Palmetto Automatic Sprinkler Co Inc v. Smith Cooper International Inc et al

Filing 15

ORDER granting 10 Motion to Remand to State Court. Clerk's Notice: Attorneys are responsible for supplementing the State Record with all documents filed in Federal Court. Signed by Honorable Margaret B Seymour on 1/21/2014.(asni, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
COLUMBIA DIVISION
Palmetto Automatic Sprinkler Co., Inc.,

Plaintiff,
vs.
Smith Cooper International, Inc., and
Leonhardt Pipe & Supply, Inc.,

Defendants.
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C.A. No. 3:13-CV-3313-MBS

ORDER

On October 18, 2013, Plaintiff Palmetto Automatic Sprinkler Co., Inc., (“Plaintiff”) filed this
action against Defendant Smith Cooper International, Inc. (“Smith Cooper”) and Defendant
Leonhardt Pipe & Supply, Inc. (“Leonhardt”) in the Lexington County Court of Common Pleas. In
its complaint, Plaintiff asserts claims for negligence, breach of warranties, breach of contract, breach
of contract accompanied by a fraudulent act, and violations of the South Carolina Unfair Trade
Practices Act. ECF No. 1. On November 27, 2013, Smith Cooper filed a notice of removal pursuant
to 28 U.S.C. §§ 1332 and 1446. ECF No. 1. On December 3, 2013, Leonhardt filed a motion to
remand the case to the Lexington County Court of Common Pleas. ECF No. 10. On December 9,
2013, Smith Cooper filed a response indicating that it does not oppose Leonhardt’s motion to
remand. ECF No. 11.
I. PROCEDURAL BACKGROUND
Following the filing of Plaintiff’s complaint on October 18, 2013, Smith Cooper was served
with a copy of the summons and complaint via certified mail on October 28, 2013. Id. at 1.
Thereafter, on November 27, 2013, Smith Cooper filed a notice of removal in this court pursuant to

