C o u n t y o n M a r c h 2 3 , 2 0 0 9 . D e f e n d a n t s w e r e s e r v e d o n J u n e 2 3 , 2 0 0 9 , and f i l e d a n A n s w e r o n July 10, 2009. On August 3, 2009, defendants filed an Amended A n s w e r asserting c l a i m s a g a i n s t p l a i n t i f f a n d a g a i n s t c o u n t e r c l a i m - d e f e n d a n t , M e r r i l l L y n c h & C o . , Inc. ( M e r r i l l ) . O n September 4 , 2 0 0 9 , Merrill filed a Notice o f Removal to this court, accompanied b y a C o n s e n t s i g n e d b y p l a i n t i f f M e r r i l l L y n c h C o m m e r c i a l F i n a n c e Corp. ( M e r r i l l F i n a n c e ) . D e f e n d a n t s s u b s e q u e n t l y m o v e d t o r e m a n d . T h a t m o t i o n is w e l l - t a k e n . STANDARDS T h e general removal statute, 28 U.S.C.A. § 1441, provides that "any civil action brought i n a S t a t e c o u r t o f w h i c h t h e d i s t r i c t c o u r t s o f t h e U n i t e d S t a t e s h a v e original j u r i s d i c t i o n , m a y b e removed b y the defendant o r the defendants, to t h e district court o f t h e United States for t h e district a n d division embracing the place w h e r e such action is pending." § 1441 (a) (emphasis added). Section 1446 o f Title 28 o f t h e United States Code establishes t h e procedures for r e m o v a l o f a c a s e u n d e r § 1441. S e e 2 8 U . S . C . A . § 1446. A s s e r t i n g a m o t i o n to r e m a n d i s t h e p r o p e r p r o c e d u r e f o r c h a l l e n g i n g r e m o v a l . S e e N

Cal. Dist. Council o fLaborers v. Pittsburgh-Des Moines Steel Co., 69 F.3d 1034, 1037-38 ( 9 t h
C i r . 1995). T h e r e is a " s t r o n g p r e s u m p t i o n " a g a i n s t r e m o v a l a n d t h e b u r d e n o f p e r s u a s i o n i s placed upon the party seeking removal. Gaus v. Miles, Inc., 980 F.2d 564, 566 ( 9 t h Crr. 1992) (citing Nishimoto v. Federman-Bachrach & Assocs., 903 F.2d 709, 712 n.3 (9th Crr. 1990);

E m r i c h v. Touche Ross & Co., 846 F.2d 1190, 1195 (9th Cir. 1 9 8 8 » ; see also Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108 (1941) (because Congress restricted the jurisdiction o f

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federal courts o n removal, t h e removal statute i s strictly construed against removal jurisdiction) (pre-1988 amendment); California ex rei. Lockyer v. Dynegy, Inc., 375 F.3d 831, 838 (9th Cir. 2 0 0 4 ) ( r e c o g n i z i n g t h a t f e d e r a l j u r i s d i c t i o n m u s t b e r e j e c t e d i f t h e r e i s a n y d o u b t as t o t h e r i g h t o f r e m o v a l a n d t h a t t h e b u r d e n o f e s t a b l i s h i n g f e d e r a l j u r i s d i c t i o n falls t o t h e p a r t y i n v o k i n g t h e statute) (citing Ethridge v. Harbor House Rest., 861 F.2d 1389, 1393 (9th Cir. 1988). DISCUSSION D e f e n d a n t s assert correctly t h a t r e m o v a l statutes are s t r i c t l y c o n s t r u e d a n d r e m o v a l i s disfavored. W h i l e c o u n s e l f o u n d n o a u t h o r i t i e s w i t h i n t h e N i n t h C i r c u i t d i r e c t l y a d d r e s s i n g w h e t h e r a c o u n t e r c l a i m d e f e n d a n t c a n seek r e m o v a l , this c o u r t c o n c u r s w i t h t h e w e l l - r e a s o n e d d e c i s i o n b y t h e F o u r t h C i r c u i t t h a t h e l d t h a t a c o u n t e r c l a i m d e f e n d a n t has n o r i g h t t o r e m o v e t h e c a s e to f e d e r a l c o u r t , s i n c e i t i s n o t a " d e f e n d a n t " i n t h e t r a d i t i o n a l s e n s e o f t h e t e r m . P a l i s a d e s

Collections, L L C v. Short, SS2 F.3d 3 2 7 ( 4 t h Cir. 2 ( 0 8 ) . T h e Fourth Circuit's ruling is i n
a c c o r d a n c e w i t h S h a m r o c k O i l a n d i s p e r s u a s i v e a u t h o r i t y for p u r p o s e s o f r e s o l v i n g p l a i n t i f f s motion: O f course, additional c o u n t e r - d e f e n d a n t s , l i k e t h i r d - p a r t y d e f e n d a n t s , a r e c e r t a i n l y n o t d e f e n d a n t s a g a i n s t w h o m t h e o r i g i n a l p l a i n t i f f a s s e r t s claims. Thus, w e easily conclude that an additional counter-defendant is not a "defendant" for p u r p o s e s o f § 1441(a). * * * C o n g r e s s h a s s h o w n t h e a b i l i t y t o c l e a r l y e x t e n d t h e reach o f removal statutes to include counter-defendants, cross-claim defendants, o r third-party defendants. In crafting § 1441 (a), however, Congress m a d e t h e c h o i c e to r e f e r o n l y t o " t h e d e f e n d a n t o r t h e d e f e n d a n t s , t I a c h o i c e w e m u s t respect.

P a l i s a d e s C o l l e c t i o n s , 552 F . 3 d a t 3 3 3 ( c i t a t i o n s a n d i n t e r n a l q u o t a t i o n s o m i t t e d ) .
T h i s c o u r t concludes t h a t counterclaim-defendant Merrill i s n o t a d e f e n d a n t a n d lacks t h e p o w e r to r e m o v e a n a c t i o n f r o m s t a t e c o u r t .

3 -ORDER

Opposing counsel's efforts to advance a m o r e liberal interpretation o f Shamrock Oil, a n d t h e N i n t h C i r c u i t p r e c e d e n t r e g a r d i n g r e m o v a l , a r e unavailing.

CONCLUSION
F o r t h e reasons provided above, defendants' M o t i o n t o R e m a n d to State Court [7] is GRANTED. B y this Order, Civil No. 09-1061-HA is remanded to the Circuit Court o f the State o f O r e g o n f o r M u l t n o m a h C o u n t y . A c c o r d i n g l y , p l a i n t i f f s M o t i o n f o r S u n u n a r y J u d g m e n t [12] a n d d e f e n d a n t s ' M o t i o n t o H o l d S u m m a r y J u d g m e n t P r o c e e d i n g s i n A b e y a n c e [18] a r e d e n i e d a s m o o t . T h i s a c t i o n i s c l o s e d , a n d a n y o t h e r p e n d i n g m o t i o n s a r e d e n i e d as m o o t . IT IS S O ORDERED. D A T E D this

- L d a y o f March, 2010.

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A n c e r L. H a g g U n i t e d States D i s t r i c t J u d g e

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