Carmax, Inc. et al v. Sibley

Filing 30

MEMORANDUM OPINION. Signed by District Judge M. Hannah Lauck on 12/30/2016. Copy mailed to Pro Se Defendant. (jsmi, )

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA
Richmond Division

CARMAX AUTO SUPERSTORES, INC.
and

CARMAX, INC.,
Plaintiffs,
V.

Civil Action No. 3:16cv611

MONTGOMERY B. SIBLEY,
Defendant.
MEMORANDUM OPINION

This matter comes before the Court on what amounts to two motions: (1) pro se
Defendant Montgomery B. Sibley's "Opposition to Motion to Remand and Motion for

Jurisdictionai Discovery" (Sibley's "First Motion for Jurisdictional Discovery"),' (ECF No. 15);

' Because the Court denied CarMax's First Motion to Remand as moot, (ECF No. 14),
the Court need not evaluate Sibley's opposition to it. The Court will consider Sibley's filing only
to the extent it requests jurisdictional discovery. That said, the Court finds the unorthodox
manner in which Sibley presents his motions troubling. It is only in deference to his pro se
status that the Court considers his motions for jurisdictional discovery.
First, Sibley filed the First Motion for Jurisdictional Discovery in both this Court and the
United States District Court for the District of Maryland; it has a caption for both cases he has
pending in those federal courts. While no rule may specifically prohibit such a filing, no
procedural rule unambiguously allows it, either. Such a "double filing" creates potential
confusion. Two sets of opponents, perhaps with divergent agendas, must respond. While highly
unlikely, such a "double filing" risks two judges ruling—perhaps differently—on an identical
motion. More likely, and as became evident here, judges must rule on motions that pertain to
another court's case, if only to say the motion relates to that other case. The practice wastes
judicial resources.
Second, much of Sibley's First Motion for Jurisdictional Discovery was re-filed amid
arguments against remand, but nearly verbatim, within his Opposition to the Second Motion to
Remand, (ECF No. 19). The Court will discuss later the upshot of Sibley's repeated violation of
Eastern District Local Civil Rule 7(F), which requires a separate motion and memorandum. But
it must also be said that such repetitive motions practice is unacceptable and improper regardless
of whether a litigant—even a pro se litigant—follows procedural rules. Filing the same motion
twice unquestionably runs counter to the efficient administration ofjustice.

and, (2) Plaintiffs CarMax Auto Superstores, Inc. and Carmax, Inc.'s (collectively, "CarMax")

Second Motion to Remand, (ECF No. 17). CarMax responded to the First Motion for
Jurisdictional Discovery, (ECF No. 20), and Sibley has replied, (ECF No. 22). Sibley responded
to the Second Motion to Remand, including in his Opposition a Second Motion for Jurisdictional

Discovery, (ECF No. 19), and CarMax has replied, (ECF No. 21). The matters are ripe for
disposition. The Court dispenses with oral argument because the materials before it adequately
present the facts and legal contentions, and argument would not aid the decisional process.

For

the reasons that follow, the Court will deny both Motions for Jurisdictional Discovery, grant the
Second Motion to Remand, order CarMax to submit a motion, briefing, and an affidavit of fees

and costs as to sanctions, and require Sibley to show cause why this Court should not award
CarMax fees and costs incurred as a result of Sibley's removal
I, Procedural and Factual Background

On June 29,2016, CarMax served Sibley with a Complaint filed in Goochland Circuit
Court in Goochland, Virginia. (ECF No. 1-1.) On July 11, 2016, Sibley removed the case to the
Alexandria Division of the United States District Court for the Eastern District of Virginia.

(ECF No. 1.) As the basis for subject matter jurisdiction, Sibley alleged that the Court had

diversity jurisdiction under 28 U.S.C. § 1332.^ On July 15, 2016, the Honorable Claude M.
Hilton, United States District Judge, transferred the case to the proper venue: the Richmond

Division of the Eastern District of Virginia.

2

This opinion renders moot CarMax's Motion for Oral Argument on Their Second
Motion to Remand, (ECF No. 24), as well as Sibley's request to appear telephonically, (ECF
No. 27).

^Section 1332 confers subject matter jurisdiction when the parties are diverse and the
amount in controversy exceeds $75,000. 28 U.S.C. § 1332(a).

That same day, CarMax filed a Motion to Remand, (ECF No. 4), arguing that Sibley

failed to demonstrate any facts establishing the requisite amount in controversy. On July 27,
2016, before responding to the Motion to Remand, Sibley submitted four filings to the Court:
(1) his "Verified Motion to Transfer to the District Court of Maryland and to Consolidate" (the
"Motion to Transfer"), (ECF No. 10); (2) his Motion to Enlarge Time to Respond to the Motion

to Remand of CarMax, (ECF No. 11); (3) his "First Notice of Vacation," notifying the Court he
intended to take a vacation, (ECF No. 12); and, (4) his Amended Notice of Removal, (ECF
No. 13).

