Witchey et al v. First Gold Buyers, Inc.
MEMORANDUM (Order to follow as separate docket entry) re 3 motion to remand LDW, Inc., Witchey Enterprises, Inc., Dana Lee Witchey, Louis Anthony Witchey. Signed by Honorable Malachy E Mannion on 9/28/17. (bs)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF PENNSYLVANIA
LOUIS ANTHONY WITCHEY,
DANA LEE WITCHEY,
ENTERPRISES, INC., and
FIRST GOLD BUYERS, INC.
d/b/a SIGNATURE FUNDING
CIVIL ACTION NO. 3:16-2312
Presently before the Court is the plaintiffs’ motion to remand this
action to the state court from which it was removed. Finding that the Court
has federal subject matter jurisdiction over this action, the plaintiffs’ motion
to remand to state court is DENIED.
The individual plaintiffs in this case, Louis Anthony Witchey and Dana
Lee Witchey, together are one-hundred percent shareholders of two
corporate entities, Witchey Enterprises, Inc. and LDW Corp., both of which
are also named as plaintiffs. (Doc. 1, Exh. B). The individual plaintiffs are
Pennsylvania residents, and their two closely-held corporations are
organized under Pennsylvania law and maintain their principal places of
business in Pennsylvania. (Id.). Acting solely in their capacities as
authorized agents of their corporations, the plaintiffs executed a series of
agreements, security agreements, and other contractual obligations
(collectively, “the agreements at issue”), with the named defendant in this
case, First Gold Buyers, Inc., which is a New York corporation with its
principal place of business in the state of New York. (Id.; Doc. 9).
On October 13, 2016, the plaintiffs filed the present action in the
Court of Common Pleas of Luzerne County, Pennsylvania, alleging wideranging violations of both federal and state law. (Doc. 1, Exh. B). The
federal causes of action presented in the plaintiffs’ complaint include claims
arising under the federal Consumer Credit Protection Act, 15 U.S.C. §1601,
et seq., the federal Truth in Lending Act, 12 U.S.C. §2601, et seq., Title 12
of the Code of Federal Regulations (“Regulation Z”), 12 C.F.R. §226, et
seq., and the federal Real Estate Settlement Procedures Act, 12 U.S.C.
§2610, et seq. The plaintiffs also make several claims arising under state
law, such as Pennsylvania’s Unfair Trade Practices and Consumer
Protection Law, 73 P.S. §§201-1–201-9.3, as well as common law claims
for breach of contract and fraud.
On November 7, 2016, the defendant removed this action to the
United States District Court for the Middle District of Pennsylvania, alleging
federal subject matter jurisdiction based on both the parties’ diverse states
of citizenship and the presence of federal questions of law in the plaintiffs’
complaint. (Doc. 1, Exh. B). On December 6, 2016, the plaintiffs filed the
instant motion to remand (Doc. 3); the plaintiffs’ supporting brief (Doc. 6)
followed on December 20, 2016. The defendant filed a brief in opposition to
the plaintiffs’ motion to remand on January 3, 2017 (Doc. 9), and the
plaintiffs filed a reply to the defendant’s brief in opposition on January 16,
2017 (Doc. 10). The Court then granted the defendant’s request for leave
to file a sur reply to the plaintiffs’ reply brief; the defendant’s sur reply (Doc.
14) was thereafter filed on January 31, 2017. The motion to remand this
matter to state court has been fully briefed and is now ripe for disposition.
For the following reasons, the Court will deny the plaintiffs’ motion.
This case presents no basis for remand to the state court in which it
was filed because the federal court has subject matter jurisdiction over the
case based on both federal question and diversity of citizenship jurisdiction.
“[A]ny civil action brought in a state court of which the district courts of the
United States have original jurisdiction may be removed by the defendant
or the defendants to the district court of the United States for the district
and division embracing the place where such action is pending.” 28 U.S.C.
§1441. “If it appears at any time that the district court lacks subject matter
jurisdiction, the case shall be remanded.” Id. §1447(c). If, however, the
federal district court does possess subject matter jurisdiction, the case
cannot be remanded.
A. Federal Question Jurisdiction
The federal district courts have original jurisdiction over any federal
claim arising under the Constitution, laws, or treaties of the United States.
