Republic Metals Corporation v. Gray et al
Filing
13
MEMORANDUM OPINION AND ORDER granting 7 Motion to Remand to State Court filed by Republic Metals Corporation. Plaintiff's August 2, 2013 motion to remand is granted, and this case is remanded to the 193rd Judicial District Court of Dallas County, Texas. The clerk of court shall effect the remand according to the usual procedure. (Ordered by Chief Judge Sidney A Fitzwater on 8/7/2013) (Chief Judge Sidney A Fitzwater)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
REPUBLIC METALS CORPORATION, §
§
Plaintiff,
§
§ Civil Action No. 3:13-CV-3001-D
VS.
§
§
MULLIGAN MINT, INC., et al.,
§
§
Defendants. §
MEMORANDUM OPINION
AND ORDER
Plaintiff’s August 2, 2013 motion to remand is granted, and this case is remanded to
state court.1
A case cannot be removed to federal court based on diversity of citizenship when a
properly joined and served in-state citizen is a defendant. See 28 U.S.C. § 1441(b)(2) (“A
civil action otherwise removable solely on the basis of the jurisdiction under section 1332(a)
of this title may not be removed if any of the parties in interest properly joined and served
as defendants is a citizen of the State in which such action is brought.”). In other words,
even though there is complete diversity of citizenship, the removal statute does not permit
1
Under § 205(a)(5) of the E-Government Act of 2002 and the definition of “written
opinion” adopted by the Judicial Conference of the United States, this is a “written opinion[]
issued by the court” because it “sets forth a reasoned explanation for [the] court’s decision.”
It has been written, however, primarily for the parties, to decide issues presented in this case,
and not for publication in an official reporter, and should be understood accordingly.
removal by Texas citizens where, as here, the federal court sits in Texas.2 It is undisputed
that all three defendants are Texas citizens and that all three have been properly joined and
served.
In response to plaintiff’s motion to remand, defendants raise a new basis for removal
not mentioned in their notice of removal: that § 1441(b)(2) does not preclude removal
because they are not relying solely on diversity of citizenship, but are instead relying on
diversity and a contractual provision that mandates that this lawsuit be brought in MiamiDade County, Florida. See Ds. Br. 2, ¶ 4 (“The basis of the removal is a complete diversity
of parties and the contractual provision which mandates the State Court Action be brought
in the County of Miami-Dade, State of Florida.”); id. at 3, ¶ 7 (“In this action, removal is
based upon a contractual forum clause and diversity, not ‘solely on the basis of jurisdiction
under Section 1332(a)’ (diversity jurisdiction).”). Defendants’ position is incorrect.
First, “[s]ection 1441(b) explicitly provides, and the cases uniformly hold, that
diversity cases may be removed to federal court only if none of the parties in interest properly
joined and served as a defendant is a citizen of the state in which the action was brought.”
14B Charles Alan Wright, et al., Federal Practice and Procedure § 3723, at 683 (4th ed.
2009) (emphasis added).
Second, even if defendants could invoke the forum selection clause, the clause
2
Although this type of defect is procedural, see, e.g., Halmekangas v. State Farm Fire
& Casualty Co., 603 F.3d 290, 295 n.18 (5th Cir. 2010), plaintiff has filed a timely motion
to remand, thereby properly challenging this procedural defect.
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provides that “all legal proceedings . . . shall be brought in the State or Federal Courts sitting
in Miami-Dade County, Florida,” Ds. App. 3, not in this court. Defendants maintain that,
“[w]hen the parties to a contract choose a forum in which to litigate, the parties are bound
by such forum choice, and such forum choice allows for removal and the transfer of the
pending action.” Ds. Br. 3, ¶ 8 (emphasis added). But the cases they cite in support of this
assertion do not withstand scrutiny. The first case is High Rev Motorsports, L.L.C. v. Yang
Ming Marine Transport Corp., 2013 WL 607155 (N.D. Tex. Feb. 19, 2013) (Fish, J.). But
in High Rev Motorsports the notice of removal shows that the removing defendant relied on
federal question jurisdiction to remove the case. See No. 3:12-CV-3684-G, ECF Doc. No.
1 at 2, ¶ 8 (“Removal to this Court is proper because federal subject matter jurisdiction exists
due to a federal question, 28 U.S.C. § 1331.”). The removing defendant did not, as
defendants seem to suggest in their brief, remove based on a forum selection clause, and the
restriction of § 1441(b)(2) was not at issue. The other case defendants cite to support this
assertion is GP Plastics Corp. v. Interboro Packaging Corp., 108 Fed. Appx. 832 (5th Cir.
2004). But GP Plastics involved a remand to state court based on a forum selection clause
that precluded removal. See id. at 833 (“Interboro removed to federal district court on
diversity grounds. Citing the parties’ forum-selection agreement, the district court remanded
the action to state court. We AFFIRM the judgment of the district court, holding that the
complaint invokes a forum-selection clause constituting a valid waiver of Interboro’s
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removal rights.”).3
In this case, where removal is not available, defendants must rely on a procedure that
is clearly available to them in Texas state court: a motion to dismiss based on the forum
selection clause. See, e.g., In re Ruby Tequila’s Amarillo W., LLC, 2012 WL 537812, at *2
(Tex. App. Feb. 17, 2012) (per curiam) (orig. proceeding) (“A motion to dismiss is the proper
procedural means of enforcing a forum-selection clause.”).
Accordingly, plaintiff’s August 2, 2013 motion to remand is granted, and this case is
remanded to the 193rd Judicial District Court of Dallas County, Texas. The clerk of court
shall effect the remand according to the usual procedure.
SO ORDERED.
August 7, 2013.
_________________________________
SIDNEY A. FITZWATER
CHIEF JUDGE
3
Defendants make a number of assertions in their brief about the enforceability of
forum selection clauses. These assertions, and the cases on which defendants rely, do not
support their position that this case is removable despite § 1441(b)(2).
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