Opinion
Case No. 02-4074-JAR
November 1, 2002
MEMORANDUM AND ORDER GRANTING PLAINTIFF'S MOTION TO REMAND
This matter comes before the Court on Plaintiff L. H. Energy, Inc.'s motion to remand the case to the District Court of Allen County, Kansas (Doc. 8). Plaintiff asserts that there is no diversity of citizenship between the parties such that the Court lacks subject matter jurisdiction under 28 U.S.C. § 1332. For the reasons stated below, the Court concludes that remand is appropriate.
Plaintiff originally filed this action for breach of contract on April 18, 2002, in the District Court of Allen County, Kansas. Plaintiff stated in its petition that both it and defendant were corporations authorized to do business in Kansas. Defendant filed a Notice of Removal (Doc. 1) to this Court on May 15, 2002, alleging diversity of parties, to wit: "Plaintiff was and is now a corporation duly formed and existing according to the laws of the State of California, being duly authorized to do business in the State of Kansas," and "Defendant is a corporation organized and existing under the laws of the State of Oklahoma, with its principal place of business in Tulsa, Oklahoma."
Standards for Removal
A civil action is removable only if plaintiff could have originally brought the action in federal court. The Court is required to remand "if at any time before final judgment it appears that the district court lacks subject matter jurisdiction." Because federal courts are courts of limited jurisdiction, the law imposes a presumption against federal jurisdiction, and requires a court to deny its jurisdiction in all cases where such jurisdiction does not affirmatively appear in the record.
Id. § 1447(c).
Frederick Warinner v. Lundgren, 962 F. Supp. 1580, 1582 (D.Kan. 1997) [citing Basso v. Utah Power Light Co., 495 F.2d 906, 909 (10th Cir. 1974)].
Insurance Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702 (1982).
In its motion to remand, Plaintiff alleges that both Plaintiff and Defendant are corporations incorporated in the State of Kansas, such that the parties are not diverse. Plaintiff attaches to its motion copies of online printouts from the Kansas Secretary of State that indicate that both Plaintiff and Defendant are registered corporations in good standing. Plaintiff also attaches a Letter of Good Standing from the same office indicating that defendant Kansas Gas Service Co.'s state of incorporation is Kansas.
In its response to the motion for remand, Defendant contends that Kansas Gas Service Company is not the same entity as the defendant named in this action, "Kansas Gas Service Co., a Division of Oneok, Inc." Defendant acknowledges that Kansas Gas Service Company is a Kansas corporation, allegedly created for the purpose of acquiring ownership and use of the name Kansas Gas Service, but argues that "Kansas Gas Service Co., a Division of Oneok, Inc." is but a division of Oneok, Inc., an Oklahoma corporation. If the named defendant is an unincorporated division of Oneok, Inc., then it would not be a separate citizen for diversity purposes and would have the citizenship of Oneok, Inc. Because Oneok, Inc. is an Oklahoma corporation with a principal place of business in Oklahoma, an unincorporated division of Oneok, Inc. would be a citizen of Oklahoma.
See Schwartz v. Electronic Data Systems, Inc., 913 F.2d 279, 284 (6th Cir. 1990); Bretiman v. May Co. California, 37 F.3d 562, 564 (9th Cir. 1994); Wisconsin Knife Works v. National Metal Crafters, 781 F.2d 1280 (7th Cir. 1986); 13B, Wright, Miller Cooper, Federal Practice Procedure § 3624 (1990 Supp. at 90 n. 22.1).
Defendant does not attach any documentation supporting its assertion that the named defendant is just a division of Oneok, Inc. and there is a separate corporate entity known as Kansas Gas Service Company. And, the burden is on the party requesting removal to demonstrate that the Court has jurisdiction. Defendant has failed its burden of proof. Although Defendant's assertion that these are not the same entities sounds plausible, without any supporting documentation, the Court cannot ascertain whether the named defendant is the same entity as the Kansas corporation known as Kansas Gas Service Company. Because the Court must resolve any doubts concerning the propriety of removal in favor of remand, the Court grants the Motion for Remand.
Laughlin v. Kmart Corp., 50 F.3d 871, 873 (10th Cir.), cert. denied 516 U.S. 863 (1995).
J.W. Petroleum, Inc. v. Lange, 787 F. Supp. 975, 977 (D.Kan. 1992).
Attorneys fees and costs
Plaintiff seeks an award of fees under 28 U.S.C. § 1447(c), which provides that "[a]n order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal." Because the Court has found that removal was improper, it has discretion to award fees. Although the Court does not need to find that Defendant acted in bad faith, it notes that Plaintiff gave Defendant two opportunities to voluntarily remand the case prior to filing its motion, and Defendant declined. The Court awards fees in this case to compensate Plaintiff for the time and resources expended in remedying Defendant's improper removal.
See Suder v. Blue Circle, Inc., 116 F.3d 1351, 1352 (10th Cir. 1997); Amundson Associates Art Studio, Ltd. v. National Council on Compensation Ins., Inc., 977 F. Supp. 1116, 1128 (D.Kan. 1997).
Suder, 116 F.3d at 1352.
IT IS THEREFORE ORDERED that Plaintiff's Motion for Remand (Doc. 8) is GRANTED. The Clerk is directed to REMAND the case to the District Court of Allen County, Kansas. The Court orders the parties to comply with D. Kan. Rule 54.1 in determining the proper award of costs and expenses.
The Court does not reach defendant's Motion to Dissolve Ex Parte Restraining Order (Doc. 6), filed June 20, 2002.
IT IS SO ORDERED.