Source: https://law.justia.com/cases/federal/appellate-courts/F3/261/196/570643/
Timestamp: 2019-08-24 13:26:08
Document Index: 39230515

Matched Legal Cases: ['§ 302', '§ 1446', '§ 3011', '§ 1446', '§ 16', '§ 1446', '§ 305', '§ 3011', '§ 1446', '§ 1446', '§ 302', '§ 302', '§ 302', '§ 302', '§ 302', '§ 302']

Ridley M. Whitaker, Plaintiff-appellant, v. American Telecasting, Inc. and Rosenthal, Judell & Uchima, Defendants-appellees,andfresno Telsat, Inc., James A. Simon and Jas Partners, Ltd., and John Does Nos. 1-10 (which Are Individuals and Entities Whose Identities Are Unknown), Defendants, 261 F.3d 196 (2d Cir. 2001) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Second Circuit › 2001 › Ridley M. Whitaker, Plaintiff-appellant, v. American Telecasting, Inc. and Rosenthal, Judell & Uchim...
Ridley M. Whitaker, Plaintiff-appellant, v. American Telecasting, Inc. and Rosenthal, Judell & Uchima, Defendants-appellees,andfresno Telsat, Inc., James A. Simon and Jas Partners, Ltd., and John Does Nos. 1-10 (which Are Individuals and Entities Whose Identities Are Unknown), Defendants, 261 F.3d 196 (2d Cir. 2001)
US Court of Appeals for the Second Circuit - 261 F.3d 196 (2d Cir. 2001)
Argued: December 14, 2000Decided: July 25, 2001
This is a consolidated appeal from two orders rendered in the United States District Court for the Southern District of New York, Scheindlin, J., denying the plaintiff's motion to remand and dismissing the amended complaint pursuant to Fed. R. Civ. P. 12(b) (2) for want of personal jurisdiction.
In the second order appealed, the district court dismissed the action pursuant toFed. R. Civ. P. 12(b) (2) for want of personal jurisdiction. See Whitaker v. Fresno Telsat, Inc., 87 F. Supp. 2d 227 (S.D.N.Y. 1999). We find no error. Accordingly, we affirm the judgment of the district court in connection with both orders.
On August 3, 1999, ATI, as a Delaware corporation located in Colorado, moved pursuant to Fed. R. Civ. P. 12(b) (2) to dismiss the amended complaint for want of personal jurisdiction. As the record disclosed, ATI is not incorporated, licensed or qualified to do business in New York. It has no offices, agents, employees, property, bank accounts or telephone listing in New York, and has not appointed an agent for service of process in New York. ATI neither sells any products in New York nor does it otherwise transact any business in New York.
On December 14, 1999, the district court granted ATI's motion, concluding that Whitaker failed to demonstrate any factual predicate authorizing jurisdiction over ATI under the New York long arm statute, N.Y.C.P.L.R. § 302(a), and that, in any event, compelling ATI to litigate in New York would offend the due process clause of the Fourteenth Amendment to the United States Constitution. Whitaker v. Fresno Telsat, Inc., 87 F. Supp. 2d 227, 233 (S.D.N.Y. 1999). On January 5, 2000, Whitaker moved for reargument and for reconsideration and, on February 9, 2000, the court denied the motion. Whitaker subsequently settled his claims with respect to the FTI defendants, and on March 7, 2000, the district court entered a consent order dismissing the action with prejudice as to all defendants except for ATI and RJU. On March 20, 2000, Whitaker filed a notice of appeal, naming only ATI and RJU as the defendants-appellees.
Whitaker first argues that the district court erroneously interpreted the Supreme Court's decision in Murphy Brothers, Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 119 S. Ct. 1322 (1999), as holding that only a complaint can constitute the initial pleading under 28 U.S.C. § 1446(b). See Whitaker, 1999 WL 767432 at *1-2. We agree.
