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Parker Hannifin Corp. v. Federal Insurance Co.

United States District Court, W.D. Pennsylvania

May 29, 2014


For PARKER HANNIFIN CORPORATION, PARKER ITR S.R.L., Plaintiffs: Andrew M. Roman, Richard A. Ejzak, LEAD ATTORNEYS, Cohen & Grigsby, Pittsburgh, PA.

For FEDERAL INSURANCE COMPANY, Defendant: David Newmann, LEAD ATTORNEY, Hogan Lovells U.S. LLP, Philadelphia, PA; Liana G.T. Wolf, LEAD ATTORNEY, PRO HAC VICE, Hogan Lovells U.S. LLP, Washington, DC.


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Joy Flowers Conti, Chief United States District Judge.

I. Introduction

This case involves an insurance coverage dispute in which plaintiffs Parker Hannifin Corporation and Parker ITR S.R.L. (together, " plaintiffs" ) seek insurance coverage from defendants Federal Insurance Co. (" Federal Insurance" ) and National Union Fire Insurance Co. (" National Union" and together with Federal Insurance, " defendants" ) for claims relating to an alleged price-fixing scheme in the marine oil and gas hose business. The issue addressed by this opinion is whether under the applicable removal statutes, this case should be remanded to state court.

On January 7, 2011, plaintiffs filed a praecipe for writ of summons in the Court of Common Pleas of Allegheny County, Pennsylvania (the " state action" ) against defendants. On October 7, 2013, plaintiffs filed a complaint in the state action. On the same day, the state action was removed by Federal Insurance from the Court of Common Pleas of Allegheny County to this court on the basis of diversity jurisdiction. (ECF No. 1.) In the complaint, plaintiffs allege three claims of breach of contract against defendants who

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are plaintiffs' primary and secondary insurers. (ECF No. 1-1.)

On November 6, 2013, plaintiffs filed a motion to remand and a brief in support of the motion. (ECF Nos. 4, 5.) On November 25, 2013, Federal Insurance filed a response in opposition to plaintiffs' motion and brief in support. (ECF Nos. 10, 11.) On February 18, 2014, plaintiffs with leave of court filed a reply brief. (ECF No. 20.) On May 2, 2014, Federal Insurance with leave of court filed a sur-reply brief. (ECF No. 29.) On February 24, 2014, the court held a hearing with respect to plaintiffs' motion to remand. After reviewing the submissions and hearing oral argument from the parties, the court took the matter under advisement. Plaintiff's motion to remand is now ripe to be decided by the court.

II. Standard of Review

" [D]istrict courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. " [A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. § 1441(a). The Court of Appeals for the Third Circuit has held that " [i]t is settled that the removal statutes . . . are to be strictly construed against removal and all doubts should be resolved in favor of remand." Steel Valley Auth. v. Union Switch and Signal Div., 809 F.2d 1006, 1010 (3d Cir. 1987) (footnote omitted). Courts " must focus on the plaintiff's complaint at the time the petition for removal was filed. . . . It remains the defendant's burden to show the existence and continuance of federal jurisdiction." Id.

III. Discussion

Plaintiffs argue the removal of this action was defective for two reasons: (1) the forum defendant rule prohibits removal in this case because one of the defendants, i.e., National Union, is a Pennsylvania corporation; and (2) the removal statute prohibits removal because the notice of removal was filed more than one year after the action was commenced. Federal Insurance argues the forum defendant rule does not apply because plaintiffs did not serve National Union with its complaint prior to removal, and, therefore, National Union was not " properly joined and served" as required by 28 U.S.C. § 1441(b). With respect to plaintiffs' second argument, Federal Insurance argues the one-year time limit for removal set forth in the second paragraph of § 1446(b) does not apply to this case because within the Third Circuit, " the one-year limit only applies if the 'initial pleading' in the case is not removable, and the 'initial pleading' refers to the complaint, not to a writ of summons." (ECF No. 10-1 at 2.) According to Federal Insurance, plaintiffs' original complaint was filed on October 7, 2013, and was removable based upon federal diversity jurisdiction on that date. Therefore, Federal Insurance's notice of removal in this case was timely filed within one year from the date the initial pleading was filed. These arguments and the applicable law are addressed below.

A. Forum Defendant Rule

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