Opinion
02 CIV. 610 (DLC)
May 31, 2002
Ralph P. Casella, Vincent A. Moccio, Staten Island, NY, for Plaintiff.
Arthur P. Fisch, New York, NY, for Defendants.
OPINION AND ORDER
Plaintiff Stephanie Siegel ("Siegel") has moved to remand this case to state court. Defendants have moved for sanctions under Rule 11, Fed.R.Civ.P. ("Rule 11"). For the reasons that follow, plaintiff's motion to remand and defendants' motion for Rule 11 sanctions are denied.
BACKGROUND
On December 13, 2001, Siegel filed suit against the defendants in New York Supreme Court alleging that she was discriminated against on the basis of pregnancy and temporary disability. Siegel's complaint alleges claims under New York Executive Law § 296, New York City Human Rights Law 8-101 et seq. and Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. ("Title VII").
Defendants were served on January 9, 2001, and removed the action to federal court on January 25, 2002. In the notice of removal, the defendants stated that removal was proper because the district court had original jurisdiction over the action pursuant to 28 U.S.C. § 1331 on the ground that the complaint stated a federal claim under Title VII. Defendants answered the complaint on January 30, 2002.
On February 26, 2002, the plaintiff filed a motion to remand the action to state court on the ground that the Court did not have subject matter jurisdiction over the action because diversity of citizenship was lacking. The plaintiff also requested costs and fees associated with filing the motion to remand "in light of defendants' intentional and knowing removal without complete diversity."
In a letter dated March 7, 2002, counsel for the defendants advised plaintiff that removal was proper because plaintiff's complaint alleges a claim under federal law. Counsel for the defendants offered plaintiff an opportunity to withdraw the motion to remand, and stated that "[s]hould you fail to withdraw your motion by March 13th, I will be left with no alternative but to seek sanctions." In a letter dated March 8, 2002, plaintiff flatly refused to withdraw the motion, explaining as follows:
Contrary to your assertion that the motion for remand is wholly frivolous . . ., please be assured that the motion rests on the conviction that it is well established that federal courts do not have exclusive jurisdiction over Title VII actions.
The defendants opposed the motion to remand and cross-moved for sanctions under Rule 11, including attorney's fees and costs.
The cross-motion was served on March 21 and filed on March 22 with the opposition to the motion to remand. Plaintiff's reply to defendants' opposition and her opposition to the cross-motion were filed on April 1.
A second copy of the defendants' cross-motion for Rule 11 sanctions and the defendants' opposition was filed on April 1, 2002.
Plaintiff argues that sanctions are not warranted and remand is proper because federal courts do not have exclusive jurisdiction over Title VII employment discrimination cases, and that the lack of diversity between the parties is a factor favoring remand. Responding to the defendants' March 7 request for plaintiff's compliance with her initial disclosure obligations, the plaintiff stated that "[s]ince I believe that this case will be remanded, I don't think it makes much sense to proceed with discovery at this time."
DISCUSSION
1. Removal
"Any action that was originally filed in state court may be removed by a defendant to federal court only if the case originally could have been filed in federal court." Marcus v. ATT Corp., 138 F.3d 46, 52 (2d Cir. 1998); see also 28 U.S.C. § 1441(a) (2002); Foy v. Pratt Whitney Group, 127 F.3d 229, 232 (2d Cir. 1997). An action may be filed in federal court if the action "aris[es] under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331 ("Section 1331"). When a federal court has original jurisdiction over an action "arising under the Constitution, treaties or laws of the United States" pursuant to Section 1331, that action "shall be removable without regard to the citizenship or residence of the parties." Id. § 1441(b) (emphasis supplied); see also Fax Telecommunicaciones Inc. v. ATT, 138 F.3d 479, 486 (2d Cir. 1998). Since the plaintiff's Title VII claim clearly arises under federal law, see 42 U.S.C. § 2000e et seq., and appears plainly on the face of her complaint, the action was properly removed.
When a defendant seeks removal on the ground that one or more of the plaintiff's claims arises under federal law, "the entire case may be removed," even if the plaintiff has also alleged "one or more otherwise non-removable claims or causes of action." 28 U.S.C. § 1441(c).
The ability of state courts to hear Title VII claims is irrelevant to the propriety of the removal and provides no basis for a remand. Remand may be had if removal was improper or defective, see 28 U.S.C. § 1447(c); Pierpoint v. Barnes, 94 F.3d 813, 819 (2d Cir. 1996), the court lacks subject-matter jurisdiction, see 28 U.S.C. § 1447(c), or, in extraordinary cases, where federal abstention is required. See Minot v. Eckardt-Minot, 13 F.3d 590, 593 (2d Cir. 1994). The plaintiff has articulated no basis on which this case may be remanded and her motion must be denied.