Id. (emphasis added). Prior to the Supreme Court's decision in Murphy Brothers, several federal circuits, in interpreting the section 1446(b) requirement that a defendant receive the initial pleading "through service or otherwise" held that receipt of the initial pleading alone triggered the running of the removal period, with formal service of process unnecessary. See Murphy Brothers, 526 U.S. at 349 & n.2, 119 S. Ct. at 1326 (citing Reece v. Wal-Mart Stores, Inc., 98 F.3d 839, 841 (5th Cir. 1996); Roe v. O'Donohue, 38 F.3d 298, 303 (7th Cir. 1994)). These courts, in emphasizing the plain meaning of section 1446(b), were of the opinion that the words "receipt... through service or otherwise" opened the door to a universe of other means aside from service of process for putting a defendant in possession of the initial pleading, and that to construe the statute differently would be to render the phrase "or otherwise" meaningless. See e.g., Roe, 38 F.3d at 304. Other federal courts disagreed, however, and held that, notwithstanding the "or otherwise" language, formal service was indeed required to trigger the removal period. Murphy Brothers, 526 U.S. at 349 & n.2, 119 S. Ct. at 1326 (citing Bowman v. Weeks Marine, Inc., 936 F. Supp. 329, 333 (D.S.C. 1996); Baratt v. Phoenix Mut. Life Ins. Co., 787 F. Supp. 333, 336 (W.D.N.Y. 1992)).
For decades, the federal district courts in New York have confronted this issue and reached conflicting results. Some courts have held that only the complaint can constitute the initial pleading for purposes of removal under section 1446(b). See E.W. Howell Co., Inc. v. Underwriters Labs., Inc., 596 F. Supp. 1517 (E.D.N.Y. 1984); Mfrs. & Traders Trust Co. v. Hartford Accident and Indem. Co., 434 F. Supp. 1053 (W.D.N.Y. 1977). These courts have rejected the notion that a summons with notice can constitute the initial pleading because: (a) the summons with notice is not defined as a pleading under N.Y.C.P.L.R. § 3011; (b) the notice has nolegal effect under New York law except in cases of default; and (c) the legislative history of section 1446(b) appears to point to service of the complaint alone as the relevant event for triggering the removal period. See Mfrs. & Traders Trust Co., 434 F. Supp. at 1054-55.
To the contrary, other courts have held that "a summons with notice validly filed under New York law constitute [s] an initial pleading if the summons contain [s] sufficient information to enable the defendant to 'intelligently ascertain' the basis for removal." Brooklyn Hosp. Ctr. v. Diversified Info. Techs., Inc., 133 F. Supp. 2d 197, 201 (E.D.N.Y. 2001); see also Gucciardo v. Reliance Ins. Co., 84 F. Supp. 2d 399, 402-03 (E.D.N.Y. 2000); Negrin v. Alza Corp. No. 98 Civ 4772, 1999 WL 144507, *6 (S.D.N.Y. Mar. 17, 1999); Richstone v. Chubb Colonial Life Ins., 988 F. Supp. 401, 402-03 (S.D.N.Y. 1997); Rosenthal v. Life Fitness Co., 977 F. Supp. 597, 599 (E.D.N.Y. 1997); Colon v. Nat'l Car Rental, No. 92 Civ. 8503, 1993 WL 227596, at *3 (S.D.N.Y. June 21, 1993); Universal Motors Group of Companies, Inc. v. Wilkerson, 674 F. Supp. 1108, 1112 (S.D.N.Y. 1987); Worthy v. Schering Corp., 607 F. Supp. 653, 656 (E.D.N.Y. 1985).
In resolving this issue, we look first to the language of section 1446(b) itself. Aslanidis v. United States Lines, Inc., 7 F.3d 1067, 1072 (2d Cir. 1993) (" [A] court should presume that [a] statute says what it means."). "If the words of the statute are unambiguous, judicial inquiry should end, and the law interpreted according to the plain meaning of its words." Id. (citing Rubin v. United States, 449 U.S. 424, 430, 101 S. Ct. 698, 701 (1981)). " [A] court will not adopt a different construction absent clear legislative history contradicting the plain meaning of the words." United States v. Holroyd, 732 F.2d 1122, 1125 (2d Cir. 1984).
We also find that the legislative history does not reflect a contrary intent. In 1948, Congress enacted section 1446(b) in an attempt to insure adequate time to remove cases to federal court and, at the same time, establish a national, uniform time-frame for removal which previously varied from state to state. Murphy Brothers, 526 U.S. at 351, 119 S. Ct. at 1327 (quoting H.R. Rep. No. 308, 80th Cong., 1st Sess., A135 (1947)); see also Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 104, 61 S. Ct. 868, 870 (1941). To accomplish this end, the statute originally required the removal petition to be filed within twenty days after commencement of the action or service of process, whichever was later. Murphy Brothers, 526 U.S. at 351, 119 S. Ct. at 1327 (quoting Act of June 25, 1948, 62 Stat. 939, as amended, 28 U.S.C. § 1446(b)). This rule, however, failed to insure an adequate and uniform removal period in states such as New York, where an action could be commenced by simply serving the summons-- a document that, at that time, was not required to provide information from which a defendant could ascertain removability. Id.; see also Wilkerson, 674 F. Supp. at 1111-12 (quoting 8 Gilbert-Bliss, The Civil Practice of New York Annotated, Civil Practice Act § 16 (1939)).Only the complaint provided such information and, because service of the summons commenced the action, the removal period could expire before the defendant received the complaint and could assess removability as an option. See Murphy Brothers, 526 U.S. at 352, 119 S. Ct. at 1327-28 (quoting S.Rep. No. 303, 81st Cong., 1st Sess., 6 (1949)).
