Lotte Chemical Titan (M) Sendirian Berhad v. Wilder
Filing
14
OPINION ORDER OF REMAND 5 MOTION to Remand. Case terminated on June 3, 2014. Case Remanded to the 157th Judicial District in Harris County. (Signed by Judge Melinda Harmon) Parties notified.(rvazquez)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
LOTTE CHEMICAL TITAN (M)
SENDIRIAN BERHAD f/k/a Titan
Petchem (M) Sendirian Berhad,
Plaintiff,
VS.
WARREN WILLIAM WILDER,
Defendant.
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CIVIL ACTION NO. H-14-1116
OPINION AND ORDER OF REMAND
Pending before the Court in the above referenced cause,
removed from the 157th Judicial District Court in Harris County,
Texas and seeking recognition of a Malaysian default judgment
against Defendant Warren Wilder (“Wilder”) under the Texas version
of the Uniform Foreign Country Money-Judgment Recognition Act, Tex.
Civ. Prac. & Rem. Code §§ 36.001-008, is inter alia a motion to
remand pursuant to 28 U.S.C. § 1447(c) (instrument #5) filed by
Plaintiff Lotte Chemical Titan (M) Sendirian Berhad f/k/a Titan
Petchem (M) Sendirian Berhad (“Titan Petchem”).
On May 2, 2013, Wilder filed a suit in this district titled
Warren Wilder v. Titan Chemical Corp. BHD and Titan Petchem (M) SDN
BHD, H-13-1277, pending before the Honorable Kenneth M. Hoyt,
alleging breach of an employment contract entered into on July 10,
2008 by Wilder and Titan Petchem for failure to pay Wilder certain
compensation owed to
him under the contract.
On March 12, 2014
Titan Petchem filed the instant action is state court, Cause No.
2014-16260, conceding that it arises from the same employment
contract in dispute in H-13-1277, but seeking to enforce a default
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judgment it had meanwhile obtained in a Malaysian court on December
6, 2013 against Wilder for his alleged failure to make a required
tax equalization payment in 2010.
In that Malaysian suit Wilder
was purportedly never served, nor did he receive notice of that
action before judgment.
According to the Notice of Removal (#1),
Titan Petchem had this tax equalization claim against Wilder at the
time it filed and served its answer on December 13, 2013 in H-131277
and
thus
the
allegations
in
this
action
are
compulsory
counterclaims in H-13-1277 under Federal Rule of Civil Procedure
13(a)(1)(“A pleading must state as a counterclaim any claim that-at the time of its service--the pleader has against an opposing
party if the claim: (A) arises out of the transaction or occurrence
that is the subject matter of the opposing party’s claims; and (B)
does not require adding another party over whom the court cannot
acquire jurisdiction.”).
According
to
Wilder’s
Notice
of
Removal,
the
Court
has
jurisdiction under 28 U.S.C. § 1332(a)(2) because it is a civil
action “between citizens of a state and citizens or subjects of a
foreign state,” 28 U.S.C. § 1367(a)(supplemental jurisdiction), and
Federal Rule of Civil Procedure 13(a), and is properly removable
under 28 U.S.C. § 1441(b) based on diversity jurisdiction.
The
Notice states that Wilder “is a citizen of the United States and
maintains a residence at 6645 Westchester Street, Houston, Texas
77005,”1 and is thus a citizen of Texas but is temporarily working
1
Titan Petchem charges that Wilder has failed to plead his
citizenship adequately and for that failure alone the case
should be remanded. “For diversity jurisdiction, the party
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in Saudi Arabia.
Titan Petchem is a Malaysian company with its
registered office in Kuala Lumpur, Malaysia.
Titan Petchem moves for remand on the grounds that the removal
did not comply with the resident-defendant rule under the removal
statute, 28 U.S.C. § 1441(b), “Removal based on diversity of
citizenship.”
It provides, “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.”
This action is based solely on
Texas law.
Wilder is either a citizen of Texas or a United States citizen
who is domiciled abroad.
jurisdiction.2
If the latter, there is no subject matter
Without admitting to that as a fact, Titan Petchem
asserting federal jurisdiction must ‘distinctly and affirmatively
allege[]’ the citizenship of the parties. Failure to adequately
allege the basis for diversity jurisdiction mandates dismissal.”
Howery v. Allstate Ins., 243 F.3d 912, 919 (5th Cir. 2001). See
also Grizzly Mountain Aviation, Inc. v. McTurbine, Inc., 619 F.
Supp. 2d 282, 284 n.3 (S.D. Tex. 2008)(allegation that defendants
were “citizens of the United States” was insufficient to
establish citizenship for purposes of diversity.” Wilder’s claim
tht he “maintains a residence” in Texas is insufficient to
establish Texas citizenship because citizenship is based on a
party’s domicile, and “[d]omicile requires . . . residence and
the intention to remain.” Hollinger v. Home State Mut. Ins. Co.,
654 F.3d 564, 571 (5th Cir. 2011). Any doubt “should be resolved
against federal jurisdiction.” Acuna v. Brown & Root, Inc., 200
F.3d 335, 339 (5th Cir. 2000).
