Providence Piers, LLC v. SMM New England, Inc. et al

Filing 25

OPINION AND ORDER denying 7 Motion to Remand. So Ordered by Judge William E. Smith on 1/16/13. (Jackson, Ryan)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
________________________________
)
)
)
Plaintiff,
)
)
v.
)
)
SMM NEW ENGLAND, INC.; THE CITY )
OF PROVIDENCE, RHODE ISLAND;
)
ANDREW J. ANNALDO, in his
)
capacity as Chairman & Secretary )
of the City of Providence Board )
of Licenses; ARYS BATISTA, in
)
his capacity as Vice Chairman of )
the City of Providence Board of )
Licenses; ALLENE MAYNARD, in her )
capacity as Member of the City
)
of Providence Board of Licenses; )
JEFFREY WILLIAMS, in his
)
capacity as Member of the City
)
of Providence Board of Licenses; )
and EVERETT BIANCO, in his
)
capacity as Member of the City
)
of Providence Board of Licenses, )
)
Defendants.
)
________________________________)
PROVIDENCE PIERS, LLC,

C.A. No. 12-532-S

OPINION AND ORDER
WILLIAM E. SMITH, United States District Judge.
Before

the

Court

is

Plaintiff

Providence

Piers,

LLC’s

(“Providence Piers” or “Plaintiff”) Motion to Remand this case
to the Rhode Island Superior Court.
below, the motion is DENIED.

For the reasons stated

I.

Background
This action began as a suit by Providence Piers, a Rhode

Island limited liability company, against SMM New England, Inc.
(“SMM”),

a

Delaware

interference
trespass,

with

private

corporation,

Plaintiff’s
nuisance,

for

use

tortious

its

real

property,

temporary

and

of

negligence,

and

permanent

injunctive relief in connection with damage to a building (the
“Building”) on Plaintiff’s land allegedly due to a scrap metal
pile

on

SMM’s

land.

Plaintiff

subsequently

dismissed

its

initial suit and filed a substantially identical complaint that,
in addition to the claims listed above against SMM, also seeks
injunctive

and

declaratory

relief

against

the

City

of

Providence, Rhode Island and each of the individuals named as
Defendants in his or her capacity as a member of the City of
Providence Board of Licenses (collectively, the “City”).

SMM

removed the case to this Court pursuant to 28 U.S.C. § 1441,
arguing

diversity

of

citizenship.

Plaintiff

now

moves

to

remand, contending a lack of complete diversity because both
Plaintiff and the City are Rhode Island entities.
II.

Facts
Plaintiff

Allens

Avenue,

is

the

owner

Providence,

of

Rhode

the

property

Island,

located

where

the

at

200

Building,

which is on the National Register of Historic Places, stands.
In 2005, a tower (the “South Tower”) was added to the south face
2

of

the

Building,

but,

in

order

to

preserve

the

historic

structure, the South Tower was not physically attached to the
Building.
In October 2011, SMM began stockpiling scrap metal on the
lot

immediately

south

of

Plaintiff’s

lot.

Because

the

Providence harbor required dredging before ships could remove
the scrap metal from SMM’s property, the scrap metal began to
accumulate.

It grew to more than 50,000 tons and was located

50-100 feet from the Building.
On January 18, 2012, the City approved a “junkshop” license
for SMM under R.I. Gen. Laws § 5-21-1 (Local licensing–Fees–
Penalty–Record

of

transaction).

1

Plaintiff

claims

that

the

junkshop license was improperly issued by the City because Rhode
Island

law

provides

that

no

license

shall

be

granted

for

a

junkshop that is (i) less than 1000 feet from the nearest edge
of any highway on the interstate or primary system, or (ii) less
than 600 feet from any other state highway.
21-4.