In order to "make [the statute] fit the diverse procedural laws of the various states" Wilkerson, 674 F. Supp. at 1111 (quoting H.R. Rep. No. 352, 81st Cong., 1st Sess., reprinted in 1949 U.S.Code, Cong. & Admin News, 1248, 1254), and insure adequate time for removal, Congress in 1949 enacted the current version of section 1446(b).4 Murphy Brothers, 526 U.S. at 352, 119 S. Ct. at 1327. Under the 1949 revision, Congress forbade the removal period from commencing until the defendant received information from which removability could be ascertained, Murphy Brothers, 526 U.S. at 352, 119 S. Ct. 1327-28, by triggering the running of the clock on the defendant's receipt of "the initial pleading setting forth the claim for relief upon which such action or proceeding is based." 28 U.S.C. § 1446(b) (emphasis added).
The legislative history reflects a clear concern for ensuring that a defendant "know [] what the suit is about" before triggering the removal clock. Murphy Brothers, 526 U.S. at 352, 119 S. Ct. at 1327 (quoting S.Rep. No. 303, 81st Cong., 1st Sess., 6 (1949)). That history does not, however, reflect any concern for limiting the term "initial pleading" to mean the complaint in all instances. While there is a discussion in the 1949 history rejecting the notion that a summons can constitute the initial pleading under then-existing New York law,5 this discussion does not reflect the current state of New York law, which, since 1979, has required the summons to provide notice stating the nature of the action and the relief sought-- that is, information from which a defendant can ascertain removability. See Brooklyn Hosp. Ctr., 133 F. Supp. 2d at 202 (quoting N.Y.C.P.L.R. § 305(b)). Because the summons with notice generally provides information from which a defendant can ascertain removability, this document is often consistent with the 1949 Congressional conception of an initial pleading. Id. at 203. Further, although a summons with notice is not technically defined as a pleading under N.Y.C.P.L.R. § 3011, and the notice has no legal effect in New York except in cases of default, we nevertheless conclude that it may constitute an initial pleading for purposes of the federal removal statute. See Universal Motors Group of Companies, Inc., 674 F. Supp. at 1111 (S.D.N.Y. 1987) ("a court should look beyond the particular label which a local jurisdiction chooses to give the document and instead focus on whether the contentof the document satisfies the conditions of the federal removal statute.") (citing Ardison v. Villa, 248 F.2d 226 (10th Cir. 1957)). We therefore conclude that a summons with notice may serve as an initial pleading under section 1446(b).
The removal statute requires the notice of removal to contain "a short and plain statement of the grounds for removal." 28 U.S.C. § 1446(a). Where the notice fails to state a proper basis for removal, a defendant generally will not be permitted to amend the notice after the close of the thirty day removal period. Lupo, 28 F.3d at 274. Here, the notice of removal states that jurisdiction is proper in federal court based upon "diversity of citizenship between the plaintiff and defendants and [a matter] in controversy exceed [ing] the sum of $75,000, exclusive of interest and costs." This is a proper basis for removal and, because the record does not indicate that ATI or any of the other defendants ever sought to change that notice to reflect a different basis for removal, we reject Whitaker's strained contention that ATI somehow amended it simply by responding to Whitaker's motion to remand.