See 28 U.S.C. §1331. Whether a claim arises under federal law for
purposes of federal question jurisdiction is governed by the “well pleaded
complaint rule,” providing that federal jurisdiction exists only where a
federal question is presented on the face of a plaintiff’s properly pleaded
complaint. Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). This
paradigm holds true regardless of the number of state law claims that are
also presented in a plaintiff’s complaint and regardless of the complaint’s
relative proportions of federal claims to state claims.
The plaintiffs’ argument that the presence of particular state law
claims in the complaint somehow avoids federal question jurisdiction is
therefore without merit. Even a single question of federal law presented in
the plaintiff’s complaint would be sufficient for the federal district court to
retain federal subject matter jurisdiction over the instant action. Here, the
plaintiffs have asserted at least twenty separate claims based on federal
statutory law; the presence of any one of those claims is enough to
preclude this case’s remand to state court.
Since the well pleaded complaint rule makes the plaintiff the master
of the complaint, a plaintiff may choose to have the case heard in state
court simply by avoiding claims based on federal law. See id. at 388.
Relatedly, a claim’s ultimate success or chances of success on the merits
is irrelevant to this inquiry. If a plaintiff makes a claim based on an act of
Congress, then jurisdiction in the federal courts exists whether or not the
claim is ultimately held to be valid. See Louisville & N. R. Co. v. Rice, 247
U.S. 201, 202 (1918).
The plaintiffs here relied heavily on federal law in establishing their
allegations against the defendant, so jurisdiction in the federal district court
is appropriate. Accordingly, the action cannot be remanded to the state
court from which it originated.
B. Diversity of Citizenship Jurisdiction
The federal district courts have original jurisdiction over all civil
actions in which the matter in controversy exceeds $75,000 . . . and is
between . . . citizens of different states. See 28 U.S.C. §1332(a). A
defendant may remove an action on the basis of diversity of citizenship if
there is complete diversity between all named plaintiffs and all named
defendants and if no defendant is a citizen of the forum state. See Lincoln
Prop. Co. v. Roche, 546 U.S. 81, 84 (2005). As a preliminary matter, the
plaintiffs’ complaint alleges harms totaling well in excess of $75,000, so the
amount in controversy requirement is satisfied.
For individual parties, one’s place of citizenship is synonymous with
his or her place of domicile. See Vlandis v. Kline, 412 U.S. 441, 454 (1973).
For corporations, citizenship is determined with regard to both the entity’s
state of incorporation and its principal place of business where corporate
officers direct, control, and coordinate the corporation’s activities. See
Hertz Corp. v. Friend, 559 U.S. 77, 78 (2010). In the instant action, it is
undisputed that the individual plaintiffs, Louis and Dana Witchey, reside
and are domiciled in Pennsylvania and that the corporate plaintiffs, Witchey
Enterprises, Inc. and LDW Corp., are organized under Pennsylvania law
and operate exclusively out of Pennsylvania. (Doc. 1, Exh. B). All plaintiffs
are thus exclusively citizens of Pennsylvania. The defendant named in the
complaint, First Gold Buyers, Inc., is indisputably a corporation organized
under the laws of New York and maintaining its principal place of business
in New York. (Doc. 9, Exh. A).
While the plaintiffs later in their motion to remand point to the
citizenship of another business entity, Signature Funding, LLC, in an
attempt to argue that the parties are not of diverse citizenship, this
argument is without merit. (Doc. 6). The question of whether diversity of
citizenship exists is determined at the time when the complaint is filed. S.
Cross Overseas Agencies, Inc. v. Wah Kwong Shipping Group Ltd., 181
F.3d 410, 414 n.2 (3d Cir. 1999) (citing Smith v. Sperling, 354 U.S. 91, 93
n.1 (1957)). As such, the only parties whose states of citizenship are
relevant to determining whether the federal court has subject matter
jurisdiction based on diversity of citizenship are those parties named in the
Here, the named parties are of diverse citizenship, as the named
defendant is a citizen of a state that is different from that of the named
plaintiffs, and the amount in controversy exceeds $75,000. (Doc. 1, Exh.
A). Accordingly, jurisdiction in this Court is proper, and the action cannot be
remanded to state court.
For the reasons outlined above, the plaintiffs’ motion to remand this
action to state court will be DENIED. An appropriate order shall follow.
s/ Malachy E. Mannion
MALACHY E. MANNION
United States District Judge
Date: September 28, 2017
O:\Mannion\shared\MEMORANDA - DJ\CIVIL MEMORANDA\2016 MEMORANDA\16-2312-01.docx
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