2. Sanctions
Defendants have moved for the imposition of sanctions pursuant to Rule 11, including an award of attorney's fees and costs. On motion or its own initiative, court may, after notice and an opportunity to respond, impose sanctions for violations of Rule 11(b). Under Rule 11, when an attorney presents a written motion to the court, that attorney certifies
that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, . . . the claims, defenses, and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law.
Fed.R.Civ.P. 11(b)(2). Attorneys have a duty under Rule 11 not to advance legal contentions that are unwarranted by existing law or that constitute a frivolous argument to change the law. Whiting v. Lacara, 187 F.3d 317, 322-23 (2d Cir. 1999). This duty is violated "when it is clear under existing precedents that [the argument has] no chance of success and [there exists] no reasonable argument to extend, modify or reverse the law as it stands." Gurary v. Winehouse, 235 F.3d 792, 798 (2d Cir. 2000) (citation omitted), cert. denied, 122 S.Ct. 66 (2001); see also Morley v. Ciba-Geigy Corp., 66 F.3d 21, 25 (2d Cir. 1995). An attorney's "good faith subjective belief" in the validity of an argument is irrelevant; Rule 11, as amended in 1993, provides for "an objective standard of reasonableness." Sussman v. Bank of Isr., 56 F.3d 450, 456 (2d Cir. 1995); see also Knipe v. Skinner, 19 F.3d 72, 75 (2d Cir. 1994).
Any reasonable inquiry by plaintiff's counsel into the statutory and case law governing removal would have revealed that the defendants properly removed the case and that there was no ground for a remand. Plaintiff's arguments constitute "a frivolous legal position" because "under an objective standard of reasonableness, it is clear" that the argument had "no chance of success and [that there exists] no reasonable argument to extend, modify, or reverse the law as it stands." Morley, 66 F.3d at 25 acknowledge that her position lacked merit, even after being warned by defendants and afforded an opportunity to withdraw the motion without consequence.
Although sanctions would be warranted in this case, defendants' motion must be denied because it does not comply with the safe harbor provisions of Rule 11. Rule 11 provides that a motion for sanctions "shall not be filed with or presented to the court unless, within 21 days after service of the motion . . ., the challenged paper . . . is not withdrawn or appropriately corrected." Fed.R.Civ.P. 11(c)(1)(A); see also Perpetual Sec., Inc. v. Tang, ___ F.3d ___, No. 01-7901, 2002 WL 927457, at *8 (2d Cir. May 9, 2002); Martens v. Thomann, 273 F.3d 159, [ 273 F.3d 160,] 178 (2d Cir. 2001). "To stress the seriousness of a motion for sanctions and to define precisely the conduct claimed to violate the rule, . . . the `safe harbor' period begins to run only upon service of the motion." Fed.R.Civ.P. advisory committee's note (emphasis supplied). The defendants' Rule 11 motion was served on the plaintiff on March 21 and filed one day later, on March 22. Even assuming that the warning letter were sufficient to trigger the safe harbor period, cf. Gamla Enter. N. Am., Inc. v. Lunor-Brillen Design u. Vertriebs GmbH, No. 98 Civ. 992 (MGC), 2000 WL 193120, at *3 (S.D.N.Y. Feb. 17, 2000); Weeks Stevedoring Co. v. Raymond Int'l Builders, Inc., 174 F.R.D. 301, 305 (S.D.N.Y. 1997); Bellistri v. United States, No. 94 Civ. 3768 (KMW), 1997 WL 115545, at *3 (S.D.N.Y. Mar. 14, 1997); Lancaster v. Zufle, 170 F.R.D. 7, 7 (S.D.N.Y. 1996), the Rule 11 motion was filed only fourteen days after the defendants sent the letter to the plaintiff on March 7. The Second Circuit construes Rule 11's safe harbor provision strictly, see Hadges v. Yonkers Racing Corp., 48 F.3d 1320, 1328 (2d Cir. 1995), and even though the plaintiff did not raise the requirements of the safe harbor provision in her opposition to the motion for sanctions, the defendants' non-compliance with this provision requires the denial of the Rule 11 motion.
Plaintiff's counsel is advised, however, that continued failure to comply with Rule 11 will result in the imposition of sanctions. Counsel should also be aware that monetary sanctions may not be imposed on a represented party for violations of Rule 11(b)(2) "because responsibility for such violations is more properly placed solely on the party's attorneys." Gurary, 235 F.3d at 798 (citation omitted); see also Fed.R.Civ.P. 11(c)(2)(A).
CONCLUSION
For the reasons stated above, plaintiff's motion to remand and defendants' motion for sanctions are denied.
SO ORDERED: