Opinion
C/A No. 3:18-2982-MGL-PJG
01-11-2019
Wengui Guo, also known as Miles Kwok, Plaintiff, v. Yudan Lin, Defendant.
REPORT AND RECOMMENDATION
The plaintiff, Wengui Guo, a Chinese citizen in New York seeking political asylum, filed a defamation action against the defendant, Yudan Lin, in the Lexington County Court of Common Pleas. Plaintiff filed a notice of removal pursuant to 28 U.S.C. § 1446(a). (ECF No. 1.) This matter is before the court pursuant to 28 U.S.C. § 636(b) and Local Civil Rule 73.02(B)(2) (D.S.C.) for a Report and Recommendation on two motions to dismiss, a motion to remand, and a motion for sanctions. (ECF Nos. 16, 21, 23, & 30.) Following Plaintiff's filing of a motion to dismiss counterclaims for failure to state a claim (ECF No. 16), the court advised Defendant of the summary judgment and dismissal procedures and the possible consequences if she failed to respond adequately to the Plaintiff's motion in accordance with Roseboro v. Garrison, 528 F.2d 309 (4th Cir. 1975). (ECF No. 17.) Defendant then filed a response in opposition to the motion (ECF No. 24), and the Plaintiff filed a reply (ECF No. 25). Plaintiff also filed a motion to remand this action. (ECF No. 21.) Thereafter, Defendant filed a motion to dismiss for failure to state a claim and a motion for sanctions. (ECF Nos. 23 & 30.) Having reviewed the record presented and the applicable law, the court finds that this case should be remanded.
The court granted Plaintiff's motions to extend the deadlines for his responses to those motions to fifteen days following this court's ruling on his motion to remand. (See ECF Nos. 27, 29, 35, 37.) As such, these motions have not been fully briefed.
BACKGROUND
On October 23, 2018, Plaintiff filed an action in the Lexington County Court of Common Pleas, asserting the following causes of action: (1) defamation, (2) defamation per se, (3) intentional infliction of emotional distress, and (4) intentional interference with prospective contractual relations. (See ECF No. 16-1 at 2.) On November 5, 2018, Defendant filed a notice of removal in this court. (ECF No. 1.) Defendant asserts that removal is proper as "[t]here is complete diversity between the parties" and "[t]he amount in controversy exceeds $ 75,000, excluding interest, costs, and attorney fees." (ECF No. 1 at 1-2) (citing 28 U.S.C. § 1332(a)). Defendant further states, "Plaintiff is a citizen of the state of New York, not a United States citizen. Defendant is a citizen of the state of SOUTH CAROLINA, a United States citizen." (ECF No. 1 at 2.)
Defendant did not include a copy of the state court documents as required by 28 U.S.C. § 1446(a) ("A defendant or defendants desiring to remove any civil action from a State court shall file in the district court of the United States for the district and division within which such action is pending a notice of removal . . . together with a copy of all process, pleadings, and orders served upon such defendant or defendants in such action."). Thus, the court relies upon Plaintiff's own statement of what claims are included in his state court complaint.
DISCUSSION
A. Rule 12(b)(1) Standard
Dismissal under Federal Rule of Civil Procedure 12(b)(1) examines whether the complaint fails to state facts upon which jurisdiction can be founded. It is the plaintiff's burden to prove jurisdiction, and the court is to "regard the pleadings' allegations as mere evidence on the issue, and may consider evidence outside the pleadings without converting the proceeding to one for summary judgment." Richmond, Fredericksburg & Potomac R.R. Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991).
To resolve a jurisdictional challenge under Rule 12(b)(1), the court may consider undisputed facts and any jurisdictional facts that it determines. The court may dismiss a case for lack of subject matter jurisdiction on any of the following bases: "(1) the complaint alone; (2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts." Johnson v. United States, 534 F.3d 958, 962 (8th Cir. 2008) (quoting Williamson v. Tucker, 645 F.2d 404, 413 (5th Cir. 1981)).
Further, while the federal court is charged with liberally construing a complaint filed by a pro se litigant to allow the development of a potentially meritorious case, see, e.g., Erickson v. Pardus, 551 U.S. 89 (2007), the requirement of liberal construction does not mean that the court can ignore a clear failure in the pleadings to allege facts which set forth a federal claim, nor can the court assume the existence of a genuine issue of material fact where none exists. Weller v. Dep't of Soc. Servs., 901 F.2d 387 (4th Cir. 1990).
