Opinion
Case No. 02-2519-JWL
December 17, 2002
MEMORANDUM AND ORDER
Plaintiffs filed suit against defendant in state court alleging that defendant, without notice to or consent from plaintiffs, unlawfully converted plaintiffs' local telephone service from Southwestern Bell Telephone Company to ATT — conduct known as "slamming" and prohibited by K.S.A. § 50-6,103. In their petition, plaintiff sought civil penalties pursuant to K.S.A. § 50-6,103(d), damages for tortious interference with contract and damages for violations of the Kansas Consumer Protection act, K.S.A. § 50-623 et seq. Thereafter, defendant removed the case to this court. This matter is now before the court on plaintiffs' motion to remand (doc. #13). For the reasons set forth below, plaintiffs' motion to remand is denied.
Plaintiffs present two separate arguments in support of their motion to remand. First, they contend that defendant's notice of removal is defective because it does not demonstrate diversity of citizenship — the basis for defendant's removal. Second, plaintiffs contend that, even assuming the notice of removal is adequate, the court should nonetheless abstain from exercising jurisdiction over this case pursuant to the abstention doctrine recognized by the Supreme Court in Burford v. Sun Oil Co., 319 U.S. 315 (1943). The court addresses each of these arguments in turn.
Diversity of Citizenship
In its removal notice, defendant maintains that removal is proper because this court would have original jurisdiction over the case based on the diversity jurisdiction statute, 28 U.S.C. § 1332. To establish diversity jurisdiction, the party asserting jurisdiction (here, defendant) must allege facts essential to show jurisdiction — namely, that the plaintiffs and defendant are citizens of different states and that the amount in controversy is greater than $75,000. See Rice v. Office of Servicemembers' Group Life Ins., 260 F.3d 1240, 1245 (10th Cir. 2001) (citing 28 U.S.C. § 1332(a)). The state court petition reveals that the amount in controversy is greater than $75,000 and that plaintiffs are all individual hairstylists duly licensed in Kansas and that each plaintiff conducts an independent business in Kansas. While the petition also indicates that defendant is a corporation registered to do business in Kansas, it does not mention the state in which defendant is incorporated or the state where defendant has its principal place of business. See 28 U.S.C. § 1332(c) (A corporation is treated as a citizen of the state where it is incorporated and the state where it has its principal place of business). Where the petition is inadequate, however, the court may review the record to find evidence that diversity exists. See Rice, 260 F.3d at 1245.
Defendant alleges in its notice of removal that it "is incorporated in a state other than Kansas with its principal place of business in a state other than Kansas." Removal Notice ¶ 4. Plaintiffs contend that this statement, standing alone, is insufficient to establish diversity and that defendant must affirmatively state its principal place of business and its state of incorporation rather than simply asserting that its principal place of business and state of incorporation are in states "other than Kansas."
The court concludes that defendant's removal notice adequately demonstrates diversity of citizenship. As an initial matter, the court has uncovered no authority suggesting that defendant's manner of describing its citizenship is insufficient to show diversity. In fact, several opinions from the Tenth Circuit clearly suggest that this method is sufficient. See, e.g., Amoco Rocmount Co. v. Anschutz Corp., 7 F.3d 909, 915-16 n. 1 (10th Cir. 1993) ("Diversity jurisdiction is premised upon the parties being from different states; which states those happen to be is not relevant . . . as long as it is clear that the possibilities do not include states that would destroy diversity.") (upholding district court's conclusion that it need not definitively establish Amoco's principal place of business but only determine that it was not in Colorado); Hendrix v. New Amsterdam Casualty Co., 390 F.2d 299, 300-01 (10th Cir. 1968) ("The jurisdictional allegations of the original petition for removal were defective for failure to specify . . . the principal place of business of the defendant insurer or otherwise to show that such principal place of business was in a state other than that of the citizenship of the plaintiff.") (emphasis added); Buell v. Sears, Roebuck Co., 321 F.2d 468, 471 (10th Cir. 1963) (requiring defendant on remand to district court "to file an amendment to the petition for removal alleging that its principal place of business is in a state other than Colorado") (emphasis added).
Moreover, defendant, in connection with its response to plaintiffs' motion to remand, has submitted the affidavit of one of defendant's officers indicating that defendant is incorporated in New York and that its principal place of business is in New Jersey.
These cases are consistent with the language of 28 U.S.C. § 1446, which provides that a defendant desiring removal must file a notice of removal "containing a short and plain statement of the grounds for removal." Moreover, the diversity jurisdiction statute requires only that the controversy exist between "citizens of different states." 28 U.S.C. § 1332(a)(1). Defendant's statement that it is incorporated in a state "other than Kansas" and that its principal place of business is a state "other than Kansas" satisfies the "short and plain statement" requirement of § 1446 and shows that defendant and plaintiffs are citizens of different states. No more is required for diversity jurisdiction. Abstention
Plaintiffs suggest that defendant is required to set forth facts in its removal notice from which the court could determine, using the "total activity" test endorsed by the Tenth Circuit, see Amoco, 7 F.3d at 914-15, defendant's principal place of business. However, defendant is required to set forth such facts, and the court is required to engage in a "total activity" analysis, only when the plaintiff or plaintiffs contend that the defendant's principal place of business is in a state other than that alleged by defendant. See id. (engaging in "total activity" analysis after plaintiff contended that defendant's principal place of business was in Colorado). Here, plaintiffs have challenged only the form of defendant's removal notice — they do not contend that defendant's principal place of business is Kansas nor do they have any evidence suggesting that defendant's principal place of business is Kansas.