2
This Court notes that “United States citizens permanently
residing abroad are not citizens of any particular state in the
United States and, therefore, cannot sue or be sued in federal
court on the diversity jurisdiction.” Coury v. Prot, 85 F.3d
244, 248 (5th Cir. 1996); Herrick Co., Inc. v. SCS Commc’n, Inc.,
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assumes for the purpose of its motion to remand that Wilder is a
citizen of Texas.
Titan Petchem argues that Wilder is seeking to circumvent the
requirements of § 1441(b) by alleging that the “removal is not
‘solely on the basis of the jurisdiction under section 1332(a),’
but removal is also based on 28 U.S.C. § 1367(a)[the supplemental
jurisdiction statute] and Fed. R. Civ. P. 13(a)[the compulsory
counterclaim rule].”
contends
that
it
is
Notice of Removal at ¶11.
well
established
that
Titan Petchem
the
supplemental
jurisdiction statute cannot be used to circumvent the resident
defendant rule.
Motion Control Corp. v. SICK, Inc., 354 F.3d 702,
706 (8th Cir. 2003),
cited with approval by the Fifth Circuit,
Energy Mgmt. Services, LLC v. City of Alexandria, 739 F.3d 255, 257
(5th Cir. 2014)(“§ 1367, by its own terms cannot fill the void” when
the removal statute is not satisfied), and
Halmekangas v. State
Farm Fire & Cas. Co., 603 F.3d 290, 294 (5th Cir. 2010)(“While [§
1367(a)] does allow factually related state law claims to be joined
with the claim over which the federal district court has original
jurisdiction, it plainly does not provide a separate basis for
removal of independent state law actions . . . [It] is not original
jurisdiction.”).
Furthermore the United States Supreme Court has
held that “federal jurisdiction [cannot] rest upon an actual or
anticipated counterclaim.” Vaden v. Discover Bank, 556 U.S. 49, 60
(2009).
See also Siemens Water Tech., LLC v. Sooter, No. H-14-49,
2014 WL 710953, at *2 (S.D. Tex. Feb. 24, 2014)(Werlein, J.)(“Even
251 F.3d 315, 322 (2d Cir. 2001); 13E Charles Alan Wright, et
al., Federal Practice & Procedure § 3621 (3d ed. 2012).
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if [the plaintiff’s] claims are compulsory counterclaims, . . . the
supplemental jurisdiction statute, 28 U.S.C. § 1367, does not
provide for removal jurisdiction.”), citing Halmekangas, 603 F.3d
at 295 (“Supplemental jurisdiction on its own does not give federal
courts the power to remove a state case that does not arise from a
federal question or offer complete diversity of citizenship.”).
Therefore this action must be remanded, insists Titan Petchem.
Petchem emphasizes that the claims in the suit before Judge
Hoyt and the claims in this suit, although arising out of the same
contract, do not overlap since one addresses Wilder’s salary
dispute and the other his tax obligations owed to Titan Petchem.
If Wilder is a citizen of Texas for diversity purpose, removal
is improper for failure to satisfy § 1441(b)(2) because Wilder is
a “citizen of the State [Texas] in which such action is brought.”
Wilder’s
supplemental
jurisdiction
theory
under
§
1367(a)(“[I]n any civil action of which the district courts have
original jurisdiction, the district courts shall have supplemental
jurisdiction over all other claims that are so related to claims in
the action within such original jurisdiction that they form part of
the same case or controversy . . . .”) also fails as a basis for
the Court’s jurisdiction over this suit.
Section 1367 is not a
removal statute and applies only after § 1441 has been satisfied.
Syngenta
Crop Prot., Inc. v. Henson
, 537 U.S. 28, 34
(2002)(“Removal is governed by statute, and invocation of ancillary
jurisdiction [as codified in § 1367] . . . does not dispense with
the need for compliance with statutory requirements.”);
Energy
Management, 739 F.3d at 257 (once § 1441 is satisfied, the court
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may then assert supplemental jurisdiction pursuant to § 1367 over
any remaining state-law claims that do not independently satisfy
original jurisdiction if the state-law claims are part of the same
case or controversy as the “anchor claim.”).
An “anchor claim” is
a claim over which the federal court has original jurisdiction
pursuant to §§ 1331, 1332, or 1369.
259 n.2.
Energy Management, 739 F.3d at
The claim in this action cannot simultaneously be the
“anchor claim” from which supplemental jurisdiction derives and the
claim over which supplemental jurisdiction can be exercised, so
Wilder has tried to “ride on the jurisdictional coattails of the
related Salary Dispute Action” in Judge Hoyt’s court by claiming it
is the anchor claim from which supplemental jurisdiction can be
exercised over the instant action and by filing a motion in Judge
Hoyt’s suit to consolidate the two actions.
#5 at p. 8.
Titan
Petchem maintains that the fact that “a related case is pending in
the federal court” does not change the rule that “[t]he original
jurisdiction
requirement
prerequisite
to
removal
jurisdiction
statute
is
is
an
absolute
jurisdiction”
not
itself
and
a
and
the
source
nonwaivable
“supplemental
of
original
jurisdiction and therefore is not a proper basis for removal.”
