Opinion
CIVIL ACTION NO. 00-2579 SECTION "C" (1).
October 3, 2000.
ORDER REASONS
Defendant filed a Notice of Removal of this matter on August 30, 2000. (Rec. Doc. 1) On September 26, 2000, Plaintiff filed a Motion to Remand and requested an expedited hearing and oral argument on the motion. The Court granted Plaintiff's Motion for Expedited Hearing and denied both parties' request for oral argument. After considering the submissions of the parties, the record and the relevant law, the Court hereby GRANTS the Plaintiff's Motion to Remand, but DENIES Plaintiff's Motion for Costs and Attorney's Fees. Background
The Court also dismisses Defendant's pending Motion to Dismiss or in the Alternative to Stay Proceedings, as this Court no longer has jurisdiction. With regard to Defendant's Motion to Stay Proceedings, the Court notes that Defendant suggested that under the primary jurisdiction doctrine, this Court should defer to the Louisiana Commissioner of Insurance for resolution of this dispute. The Court expresses no opinion on the applicability of the primary jurisdiction doctrine to this case. However, the Louisiana courts are better suited to determine whether the state legislature has reserved disputes of this kind to the Department of Insurance for consideration in the first instance.
In May 1997, Plaintiff, a citizen of Louisiana, was involved in a one-car accident causing substantial damage to his vehicle. After approximately five months of negotiation with Defendant, a Rhode Island corporation, Plaintiff filed a Petition for Damages in First Parish Court for Jefferson Parish, and Defendant was properly served. In this complaint, Plaintiff alleges that Defendant systematically undervalued vehicles that were "total losses" by deviating from the values provided by the National Automobile Dealers' Association Handbook ("NADA Bluebook"). Plaintiff's initially sought damages only for his harm (an amount less than $75,000), but in January, 2000, Plaintiff began formal proceedings to expand his lawsuit into a class action. On February 17, 2000, Judge George Giaccobe held a hearing to determine if an intent to seek class certification required that the matter be transferred to the 24th Judicial District Court for Jefferson Parish, and decided in favor of transfer on May 9, 2000.
With leave of the court, on June 22, 2000, Plaintiff filed a First Supplemental and Amended Petition, where Plaintiff makes class action allegations. Plaintiff sent a copy to Defendant's counsel via certified mail on July 20, 2000, and Defendant received the copy the following day. See Plaintiff's Motion to Remand, Exhibit 5. Plaintiff filed a Motion for Class Certification in the 24th Judicial District Court, and a hearing is scheduled for October 4, 2000. Defendant filed a Notice of Removal on August 30, 2000, alleging that because this case may now be a class action, the potential award of attorney's fees has increased the amount in controversy to above $75,000, satisfying the requirements for diversity jurisdiction under 28 U.S.C. § 1332.
Removal
Removal of a case to federal court is proper under 1441 for "any civil action brought in a State court of which the district courts of the United States have original jurisdiction. . . ." 28 U.S.C. § 1441. However, a defendant does not have an infinite time to exercise his prerogative to remove a case to federal court. A notice of removal must be filed
within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within thirty days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter. If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable, except that a case may not be removed on the basis of jurisdiction conferred by section 1332 of this title more than 1 year after commencement of the action.28 U.S.C. § 1446(h). The Supreme Court has held that for purposes of the initial complaint, the thirty day period does not begin to run until the defendant has been formally served with process. This is because, until a defendant has been properly served, "a court ordinarily may not exercise power over a party the complaint names as defendant." Murphy Bros. Inc. v. Michetti Pipe Stringing. Inc., 526 U.S. 344, 350 (1999). Once a defendant is properly before a court, however, and he later discovers grounds that would justify removal, he is required to remove within thirty days of discovering those grounds, regardless of whether such information is contained in properly served amended pleadings or from some other source, such as deposition testimony or even correspondence from counsel. See Huffman v. Saul Holdings Ltd. P'ship, 194 F.3d 1072, 1078 (10th Cir. 1999); Sunburst Bank v. Summit Acceptance Corp., 878 F. Supp. 77 (S.D. Miss. 1995).
In this case, Defendant was aware that Plaintiff intended on bringing a class action as early as January, 2000, in connection with the motion to transfer. It is undisputed, moreover, Defendant received a copy of Plaintiff's Amended Complaint, containing the class action allegations, on July 21, 2000. At that point, Defendant had thirty days to remove this lawsuit to federal court. Formal service of an amended complaint was not necessary to open the thirty-day window for removal. Unlike in Murphy. Defendant had already been properly served and within the jurisdiction of the Court. Therefore, the concerns expressed by the Murphy court about the running of the thirty day removal period before a defendant has been properly haled into court are not applicable to this case. By waiting until August 30 to file a Notice of Removal, Defendant lost its tight to a federal forum. Therefore, Plaintiff's Motion to Remand is GRANTED.
Because the Court finds that Defendant did not comply with the thirty day requirement of § 1446, it is unnecessary to address the arguments related to the one-year limitation on cases that become removable under the Court's diversity jurisdiction. See 28 U.S.C. § 1446(b).
Costs and Attorney's Fees
The Court finds that the Defendant was not objectively unreasonable in believing that removal was legally proper, and therefore the Court orders each party to bear their own costs related to these Removal and Remand proceedings.
Plaintiff's Motion for Costs and Attorney's Fees under 28 U.S.C. § 1447 (c) is DENIED.