Having concluded that complete diversity of citizenship exists between the parties and that jurisdiction is therefore proper in this court, the court must now determine whether it should exercise that jurisdiction or whether it should abstain from exercising jurisdiction pursuant to the Burford abstention doctrine. Before addressing the propriety of Burford abstention, the court notes that it has a "virtually unflagging obligation" to exercise jurisdiction given it. See Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716 (1996) (quoting Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 821 (1976)). Indeed, the Supreme Court has cautioned that abstention from the exercise of federal jurisdiction is the exception rather than the rule:
The doctrine of abstention, under which a District Court may decline to exercise or postpone the exercise of its jurisdiction, is an extraordinary and narrow exception to the duty of a District Court to adjudicate a controversy properly before it. Abdication of the obligation to decide cases can be justified under this doctrine only in the exceptional circumstances where the order to the parties to repair to the State court would clearly serve an important countervailing interest.Moses H. Cone Memorial Hosp. v. Mercury Const. Corp., 460 U.S. 1, 14 (1983) (quoting Colorado River, 424 U.S. at 813); accord Quackenbush, 507 U.S. at 728 ("[T]he power to dismiss recognized in Burford represents an `extraordinary and narrow exception to the duty of the District Court to adjudicate a controversy properly before it.'") (quoting same).
Bearing these principles in mind, the court turns to address whether an application of Burford abstention is appropriate here. Burford abstention, as distinguished from other abstention doctrines, is concerned with protecting complex state administrative processes from undue federal influence. See New Orleans Pub. Serv., Inc. v. Council of City of New Orleans ("NOPSI"), 491 U.S. 350, 362 (1989) (reviewing development of Burford doctrine). As the Supreme Court recently reiterated, Burford abstention "allows a federal court to dismiss a case only if it presents `difficult questions of state law bearing on policy problems of substantial public import whose importance transcends the result in the case then at bar,' or if its adjudication in a federal forum `would be disruptive of state efforts to establish a coherent policy with respect to a matter of substantial public concern.'" Quackenbush, 507 U.S. at 726-27 (quoting NOPSI, 491 U.S. at 361 (quoting Colorado River, 424 U.S. at 814)).
There are three other abstention doctrines recognized by the Supreme Court. See Railroad Comm'n of Texas v. Pullman Co., 312 U.S. 496 (1941) (federal court may abstain in cases presenting a federal constitutional issue which may be disposed of by a state court ruling on state law) ( Pullman abstention); Younger v. Harris, 401 U.S. 37 (1971) (federal court must abstain in cases filed to enjoin state enforcement proceedings absent a showing of bad faith, harassment, or other unusual circumstances calling for equitable relief) ( Younger abstention); Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976) (federal court may abstain when parallel state court proceedings are pending) ( Colorado River abstention).
Plaintiffs' argument that this court should abstain under Burford fails for two reasons. First, plaintiffs simply have not identified any "state administrative process" with which this court's exercise of jurisdiction would allegedly interfere. Second, plaintiffs have not shown that Kansas maintains a coherent policy concerning "slamming" by telecommunications service providers or that this court's exercise of jurisdiction would disrupt the state's efforts to maintain such a policy. While plaintiffs allege in conclusory fashion that Kansas "has in place a comprehensive policy to control consumer practices that includes specific efforts to control and prevent slamming by telecommunications providers," plaintiffs direct the court only to the state's anti-slamming law and the state's consumer protection act. These acts, however, do not establish a comprehensive or coherent policy concerning "slamming" — they simply permit aggrieved persons to file a private action in state court. See K.S.A. § 50-6,103(g). Moreover, such lawsuits are not concentrated in any particular state court and there is no suggestion that the state courts enjoy special competence to hear "slamming" cases. Finally, the court notes that another judge in this district has rejected the notion that a state's interest in consumer protection justifies abstention under Burford. See Alexander v. Certified Master Builder Corp., 1997 WL 298448, at *2-3 (D. Kan. May 27, 1997) (VanBebber, J.).
Plaintiffs do not contend that their claims present "difficult questions of state law bearing on policy problems of substantial public import."
In short, nothing in the record suggests that this court's exercise of jurisdiction would interfere with any state administrative process, that Kansas maintains (or even attempts to maintain) a coherent policy concerning slamming or, even assuming such a policy existed, that this court's exercise of jurisdiction would interfere with any policy concerning slamming. There is simply no complicated state regulatory scheme involved here. In the absence of an adequate showing from plaintiffs that the facts of this case or the nature of plaintiffs' claims justify abstention, plaintiffs' motion is denied.
IT IS THEREFORE ORDERED BY THE COURT THAT plaintiffs' motion to remand (doc. #13) is denied.