In a Memorandum Order, this Court held that Sibley timely filed the Amended Notice of

Removal,'^ and, construing his filing liberally, determined that Sibley added new grounds for
removal.^ (ECF No. 14.) The Court denied the Mofion to Remand as moot. The Court also
denied Sibley's Motion to Transfer without prejudice, reasoning that it would "not consider
arguments regarding venue until after it addresses any filings pertaining to its subject matter
jurisdiction, i.e., a motion to remand in response to the Amended Notice of Removal." (August

4, 2016 Memorandum Order 4.) Noting that Sibley had failed to follow Local Civil Rule 7(F) by
filing both a motion and brief in support of his proposed amended removal, and seeing that no

'' The Court concluded that Sibley filed his Amended Notice of Removal within the
thirty-day removal period provided under 28 U.S.C. § 1446(b) and thus allowed him to freely
amend as the law requires. See Muhlenbeck v. Kl, LLC, 304 F. Supp. 2d 797, 799 (E.D. Va.
2004) ("[DJuring that thirty-day removal period, a defendant seeking removal generally has the
right to amend its removal petition .. . ."); see also 14C Charles A. Wright & Arthur R. Miller,
Federal Practice and Procedure § 3733 (4th ed. 2009) ("Prior to the expiration of the 30-day
period for removal... the defendants may freely amend the notice of removal required by
Secfion 1446(b).").

^The Court explained that "'[djefecfive allegations ofjurisdiction may beamended, upon
terms, in the trial or appellate courts.'" (August 4, 2016 Memorandum Order 3 (quoting
28 U.S.C. § 1653).). The Court did not decide whether Sibley's added allegations provided
sufficient bases for subject matter jurisdiction.

basis in Local or the Federal Rules of Civil Procedure existed to undergird Sibley's "Notice of
Vacation," the Court warned Sibley as follows:
The Court has given Sibley appropriate deference to his status as a pro se
litigant. However, any pro se litigant—including Sibley—must follow federal
and local rules, and must adhere to applicable procedure. This is especially
true when, as now, a litigant has received notice of a failure to follow rules
and procedure. SIBLEY IS ADMONISHED THAT ANY FUTURE
FAILURE TO COMPLY WITH THE LOCAL RULES OR THE FEDERAL
RULES OF CIVIL PROCEDURE WILL RESULT IN APPROPRIATE

CONSEQUENCES, INCLUDNG SANCTIONS.

{Id. (emphasis in original).)

After the Court issued the August 4, 2016 Memorandum Order, Sibley filed a First
Motion Requesting Jurisdictional Discovery as part of his Opposition to CarMax's Motion to
Remand. (ECF No. 15.) CarMax responded, (ECF No. 20), and Sibley replied, (ECF No. 22).
Before the Motion Requesting Jurisdictional Discovery became ripe, CarMax filed the Second
Motion to Remand. (ECF No. 17.) Sibley opposed the motion, including within it what
amounted to a Second Motion for Jurisdictional Discovery, (ECF No. 19), and CarMax replied,
(ECF No. 21). CarMax then filed a Notice of Supplemental Authority, (ECF No. 23), which

attached the opinion of the Honorable Roger W. Titus, District Judge for the United States

District Court for the District of Maryland, in a case involving CarMax Auto Superstores, Inc.
and Sibley. See Carmax Auto Superstores, Inc. v. Sibley, No. 16cvl459, 2016 WL 6091174, at
*6-8 (D. Md. Oct. 14, 2016) (the "District of Maryland Sibley case").
II. The District of Maryland Sibley Case

The Court pauses to discuss the District of Maryland Sibley case because it overlaps to

some degree with this Eastern District of Virginia action. While CarMax claims defamation and
seeks an injunction here, both actions appear to arise from events that followed CarMax's
termination of Sibley's employment in May 2016. In Maryland, CarMax sought enforcement of

post-termination arbitration under the Dispute Resolution Agreement (including the class action
waiver and confidentiality provisions of the Dispute Resolution Rules and Procedures) that
Sibley signed when he obtained employment from CarMax.

In what will be a published decision, Judge Titus described Sibley as someone "trained

and previously licensed as an attorney, [who] was suspended from the practice of law by three
jurisdictions based on his pursuit of meritless and vexatious litigation [and who] has not been

reinstated by any ofthose jurisdictions."^ Sibley, 2016 WL 6091174, at *1 (discussing earlier
opinion in which such findings were made). The Court warned Sibley that it "would not tolerate
the type of vexatious and frivolous litigation that he had previously engaged in and which caused
the loss of his licenses to practice law." Id. at *1.

After that warning, the District of Maryland determined every substantive issue contrary
to Sibley's position. Judge Titus also denied two motions that actually pertained to this Eastern

District of Virginia case.^ CarMax sought sanctions. Citing Sibley's baseless motions and
Sibley's duplicative presentation of previously rejected positions. Judge Titus ordered Sibley to
show cause why sanctions should not be entered against him. Id. at *7-8.

^CarMax filed documents before this Court establishing some ofthese same facts.

^Sibley asked the District ofMaryland court to transfer the Eastern District ofVirginia
case to the District of Maryland. However, Sibley cited a statute that manifestly permits only
this Court the power to transfer the case to federal court in Maryland. Sibley, 2016 WL 6091174,
at *6. Sibley also sought leave from the District of Maryland to engage in jurisdictional
discovery. That discovery motion, filed both in the District of Maryland and here (as ECF
No. 15) had nothing whatsoever to do with the District of Maryland Sibley case. As noted above.
Judge Titus thus became obliged to address this entirely irrelevant "duplicate[]" motion. Id. The
District of Maryland court properly denied Sibley's motion as pertaining only to this Eastern
District of Virginia acfion. Id.
The need for Judge Titus to consider motions relevant only to this Eastern District of
Virginia case constitutes an utter waste ofjudicial resources. Sibley is therefore INSTRUCTED
that any future filing in this case MUST BE FILED ONLY IN THIS COURT. ANY FAILURE
TO FOLLOW THIS INSTRUCTION WILL RESULT IN APPROPRJATE CONSEQUENCES,
INCLUDING SANCTIONS.

Procedural and substantive events in the District of Maryland Sibley case provide context
to the arguments presented by CarMax here. In Virginia, CarMax seeks damages for, and an

injunction against, Sibley continuing to distribute what it calls a False Press Release via an
online newswire with widespread distribution. CarMax contends that Sibley continues (or at
least engages in) a practice of vexatious litigation by displaying what CarMax calls "patent

gamesmanship" when he removed, without proper legal basis, the Goochland Circuit Court case
the day before that court was scheduled to hear its injunction motion. CarMax maintains that

Sibley, despite his legal training, delayed matters even further by naming the wrong federal court
division. This Court allowed Sibley to amend his notice of removal, deemed other pending
motions moot, and warned Sibley that any additional failure to follow Federal or Local Rules
could result in sanctions. CarMax now seeks sanctions in addition to remand.
111. Analysis: Motion for Jurisdictional Discovery

With that backdrop, the Court will first address Sibley's Motions for Jurisdictional

Discovery, in part because Sibley contends that additional discovery could impactthe analysis of
CarMax's Second Motion for Remand. Because Sibley had the opportunity to seek discovery in
Goochland Circuit Court, but instead removed this case in the absence of a basis for federal

subject matter jurisdiction, the Court will deny Sibley's Motions for Jurisdictional Discovery.

In his motions,^ Sibley asks for "the opportunity to serve and receive on an expedited
basis 'Special Interrogatories on Jurisdictional Facts' requiring CarMax to specify whether it

^ As noted above, Sibley places essentially identical requests for jurisdictional discovery
before this Court. (ECF Nos. 15, 19.) In both documents, Sibley's "motion" for jurisdictional
discovery appears on page five of the document. Thus, regarding his discovery motions, any
citation to a quote from one document pertains to the other, even pincites.
Sibley's Motions for Jurisdictional Discovery offend beyond their repetitive nature.
Contrary to this Court's August 8, 2016 admonition, Sibley improperly embeds both Motions for
Jurisdictional Discovery within oppositions to motions brought by CarMax. By failing to file a
separate motion and brief in support, Sibley violates Local Civil Rule 7(F) for a second time in

intended to seek more than $75,000 in damages." (Mot. Jurisdictional Discovery 5.) Sibley
suggests that the thirty-day time period to file a Notice of Removal prohibited him from

obtaining any necessary discovery in the Goochland Circuit Court. Sibley maintains that that the
timetable to seek approval for discovery and then to "serve and receive answer [sic] to such
discovery would well exceed the 30 day time to file a Notice of Removal." {Id.) According to

Sibley, his "only practical recourse was to file that Notice [of Removal] and seek that agreed-asnecessary-by-the-parties discovery in this Court." {Id.) Sibley is patently incorrect. Both the
removal statute and decisions interpreting it reject the arguments Sibley places before this Court.
First, as to the statute, 28 U.S.C. § 1446 plainly states that, "if [a] case stated by the initial

pleading is not removable, a notice of removal may be filed withinthirty days after receipt by the
defendant... of a copy of an amended pleading, motion, order or other paper from which it may
first be ascertained that the case is one which is or has become removable." 28 U.S.C.

