Opinion
Civil Action No: 01-1444 Section: "R" (5)
September 14, 2001
ORDER GRANTING REMAND
Before the Court is plaintiff's motion to remand this matter to state court pursuant to 28 U.S.C. § 1447(c). Plaintiff seeks remand on the grounds that defendant's Notice of Removal was untimely filed and that defendant has no grounds for removal because the joinder of the only non-diverse defendant was proper and therefore, defeats federal diversity jurisdiction. For the following reasons, plaintiff's motion is granted.
I. Background
On or about March 5, 2000, plaintiff Jennifer R. Vinson attended a Mardi Gras function at the Sheraton Hotel at 500 Canal Street in New Orleans, Louisiana. Sheraton allegedly leased the premises to the Krewe of Orpheus. While on a second-floor balcony, Vinson alleges she tripped and fell over a concrete bump. On March 2, 2001, Vinson filed this personal injury case in state court against two Sheraton affiliates and the Krewe of Orpheus. On May 10, 2001, Sheraton Operating Corporation removed this action to this Court on the basis of diversity jurisdiction. Vinson, a Louisiana resident, now moves this Court to remand this action to state court on the grounds that: (1) the defendant's notice of removal was not timely, and (2) diversity jurisdiction is not present because a named defendant, the Krewe of Orpheus, is a Louisiana corporation.
II. Discussion
A. Timeliness of Removal
"Removal statutes are to be construed strictly against removal and for remand and a failure to timely file a notice of removal is a defect that requires remand to state court." Delaney v. Viking Freight, Inc., 41 F. Supp.2d 672, 674 (E.D. Tex. 1999) (quoting Eastus v. Blue Bell Creameries, L.P., 97 F.3d 100, 106 (5th Cir. 1996) (quotes omitted), and citing Royal v. State Farm Fire Cas. Co., 685 F.2d 124, 127 (5th Cir. 1982)). Pursuant to 28 U.S.C. § 1446, which sets forth the general procedure for removal, a determination of whether a defendant timely removed a case is essentially a two-step process. See Chapman v. Powermatic, Inc., 969 F.2d 160, 161 (5th Cir. 1992).
First, if the case stated by the initial pleading is removable, a defendant has thirty days from receipt of the initial pleading to file a notice of removal. See 28 U.S.C. 1446(b); Chapman, 969 F.2d at 161. However, the defendant's mere receipt of the complaint without any formal service is not enough. The Supreme Court has held that the defendant's time to remove is triggered by simultaneous service of the summons and complaint, or by receipt of the complaint after and apart from the formal service of the summons. See Murphy Bros. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 347 (1999) (mere receipt of the complaint without any formal service not enough to trigger removal period). Second, if the case stated by the initial pleading is not removable, then notice of removal must be filed within thirty days from the receipt of an amended pleading, motion, order, or other paper from which the defendant can ascertain that the case is removable. 28 U.S.C. 1446(b); Chapman, 969 F.2d at 161. Specifically, in removal cases involving fraudulent joinder claims, the removal period commences when the defendant can first ascertain that a party has been fraudulently joined. See Jernigan v. Ashland Oil, 989 F.2d 812, 817 (5th Cir. 1993); Delaney v. Viking Freight, Inc., 41 F. Supp.2d 672, 674 (E.D. Tex. 1999).
The Delaney court did note that one court in this district held that the removal notice must be filed within a "reasonable time" after fraudulent joinder becomes evident. See Delaney, F. Supp.2d at 674, n. 2. This Court's decision would be no different under a reasonableness standard.
Sheraton contends that because no proper defendant has been formally served notice in this case, the thirty-day period for removal did not begin to run, and the May 10, 2001 notice of removal was timely. ( See Def.'s Mem. Opp'n Mot. Remand at 2-3) In her Supplemental Memorandum in Support of Motion to Remand, Ms. Vinson asserts that notice was formally served upon Sheraton through its registered agent for service, James R. Morton, on March 8, 2001. ( See Pl.'s Suppl. Mem. Supp. Mot. Remand at 1) Sheraton does not dispute that Mr. Morton was served on March 8th. Rather, the crux of Sheraton's argument is that C. T. Corporation was its registered agent for service as of the date in question, not Mr. Morton. ( See Def.'s Reply Pl.'s Suppl. Mem. at 3).
Section 12:308 of the Louisiana Revised Statutes requires a foreign corporation transacting business in Louisiana to maintain at least one registered agent for service of process in the state. See LA. REV. STAT. § 12:308(A)(1). A corporation may change its registered agent for service of process by filing a statement with the office of the Secretary of State in compliance with the requirements of Section 12:308(B). See LA. REV. STAT. § 12:308(B). It is clear from Section 12:308(B) that the effectiveness of a change in registered agent is not dependant upon the Secretary of State's mere receipt of the statement. Rather Section 12:308(B) expressly provides that the change becomes effective when the Secretary of State files the statement in his office: "[i]f the secretary of state finds that the statement conforms to the provisions of this Chapter, he shall file the statement in his office, and upon such filing . . . the appointment of a new registered agent . . . shall become effective." Id. (emphasis added).
The record reflects that as of March 1, 2001, James R. Morton was Sheraton's registered agent for service in the state of Louisiana. ( See Pl.'s Suppl. Men. Supp. Remand Ex. 1) Four days later on March 5, 2001, Sheraton filed a statement with the office of the Secretary of State replacing Mr. Morton and designating C. T. Corporation as its registered agent. ( See Def.'s Reply Pl.'s Suppl. Men. at 3) On March 8th, the plaintiff formally served notice of process in this case upon Mr. Morton. ( See Def.'s Notice of Removal Ex. A at 7) Although Sheraton submitted its statement on March 5th, the Secretary of State's certificate clearly shows that the Secretary of State deemed the appointment of C. T. Corporation System effective on March 26, 2001. ( See Pl.'s Suppl. Mem. Supp. Mot. Remand Ex. 2) Thus, James Morton remained Sheraton's officially registered agent for service of process in Louisiana until that date. Accordingly, proper service was made upon Mr. Morton on March 8, 2001.
Sheraton removed this action on the basis of diversity jurisdiction, claiming that the citizenship of the only non-diverse defendant, the Krewe of Orpheus, must be ignored because that party was fraudulently joined. Sheraton's allegation of fraudulent joinder is based solely upon the allegations in plaintiff's petition for damages. ( See Def.'s Notice of Removal at ¶ 24) Thus, Sheraton could have ascertained that the Krewe of Orpheus was fraudulently joined at the time the initial pleading was served. Consequently, the initial petition, which was served upon Sheraton's registered agent for service of process on March 8, 2001, was sufficient to start the thirty-day period for removal. Sheraton's May 10, 2001 notice of removal is clearly beyond the thirty-day period proscribed by statute, and it is untimely.
Since the Court has determined that removal was untimely, it need not address the question of fraudulent joinder.
III. Conclusion
For the foregoing reasons, IT IS ORDERED that Plaintiff's Motion to Remand is GRANTED.