Opinion
23 Civ. 1619 (PGG) (GWG)
04-05-2023
AKF INC., d/b/a FUNDKITE, Petitioner, v. SIERRA SLOT SOURCE LLC, et al., Respondents.
REPORT & RECOMMENDATION
GABRIEL W. GORENSTEIN, UNITED STATES MAGISTRATE JUDGE
Petitioner AKF Inc, d/b/a/ FundKite (“AKF”), brought a petition in the Supreme Court, New York County, to restrain the bank accounts of respondents Sierra Slot Source LLC (“Sierra”); Chilcoot Properties, LLC (“Chilcoot”); Donald F. Dupont, Jr.; and Suresh N. Naidu, in order to effectuate a pending arbitration. See Verified Petition, annexed as Ex. B to Mot. (Docket # 5-2) (“Pet'n”). On January 13, 2023, Naidu filed a notice of removal to the Southern District of New York, which was docketed in this District on February 17, 2023. Notice of Removal, filed Feb. 17, 2023 (Docket # 1) (“Notice”). On March 8, 2023, AKF filed a motion to remand. Notice of Motion to Remand, filed Mar. 8, 2023 (Docket # 5) (“Mot.”). Naidu did not timely respond to the motion. For the reasons that follow, AKF's motion should be granted.
See Mot.; Memorandum of Law, filed Mar. 8, 2023 (Docket # 6) (“Mem.”).
I. BACKGROUND
On July 20, 2022, AKF filed a “Verified Petition for Preliminary Injunction in Aid of Arbitration” in the Supreme Court of the State of New York. See Pet'n at 1, 11. On July 26, 2022, AKF effectuated service on all respondents in that case, including Naidu. See Affidavit of Service, dated July 26, 2022, annexed as Ex. D to Mot. (Docket # 5-4) (“Aff.”). On July 27, 2022, counsel appeared on behalf of all respondents. See Notice of Appearance, dated July 27, 2022, annexed as Ex. E to Mot. (Docket # 5-5). On October 19, 2022, respondents' counsel was allowed to withdraw. Order, dated Oct. 19, 2022, annexed as Ex. G to Mot. (Docket # 5-7).
On January 13, 2023, Naidu, proceeding pro se, filed a notice of removal to the Southern District of New York, alleging that this was an action between citizens of different states, and thus could be brought in this Court under diversity jurisdiction. See Notice ¶¶ 11-12. The Notice was signed only by Naidu, see id. at *8, but was served on all other parties, see Affidavit of Service, dated Jan. 18, 2023, annexed to Notice at *21 (Docket # 1). On March 8, 2023, AKF filed the instant motion to remand. Neither Naidu nor any other defendant has responded to the motion.
II. LEGAL STANDARD
A defendant may remove to federal district court “any civil action brought in a State court of which the district courts of the United States have original jurisdiction.” 28 U.S.C. § 1441(a). To do so, the defendant must file a signed notice of removal “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.” 28 U.S.C. § 1446(a). The notice of removal must be filed within 30 days after the defendant receives a copy of the initial pleading, id. § 1446(b)(1), and “all defendants who have been properly joined and served must join in or consent to the removal of the action,” id. § 1446(b)(2)(A). Because removal is “entirely a creature of statute,” the “statutory procedures for removal are to be strictly construed.” Syngenta Crop Protection, Inc. v. Henson, 537 U.S. 28, 32 (2002). “[F]ederal courts are courts of limited jurisdiction and lack the power to disregard such limits as have been imposed by the Constitution or Congress.” Durant, Nichols, Houston, Hodgson & Cortese-Costa P.C. v. Dupont, 565 F.3d 56, 62 (2d Cir. 2009) (citation omitted). Thus, any doubts as to these limits should be resolved against removability. See In re Methyl Tertiary Butyl Ether Prods. Liab. Litig., 488 F.3d 112, 124 (2d Cir. 2007).
III. DISCUSSION
Among the ground raised by AKF for remanding this case to the New York Supreme Court are the following: (1) Naidu has failed to adequately allege that all parties in this case are diverse, depriving the court of subject-matter jurisdiction; (2) Naidu failed to obtain the consent of all respondents for the removal of this action; and (3) Naidu's notice of removal was untimely. Mem. at 3-5. We examine each ground for remand next.