R.I. Gen. Laws § 5-

Plaintiff alleges that the pile was located less than

1

While both Plaintiff’s Complaint and SMM’s Answer stated
that the junkshop license had been “issued” to SMM on January
18, 2012, SMM clarified during oral argument that the City
approved the license in January and then issued it on November
9, 2012.
(Oral Argument Tr. 12, Nov. 28, 2012.)
The record
indicates that SMM operated as a junkshop before the issuance of
the license without being fined or sanctioned in any way,
suggesting that a junkshop license may not be necessary for SMM
to legally stock pile scrap metal on its property.
3

1000 feet from I-95 and less than 600 feet from Allens Avenue, a
state highway.
Plaintiff’s

tort

claims

against

SMM

assert

that

its

historic Building has been damaged by the accumulating tower of
scrap

metal

located

within

a

stone’s

throw

of

its

walls.

Plaintiff’s claims for equitable relief against the City request
an injunction ordering the City to rescind the junkshop license
issued to SMM and to not renew it in 2013, and declaratory
relief to the effect that the junkshop license was issued in
contravention of state law.

(Notice of Removal, Ex. A, ¶¶ 73-

92, ECF No. 1-1.)
III. Discussion
It

is

well

settled

that

a

federal

court

has

diversity

jurisdiction over a matter only when complete diversity exists
between the parties; that is, when no plaintiff is a citizen of
the same state as any defendant.

Diaz-Rodriguez v. Pep Boys

Corp., 410 F.3d 56, 58 (1st Cir. 2005); 28 U.S.C. § 1332(a).
Additionally,

diversity

jurisdiction

exists

only

where the amount in controversy exceeds $75,000.

over

matters

28 U.S.C. §

1332(a).
A.

Diversity of Citizenship

Neither

party

disputes

that

this

Court

jurisdiction but for the joinder of the City.
diversity

exists

among

the

parties
4

because

has

original

SMM argues that
the

City

was

fraudulently joined, and it should therefore be disregarded for
purposes of determining whether diversity of citizenship exists.
See Polyplastics, Inc. v. Transconex, Inc., 713 F.2d 875, 877
(1st Cir. 1983) (“A party fraudulently joined to defeat removal
. . . is disregarded in determining diversity of citizenship.”);
Lawrence Builders, Inc. v. Kolodner, 414 F. Supp. 2d 134, 137
(D.R.I. 2006) (“[O]nce a court has determined that a party has
been fraudulently joined, it proceeds to analyze jurisdiction
without

reference

“Fraudulent

to

joinder

the

fraudulently

describes

any

joined

improper

party.”).

joinder,

so

a

defendant need not prove that the plaintiff intended to mislead
or deceive in order to sustain its burden” of proving that a
party was fraudulently joined.
C.A.

No.

2006).

06-108ML,
This

2006

Court

has

WL

Antonucci v. Cherry Hill Manor,

2456488,

stated

that

at

*2

“[t]he

(D.R.I.

Aug.

linchpin

of

22,
the

fraudulent joinder analysis is whether the joinder of the nondiverse

party

has

a

reasonable

basis

in

law

and

fact.”

Gabrielle v. Allegro Resorts Hotels, 210 F. Supp. 2d 62, 67
(D.R.I. 2002).
Here, joinder of the City was improper.

The only purpose

of the action against the City is to challenge the issuance, and
to seek the revocation, of the license issued to SMM to operate
as a junkshop.
that

only

it

The Rhode Island Supreme Court has made clear
has

jurisdiction
5

to

hear

appeals

of

licensing

decisions by the City. 2
A.2d

1236,

certiorari
procedure

1239-40
to

to

See Phelps v. Bay St. Realty Corp., 425

(R.I.

the

Rhode

seek

to

1981)

Island
overturn

(petition

Supreme
a

for

Court

parking

a

was

lot

writ

the

of

proper

license

that

violated town ordinances); E. Scrap Servs., Inc. v. Harty, 341
A.2d 718, 718-20 (R.I. 1975) (proper procedure to review the
denial of a second-hand shop license under R.I. Gen. Laws § 521-1 was to seek a writ of certiorari); Aldee Corp. v. Flynn, 72
R.I. 199, 200-02 (R.I. 1946) (proper procedure for review of
denial of an application for a gasoline filling station license
was to seek a writ of certiorari).

The proper procedure to

challenge the license and obtain the relief sought by Plaintiff
would be to petition the Rhode Island Supreme Court for a writ
of certiorari.
Because

Plaintiff

may

not

pursue

the

injunctive

and

declaratory relief sought in Rhode Island Superior Court, the
City was a fraudulently joined party.

Cf. Lafazia v. Ecolab,

Inc., C.A. No. 06-491ML, 2006 WL 3613771, at *1 (D.R.I. Dec. 11,
2006) (District Court for the District of Rhode Island could

2

During
oral
argument,
Plaintiff
characterized
its
challenge to the approval of the junkshop license as a challenge
to the validity of the city ordinance under which the license
was issued.
(Oral Argument Tr. 4-5, Nov. 28, 2012.)
This is
not consistent with Plaintiff’s Complaint.
The prayers for
relief in the Complaint clearly amount to claims that the grant
of a junkshop license to SMM by the City violated the state’s
licensing statute.
6

exercise diversity jurisdiction because non-diverse defendants
were fraudulently joined where all claims against them should
have been brought in Workers’ Compensation Court rather than
Rhode Island Superior Court).
Plaintiff also argues that the City is an indispensable
party that must be joined even when no separate claim against it
is raised.

See Audi of Smithtown, Inc. v. Volkswagen of Am.,

Inc., No. 08-CV-1773 (JFB)(AKT), 2009 WL 385541, at *5 (E.D.N.Y.
Feb.

11,

2009)

(finding

that

non-diverse

defendant

was

not

fraudulently joined, even though no claim was asserted against
it, because it was a necessary party in that its interests would
be

substantially

defendant).

effected

by

a

judgment

against

This Court does not agree.

the

diverse

Rule 19(a) of the

Federal Rules of Civil Procedure states that:
A person who is subject to service of process and
whose joinder will not deprive the court of subjectmatter jurisdiction must be joined as a party if:
(A) in that person's absence, the court cannot accord
complete relief among existing parties; or
(B) that person claims an interest relating to the
subject of the action and is so situated that
disposing of the action in the person's absence
may:
(i) as a practical matter impair or impede the
person's ability to protect the interest; or
(ii) leave
an
existing
party
subject
to
a
substantial
risk
of
incurring
double,
multiple,
or
otherwise
inconsistent
obligations because of the interest.

7

Fed. R. Civ. P. 19(a)(1). 3

This Court has the ability to award

complete relief to the Plaintiff even without the City as a
defendant.

The

Court

may

award

compensatory

damages

and/or

injunctive relief preventing SMM from operating its business in
a manner detrimental to Plaintiff.

Furthermore, neither the

City, nor any other party, has alleged that the City has any
independent

interest

at

stake

in

this

litigation.

While

Plaintiff argues that the City must be joined because SMM will
be harmed if the City is prevented from re-issuing the junkshop
license

to

SMM,

this

argument

has

no

merit

because

SMM

is

already a party to the suit as a defendant and is seeking no
affirmative relief.
B.

Amount in Controversy

SMM has carried its burden of showing that the amount in
controversy

exceeds

$75,000.

“The

3

party

invoking

federal

Plaintiff refers to the Rhode Island Superior Court Rules
of Civil Procedure to argue that the City is a necessary and
indispensable party.
However, the federal rules govern here.
“Federal courts sitting in diversity apply state substantive law
and federal procedural rules.” Correia v. Fitzgerald, 354 F.3d
47, 53 (1st Cir. 2003).
While the line between a substantive
law and a procedural rule is often fine, “[w]hen a situation is
covered by one of the Federal Rules [of Civil Procedure] . . .
the court has been instructed to apply the Federal Rule, and can
refuse to do so only if the Advisory Committee [on the Federal
Rules of Civil Procedure], [the Supreme Court], and Congress
erred in their prima facie judgment that the Rule in question
transgresses neither the terms of the [Rules] Enabling Act nor
constitutional restrictions.”
Hanna v. Plumer, 380 U.S. 460,
471 (1965).
Regardless, the City is not necessary and
indispensable under either the state or federal rules of civil
procedure.
8

jurisdiction has the burden of establishing that the court has
subject matter jurisdiction over the case.”

