United States District Court, W.D. Pennsylvania
NICHOLAS RANJAN, UNITED STATES DISTRICT JUDGE
removed this case to federal court on October 11, 2019. [ECF
1]. In their notice of removal, Defendants alleged that the
Court had subject matter jurisdiction under 28 U.S.C. §
1332, “in that [the case] arises under diversity
jurisdiction and the amount in controversy exceeds $75,
000.00.” [ECF 1 at ¶ 13]. Defendants also made
passing citation to 28 U.S.C. § 1331, the statute
governing “federal question” jurisdiction, as a
basis for removal. But Defendants did not point to any
federal claim in Hyundai's complaint (there were none) or
otherwise identify any factual predicate for removing under
October 15, 2019, the Court directed Defendants to show cause
why the Court should not remand this case to state court
under 28 U.S.C. § 1441(b)(2). [ECF 7]. The so-called
“forum defendant rule” established by that
statute provides that an action “may not be
removed” based on diversity jurisdiction if any
defendant is “a citizen of the State in which such
action is brought.” 28 U.S.C. § 1441(b)(2).
Defendants are, by their own admission, citizens of
Pennsylvania-the state in which Hyundai filed this case.
after the Court issued its show cause order, Hyundai moved to
remand this case on the same basis. [ECF 8; ECF 9].
Defendants responded on October 18, 2019, [ECF 14], Hyundai
replied on October 21, 2019, [ECF 15], and Defendants
sur-replied on October 22, 2019 [ECF 16-1]. Now, for the
following reasons, the Court will grant Hyundai's motion
and remand this case to state court.
Discussion & Analysis
district courts are courts of limited jurisdiction. They
“may not exercise jurisdiction absent a statutory
basis.” Home Depot U.S.A., Inc. v. Jackson,
139 S.Ct. 1743, 1746 (2019). What's more, “removal
statutes are to be strictly construed, with all doubts to be
resolved in favor of remand.” Manning v. Merill
Lynch Pierce Fenner & Smith, Inc., 772 F.3d 158, 162
(3d Cir. 2014). And a defendant who removes a case
“carries a heavy burden of showing that at all stages
of the litigation the case is properly before the federal
court.” Id. That said, the Court must be
cautions when deciding to remand a case, “lest it
erroneously deprive a defendant of the right to a federal
forum.” Hunter v. Greenwood Tr. Co., 856
F.Supp. 207, 211 (D.N.J. 1992).
to state court is “required” if, at any time
before final judgment, “it appears that the district
court lacks subject matter jurisdiction.” Hoffman
v. Nutraceutical Corp., 563 Fed.Appx. 183, 185 (3d Cir.
2014); see Stewart v. Lewis, No. 2:19-CV-00847, 2019
WL 4267387, at *2 (W.D. Pa. Sept. 10, 2019). Separately, a
plaintiff may also move to remand an action to state court
“if removal was ‘procedurally
defective.'” Parker Hannifin Corp. v. Fed. Ins.
Co., 23 F.Supp.3d 588, 590 (W.D. Pa. 2014). A motion to
remand based on procedural, rather than jurisdictional,
defects must be filed “within 30 days after the filing
of the notice of removal.” 28 U.S.C. § 1447(c).
U.S.C. § 1331 and 28 U.S.C. § 1332, Congress
granted federal courts original jurisdiction over two types
of cases relevant here. Section 1331 empowers federal courts
to hear cases “arising under” federal law. This
is known as “federal-question jurisdiction.”
Home Depot U.S.A., Inc., 139 S.Ct. at 1746. Section
1332 empowers federal courts to hear cases between
“citizens of different States, ” so long as the
amount in controversy exceeds $75, 000.00. This is known as
“diversity jurisdiction.” Id.
“Federal-question jurisdiction affords parties a
federal forum in which ‘to vindicate federal
rights,' whereas diversity jurisdiction provides ‘a
neutral forum' for parties from different States.”
case that would be within the federal courts' original
jurisdiction is filed in state court, a defendant may remove
that case to federal court. 28 U.S.C. § 1441(a).