28 U.S.C. §§ 1332 and 1446 on the basis of diversity jurisdiction.1 At the time Smith Cooper filed
its notice of removal, it was “unable to determine if Leonhardt was properly joined and served.”
ECF No. 11 at 1. On December 3, 2013, Leonhardt filed the instant motion to remand, indicating
that it had not consented to, and in fact opposed, removal of the case. ECF No. 8 at 1. Leonhardt’s
motion contains no information concerning service of process prior to Smith Cooper’s notice of
removal.
II. LEGAL BACKGROUND
Pursuant to 28 U.S.C. § 1441(a), “any 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.” 28 U.S.C. § 1441(a). The relevant procedure for removing a case to federal court is
as follows:
(a) A defendant or defendants desiring to remove any civil action or criminal prosecution
from a State court shall file in the district court of the United States for the district and
division within which such action is pending a notice of removal signed pursuant to Rule
11 of the Federal Rules of Civil Procedure and containing a short and plain statement of
the grounds for removal, together with a copy of all process, pleadings, and orders served
upon such defendant or defendants in such action.
(b) The notice of removal of a civil action or proceeding shall be filed within thirty days
after the receipt by the defendant, through service or otherwise, of a copy of the initial
pleading setting forth the claim for relief upon which such action or proceeding is based,
or within thirty days after the service of summons upon the defendant if such initial
pleading has then been filed in court and is not required to be served on the defendant,
whichever period is shorter.
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Plaintiff is a corporation organized and existing under and by virtue of the laws of the State
of South Carolina with its principal place of business in Lexington County, South Carolina.
ECF No. 1-1 at 7. Smith Cooper is a corporation organized and existing under and by virtue
of the laws of the State of California with its principal place of business in Commerce,
California. Id. Leonhardt is a corporation organized and existing under and by virtue of the
laws of the State of North Carolina with its principal place of business in Mecklenburg County,
North Carolina. Id. at 7-8. The amount in controversy exceeds $75,000. ECF No. 1 at 2.
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28 U.S.C. § 1446. “The Supreme Court has construed these statutes to require all defendants in a
case to join in or consent to removal, creating the so-called ‘rule of unanimity.’” Hartford Fire Ins.
Co. v. Harleysville Mut. Ins. Co., 736 F.3d 255, 259 (4th Cir. 2013). The Fourth Circuit has
recognized that “the rule of unanimity is consistent with [the court’s] obligation to construe removal
jurisdiction strictly because of the significant federalism concerns implicated.” Id. (internal
quotations omitted). “When a defendant does not timely join in a removal petition and the plaintiff
does not waive the irregularity, the plaintiff is entitled to a remand.” Funchess v. Blitz U.S.A., Inc.,
2010 WL 4780357, at *4 (D.S.C. Nov. 16, 2010).
Federal courts have recognized exceptions to the rule of unanimity. See Hartford Fire Ins. Co.,
736 F.3d at 259. A defendant need not join in or consent to removal if: “(1) it had not been served
with process at the time the removal petition was filed; (2) it is merely a nominal or formal party
defendant; or (3) the removed claim is independent of one or more nonremovable claims against the
nonjoining defendants.” Creekmore v. Food Lion, Inc., 797 F. Supp. 505, 508 (E.D. Va. 1992).
“The burden of demonstrating jurisdiction and therefore the propriety of removal rests with the
removing party.” Hartford Fire Ins. Co., 736 F.3d at 259. Thus, where a defendant does not consent
to removal, the party seeking removal has the burden of proving that an exception to the rule of
unanimity applies. See Creed v. Virginia, 596 F. Supp. 2d 930, 934 (E.D. Va. 2009).
III. DISCUSSION
In its motion to remand, Leonhardt contends that because it does not consent to removal, the
case must be remanded. ECF No. 10-1 at 1. In response, Smith Cooper concedes that it is “without
basis to oppose Leonhardt’s Motion to remand this action.” ECF No. 11 at 2. Specifically, Smith
Cooper contends that at the time it filed its notice of removal, it was not aware of whether Leonhardt
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had been properly joined and served. Id. Without providing any further information concerning
whether Leonhardt had been served with process, Smith Cooper’s response concedes that it “lacks
the requisite consent of Leonhardt necessary to proceed forward with removal of this case to the
District Court.” ECF No. 11 at 2.
Although Smith Cooper does not object to Leonhardt’s motion to remand, as a general rule,
the parties cannot stipulate to questions of federal subject matter jurisdiction. City Nat. Bank v.
Edmisten, 681 F.2d 942, 945 n.5 (4th Cir. 1982). In that regard, despite the consent of both
Defendants, the court must still consider whether remand is appropriate in this case. It is well
established that Leonhardt does not consent to removal. The court recognizes that ordinarily, the
failure of any defendant to consent to removal renders the removal improper and requires remand.
Tyler v. Gant, 2:11-118-TLW-BHH, 2011 WL 2119298, at *3 (D.S.C. Mar. 10, 2011), report and
recommendation adopted, 2:11-CV-118-TLW-BHH, 2011 WL 2111401 (D.S.C. May 27, 2011)
(“The failure of all served defendants to join in or consent to a removal petition within the thirty day
period of being served is sufficient to render removal improper and to require remand.”).
However, an exception to the rule of unanimity may be invoked if a defendant has not been
served with process at the time the removal petition was filed. At the time Smith Cooper filed its
removal petition, it lacked knowledge regarding whether Leonhardt had been properly served.
However, this lack of knowledge cannot satisfy the service of process exception to the rule of
unanimity. As the removing party, Smith Cooper bears the burden of establishing federal subject
matter jurisdiction. Jones v. Allstate Ins. Co., 258 F. Supp. 2d 424, 426 (D.S.C. 2003). Smith
Cooper has presented no evidence concerning whether Leonhardt was served with process at the time
the removal petition was filed. Instead, Smith Cooper has expressly “concede[d] that all conditions
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precedent to removal under 28 U.S.C. § 1446 have not been met.” ECF No. 11 at 2. Accordingly,
the court finds that Smith Cooper has not sustained its burden of proving that an exception to the rule
of unanimity is applicable. Because Leonhardt does not consent to the removal and because no
exception to the unanimity rule has been shown, the court grants Leonhardt’s motion to remand. See
Thalacker v. Concessions Int’l, LLC, 1:06CV2685, 2007 WL 521902, at *4 (N.D. Ga. Feb. 15, 2007)
(“Because Defendants have failed to show that this case falls under the exception to the unanimity
rule . . . this case was not properly removed and it is required to be remanded.”).
IV. CONCLUSION
For the foregoing reasons, Defendant Leonhardt’s motion to remand, ECF No. 10, is
GRANTED. This case is hereby REMANDED to the Lexington County Court of Common Pleas.
IT IS SO ORDERED.
s/ Margaret B. Seymour
Margaret B. Seymour
Senior United States District Judge
Columbia, South Carolina
January 21, 2014

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