B. Standard for Remand
Federal courts are courts of limited jurisdiction, "constrained to exercise only the authority conferred by Article III of the Constitution and affirmatively granted by federal statute." In re Bulldog Trucking, Inc., 147 F.3d 347, 352 (4th Cir. 1998). Accordingly, a federal court is required to determine if a valid basis for its jurisdiction exists, "and to dismiss the action if no such ground appears." Id. at 352; see also Fed. R. Civ. P. 12(h)(3) ("If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action."). Generally, a case can be filed in federal district court if there is diversity of citizenship under 28 U.S.C. § 1332, or if there is federal question jurisdiction under 28 U.S.C. § 1331. The removal statute, 28 U.S.C. § 1441, allows a state court defendant to remove a case to a federal district court if the state court action could have been originally filed there. See Darcangelo v. Verizon Commc'ns, Inc., 292 F.3d 181, 186 (4th Cir. 2002). However, the removing defendant has the burden of establishing subject matter jurisdiction. Mulcahey v. Columbia Organic Chems. Co., Inc., 29 F.3d 148, 151 (4th Cir. 1994).
The United States Supreme Court has commanded that, when considering jurisdiction over a removed case, federal courts must "scrupulously confine their own jurisdiction to the precise limits which the statute has defined." Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 109 (1941) (internal quotation marks and citation omitted). In addition, "[r]emoval statutes must be strictly construed against removal," Scott v. Greiner, 858 F. Supp. 607, 610 (S.D. W. Va. 1994), and a federal court must "resolve all doubts about the propriety of removal in favor of retained state court jurisdiction." Marshall v. Manville Sales Corp., 6 F.3d 229, 232 (4th Cir. 1993); see also Palisades Collections LLC v. Shorts, 552 F.3d 327, 333-34 (4th Cir. 2008); Mulcahey, 29 F.3d at 151 ("If federal question jurisdiction is doubtful, a remand is necessary.").
C. Motion to Remand
Plaintiff argues that this court should dismiss the instant action for lack of subject matter jurisdiction. (ECF No. 16-1 at 8-10.) Noting that a state court defendant may remove a case to federal district court only if the action could have originally been filed there, Plaintiff argues that there is no basis for removal here. (ECF No. 16-1 at 9.) First, Plaintiff argues that removal is improper based on diversity jurisdiction because 28 U.S.C. § 1441(b) "prohibits removal of actions purely based on diversity jurisdiction where the defendant is a resident of the forum state." Id. Plaintiff states "Defendant is precluded, as a matter of law, from removing this case on the basis of diversity of citizenship since she is a citizen of South Carolina, as admitted on the face of her removal papers." Id. Second, Plaintiff argues that, "[t]o the extent Defendant seeks federal question jurisdiction by way of her counterclaims asserting federal law, it is well-established that such counterclaims cannot serve as a basis for federal question jurisdiction on removal." (ECF No. 16-1 at 9-10.) In his subsequent motion to remand, Plaintiff asks this court to remand this action since removal was improper. (ECF No. 21.)
In her response in opposition to Plaintiff's motion to dismiss, Defendant does not address subject matter jurisdiction. (See ECF No. 24.) However, in her own motion to dismiss, Defendant asserts "that she will add [Racketeer Influenced and Corrupt Organizations ("RICO")] violations as an additional cross-cause of action against Plaintiff . . . ." (ECF No. 23 at 2.) Thus, she contends that this court has federal question jurisdiction over this case. Id.
The court concludes that Defendant has failed to establish jurisdiction based on a federal question or diversity of citizenship, and no other source of jurisdiction is apparent from the pleadings.