“In removed cases, a federal court may only exercise
jurisdiction on a basis which the removing party has alleged
in its notice of removal.” Jessup v. Cont'l
Motors, Inc., No. 12-CV-4439, 2013 WL 309895, at *3
(E.D. Pa. Jan. 24, 2013); see14C Charles Alan Wright
& Arthur R. Miller, et al., Federal Practice and
Procedure § 3733 (4th ed. 2012) (“In most
circumstances ... defendants may not add completely new
grounds for removal or furnish missing allegations, even if
the court rejects the first-proferred basis of
removal.”). “This rule accords with the
fundamental principle that the party seeking to establish
federal jurisdiction bears the burden to do so.”
Jessup, No. 12-CV-4439, 2013 WL 309895, at *3.
notice of removal articulated one basis for the Court to
exercise jurisdiction over this case: diversity. In
describing why removal was proper, Defendants stated only
that the case was “one which may be removed to this
Court … in that it arises under diversity
jurisdiction and the amount in controversy exceeds $75,
000.00.” [ECF 1 at ¶ 13] (emphasis added).
The civil cover sheet accompanying Defendants' filing
identified “diversity” as the sole “basis
of jurisdiction.” [ECF 1-1]. Defendants'
later-filed, 187-paragraph counterclaims also identified
diversity, and not federal question jurisdiction, as the
basis for proceeding in this Court. [ECF 5 at p. 14, ¶
said, the Court acknowledges that Defendants passingly cite
Section 1331 in their notice of removal, albeit without any
factual enhancement. See [ECF 1] (“This Court
has jurisdiction pursuant to 28 U.S.C. § 1331 and 1332,
and is one which may be removed to this Court … in
that it arises under diversity jurisdiction[.]”). And
Defendants now say that their omission of federal question
jurisdiction from both their cover sheet and counterclaims
was “inadvertent.” See [ECF 14 at ¶
8] (“However, Defendants admit that their Civil Cover
Sheet inadvertently only identified diversity as the basis of
jurisdiction.”); [Id. at ¶ 9]
(“[I]t appears that Paragraph 5 of Defendants'
counterclaims is equally deficient as it also only identifies
Section 1332 as the basis of this Court's jurisdiction[.]
… [T]he paragraph should have correctly stated that
jurisdiction over the counterclaims was proper pursuant to
both Section 1331 and 1332.”).
purposes of this motion, the Court will accept
Defendants' representations and consider whether it may
exercise either diversity jurisdiction or federal question
jurisdiction over this case. The answer to both questions is
The Court does not have diversity jurisdiction over
Hyundai's claims, because Defendants are citizens of
diversity jurisdiction does not exist here. 28 U.S.C. §
1332. “[J]urisdiction based on diversity of citizenship
requires that opposing parties be citizens of diverse
states.” GBForefront, L.P. v. Forefront Mgmt. Grp.,
LLC, 888 F.3d 29, 34 (3d Cir. 2018). “Complete
diversity requires that, in cases with multiple plaintiffs or
multiple defendants, no plaintiff be a citizen of the same
state as any defendant.” Zambelli Fireworks Mfg.
Co. v. Wood, 592 F.3d 412, 419 (3d Cir. 2010).
key inquiry in establishing diversity is thus the
‘citizenship' of each party to the action.”
Id. And the rules governing citizenship are well
known: “A natural person is deemed to be a citizen of
the state where he is domiciled.” Id. “A
corporation is a citizen both of the state where it is
incorporated and of the state where it has its principal
place of business.” Id. “And a
partnership, as an unincorporated entity, takes on the
citizenship of each of its partners.” Id.
have alleged that they are all citizens of Pennsylvania,
while Hyundai is a citizen of California. [ECF 1 at
¶¶ 9-12]. Thus, the opposing parties appear to be
“citizens of diverse states.” GBForefront,
L.P., 888 F.3d at 34.
Section 1441(b)(2), however, Congress created an exception to
the removal statute, barring removal of cases based on
diversity if any defendant “is a citizen of the State
in which such action is brought.” 28 U.S.C. §
1441(b)(2). This is often called the “forum defendant
rule.” Encompass Ins. Co. v. Stone Mansion Rest.
Inc., 902 F.3d 147, 152 (3d Cir. 2018). Thus, diversity
jurisdiction in a removal case is “narrower than if the
case was originally filed in federal court by the
plaintiff.” Id. The rule reflects the fact
“that the rationale for diversity jurisdiction no
longer exists when one of the defendants is a citizen of the
forum state since the likelihood of bias is reduced, if not
eliminated.” Stunteback ...