§ 1446(b)(3). If the case "is not removable solely because the amount in controversy does not
exceed the amount specified in section 1332(a), information relating to the amount in

controversy in the record ofthe [sjtate proceeding, or in responses to discovery, shall be treated
as an 'other paper' under subsection (b)(3).'''' Id. § 1446(c)(3)(A) (emphasis added). The thirtyday deadline provided under § 1446(b)(3) did not, as Sibley argues, provide removal and

discovery in federal court as the only recourse. Instead, pursuant to § 1446, Sibley could
conduct discovery in the state proceeding, including using "responses to discovery" to establish
the federal jurisdictional amount. Id. The removal statute, unambiguously, then grants Sibley

the same case. His Second Motion for Jurisdictional Discovery brazenly repeats the same error.
Despite his legal background, Sibley thereby commits two violations of Local Civil Rule 7(F)
after this Court warned him not to do so in thefuture. Even before the Court notes the feeble
arguments Sibley proffers in his quest for discovery, such blatant disregard for the governing
rules could, independently, constitute sanctionable conduct.

thirty days to present information—such as responses to discovery—from the Goochland Circuit
Court case to the federal court. The federal court must then treat that state court information "as

an 'other paper'" when evaluating whether the $75,000 amount in controversy has been
established. Id.

Second, as to case law, federal courts interpreting § 1446 confirm in crystal clear fashion
that any discovery regarding the amount in controversy must transpire in state, not federal court.

See, e.g., O 'Brien v. Falcon Drilling Co. LLC, No. 5:15cvl3, 2015 WL 1588246, at *6 (N.D. W.

Va. Apr. 9, 2015) ("[I]t is clear that [§ 1446(c)(3)(A)] is related to discovery that is taken in the
state court, not discovery that is taken in the federal court after removal"). Amounts must be
determined at the state level because "[w]hen an action is removed from state court, the amount
in controversy for jurisdictional purposes is determined at the time of removal." Washington v.
Wells Fargo Bank, N.A., No. 3:15cv741, 2016 WL 1572941, at *2 (E.D. Va. Apr. 18, 2016)

(citing Dennison v. Carolina Payday Loans, Inc., 549 F.3d 941, 943 (4th Cir. 2008)). The Court
will not disregard unambiguous statutory language, and well-reasoned case law applying it, by
granting Sibley's improper request to permit post-removal discovery in this federal court. To the
extent both motions are properly before this Court, Sibley's Motions for Jurisdictional Discovery
will be denied.
IV. Analysis: Second Motion for Remand

Having rejected Sibley's Motions for Jurisdictional Discovery, the Court next considers
CarMax's Second Motion for Remand. Taking Sibley's arguments in turn, the Court concludes
that Sibley cannot establish the requisite amount in controversy for diversity jurisdiction. Nor

does the case turn on a federal question. Sibley's alternative bases for subject matter jurisdiction
also flatly do not apply. The Court therefore lacks subject matter jurisdiction and will grant the
Second Motion to Remand.

A.

Standard for Removal and Remand

Under 28 U.S.C. § I441(a),^ a defendant may remove a civil action to a federal district
court if the plaintiff could have originally brought the action in federal court. 28 U.S.C.

§ 1441(a). Section 1446 delineates the procedure for removal, including the requirement that the
defendant file a notice of removal in the district court and the state court. See 28 U.S.C.

§§ 1446(a), (d). The state court loses jurisdiction upon the removal of an action to federal court.
28 U.S.C. § 1446(d) ("[T]he State court shall proceed no further unless and until the case is
remanded.").

"The party seeking removal bears the initial burden of establishing federal jurisdiction."
Abraham v. Cracker Barrel Old Country Store, //7C., No. 3:llcvl82, 2011 WL 1790168,at*l
(E.D. Va. May 9, 2011) (citing Mulcahey v. Columbia Organic Chem. Co., 29 F.3d 148, 151 (4th

Cir. 1994)). No presumption favoring the existence of federal subject matter jurisdiction exists
because federal courts have limited, not general, jurisdiction. Id. (citing Pinkley Inc. v. City of
Frederick^ 191 F.3d 394, 399 (4th Cir. 1999)). Courts must construe removal jurisdiction
strictly. Id. (citing Mulcahey, 29 F.3d at 151.) "'If federal jurisdiction is doubtful, a remand is
necessary.'" Id. (quoting Mulcahey, 29 F.3d at 151.)

^Section 1441(a) provides, inpertinent part:
[A]ny 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, to the district court of the United States for the district and division

embracing the place where such action is pending.
28 U.S.C. § 1441(a).

Sibley's Amended Notice of removal cites four bases for subject matter jurisdiction in

this case: (1) federal question jurisdiction under 28 U.S.C. § 1331;'^ (2) diversity jurisdiction
under 28 U.S.C. § 1332;'^ (3) supplemental, pendent, and ancillary jurisdiction; and, (4) the
mandatory retention doctrine. Only the first two bases merit serious consideration because

Sibley's reliance on both supplemental jurisdiction and the mandatory retention doctrine is
woefully inapt. As a result, the Court begins by examining removal under federal question
jurisdiction and diversity jurisdiction.

B.