We disagree. A case is removable when the initial pleading "enables the defendantto 'intelligently ascertain' removability from the face of such pleading, so that in its petition for removal [, the] defendant can make a short and plain statement of the grounds for removal as required [by] 28 U.S.C. § 1446(a)." Richstone, 988 F. Supp. at 403 (citing Ardison v. Villa, 248 F.2d 226, 227 (10th Cir. 1957)). A pleading enables a defendant to intelligently ascertain removability when it provides "the necessary facts to support [the] removal petition." Id. (quoting Rowe v. Marder, 750 F. Supp. 718, 721 (W.D. Pa. 1990), aff'd, 935 F.2d 1282 (3d Cir. 1991)). In cases where removal is based upon diversity, the facts required to support the removal petition include the amount in controversy and the address of each party. See e.g., Day v. Zimmer Inc., 636 F. Supp. 451, 453 (N.D.N.Y. 1986). While this standard requires a defendant to apply a reasonable amount of intelligence in ascertaining removability, it does not require a defendant to look beyond the initial pleading for facts giving rise to removability. See e.g., Rowe, 750 F. Supp. at 720 ("a defendant must be able to ascertain easily [from the pleading] the necessary facts to support his removal petition.") (internal quotation marks/citations omitted); see also Foster v. Mutual Fire, Marine & Inland Ins. Co., 986 F.2d 48, 54 (3d Cir. 1993) ("the relevant test is not what the defendants purportedly knew, but what [the document] said.").
" [A] plaintiff may not defeat a federal court's diversity jurisdiction and a defendant's right of removal by merely joining as defendants parties with no real connection with the controversy." Pampillonia v. RJR Nabisco, Inc., 138 F.3d 459, 460-61 (2d Cir. 1998) (citations omitted).
Id. at 461. "Joinder will be considered fraudulent when it is established 'that there can be no recovery [against the defendant] under the law of the state on the cause alleged.'" Allied Programs Corp. v. Puritan Ins. Co., 592 F. Supp. 1274, 1276 (S.D.N.Y. 1984) (citations omitted/brackets in original).
The amended complaint states that the action is one for "damages, declaratory and injunctive relief arising out of a conspiracy among defendant [FTI], defendant [ATI], defendant JAS Partners, Ltd., and defendant [Simon] to deprive Ridley Whitaker ... and [RJU] of legal fees." The amended complaint does not assert any claims against RJU and, in the prayer for relief, Whitaker requests no relief against RJU, but instead seeks a declaration that "RJU be entitled to receive at least $75,000 of any contingent payment paid to Mr. Whitaker" and " [t]hat all defendants except RJU be directed to account for and deliver to Mr. Whitaker payment of attorneys fees due and owing under the statutory charging lien." (emphasis added). Because the amended complaint does not state a cause of action against RJU or seek any relief against this entity under state law and, to the contrary, seeks relief on behalf of Whitaker and RJU, we find no error with the district court's conclusion that Whitaker fraudulently joined RJU in an attempt to defeat federal diversity jurisdiction.
In granting ATI's motion to dismiss under Fed. R. Civ. P. 12 (b) (2), the district court held that Whitaker failed to demonstrate any factual predicate authorizing jurisdiction over ATI under the New York long arm statute, N.Y.C.P.L.R. § 302(a) and that, in any event, compelling ATI to litigate in New York would offend the due process clause of the Fourteenth Amendment to the United States Constitution. Whitaker v. Fresno Telsat, Inc., 87 F. Supp. 2d 227, 233 (S.D.N.Y. 1999). On appeal, Whitaker argues that the district court: (1) erred in concluding that Whitaker failed to show injury in New York and, hence, a basis for reaching ATI under the New York long arm statute, and (2) erred in concluding that contacts between ATI and New York were so lacking that compelling ATI to litigate in New York would offend the due process clause of the Fourteenth Amendment.
"This Court reviews de novo a dismissal for lack of personal jurisdiction." Chaiken v. VV Publ'g. Corp., 119 F.3d 1018, 1025 (2d Cir. 1997) (citations omitted). The plaintiff bears the burden of establishing that the court has jurisdiction over the defendant when served with a Rule 12 (b) (2) motion to dismiss. Robinson v. Overseas Military Sales Corp., 21 F.3d 502, 507 (2d Cir. 1994). A plaintiff may carry this burden "by pleading in good faith... legally sufficient allegations of jurisdiction, i.e., by making a 'prima facie showing' of jurisdiction." Jazini v. Nissan Motor Co., Ltd., 148 F.3d 181, 184 (2d Cir. 1998) (quoting Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir. 1990). A plaintiff can make this showing through his "own affidavits and supporting materials [,]" Marine Midland Bank, N.A. v. Miller, 664 F.2d 899, 904 (2d Cir. 1981), containing "an averment of facts that, if credited..., would suffice to establish jurisdiction over the defendant." Metropolitan Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 567 (2d Cir. 1996) (quoting Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir. 1990). " [W]here the issue is addressed on affidavits, all allegations are construed in the light most favorable to the plaintiff and doubts are resolved in the plaintiff's favor [.]" A.I. Trade Finance, Inc. v. Petra Bank, 989 F.2d 76, 79-80 (2d Cir. 1993).
The New York long arm statute authorizes personal jurisdiction over non-domiciliaries under several circumstances, see N.Y.C.P.L.R. § 302(a), including those cases where the non-domiciliary "commits a tortious act [outside] the state causing injury to person and property within the state, [among other requirements]." N.Y.C.P.L.R. § 302(a) (3) (McKinney's 2001). " [C]ourts determining whether there is injury in New York sufficient to warrant § 302(a) (3) jurisdiction must generally apply a situs-of-injury test, which asks them to locate the 'original event which caused the injury.'" Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 791 (2d Cir. 1999) (citation omitted). " [T]he situs of the injury is the location of the original event which caused the injury, not the location where the resultant damages are felt by the plaintiff." Mareno v. Rowe, 910 F.2d 1043, 1046 (2d Cir. 1990) (internal citation/quotations omitted) (where plaintiff lived in New York and sued his New Jersey employer for wrongful discharge, situs of injury was location of events which caused injury, i.e., New Jersey, not place where economic consequences were felt, i.e., New York); see also Hermann v. Sharon Hosp., Inc., 135 A.D.2d 682, 683, 522 N.Y.S.2d 581, 583 (2d Dep't 1987) (in medical malpractice action, situs of injury was place where plaintiff received medical treatment, not where the effects of the doctor's negligence were felt). "The occurrence of financial consequences in New York due to the fortuitous location of plaintiffs in New York is not a sufficient basis for jurisdiction under § 302(a) (3) where the underlying events took place outside New York." United Bank of Kuwait v. James M. Bridges, Ltd., 766 F. Supp. 113, 116 (S.D.N.Y. 1991).
In this case, Whitaker averred that ATI committed tortious conduct outside of New York through conspiring with FTI to deprive him of legal fees, with the intent to economically injure him in New York. Further, he asserts that the original event giving rise to his claim of economic harm was his tendering of legal service to FTI in New York. Accepting these averments as true, they fail to serve as the basis for injury in New York and hence, jurisdiction under § 302(a) (3). As set forth above, the situs of injury for purposes of asserting long arm jurisdiction is the place where the underlying, original event occurred which caused the injury. The alleged injury here does not arise out of the legal services provided, but out of ATI's alleged failure to pay for such services. Accordingly, we agree with the district court that the relevant, original event which caused the alleged injury was "either the structuring of the partnership sale to avoid payment [to Whitaker] or the actual withholding of payment to Whitaker, both of which occurred outside New York." Whitaker, 87 F. Supp. 2d at 233. We therefore agree with the district court that Whitaker has failed to allege New York injury and hence, a factual predicate sufficient to authorize jurisdiction over ATI under the New York long arm statute. Consequently, we conclude that the district court did not err in dismissing the action under Fed. R. Civ. P. 12 (b) (2) for want of personal jurisdiction.
In Murphy Brothers, the Supreme Court discussed a Maryland case in which a federal district court articulated four possible scenarios for triggering the removal clock, including that, "if the defendant is served with the summons but the complaint is furnished to the defendant sometime after, the period for removal runs from the defendant's receipt of the complaint." Murphy Brothers, 526 U.S. at 354, 119 S. Ct. at 1328-29 (emphasis added) (citing Potter v. McCauley, 186 F. Supp. 146, 149 (D. Md. 1960)). The court below used this language to buttress its conclusion that, after Murphy Brothers, the only kind of initial pleading that can trigger the removal period is the complaint. Whitaker, 1999 WL 767432, at *2. We find error with this conclusion. The High Court did not discuss the term "initial pleading" or decide that only a complaint can constitute the initial pleading under section 1446 (b). Rather, the Court used the four scenarios to illustrate that, in any given case, the rule announced requiring formal service of process affords a removing defendant at least thirty days from the date of service to file the notice of removal, even in states, such as New York, that historically utilized atypical procedures for commencement of an action and filing of the complaint. Murphy Brothers, 526 U.S. at 354, 119 S. Ct. at 1328-29.
See E.W. Howell Co., Inc. v. Underwriters Labs., Inc., 596 F. Supp. 1517, 1519 (E.D.N.Y. 1984) (quoting H.R. Rep. No. 352, 81st Cong., 2d Sess., reprinted in 1949 U.S. Code Cong. & Admin.News, 1248, 1254, 1268).