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Silverman v. China National Native Produce & Animal By-Products Import & Export Corp.

February 12, 2007

ROBERT S. SILVERMAN, PLAINTIFF,
v.
CHINA NATIONAL NATIVE PRODUCE & ANIMAL BY-PRODUCTS IMPORT & EXPORT CORPORATION, CHINA NATIONAL FIREWORKS COMPANY, LTD., ALSO KNOWN AS KWONGYUEN HANGKEE COMPANY, LTD., RIMCOR, INC., SAM AND ARLENE LAU, TRADING AND DOING BUSINESS AS CHINA NATIONAL FIREWORKS COMPANY, LTD. ALSO KNOWN AS KWONGYUEN HANGKEE COMPANY, LTD., DEFENDANTS.



The opinion of the court was delivered by: Arthur J. Schwab United States District Judge

MEMORANDUM OPINION

ELECTRONICALLY FILED

Introduction

These consolidated cases present complicated procedural and jurisdictional issues involving serious and permanent injuries to a Pennsylvania resident, a multi-million dollar Pennsylvania state court judgment entered against a corporation owned by a foreign sovereign nation, the validity of state court judgments against a foreign sovereign and/ or its agents or instrumentalities in light of the Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. §§ 1602-1611, removal to federal court of the original action and two Pennsylvania Writs of Revival of judgment under the removal statutes, 28 U.S.C. §§ 1441-1453, and the weighing of important federal and state interests, giving appropriate deference to a state court judgment in order to foster comity between the respective judiciaries.

Defendant raises a number of interesting jurisdictional, substantive and procedural defenses to revival of the judgment and to the validity of the underlying judgment itself. Without expressing an opinion, some of these defenses may have arguable merit. Before getting to these matters, however, there is a thorny threshold issue: are defendant's notices of removal timely under the removal statutes? If not, then defendant's jurisdictional, substantive and other procedural challenges to the state court judgment must be left to the wisdom of the state courts in which the judgment was rendered.

After careful consideration of plaintiff's motion to remand (doc. no. 16), defendant's response thereto, the briefs in support and in opposition to remand, the notices of removal and the state court records, the Court holds that all of the notices to remove are untimely, and will therefore remand the original action as well as the revival proceedings to the Court of Common Pleas of Lawrence County.

Background

In 1995, plaintiff Robert S. Silverman filed suit against China National Native Produce & Animal By-Products Import & Export Corporation (which inexplicably, but thankfully, refers to itself as "Tushu," a convention the Court will follow) and other defendants in the Court of Common Pleas of Lawrence County, Pennsylvania, alleging that plaintiff, a professional fireworks operator, sustained severe, permanent injuries while attempting to discharge a 10 inch aerial fireworks shell at a fireworks show in Annapolis Maryland on the 4th of July, 1994, when the shell detonated prematurely while still in the mortar tube. Plaintiff alleged that Tushu manufactured and distributed the defective aerial shell.

Eventually, the other defendants reached settlement but the case against defendant Tushu continued. Tushu did not answer, appear or defend the suit, and in August 2000, the state court entered a judgment in the amount of $4,602,000, following a judicial proceeding. Tushu characterizes this as a "default judgment"; plaintiff disputes this characterization and states that there was a non-jury trial in May 2000 before a Judge of the Court of Common Pleas of Lawrence County, who considered evidence before rendering his award and entering judgment of $4,602,000. For purposes of deciding the motion to remand, whether the judgment is properly characterized as a "default judgment" is not material.

Civil Action No. 06-1710. At Civil Action No. 06-1710, Tushu filed a Notice of Removal of the "entire action" from the Court of Common Pleas of Lawrence County, Pennsylvania to this Court, asserting that the $4,602,000.00 judgment entered against Tushu by the Court of Common Pleas on May 29, 2001, at that court's docket no. 10639-1995, is removable pursuant to this Court's jurisdiction over actions against foreign states (which includes agents and instrumentalities of foreign states, as Tushu apparently is or was at relevant times), 28 U.S.C. §§ 1330(a) and 1603(a) and (b), and 28 U.S.C. § 1446(a) of the removal statutes.

Tushu concedes in its Notice of Removal that it "received a copy of the Amended Complaint on or about February 6, 1996 at its offices in Beijing, China." Notice of Removal (doc. no. 1) at ¶ 2. In other pleadings and at the initial status conference on January 23, 2007, counsel for Tushu made it clear that it "conceded that service was properly effected with respect to the original action." Transcript at 7. Although Tushu does not challenge the validity of the service of the original complaint and process, it does complain about insufficient service of the subsequent Writs of Revival, the subjects of the Notices of Removal at Civil Action Nos. 06-1711 and 06-1712, and the validity of the underlying state court judgment because of the state court's purported lack of personal and subject matter jurisdiction.

Although Tushu's Notice of Removal of the "entire action" was not filed until December 28, 2006, Tushu argues that this Court should enlarge the time period for filing a notice of removal pursuant to 28 U.S.C. § 1441(d), which provides that the 30 day time limitations of 28 U.S.C. § 1446(b),*fn1 "may be enlarged at any time for cause shown" for removal of any civil action brought in a state court against a foreign state as defined in 28 U.S.C. § 1603(a).

The good cause Tushu offers to dramatically enlarge the time for removing "the entire action," as set forth in its Motion to Vacate the Default Judgment pursuant to Fed.R.Civ.P. 60(b)(4) (doc. no. 9), is that the judgment is null and void, for three reasons: (i) the state court lacked subject matter jurisdiction over claims against Tushu; (ii) the judgment was issued in violation of FSIA; and (iii) Pennsylvania lacked personal jurisdiction over Tushu. Notice of Removal at ¶ 8. Moreover, Tushu argues that the simultaneous removal of the two Writs of Revival filed in the Court of Common Pleas of Lawrence County are timely, and that it serves judicial economy and efficiency to enlarge the time for removal of "the entire action" so that not only the revival actions, but also "the entire action," can be considered together by one court, and that court should be the United States District Court for the Western District of Pennsylvania.

Civil Action Nos. 06-1711 and 06-1712. On December 28, 2006, Tushu filed Notices of Removal of two Writs of Revival that had been filed in the Court of Common Pleas of Lawrence County, respectively, at Civil Action No. 06-1711, a Writ of Revival filed on March 13, 2006, at that court's docket no. 10379-06, against Tushu and its successor Chinese-owned company, China National Cereals, Oils and Foodstuffs Corporation ("COFCO"); and at Civil Action No. 06-1712, a second Writ of Revival filed on May 17, 2006, at that court's docket no. 10723-06 against Tushu.

Pennsylvania's revival procedures were explained by the United States Bankruptcy Court for the Western District of Pennsylvania in In re Zampatti, 300 B.R. 415, 419-20 (Bankr. W.D.Pa. 2003) as follows:

A judgment lien serves to prevent a debtor from subsequently encumbering or disposing of real property the debtor owns so as to divest the effect of the judgment. It also serves to prevent subsequent lienholders from taking action against the property to satisfy a debt owed to it by the debtor without first paying off prior liens. Shearer v. Naftzinger, 560 Pa. 634, 637, 747 A.2d 859, 861 (2000).

Under the law of Pennsylvania, a judgment continues as a lien against real property for a period of five years, after which it automatically expires unless it is revived. Mid-State Bank & Trust Co. v. Globalnet International, Inc., 710 A.2d 1187, 1190 (Pa.Super. 1998), aff'd, 557 Pa. 555, 735 A.2d 79 (1999). While a judgment lien may be revived even after it has expired, any priority it had against ...


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