No Federal Question Exists Conferring Federal Question Jurisdiction Over
this Case

Federal question jurisdiction exists under 28 U.S.C. § 1331 if a plaintiff s claims arise

"under the Constitution, laws, or treaties of the United States."'^ 28 U.S.C. § 1331. Here,
federal law does not create the cause of action before the Court, and CarMax's right to relief

"The district courts shall have original jurisdiction of all civil actions arising under the
Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331.

Section 1332 provides, in pertinent part:

(a) The district courts shall have original jurisdiction of all civil actions where the
matter in controversy exceeds the sum or value of $75,000, exclusive of interest
and costs, and is between—

(1) citizens of different States ....
28 U.S.C. § 1332(a)(1).
I 'N

"The well-pleaded complaint rule has long governed whether a case 'arises under'
federal law for the purposes of § 1331." Holmes Group, Inc. v. Vornado Air Circulation Sys.,
Inc., 535 U.S. 826, 830 (2002). Under the well-pleaded complaint rule, "federal question
jurisdiction exists only when a federal question is presented on the face of the plaintiffs properly
pleaded complaint." Campbell v. Hampton Roads Bankshares, /«c.. No. 2:12cv567, 2013 WL
652427, at *2 (E.D. Va. Feb. 19, 2013) (citing Venezuela v. Massimo Zanetti Beverage U.S.A.,
Inc., 525 F. Supp. 2d 781, 784 (E.D. Va. 2007)).

10

does not necessarily depend on the resolution of a substantial federal question. Accordingly, this
Court lacks federal question jurisdiction over this case.

In the "vast majority" of cases, a cause of action "arises under" the law that creates it.
Dixon V. Coburg Dairy, Inc., 369 F.3d 811,816 (4th Cir. 2004). Thus, the first step in a court's

jurisdictional inquiryis to "discern whetherfederal or state law creates the cause of action."
Mulcahey, 29 F.3d at 151. When it is apparent from the face ofa plaintiffs complaint that
federal law creates the cause of action, federal courts "unquestionably have federal subject

matterjurisdiction." Id. If, however, state law createsthe cause of action, federal question
jurisdictionwill lie only if "it 'appears from the [complaint] that the right to relief depends upon
the construction or application of [federal law].'" Grable & Sons MetalProds, v. Darue Eng'g
& Mfg., 545 U.S. 308, 313 (2005) (quoting Smith v. Kansas City Title & TrustCo., 255 U.S. 180,

199 (1921)). This standard is met in only a"'special and small category' ofcases."'^ Gunn v.
Minton, 133 S.Ct. 1059, 1064(2013) (quoting EmpireHealthchoice Assurance, Inc. v. McVeigh,
547 U.S. 677, 699 (2006)).

CarMax's only claim charges defamation underVirginialaw. Because damage to one's
reputation does not implicate liberty or property interests under the United States Constitution, a
plaintiffmust generally seek redress for reputational damage via state tort law. Breckewidge v.
Albemarle Cty. Police Dep't.. No. 7;07cv326, 2007 WL 2029305, at *2 (W.D. Va. July 10,
2007). Courts consistently recognize that a defamation lawsuit does not arise under federal law.
Specifically, a right to relief depends upon the construction or application of federal
law if "a federal issue is[:] (I) necessarily raised, (2) actually disputed, (3) substantial, and[,]
(4) capable of resolution in federal court without disrupting the federal-state balance approved by
Congress." Id. at 1065. For a claim to "necessarily raise[ ]" a federal issue, "a right or immunity
created by the Constitution or laws of the United States must be an element, and an essential one,
of the plaintiffs cause of action." Franchise Tax Bd. v. Constr. Laborers Vacation Trust,
463 U.S. 1, 10-11 (1983) (quoting Gw//>'v. First Nat'l BanK299\}.^. 109, 112 (1936)).

11

Id. ("[DJefamation, libel, and slander are tort claims traditionally governed by state law.").
Thus, state law creates the cause of action at bar, and "federal question jurisdiction will lie only

if it appears from the [complaint] that the right to reUef depends upon the construction or
application of [federal law]." Fed. Nat. Mortg. Ass'n v. Young, No. 2:12cv471, 2013 WL

5488513, at *5 (E.D. Va. Aug. 12, 2013) (internal quotation marks omitted) (ching Grable, 545
U.S. at 313). Contrary to Sibley's stance, nothing in this case suggests relief dependent on the
construction or application of federal law.

Sibley contends that federal question jurisdiction exists because CarMax's request "for an
injunction ... seeks to impose [a] prior restraint upon Sibley's speech which imposes upon

CarMax a burden to justify the prior restraint." (Opp'n Second Mot. Remand 6.) According to

Sibley, "[t]his alleged First Amendment^violation is thus an element of the claim of CarMax
which is presumed invalid." (Id.) Sibley's assertion of federal question jurisdiction in the form
of a defense fails. See Fed. Nat. Mortg. Ass'n, 2013 WL 5488513, at *5 ("'[A]ctions in which
defendants merely claim a substantive federal defense to a state-law claim do not raise a federal
question.'" (quoting In re Blackwater Sec. Consulting, LLC^ 460 F.3d 576, 584 (4th Cir. 2006)).
"[W]hen determining whether a claim arises under federal law, the Court must examine
'allegations of the complaint and ignore potential defenses.'^'' Id. at *5 (emphasis added)

(quoting Beneficial Nat 7 Bank v. Anderson, 539 U.S. 1, 6 (2003)). Accordingly, Sibley's First
Amendment defense does not confer subject matter jurisdiction on this Court.