Motion Control, 354 F.3d at 706 (“‘[A] removal petition therefore
may not base subject-matter jurisdiction on the supplementaljurisdiction statute, even if the action which a defendant seeks to
remove is related to another action over which the federal district
court already has subject-matter jurisdiction . . . .’”). See also
Washington v. Burley, Civ. A. No. 3-12-154, 2012 WL 5289682, at *2
(S.D.
Tex.
2012)(“The
relationship
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between
consolidation
and
subject matter jurisdiction has arisen in cases in which defendants
improperly removed cases with no basis for federal jurisdiction and
then sought to establish jurisdiction by consolidating the removed
cases with other federal cases.”).
In sum, removal is improper
because § 1367 does not provide an independent basis for removal
and Wilder’s alleged Texas citizenship would prohibit removal under
§ 1441(b).
Nor
does
Wilder’s
characterization
of
this
action
as
a
compulsory counterclaim under Rule 13 resuscitate his flawed
supplemental jurisdiction theory.
Rule 13 does not contain any
language about federal jurisdiction or removal to federal district
court, nor does Wilder cite nor can he cite any authority for his
claim.
Vaden, 556 U.S. at 60 (“[F]ederal jurisdiction [cannot]
rest upon an actual or anticipated counterclaim.”).
See also
Siemens, 2014 WL 710953, at *2 (rejecting plaintiff’s claims that
the court had supplemental jurisdiction over plaintiff’s state law
claims because they were compulsory counterclaims that should have
been raised in defendant’s related suit, the court concluded that
“the supplemental jurisdiction statute, 28 U.S.C. § 1367, does not
provide for removal jurisdiction” and remanded the case).
In
accord, Sovereign Bank, N.A. v. Lee, No. CV 13-2756, 2013 WL
5081731, at *3 (E.D.N.Y. Sept. 12, 2013).
Titan Petchem requests reasonable fees and costs incurred in
filing the motion for remand pursuant to 28 U.S.C. 1447(c).
Because the Court agrees with Titan Petchem that Wilder
improperly conflates original jurisdiction and removal requirements
the
Court
does
not
summarize
Wilder’s
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erroneous
arguments.
Moreover the Court concludes that Titan Petchem has correctly
explained the law and properly applied it to the facts in this
case.
As for Titan Petchem’s request for an award of fees and costs
under § 1447(c), Wilder insists there is an objectively reasonable
basis for removal and the Fifth Circuit has held that the forum
defendant rule is procedural and waivable, not jurisdictional, and
therefore no bar to removal.
If it remands a case, the district court has the discretion to
award the “payment of just costs and any actual expenses, including
attorney’s fees, incurred as a result of removal.”
1447(c).
That
discretion
has
limits:
28 U.S.C. §
“Absent
unusual
circumstances, courts may award attorney’s fees under § 1447(c)
only where the removing party lacked an objectively reasonable
basis for seeking removal.”
U.S. 132, 141 (2005).
the
court
“‘do[es]
Marin v. Franklin Capital Corp., 546
In deciding whether to grant such an award,
not
consider
the
motive
of
the
removing
defendant,” but “considers the objective merits of removal at the
time of removal, irrespective of the ultimate remand.”
Diaz v.
Cameron County, Texas, 300 Fed. App’x 280, 281 (5th Cir. Nov, 19,
2008), quoting Valdes v. Wal-Mart Stores, Inc., 199 F.3d 290, 29293 (5th Cir. 2000).
If an objectively reasonable basis for removal
exists, an award of attorney’s fees should be denied.
Howard v.
St. Germain, 599 F.3d 455, 457 (5th Cir. 2010), citing Hornbuckle
v. State Farm Lloyds, 385 F.3d 538, 541 (5th Cir. 2004).
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See
American Airlines, Inc. v. Sabre, Inc., 694 F.3d 539, (5th Cir.
2012)(holding that the district court did not abuse its discretion
in awarding attorney’s fees because the operator did not have
objectively reasonable grounds to believe removal of case was
legally proper; a defendant’s subjective good faith belief that
removal was proper is insufficient to defeat an award of attorney’s
fees under § 1447(c) where defendants did not have objectively
reasonable grounds to believe the removal was legally proper.).
The
Court
finds
that
Wilder
did
not
have
objectively
reasonable grounds for removing this suit and accordingly grants
Titan Petchem’s request for an award of fees and costs.
Titan
Petchem shall file within ten days an appropriate affidavit request
that complies with Johnson v. Georgia Highway Express, Inc., 488
F.2d 714 (5th Cir. 1974) and any relevant records.
Wilder shall
have ten days after he receives a copy of the submission to file a
response.
Based on the reasons discussed above, the Court
ORDERS that Titan Petchem’s motion to remand (#5) is GRANTED
and this case is REMANDED to the 157th Judicial District Court in
Harris County, Texas, where it was designated Cause No. 2014-16260.
SIGNED at Houston, Texas, this
3rd
day of
June , 2014.
___________________________
MELINDA HARMON
UNITED STATES DISTRICT JUDGE
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