Amoche v. Guar.

Trust Life Ins. Co., 556 F.3d 41, 48 (1st Cir. 2009).

Though

the First Circuit has not prescribed the removing party’s burden
of proving the amount in controversy for purposes of diversity
jurisdiction where the plaintiff has not alleged an amount of
damages in the pleadings, Milford-Bennington R.R. Co. v. Pan Am
Rys., Inc., 695 F.3d 175, 178-79 (1st Cir. 2012), this Court
agrees with several recent district court decisions which hold
that defendants must show a “reasonable probability” that the
amount in controversy exceeds $75,000.

See, e.g., Reynolds v.

World Courier Ground, Inc., 272 F.R.D. 284, 285-86 (D. Mass.
2011); Mut. Real Estate Holdings, LLC v. Houston Cas. Co., Civil
No.

10–cv–236–LM,

2010

WL

3608043,

at

*3

(D.N.H.

Sept.

13,

2010); Youtsey v. Avibank Mfg., Inc., 734 F. Supp. 2d 230, 236
(D.

Mass.

2010).

Moreover,

the

First

Circuit

has

held

definitively that a defendant removing a case to federal court
under the Class Action Fairness Act of 2005 (“CAFA”), Pub. L.
No. 109-2, 119 Stat. 4 (codified in various sections of Title
28),

must

show

a

reasonable

probability

that

the

amount

controversy will exceed the jurisdictional threshold.
556

F.3d

showing

at

48-49.

that

the

There

is

no

jurisdictional

in

Amoche,

reason

why

the

burden

for

amount

is

met

should

be

different for removal under diversity of citizenship than it is
9

under CAFA.

See Youtsey, 734 F. Supp. 2d at 236 (“In this

court’s view, every reason the First Circuit used in Amoche in
arriving at the ‘reasonable probability’ standard in the context
of CAFA applies equally as well [in the context of diversity of
citizenship].”).
SMM has established to a reasonable probability that if
Plaintiff’s
$75,000.

allegations

are

true,

the

damages

would

exceed

It submitted with its Objection to Plaintiff’s Motion

to Remand a Declaration of James P. McLoughlin, P.E., (ECF No.
12), an experienced structural engineer, stating that the cost
of

repairing

$75,000.
was

Building

and

the

South

Tower

would

exceed

Such a declaration may be considered even though it

submitted

Willingham

the

v.

subsequent
Morgan,

to

395

the

U.S.

Notice
402,

of

407

n.3

Removal.
(1969)

See
(“This

[jurisdictional] material should have appeared in the petition
for removal.

However, for purposes of this review it is proper

to treat the removal petition as if it had been amended to
include the relevant information contained in the later-filed
affidavits.”); Cohn v. Petsmart, Inc., 281 F.3d 837, 840 n.1
(9th

Cir.

motion

to

2002)
remand

(treating
for

lack

the
of

defendant’s
diversity

objection

jurisdiction

to
as

the
an

amendment to the notice of removal to include evidence of the
amount in controversy).

Therefore, Plaintiff has satisfied its

10

burden of showing that the amount in controversy requirement for
diversity jurisdiction has been met.
IV.

Conclusion
For the reasons discussed above, this Court finds that the

City was fraudulently joined to the suit filed in Rhode Island
Superior Court.

Therefore, the City is disregarded for purposes

of determining diversity of citizenship and complete diversity
exists among the parties to this action.
established

a

reasonable

controversy exceeds $75,000.

probability

that

Moreover, SMM has
the

amount

in

Therefore, this Court has subject

matter jurisdiction and Plaintiff’s Motion to Remand is DENIED.

IT IS SO ORDERED.

William E. Smith
William E. Smith
United States District Judge
Date: January 16, 2013

11