"Congress shall make no law respecting an establishment of religion, or prohibiting
the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the
people peaceably to assemble, and to petition the Government for a redress of grievances." U.S.
Const, amend. I.

12

C

Sibley Cannot Demonstrate by a Preponderance of the Evidence that the
Amount in Controversy Exceeds the Jurisdictional Minimum

Both parties aclcnowledge that diversity ofcitizenship exists,'^ but the amount in
controversy also must exceed $75,000. 28 U.S.C. § 1332(a). The Court finds that Sibley has not
demonstrated by a preponderance of the evidence that the amount in controversy required by
§ 1332 has been satisfied in this case. Accordingly, this Court lacks federal diversity
jurisdiction.

The Court begins by examining the Complaint, which alleges no specific amount in
controversy. CarMax instead seeks preliminary and final injunctive relief to prevent Sibley from
continuing, allegedly, to defame it, as well as compensatory and punitive damages to be
determined at trial. Because "the complaint does not specify damages, '[Sibley] need only prove

by a preponderance of the evidence that the amount in controversy exceeds the jurisdictional
minimum.'" Lee v. Citimortgage, Inc., 739 F. Supp. 2d 940, 945 (E.D. Va. 2010) (quoting UT

& Assocs., Inc. V. Koochagian, No. WDQ~09-2405, 2009 WL 4884525, at *3 (D. Md. Dec.

10, 2009)).'®
Sibley, nonetheless, omits any evidence regarding the amount in controversy. He relies
only on bare assertions in his Amended Notice of Removal, such as: "it is clear that the matter in

controversy exceeds the sum or value of $75,000." (Am. Not. Removal ^ 3.) When opposing
the Second Motion to Remand, Sibley contends, given CarMax's demand for punitive damages
Federal diversity jurisdiction requires complete diversity of citizenship. Abraham,
2011 WL 1790168, at *2 (citing Garden v. Arkoma Assocs., 494 U.S. 185, 187 (1990)). "[T]he
'citizenship of each plaintiff [must be] diverse from the citizenship of each defendant.'"
Abraham, 2011 WL 1790168, at *2 (second alteration in original) (quoting Caterpillar Inc. v.
519 U.S. 61,68 (1996)).

On the other hand, "[w]hen a plaintiff claims damages less than $75,000, removal is
proper only if the defendant can prove to a legal certainty that the plaintiff would . . . recover

more than that if she prevailed." Citimortgage, Inc., 739 F. Supp. 2d at 945 (internal quotation
marks omitted) {citing LIT & Assocs., Inc., 2009 WL 4884525, at *3).

13

and redress for substantial damages, "[c]ommon sense dictates that more than $75,000 is at
issue." (Opp'n to Second Motion to Remand 4.) Such conclusory statements fail to establish the
amount in controversy. Indeed, "'[m]ere allegations in the notice of removal are insufficient.'"

Citimortgage, Inc., 739 F. Supp. 2d at 945 (quoting UT & Assocs.^ 2009 WL 4884525, at *3).

Instead, Sibley "must establish the amount in controversy with competent proof." Id. (internal
quotation marks omitted) (citing UT & Assocs., 2009 WL 4884525, at *3). By failing to provide
any evidence, Sibley does not meet the "competent proof threshold and fails to establish
diversity jurisdiction.
D.

Siblcv^s Other Bases for Subject Matter Jurisdiction Fail Out of Hand

The Court also must reject Sibley's other bases for subject matter jurisdiction. First,
Sibley alleges that the Court has "Supplemental, Pendent, and Ancillary Jurisdiction." (Am.

Notice Removal ^5.) These theories ofjurisdiction necessarily depend on the existence of a
federal claim and cannot stand on their own. See 28 U.S.C. § 1367(a) ("[I]n any civil action of

which the district courts have originaljurisdiction, 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 under Article III of the United
States Constitution." (emphasis added)); see also ESAB Grp., Inc. v. Zurich Ins. PLC, 685 F.3d
376, 394 (4th Cir. 2012) ("With 28 U.S.C. § 1367, Congress largely codified the doctrine of
pendent jurisdiction (and the related doctrine of ancillaryjurisdiction) as supplemental

jurisdiction."). "Because there is no underlying federal claim to which [CarMax's defamation]
claim relates and no basis for this Court's exercise of diversity jurisdiction apparent from the

record, exercise of supplemental jurisdiction under § 1367 in support of removal would be
improper." Fed. Nat. Mortg. Ass'n, 2013 WL 5488513, at *6. Sibley cannot invoke

14

supplemental, pendent, or ancillary jurisdiction as a basis for this Court's jurisdiction over
CarMax's stand-alone defamation claim.