A. Diversity Jurisdiction
“A civil claim filed in state court can only be removed to federal court if the district court would have had original jurisdiction to hear the claim.” Montefiore Med. Cntr. v. Teamsters Loc. 272, 642 F.3d 321, 327 (2d Cir. 2011) (citing 28 U.S.C. § 1441(a)). District courts have original jurisdiction over “all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between [] citizens of different States.” 28 U.S.C. § 1332(a). “The Supreme Court has interpreted ‘citizens of different States' to grant jurisdiction only ‘if diversity of citizenship among the parties is complete, i.e., only if there is no plaintiff and no defendant who are citizens of the same State.'” Platinum-Montaur Life Scis., LLC v. Navidea Biopharmaceuticals, Inc., 943 F.3d 613, 617 (2d Cir. 2019) (quoting Wis. Dep't of Corr. v. Schacht, 524 U.S. 381, 388 (1998)). “A party seeking removal bears the burden of showing that federal jurisdiction is proper.” Montefiore Med. Cntr., 642 F.3d at 327 (2d Cir. 2011) (citing Cal. Pub. Emps.' Ret. Sys. v. WorldCom, Inc., 368 F.3d 86, 100 (2d Cir. 2004)).
The respondents here include two limited liability companies, Sierra Slot Source LLC and Chilcoot Properties, LLC. See Pet'n ¶¶ 3-4. “[A] limited liability company . . . takes the citizenship of each of its members.” Bayerische Landesbank, N.Y. Branch v. Aladdin Cap. Mgmt. LLC, 692 F.3d 42, 49 (2d Cir. 2012) (citing Handelsman v. Bedford Vill. Assocs. Ltd. P'ship, 213 F.3d 48, 51-52 (2d Cir. 2000)). Naidu's notice of removal acknowledges that this rule applies, see Notice ¶ 19 (quoting rule), but does not identify the citizenship of the members of either Sierra or Chilcoot, and the underlying petition does not provide this information. See Pet'n ¶¶ 3-4. As the party seeking removal, Naidu carries the burden of demonstrating that diversity jurisdiction exists. See Montefiore Med. Cntr., 642 F.3d at 327. Because he has not demonstrated the citizenship of all defendants, this action must be remanded for lack of subject matter jurisdiction.
B. Unanimous Consent of Respondents
When a notice of removal is filed under Section 1441(a), “[a]ll defendants who have been properly joined and served must join in or consent to the removal of the action.” 28 U.S.C. § 1446(b)(2)(A). “[W]ritten consent from the non-removing co-defendants is required for a state-court action to properly be removed.” Gold Town Corp. v. United Parcel Serv., Inc., 519 F.Supp.3d 169, 175 (S.D.N.Y. 2021) (collecting cases). “[T]he failure of any defendant to provide its written consent . . . constitutes a fatal procedural defect in the removal procedure and warrants a remand of the case.” Metro Transp. Auth. v. U.S. Fidelity & Guar. Co., 2015 WL 1730067, at *4 (S.D.N.Y. Apr. 14, 2015) (quoting In re Vill. of Kiryas Joel, N.Y., 2012 WL 1059395, at *3 (S.D.N.Y. Mar. 29, 2012); accord Gold Town Corp., 519 F.Supp.3d at 176.
Here, the notice of removal reflects only that Naidu consented to removal. It does not reflect that any other party has consented, much less provide written consent from them. Thus, the notice of removal is inadequate under Section 1446(b)(2)(A) and the case should be remanded for this reason as well.
C. Timeliness
“The notice of removal of a civil action or proceeding shall be filed within 30 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.” 28 U.S.C. § 1446(b)(1). “[T]he burden is on the removing party to show that . . . removal was timely and proper.” Izquierdo v. 34th St. Diner, Inc., 2022 WL 72303, at *1 (S.D.N.Y. Jan 7, 2022) (punctuation in original) (quoting Winter v. Novartis Pharm. Corp., 39 F.Supp.3d 348, 350 (E.D.N.Y. 2014)).
Here, the respondent has provided proof that Naidu and all other respondents were served on July 26, 2022. See Aff. Naidu's notice of removal, however, was not filed until January 13, 2023, 171 days after the service date. See Notice. Thus removal was untimely and the case should be remanded for this reason as well.
Conclusion
For the foregoing reasons, AKF's motion to remand this case to the Supreme Court of the State of New York (Docket # 5) should be granted.
PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties have fourteen (14) days (including weekends and holidays) from service of this Report and Recommendation to file any objections. See also Fed.R.Civ.P. 6(a), 6(b), 6(d). A party may respond to any objections within 14 days after being served. Any objections and responses shall be filed with the Clerk of the Court. Any request for an extension of time to file objections or responses must be directed to Judge Gardephe. If a party fails to file timely objections, that party will not be permitted to raise any objections to this Report and Recommendation on appeal. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72; Fed.R.Civ.P. 6(a), 6(b), 6(d); Thomas v. Arn, 474 U.S. 140 (1985); Wagner & Wagner, LLP v. Atkinson, Haskins, Nellis, Brittingham, Gladd & Carwile, P.C., 596 F.3d 84, 92 (2d Cir. 2010).