Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Mizauctions, LLC v. Cross

United States District Court, E.D. Pennsylvania

August 22, 2017

MIZAUCTIONS, LLC; JARED MIZRAHI; RESTAURANT AUCTIONS.COM, LLC; and PCI AUCTION GROUP, LLC, Plaintiffs
v.
RUSSELL CROSS; RONALD HART; LUIS MARTINEZ; ADAM TORRES; RODNEY FRICK; TINA CRAINE; and MEG CANFIELD, Defendants

          OPINION PLAINTIFFS' EMERGENCY MOTION TO ENFORCE STATE COURT ORDERS AND TO REMAND, ECF NO. 13 GRANTED IN PART AND DENIED IN PART

          JOSEPH F. LEESON, JR. UNITED STATES DISTRICT JUDGE.

         I. Introduction

         This case involves a dispute between two former business partners, Jared Mizrahi and Russell Cross, whose relationship has gone sour. Mizrahi filed this suit in state court, and Cross promptly removed it here on both diversity and federal question grounds. Forty days later, Mizrahi moved to remand it, pointing to a series of forum selection clauses in agreements that he and Cross executed that he believes require this dispute to be heard in state court. Cross opposes a remand, chiefly on the ground that Mizrahi's motion came too late under 28 U.S.C. § 1447(c), which provides that any “motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction must be made within 30 days after the filing of the notice of removal.”

         The problem with this argument is that a federal-jurisdiction-waiving forum selection clause is not a “defect” within the meaning of the statute. That means that Mizrahi's motion is not time-barred, and because he is correct that the forum selection clauses contemplate that the state courts are the exclusive forum for this dispute to take place, the case will be remanded.

         Before that happens, Mizrahi has one other request: he seeks to have Cross compelled to abide by a series of ex parte injunctions that the state court entered against him shortly before the case was removed, which Mizrahi claims he has been flouting. That request is denied because this case was removed before the state court had a chance to hold a hearing on those injunctions, and by operation of state law, ex parte injunctions automatically dissolve if a hearing on them is not held promptly after they are issued.[1]

         II. Mizrahi's motion is not time-barred.

         In Foster v. Chesapeake Insurance Co., 933 F.2d 1207 (3d Cir. 1991), the Third Circuit considered whether a remand motion based on a forum selection clause that was filed fifty-four days after the case was removed was untimely under § 1447(c). At the time Foster was decided, § 1447(c) was worded slightly differently than it is now. In its current form, the thirty-day time limit applies to all remand motions based on “any defect other than lack of subject matter jurisdiction, ” but when Foster was decided, the thirty-day time limit applied only to remand motions based on “any defect in removal procedure.” Foster, 933 F.2d at 1210 (emphasis added).[2] That text, the Foster court held at the time, “could not be clearer”: the thirty-day time limit applied only to remand motions “grounded on a defect in removal procedure, ” not motions based on other grounds for a remand, like a forum selection clause. Id. at 1212-13.

         In 1996, the statute was amended to delete the phrase “in removal procedure, ” making the thirty-day deadline now broadly applicable to remand motions based on “any defect.” In the wake of that amendment, some litigants argued that this change was designed to make the statute categorically applicable to all remand motions (except for those challenging subject matter jurisdiction, which the statute expressly exempts). The Third Circuit has agreed that the amended version does indeed have a broader reach than before, but not so broad as to apply to every type of remand motion. See Cook v. Wikler, 320 F.3d 431, 435 & n.5 (3d Cir. 2003).

         It is clear, for example, that the current version of the statute is no longer limited to remand motions based on defects in procedure-that is, a failure by the removing party to correctly follow the statutory removal procedures-so the statute now reaches remand motions based on “even the ‘more substantive' removal defects, such as [forum defendant] § 1441(b) violations.” Kamm v. ITEX Corp., 568 F.3d 752, 756 (9th Cir. 2009) (quoting Lively v. Wild Oats Markets, 456 F.3d 933, 939 (9th Cir. 2006)). But the statute, by its terms, still applies only to remand motions that are grounded on some type of “defect in removal, ” Cook, 320 F.3d at 436 (emphasis added), which, the Third Circuit has explained, means a removal that was “not authorized by law, ” id. at 435 (quoting Pierpoint v. Barnes, 94 F.3d 813, 818 (2d Cir. 1996)).

         That stops short of reaching a remand motion like this one because Mizrahi is not contending that the removal of this case was not authorized by law. Cross removed the case pursuant to 28 U.S.C. § 1441(a), which authorizes the removal of any case over which the district courts have original jurisdiction, and no one disputes that this Court has subject matter jurisdiction over this case by virtue of the complete diversity of the parties and the fact that one of Mizrahi's claims raises a federal question. The forum selection clauses do not alter the fact that this was a removable case under the federal removal statutes because “[a] forum selection clause does not oust a court of subject matter jurisdiction.” Foster, 933 F.2d at 1212 n.7.

         Mizrahi's remand motion, then, is not based on the notion that the removal of this case was “not authorized by law.” His contention is that Cross, by agreeing to the forum selection clauses, waived the right of removal that he would have otherwise had. See Foster, 933 F.2d at 1216-17 (explaining that a forum selection clause that requires a dispute to be heard in state court “waive[s] the defendant's right to remove”). That would not, in the language of § 1447(c), be a “defect” in removal.

         So while the 1996 amendment expanded § 1447(c) to reach a broader range of remand motions than before, the amendment was not broad enough to change Foster's holding: § 1447(c) and its thirty-day clock do not apply to remand motions that are based on forum selection clauses. See Cook, 320 F.3d at 435 n.5 (“[O]ur review of many of the cases interpreting the prior language of § 1447(c), including Foster, indicates that most of their holdings appear unaffected by this statutory change . . . .”); Kamm, 568 F.3d at 757 (holding, under the current language of the statute, “that a forum selection clause is not a ‘defect' within the meaning of § 1447(c) and that the thirty-day statutory time limit does not apply to a motion to remand based on a forum selection clause”).

         This does not mean that there are no time limits at all on moving to remand a case based on a forum selection clause. Even without the statutory thirty-day deadline, “a district court in the proper exercise of its discretion may deny as untimely a [non-§1447(c)] motion to remand if made at an unreasonably late stage of the federal litigation.” Foster, 933 F.2d at 1213 n.8. But in this case, Mizrahi's motion was filed only ten days later than the statutory deadline and no substantive proceedings have yet occurred. The Court therefore turns to the merits of the motion.

         III. The forum selection clauses provide that state court is the exclusive ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.