Second, Sibley offers the "mandatory retention doctrine" as another basis for establishing
federal subject matter jurisdiction. (Am. Not. Removal ^ 6.) The mandatory retention doctrine
appears to have been recognized by only two circuits—^the United States Court of Appeals for
the Fifth Circuit and the United States Court of Appeals for the Ninth Circuit—and the United
States Court of Appeals for the Fourth Circuit has questioned its vitality. See Wood v. Crane

Co., 764 F.3d 316, 326 (4th Cir. 2014) ("The Ninth Circuit's approach, which mirrors that of the
Fifth Circuit, has been criticized as contrary to well-settled practice."). However, even if the

mandatory retention doctrine applied in the Fourth Circuit, it would not provide a basis for
subject matter jurisdiction in this case.

The mandatory retention doctrine provides that "[ojnce a case has been properly
removed, the district court has jurisdiction over it on all grounds apparent from the complaint,
not just those cited in the removal notice." Williams v. Costco Wholesale Corp., 471 F.3d 975,

977 (9th Cir. 2006) (emphasis added). In other words, even if the original basis for removal has
been destroyed, a federal court retains jurisdiction so long as an independent basis for federal
jurisdiction exists. See id. By way of example, a court could retain jurisdiction over a case
removed for federal question jurisdiction even if the basis for federal question jurisdiction is
destroyed {e.g., by an amended complaint), as long as an independent basis for subject matter

jurisdiction (such as diversity jurisdiction) exists. That said, Sibley did not properly remove this
case to this Court, nor does a basis for subject matter jurisdiction exist now. Even if the
mandatory retention doctrine were available in the Fourth Circuit, it would not confer on this
Court subject matter jurisdiction over CarMax's defamation claim.

15

Because Sibley cannot establish the requisite amount in controversy for diversity
jurisdiction, because this case does not turn on a federal question, and because Sibley's other
bases for subject matter jurisdiction do not apply, this Court lacks subject matter jurisdiction.
The Court will grant CarMax's Second Motion to Remand.
V, CarMax's Request for Fees and Costs

Under 28 U.S.C. § 1447(c), when a Court remands a case, it "may require payment of
just costs and any actual expenses, including attorney fees, incurred as a result of the removal."
CarMax seeks fees and costs because Sibley, an attorney whose license has been suspended for
pursuing meritless and vexatious litigation "removed the matter the day before a state court
hearing, to the wrong court, with deficient allegations." (Mem. Supp. Second Mot. Remand 10.)

CarMax argues that on the eve of a preliminary injunction hearing before the Goochland
Circuit Court, Sibley improperly removed this case to the Alexandria Division of the United
States District Court for the Eastern District of Virginia. CarMax notes that not only did Sibley
remove the case to the wrong federal venue, but also that the case did not belong in federal court
at all. Indeed, this Court has found that CarMax did not plead an amount in controversy in the

state court complaint, and Sibley provided no evidence demonstrating that the amount in
controversy exceeded $75,000.
After CarMax requested that this case be remanded to the Goochland Circuit Court,
Sibley did not concede procedural error. Instead, Sibley added three grounds for removal, all of
which the Court now has concluded fail to establish federal jurisdiction. Sibley filed improper

and meritless motions along the way, including his "First Notice of Vacation," (ECF No. 12),
and two "motions" for jurisdictional discovery which he filed in violation of Local Civil Rule
7(F), (ECF Nos. 15, 19), despite previous unequivocal warning by this Court to file a motion and
a memorandum in support when appropriate, (ECF No. 14). Not only did these motions

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contravene this Court's explicit warning, but they also failed to identify a viable basis for

discovery or removal. Given the prevailing case law, Sibley's filings might be dubbed frivolous.
As an aside, this Court notes that Judge Titus determined that Sibley's litigative conduct
in the Maryland District Court could warrant the imposition of sanctions at bar. CarmaxAuto
Superstores, Inc. v. Sibley, No. 16cvl459, 2016 WL 6091174, at *7-8 (D. Md. Oct. 14, 2016).
While it will not consider Sibley's actions before a different court in deciding sanctions, the two
lawsuits interrelate, and what CarMax contends are dilatory tactics here include motions cross-

filed in both cases. Sibley's status as a former lawyer, suspended in Florida and New York for
engaging in vexatious litigation, may allow this Court to consider, when weighing the imposition
of sanctions, whether he should be held to a higher standard than a typical pro se litigant. See
Frison v. Ryan Homes, No. Civ A. AW-04-350 , 2004 WL 3327904, *8 (D. Md. Oct 29, 2004).
In any event, "[t]he 'fact that the removing party is a pro se litigant does not prevent the court

from imposing sanctions.'" Fed Nat. Mortg. Ass'n, 2013 WL 5488513, at *7 (quoting M/V/er v.
Ba/cer, 5:09cv94, 2010 WL 3585423, at *1 (W.D. Va. Sept. 9, 2010)). "In fact, courts often

require payment of attorneys' fees and costs from pro se defendants who effect removal with
improper motivations." Id. (citing cases).