It is well settled that a federal question must be presented on the face of a plaintiff's complaint to satisfy federal question jurisdiction. Harless v. CSX Hotels, Inc., 389 F.3d 444, 450 (4th Cir. 2004) (discussing the well-pleaded complaint rule). Further, a plaintiff may avoid federal jurisdiction by exclusively relying on state law. Caterpillar Inc. v. Williams, 482 U.S. 386 (1987). In the present case, Defendant seeks to remove a state law defamation action, but she has not demonstrated that the state court documents contain a federal question on their face. To the extent Defendant attempts to assert counterclaims based on federal law, such claims do not establish federal question jurisdiction. See Holmes Grp., Inc. v. Vornado Air Circulation Sys., Inc., 535 U.S. 826, 830-32 (2002) (holding that a counterclaim, appearing as part of the defendant's answer, cannot serve as the basis for federal question jurisdiction). Accordingly, federal question jurisdiction is lacking in this case.
Again, Defendant has not properly complied with 28 U.S.C. § 1446(a) and provided the court with a copy of the state court documents. Also, she does not dispute the nature of the state court claims as recited by Plaintiff in his motion to dismiss.
Moreover, removal based on diversity of citizenship is not proper here because the pleadings indicate that, while the parties are citizens of different states, Defendant is a citizen of South Carolina. According to statute, a defendant may not remove an action based on diversity of citizenship where any defendant is a citizen of the forum state. 28 U.S.C. § 1441(b)(2) ("A civil action otherwise removable solely on the basis of [diversity] 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."); Lincoln Prop. Co. v. Roche, 546 U.S. 81, 84 (2005); see also Phillips Constr., LLC v. Daniels Law Firm, PLLC, 93 F. Supp. 3d 544 (S.D. W. Va. 2015) ("This provision, commonly known as the 'forum defendant rule,' is separate and apart from the statute conferring diversity jurisdiction and confines removal on the basis of diversity to instances where no defendant is a citizen of the forum state.") (internal quotations omitted). This defect is waivable. See Councell v. Homer Laughlin China Co., 823 F. Supp. 2d 370, 378-79 (N.D. W. Va. 2011) (collecting cases) (finding persuasive the majority opinion held by nine circuit courts of appeal and district courts within the Fourth Circuit (though not considered by the Fourth Circuit Court of Appeals itself) that removal by a forum defendant is a procedural defect and thus waivable); but see Hurt v. Dow Chem. Co., 963 F.2d 1142 (8th Cir. 1992) (holding § 1441(b) states a jurisdictional bar). However, as Plaintiff has asserted the forum state defendant rule, he has not waived it here.
Consequently, there is no basis for federal jurisdiction in this case, and the matter should be remanded to the state court.
Because the court lacks jurisdiction, it does not address Plaintiff's alternative bases for dismissal.
D. Other Claims/Relief
Other pending claims in this action include Plaintiff's request for costs and expenses, and Defendant's motion for sanctions. The court declines Plaintiff's request and finds Defendant's motion moot.
RECOMMENDATION
The court recommends granting in part, and denying in part, Plaintiff's motion to remand and request for costs and expenses. (ECF No. 21.) The court further recommends that all other pending motions in this action be terminated as moot.
/s/_________
Paige J. Gossett
UNITED STATES MAGISTRATE JUDGE January 11, 2019
Columbia, South Carolina
The parties' attention is directed to the important notice on the next page.
Notice of Right to File Objections to Report and Recommendation
The parties are advised that they may file specific written objections to this Report and Recommendation with the District Judge. Objections must specifically identify the portions of the Report and Recommendation to which objections are made and the basis for such objections. "[I]n the absence of a timely filed objection, a district court need not conduct a de novo review, but instead must 'only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.' " Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d 310 (4th Cir. 2005) (quoting Fed. R. Civ. P. 72 advisory committee's note).
Specific written objections must be filed within fourteen (14) days of the date of service of this Report and Recommendation. 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b); see Fed. R. Civ. P. 6(a), (d). Filing by mail pursuant to Federal Rule of Civil Procedure 5 may be accomplished by mailing objections to:
Robin L. Blume, Clerk
United States District Court
901 Richland Street
Columbia, South Carolina 29201
Failure to timely file specific written objections to this Report and Recommendation will result in waiver of the right to appeal from a judgment of the District Court based upon such Recommendation. 28 U.S.C. § 636(b)(1); Thomas v. Arn, 474 U.S. 140 (1985); Wright v. Collins, 766 F.2d 841 (4th Cir. 1985); United States v. Schronce, 727 F.2d 91 (4th Cir. 1984).