Opinion
24-cv-04024-JST
08-21-2024
CLEMENT HOLDINGS, LLC, Plaintiff, v. WINFORD REECE, Defendant.
ORDER ADOPTING REPORT AND RECOMMENDATION AND REMANDING TO STATE COURT
Re: ECF No. 6
JON S. TIGAR UNITED STATES DISTRICT JUDGE
The Court has reviewed Magistrate Judge Kandis A. Westmore's report and recommendation, ECF No. 6, to remand this case to state court. Defendant, who is not a CM/ECF participant, was served via First Class Mail to his address of record on July 26, 2024. See ECF No. 6. No objections were filed within the 14-day period, which expired on August 12, 2024. See Fed. R. Civ. P. 72(b)(2) (setting 14-day period for objections); Fed.R.Civ.P. 6(d) (allowing three additional days when service is by mail).
Defendant Winford Reece filed a late objection to the report and recommendation, styled as an “Ex Parte Motion for Reconsideration,” on August 16, 2024. ECF No. 10. The same day, Defendant also filed a complaint asserting counterclaims against Plaintiff Clement Holdings, LLC, and claims against third-party Wyoming Investments, LLC. ECF No. 11. Defendant argues that these claims, some of which arise under federal law, provide the court with supplemental jurisdiction over the original complaint. See ECF No. 10 at 7.
Although Defendant labels his claims as “crossclaims,” the filing consists of counterclaims (because Clement Holdings, LLC is the opposing party) and third-party claims (because Wyoming Investments, LLC is not a party to the original complaint). See Fed. R. Civ P. 13-14.
Defendant's motion for reconsideration is denied. “A counterclaim-which appears as part of the defendant's answer, not as part of the plaintiff's complaint-cannot serve as the basis for ‘arising under' jurisdiction.” Holmes Group v. Vornado Air Circulation Sys., Inc., 535 U.S. 826, 831 (2002); see also Takeda v. Nw. Nat. Life Ins. Co., 765 F.2d 815, 822 (9th Cir. 1985) (“The federal question defendants raise in their counterclaims does not provide a basis for removal.”). The same rule applies to the third-party claims against Wyoming Investments, LLC. “Federal question jurisdiction exists only if the plaintiff's complaint states a federal cause of action; permitting a defendant to create federal subject matter jurisdiction by casting a third-party complaint in terms of a federal cause of action would impermissibly expand the jurisdiction of the federal courts beyond that conferred by Congress.” Cross Country Bank v. McGraw, 321 F.Supp.2d 816, 820-21 (S.D. W.Va. 2004); see 6 Charles A. Wright, Arthur R. Miller, & Mary Kay Kane, Federal Practice & Procedure § 1444 (“[W]hen there is no subject-matter jurisdiction over the original action between plaintiff and defendant, it cannot be created by adding a third-party claim over which there is jurisdiction.”). Because the Court has no jurisdiction over the original complaint in this case, it also lacks jurisdiction over Defendant's counterclaims and third-party claims.
The Court finds Judge Westmore's report to be correct, well-reasoned, and thorough, and adopts it in every respect. This case is remanded to state court.
IT IS SO ORDERED.