Accordingly, the Court will order that CarMax file, no later than January 16, 2017, a
motion with appropriate citations, specifying whether it seeks fees and costs under 28 U.S.C.

§ 1447(c),Federal Rule of Civil Procedure 11,'^ or 28 U.S.C. § 1927,'^ and articulating why

Although the case will be remanded, the Court will retain jurisdiction over the
collateral issue of costs and attorneys' fees under § 1447(c) for improper removal.
See Bryant v. Britt, 420 F.3d 161, 165 (2d Cir. 2005) (holding that a district court has jurisdiction

to resolve a motion for fees and costs under § 1447(c) after a remand order has been issued); see
also WilliamsburgPlantation, Inc. v. Bluegreen Corp., No. 4:06cvl02, 2007 WL 445289, at *2
(E.D. Va. Feb. 5, 2007) (concluding that the court retained jurisdiction to consider attorneys'
fees under § 1447(c) following remand). But see United Broad. Corp. v. Miami Tele-Commc 'ns,
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sanctions would be appropriate under any provision it invokes. Pursuant to Robinson v. Equifax
Info. Servs. LLC, 560 F.3d 235 (4th Cir. 2009), CarMax shall also file an affidavit setting forth
its attorneys' fees and expenses, organized by task, to assist the Court in determining the amount
of a sanction, should one be appropriate. The Court separately reminds Sibley that, under

Chambers v. NASCO, 501 U.S. 32 (1991), the Court also has inherent power to manage its own
affairs, meaning it can "fashion an appropriate sanction for conduct which abuses the judicial
process," id. at 44-45.

Further, the Court will direct Sibley to respond to CarMax's motion and affidavit, and to
SHOW CAUSE, in writing, no later than January 30, 2017, why sanctions should not be entered
against him for the reasons stated above.

Inc., 140 F.R.D. 12, 14 (S.D. Fla. 1991) (holding that a court awarding costs and expenses under
§ 1447(c) must do so in the order of remand).
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Rule 11 requires a party when presenting a motion to certify that:

"[t]o the best of the person's knowledge information, and belief, formed anfter an
inquiry reasonably under the circumstances," that "it is not being presented for
any improper purpose, such as to harass, cause unnecessary delay, or needlessly
increase the cost of litigation."
Fed. R. Civ. P. 11(b).

28 U.S.C. § 1927 provides that:

Any attorney or other person admitted to conduct cases in any court of the United
States or any Territory thereof who so multiplies the proceedings in any case
unreasonably and vexatiously may be required by the court to satisfy personally
the excess costs, expense, and attorneys' fees reasonably incurred because of such
conduct.

28 U.S.C § 1927. "Section 1927 'was intended to sanction conduct Rule 11 does not reach; i.e.,

protracting or multiplying the litigation to run up the oppos[ing] party's costs.'" Sibley, 2016
WL 6091174, at *7 (quoting Bakker v. Grutman, 942 F.2d 236, 242 (4th Cir. 1991)).

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VI. Conclusion

For the foregoing reasons, the Court will deny the Motions for Jurisdictional Discovery,
(ECF Nos. 15, 19), grant the Second Motion to Remand, (ECF No. 17), and order further

briefing on the propriety of sanctions. Sibley's Motion to Proceed in Forma Pauperis will be
denied as moot. (ECF No. 2.)

The Court will order that CarMax file, no later than January 16, 2017, a motion and

memorandum with appropriate citations, specifying whether it seeks fees and costs under 28
U.S.C. § 1447(c), Federal Rule of Civil Procedure 11, or 28 U.S.C. § 1927. CarMax shall
articulate why sanctions would be appropriate under any provision it invokes. Pursuant to
Robinson v. Equifax Info. Servs. LLC, 560 F.3d 235 (4th Cir. 2009), CarMax shall also file an
affidavit setting forth its attorneys' fees and expenses, organized by task, to assist the Court in
determining the amount of a sanction, should one be appropriate.

The Court will direct Sibley to file a response to CarMax's motion and affidavit, and to
SHOW CAUSE, in writing, no later than January 30, 2017, why sanctions should not be entered
against him.
The Court will remand this case to the Circuit Court for the County of Goochland. This

case will remain open in this Court for the limited purpose of determining the collateral issue of
sanctions. An appropriate order will accompany this Memorandum Opinion.

HL

M. Hani

United States District Judge
Richmond, Virginia
Date:

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