Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-arwd-5_06-cv-05109/USCOURTS-arwd-5_06-cv-05109-3/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 28:1441 - Petition for Removal: SEC Act

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IN THE UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF ARKANSAS

FAYETTEVILLE DIVISION

SHIMODA-ATLANTIC, INC.

An Arkansas Corporation PLAINTIFF

v. Case No.: 06 - 5109

TALON HOLDINGS, INC.

A Delaware corporation, et al DEFENDANTS

 

O R D E R

NOW before the Court is the Motion to Dismiss Without Prejudice and Incorporated

Brief (Doc. 28), Response by Defendants National Association of Securities Dealers, Inc. and

NASD Regulation Inc. in Opposition to Plaintiff’s Motion to Dismiss Without Prejudice

(Doc. 29), Motion to Dismiss Plaintiffs’ Complaint [sic] (Doc. 23), Brief in Support of the

Motion to Dismiss Plaintiffs’ Complaint [sic] (Doc. 24), Motion to Remand (Doc. 18), and

Response in Opposition to Motion to Remand (Doc. 26). 

Plaintiff filed its Motion to Dismiss Without Prejudice and Incorporated Brief

seeking to dismiss Separate Defendants NASD Regulation, Inc. and The National

Association of Securities Dealers, Inc. on the grounds that these separate defendants have not

filed an answer or motion for summary judgment at the time Plaintiff sought their dismissal.

Accordingly, dismissal would be proper pursuant to Rule 41 (a)(1)(i) of the Federal Rules

of Civil Procedure. Defendants argue that because Plaintiff filed its dismissal as a “Motion”

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rather than a “notice,” Plaintiff is effectively seeking dismissal under Federal Rule of Civil

Procedure 41 (a)(2), which allows dismissal upon Order of the Court and with prejudice.

However, the Court will construe the “Motion” to be a notice of dismissal under Federal

Rule of Civil Procedure 41 (a) (1)(i). Accordingly, the Motion to Dismiss Without Prejudice

and Incorporated Brief (Doc. 28) is herebyGRANTED. Defendants NASD Regulation, Inc.

and National Association of Securities Dealers, Inc. are hereby DISMISSED without

prejudice. 

Plaintiff has also filed a Motion to Remand (Doc. 18) and Memorandum Brief in

Support of Motion to Remand (Doc. 18-2). Plaintiff seeks to remand the case due to the lack

of unanimity between the Defendantsfor removal, and that there is nothing before the Court,

other than a conclusion of Defendant NASD, that the amount in controversy exceeds the

requisite jurisdictional amount of $75,000.00.

The “rule of unanimity” comes from the language of 28 U.S.C. § 1446(b) and

requires that all defendants who have been served prior to removal join in the removal

petition or clearly show their consent to removal. See, e.g. Marano Enters. Of Kan. v. ZTeca Rests., L.P., 254 F.3d 753, 757 (8th Cir. 2001). Plaintiff states that Defendants Mix

Group, Firo, and Lochrie were served at the time of removal and failed to consent as required

by the unanimity rule. However, the Proof of Service (Doc. 21), filed by Plaintiff’s attorney,

states that Defendants Mix Group, Firo, and Lochrie were served on June 17, 2006. The

Notice of Removal was filed on June 16, 2006. Thus, Defendants Mix Group, Firo, and

Lochrie were not served at the time of removal. 

Non-served defendants do not have the same requirements as served defendants

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regarding consent for purposes of removal. “It is well recognized that the consent of unserved

defendants need not be obtained to effectuate removal.” Roberts v. Palmer, et al., 354 F.

Supp.2d 1041 (E.D. Mo. 2005)(citations omitted). As reflected above, Defendants Mix Group,

Firo, and Lochrie were not served at the time of removal, and the petition for removal is not

procedurally flawed for their failure to join. Indeed, 

the only action contemplated by § 1448 to be taken upon the post-removal

service of a previously unserved defendant is for the defendant to move to

remand the case to State court. Nowhere does the statute require an

affirmative act of consent by [the previously unserved defendant] for an

otherwise properly removed action to remain in federal court. Id. at 1045.

Plaintiff also claims the Petition for removal is deficient as there is nothing other than

a “self-serving conclusion” to demonstrate the amount in controversy exceeds $75,000.00.

However, in its complaint, Plaintiff demands a judgment for the full amount of the contract set

out as Exhibit 2 to the Complaint. Exhibit 2, the contract, is a purchase agreement for

20,000,000 shares of Plaintiff’s stock and the aggregate purchase price is stated to be

$3,000,000.00. 

The party invoking federal jurisdiction must prove the requisite amount by a

preponderance of the evidence. Rasmussen v. State Farm Mut. Auto. Ins. Co., 410 F.3d 1029,

1031 (8th Cir. 2005) (quoting James Neff Kramper Family Farm P’ship v. IBP, Inc., 393 F.3d

828, 831 (8th Cir. 2005)). ByPlaintiff’s own pleading, it appears Plaintiff is seeking damages

beyond the requisite amount in controversy. 

Additionally, Defendants sought removal based on a federal question being presented

in Plaintiff’s complaint. However, as the Court finds above that diversity jurisdiction has been

met, the Court does not reach the issue of federal question jurisdiction. The Motion to Remand

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(Doc. 18) is hereby DENIED.

Defendants National Association of Securities Dealers, Inc., and The NASD

Regulation, Inc. also filed a Motion to Dismiss Plaintiff’s Complaint (Doc. 23). Because the

Motion to Dismiss (Doc. 28) is granted, and Defendants National Association of Securities

Dealers, Inc. and The NASD Regulation, Inc. are dismissed without prejudice, the Motion to

Dismiss Plaintiff’s Complaint (Doc. 23) is hereby DENIED AS MOOT.

IT IS SO ORDERED. 

 /s/ Robert T. Dawson 

Honorable Robert T. Dawson

 United States District Judge

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