Goldman Phipps PLLC et al v. Gray, Ritter & Graham, P.C. et al

Filing 21

ORDER granting 4 Motion to Remand.(Signed by Judge Nelva Gonzales Ramos) Parties notified.(lcayce, )

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
CORPUS CHRISTI DIVISION
GOLDMAN PHIPPS PLLC; fka
GOLDMAN PENNEBAKER & PHIPPS,
PC, et al,

§
§
§
§
Plaintiffs,
§
VS.
§ CIVIL ACTION NO. 2:13-CV-00049
§
GRAY, RITTER & GRAHAM, P.C., et al, §
§
Defendants.
§
ORDER OF REMAND
Before the Court is Plaintiffs’ Emergency Motion to Remand (D.E. 4). Plaintiffs

filed this action in the County Court at Law No. 3, Nueces County, Texas. They seek a
declaratory judgment regarding the rights of the respective parties to attorney’s fees and
expenses from a settlement of cases pending in state court and in federal court, but not
within the scope of the pending federal Multidistrict Litigation (MDL). D.E. 1-6, p. 10.
Defendant Looper Reed & McGraw, P.C. removed this action, claiming federal
question jurisdiction because there are issues: “which relate to the federal jurisdiction,
policies, and interests, including the federal common benefit doctrine and federal court
authority to provide for and allocate attorneys [sic] fees and expenses, interpleader
jurisdiction, and the effect of the Rice MDL Court’s prior rulings on issues raised in
Plaintiffs’ [pleadings] filed in the State Court.”

D.E. 1, p. 6.

Ordinarily, removal

jurisdiction is based only on the plaintiff’s causes of action rather than any defensive
issues. Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 2429, 96 L.Ed.2d
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318 (1987). The arguments raised here clearly implicate defensive matters rather than the
well-pleaded complaint of the Plaintiffs.
Defendant argues that federal defenses confer removal jurisdiction under 28
U.S.C. § 1441(a) because, in this declaratory judgment action, the “natural” roles of
plaintiff and defendant are reversed. Wisconsin Interscholastic Athletic Ass’n v. Gannett
Co., 658 F.3d 614, 620 (7th Cir. 2011). Plaintiffs have not contested this proposition so
the Court will review Defendant’s arguments regarding the presence of defensive federal
questions as operative complaints for purposes of § 1441(a). However, there are no
answers of record from which to determine what specific defenses are being alleged. The
only sources to which the Court can turn are the Notice of Removal (D.E. 1) and the
Suggestions in Opposition to Remand (D.E. 16).
Under the language of 28 U.S.C. § 1331, federal question jurisdiction exists if the
action “arises under” the Constitution, laws, or treaties of the United States. Nothing in
Defendant’s removal petition or Suggestions in Opposition to Motion to Remand (D.E.
16) recites a substantive provision in the Constitution, laws, or treaties of the United
States that is triggered by Plaintiffs’ claims or Defendant’s anticipated defenses.
The assertion of federal questions in the Notice of Removal is based on: (1)
federal common benefit jurisprudence; (2) the effect of the Rice MDL’s prior rulings on
Plaintiffs’ state claims; (3) interpleader jurisdiction; and (4) “important federal policies or
interests [that] are entwined with Plaintiffs’ claims.” D.E. 1, p. 8. The Suggestions in
Opposition to Motion to Remand purport to flesh out these concepts. D.E. 16, pp. 11-23.

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In sum, the removing Defendant claims that a sister court’s MDL efforts and interpleader
rules confer federal jurisdiction over Plaintiffs’ state law claims.
Both of these bases for federal question jurisdiction are matters that arise out of or
are related to a case or controversy pending or adjudicated in a different federal
proceeding. The claim of interpleader jurisdiction under 28 U.S.C. § 1335 is based upon
funds subject to interpleader in Don M. Downing, et al v. Goldman Phipps PLLC, et al,
No. 4:13-cv-206 (E.D. Mo.). D.E. 1, p. 11. Those funds regard cases that were pending
in the MDL courts and not the funds at issue before this Court. The reference to the
interpleader rule, Fed. R. Civ. P. 22, is thus inapposite.

Likewise the class action

complaint is pending in the Downing case and the reference to the class action rule, Fed.
R. Civ. P. 23, is inapposite here. D.E. 1, p. 6. There is no class action relevant to the
claims before this court. There are no relevant interpleader funds in this Court, no
pleading seeking such interpleader, and no argument that interpleader is required.
Defendant specifically asserts the right to a personal judgment against the Plaintiffs for
money damages. D.E. 16, p. 9.
No federal question is implicated in this case based upon application of 28 U.S.C.
§ 1407. That statute allows for the consolidation into multidistrict litigation of cases
already pending in different federal district courts. § 1407(a). The MDL statute is a
venue provision rather than a jurisdictional provision. Nothing about that procedural
statute purports to confer jurisdiction over state law claims pending in state court.
Defendant asks this Court to accept jurisdiction based on a sister court’s
adjudication of issues within her jurisdiction. Defendant has not presented this Court
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with any authority that holds that federal question jurisdiction in this case can be satisfied
by a sister court’s exercise or failure to exercise jurisdiction in a similar or related matter.
This Court’s jurisdictional determination must be made with respect to the civil
action brought before it. 28 U.S.C. § 1331. Federal question jurisdiction is based on the
Constitution, laws, or treaties of the United States—not on another court’s ruling in a
related case. This has long been a rule of federal jurisdiction:
A suggestion was made in argument that the case is one
arising under the laws of the United States, for the reason that
the cause of action is identical with that sued on in Leather
Manufacturers' Nat. Bank v. Morgan, 117 U. S. 96, 6 Sup. Ct.
Rep. 657, decided by this court at the last term, and in which
the principles of law which govern the rights of the parties
were determined. Nothing of the kind, however, appears in
the record, and, if it did, it would not authorize a removal.
This is not that suit, and a case does not arise under the laws
of the United States simply because this court, or any other
federal court, has decided in another suit the questions of law
which are involved.
Leather Manufacturers' Nat. Bank v. Cooper, 120 U.S. 778, 781-82, 7 S.Ct. 777, 778
(1887). See also State of Okl. ex rel. Wilson v. Blankenship, 447 F.2d 687, 692 (10th Cir.
1971) (“Second, it is true that the Oklahoma state case bears a considerable relationship
to the prior federal case. As was true in Gully, this present action would not have arisen
had there not been a federal case and a federal judgment. But as shown by Gully this is
not a sufficient basis for federal removal jurisdiction”).
“On a motion to remand, ‘[t]he removing party bears the burden of showing that
federal jurisdiction exists and that removal was proper.’ ” Barker v. Hercules Offshore,
Inc., 706 F.3d 680, 684-85 (5th Cir. 2013) (quoting Manguno v. Prudential Prop. & Cas.
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Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002)). “Any ambiguities are construed against
removal because the removal statute should be strictly construed in favor of remand.” Id.
The Court finds that the Defendant has not met its burden.
The Court GRANTS the Plaintiffs’ Motion to Remand (D.E. 4) and remands this
action to the County Court at Law No. 3, Nueces County, Texas, the court from which it
was removed.
ORDERED this 15th day of March, 2013.

___________________________________
NELVA GONZALES RAMOS
UNITED STATES DISTRICT JUDGE

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