Opinion
No. 04 Civ. 7204 (PKC).
September 30, 2004
MEMORANDUM AND ORDER
On September 10, 2004, the third-party defendants removed this action from Supreme Court, Bronx County, to this Court alleging diversity jurisdiction. On September 22, 2004, I entered an order directing the "[t]hird party-defendants to show cause . . . why this action should not be dismissed for lack of subject matter jurisdiction." I questioned the existence of diversity jurisdiction based upon my reading of the Removal Petition. The same day third-party defendants wrote to me asserting that I had overlooked the fact that the original plaintiff and defendant were diverse and that this provided the basis for the third-party defendants to remove the action to this Court. I entered a second order the same day directing third-party defendants to respond to this question: "do third party defendants have standing to remove an action [to federal court] based upon diversity [of citizenship] between plaintiff and defendant?" I have given the removing parties an opportunity to respond and they have done so in a three-page letter brief. Having considered their arguments, I remand this action for the reasons set forth below.
On or about April 15, 2004, plaintiff Joey Casul brought an action against Modell's Sporting Goods Company, Inc. in Supreme Court, Bronx County. Casul v. Modell's Sporting Goods Company, Inc., Index No. 15002/04. The simple one-plaintiff, one-defendant, negligence action alleges that on May 3, 2003, a stationary bicycle in the fitness equipment section of a Modell's store on White Plains Avenue in the Bronx fell to the floor and injured Casul. The sole defendant, Modell's Sporting Goods Company, Inc., was alleged by plaintiff to be a New York corporation; its principal place of business was not alleged. On or about August 4, 2004, the defendant served a third-party complaint on Proform Fitness Products, Inc. ("Proform") and Icon Health and Fitness Inc. ("Icon") alleging several theories under which third-party defendants would be liable to the third-party plaintiff, if it, in turn, was liable to plaintiff.
Third-party defendants Proform and Icon removed this action to this court alleging that plaintiff and defendant are of diverse citizenship, 28 U.S.C. § 1332. (Removal Petition ¶ 4) As noted, plaintiff's complaint alleged that defendant Modell's Sporting Goods Company, Inc. is a New York corporation. (Complaint ¶ 1) In the third-party pleading the defendant/third-party plaintiff asserted that it was improperly sued as Modell's Sporting Goods Company, Inc. and should have been sued as Modell's NY II, Inc., a Delaware corporation with a principal place of business not alleged. The removing third-party defendants contend that Modell's NY II, Inc. is incorporated in Delaware and has its principal place of business in Delaware and that the plaintiff is a New York "resident." (Removal Petition ¶ 4)
The Removal Petition appears silent as to the place of incorporation and principal place of business of Proform Fitness Products, Inc. ("Proform"), although its answer to the third-party complaint denies that it is both incorporated and has its principal place of business in New York, leaving open the possibility that one or the other may be true.
Section 1441(a) of title 28 provides, with certain exceptions, that an action as to which there is "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. . . ." The plain text of the statute does not permit removal by a person other than a defendant and courts have routinely held that a third-party defendant may not remove under section 1441(a). See, e.g., First Nat. Bank of Pulaski v. Curry, 301 F.3d 456, 462 (6th Cir. 2002) ("We hold that third-party defendants are not `defendants' for purposes of § 1441(a)."); Knight v. Hellenic Lines, Ltd., 543 F. Supp. 915, 917 (E.D.N.Y. 1982) ("[J]udicial authority and the commentators have squarely rejected the view that a defendant in a third-party action is a `defendant' under § 1441(a)"). This interpretation of section 1441(a) comports with the need to strictly construe the removal statute lest a judicial gloss serve as an unwarranted encroachment on state sovereignty.See Shamrock Oil Gas Corp. v. Sheets, 313 U.S, 100, 108-09 (1941).
Subdivision (b) makes it plain that a defendant who is a citizen of the state in which the district is located may not remove on the grounds of diversity of citizenship. 28 U.S.C. § 1441(b). Thus, if defendant is a New York domiciliary, as plaintiff alleges it is, it could not remove the action; it would be more than anomalous to allow a third-party defendant, Proform, who does not allege that it is incorporated and has its principal place of business in a state other than New York, to remove.
Section 1441 at subdivision (c) also permits removal of an action when a "separate and independent claim" as to which there is a basis for jurisdiction under section 1331 is joined with a claim as to which there is not a basis for removal. The Sixth Circuit's recent opinion in First National Bank of Pulaski surveys the state of the law and notes that most courts, including the Seventh and Eighth Circuits, simply do not read section 1441(c) as permitting removal by a third party defendant.See First Nat. Bank of Pulaski, 301 F.3d at 463-467; see also Crawford v. Albert Einstein College of Medicine, 647 F. Supp. 843, 846 (S.D.N.Y. 1986) (Pollack, J.) ("Courts in the Southern District consistently adhere to the majority position that third-party defendants have no right to remove claims under § 1441(c)."); Burlingham, Underwood, Barron Wright White v. Luckenbach Steamship Co., 208 F. Supp. 544, 546 (S.D.N.Y. 1962) ("[T]he more persuasive reasoning lies with those denying the power of a third party to remove."). Other courts, the Sixth Circuit notes, do not prohibit per se a third party defendant from removing under section 1441(c) but strictly construe the "separate and independent" requirement. See First Nat. Bank of Pulaski, 301 F.3d at 463-467; see generally Wright, Miller Cooper, FEDERAL PRACTICE AND PROCEDURE: Jurisdiction 3d § 3731.
Subdivision (c) provides that "[w]henever a separate and independent claim or cause of action within the jurisdiction conferred by section 1331 of this title is joined with one or more otherwise non-removable claims or causes of action, the entire case may be removed and the district court may determine all issues therein, or, in its discretion, may remand all matters in which State law predominates." 28 U.S.C. § 1441(c).
Here, the liability of the third-party defendants is alleged to be derivative of the liability of the defendant to the plaintiff, even though the claims are denominated as stand-alone causes of action, and thus do not satisfy the separate and independent requirement. See Crawford, 647 F.Supp. at 847. Further, no federal question is presented and the language of section 1441(c) is restricted to claims asserting jurisdiction under section 1331.
Thus, neither subdivision (a) or (c) of section 1441 provides a basis for removal. The action is remanded to Supreme Court, County of Bronx.
SO ORDERED.