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Hiren Patel v. Sharon K. Smith and Nicole Johnson

July 20, 2012


The opinion of the court was delivered by: Goldberg, J.


This suit was removed from Pennsylvania state court by Defendants, Sharon K. Smith and Nicole Johnson, on the basis of diversity jurisdiction. 28 U.S.C. §§ 1332(a), 1441. Plaintiff, Hiren Patel, now moves to remand the suit to state court. For the reasons that follow, the motion to remand will be granted.


The present case arises out of the same facts as a prior case before the Honorable Louis H. Pollak, involving substantially the same parties -- Patel v. Smith (Patel I), 2011 WL 2746080 (E.D.Pa. Jul. 12, 2011). In Patel I, Plaintiff, Hiren Patel, sued Sharon K. Smith, Nicole Johnson, and a related business entity in federal court over a failed business transaction involving restaurant franchises in New Jersey. Plaintiff's complaint alleged seven causes of action, three under federal law and four under state law. Patel I, 2011 WL 2746080, at *2.

On July 11, 2011, Judge Pollak issued a Memorandum Opinion and Order dismissing Plaintiff's three federal causes of action for failure to state a claim. Patel I, 2011 WL 2746080, at **2-5. The remaining four causes of action under state law were also dismissed, on jurisdictional grounds. Id. Plaintiff had invoked two possible sources for federal jurisdiction over his state law claims: (i) supplemental jurisdiction, on the theory that the state law claims were pendent to federal claims over which the court had federal question jurisdiction, 28 U.S.C. §§ 1331, 1367(a); or (ii) diversity jurisdiction, id.§ 1332(a). Having dismissed Plaintiff's federal claims, Judge Pollak declined to exercise supplemental jurisdiction over his state law claims, thereby leaving diversity as the only possible basis for federal jurisdiction. Patel I, 2011 WL 2746080, at *5 (citing 28 U.S.C. § 1367(c)(3)).

Although Plaintiff had alleged that the parties were completely diverse, the complaint listed only the "principal place of business" of each party. For purposes of diversity jurisdiction, the citizenship of a natural person is determined by the person's domicile, not place of business. See, e.g., McCann v. Newman Irrevocable Trust, 458 F.3d 281, 286 (3d Cir. 2006) (discussing domicile concept). In his July 11, 2011 Memorandum Opinion and Order, Judge Pollak granted Plaintiff leave to amend the complaint to correct this pleading defect. See Patel I, 2011 WL 2746080, at *2. ("The pleading is insufficient to establish federal diversity jurisdiction . . . and Patel will be given leave to amend his complaint for the purpose of establishing diversity[.]" (quotations and citations omitted.))

On July 22, 2011, Plaintiff's counsel informed the court that no amended federal complaint would be forthcoming, as additional research had revealed that the parties were not completely diverse at the time the complaint was filed on August 18, 2010, in that Plaintiff and Defendants were all domiciled in Pennsylvania as of that date. (Dk. No. 10-4165, Doc. No. 18.)

On September 22, 2011, Plaintiff filed the present action ("Patel II") against Defendants, Smith and Johnson, in the Court of Common Pleas of Bucks County, Pennsylvania.*fn1 The Patel II complaint asserts three causes of action under state law and seeks at least $300,000 in damages in connection with the same franchise dispute that was at issue in Patel I. On October 24, 2011, Defendants removed Patel II to this court pursuant to 28 U.S.C. § 1441. On November 1, 2011, Plaintiff moved to remand Patel II to state court. (Doc. Nos. 1, 2.)

On May 15, 2012, this action was reassigned from Judge Pollak to the undersigned. A status conference was held on June 18, 2012, where the parties requested leave to submit supplemental briefing regarding Plaintiff's motion to remand. We granted this request, and each party has submitted a supplemental brief. Plaintiff's motion for remand is now ready for disposition. (Doc. Nos. 7, 11, 12, 13.)


A motion for remand under 28 U.S.C. § 1447 shall be granted where the standards for removal under 28 U.S.C. §§ 1441 and 1446 have not been met. Hogan v. Raymond Corp., 777 F.Supp.2d 906, 912-13 (W.D.Pa. 2011). The defendant bears the burden of demonstrating the propriety of removal. Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990). Removal statutes are to be strictly construed, and all doubts are to be resolved in favor of remand. Id.

To qualify for removal, an action must involve claims "of which the district courts of the United States have original jurisdiction." 28 U.S.C. § 1441(a). District courts have original jurisdiction over "all civil actions arising under the Constitution, laws, or treaties of the United States[,]" and all civil actions where diversity of citizenship exists and the amount in controversy exceeds $75,000. See 28 U.S.C. §§ 1331, 1332.


Defendants assert that this court has original jurisdiction over Patel II because the amount in controversy exceeds $75,000 and the action is between citizens of different states. 28 U.S.C. ยง 1332(a). According to the parties' submissions in Patel II, Plaintiff moved his domicile from Pennsylvania to Delaware in between the filing of Patel I in federal court in August 2010 and the filing of Patel II in state court in September 2011. Therefore, the Defendants, who are citizens of Pennsylvania, assert that diversity exists ...

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