United States District Court,

E.D. New York.

Winona Mae PALMIOTTI, Plaintiff,

v.

JAF CARRIER L.L.C. d/b/a Bagir Trucking, C.H. Robinson Company Inc., C.H. Robinson Transportation Company, C.H. Robinson Worldwide, Inc., Jose Caranza a/k/a Jose Cruz, and Jetro Cash and Carry Enterprise, LLC, Defendants.

15-CV-2365 (DRH)(ARL)

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Signed 03/28/2017

Attorneys and Law Firms

Jaroslawicz & Jaros, 225 Broadway, 24th Floor, New York, NY 10007, By: David Jaroslawicz, Esq., Norman E. Frowley, Esq., Attorneys for Plaintiff.

Dopf, P.C., 440 Ninth Avenue, New York, NY 10001, By: Martin B. Adams, Esq., Attorneys for Defendant JAF Carrier, LLC, s/h/a JAF Carrier, L.L.C. d/b/a Bagir Trucking.

Wilson, Elser, Moskowitz, Edelman & Dicker LLP, 1133 Westchester Avenue, White Plains, NY 10604, By: Lindsay J. Kalick, Esq., Attorneys for Defendants C.H. Robinson Company, Inc., C.H. Robinson Transportation, Company Inc. and C.H. Robinson Worldwide, Inc.

Morris Duffy Alonso & Faley, Two Rector Street, 22d Floor, New York, NY 10006, By: Mark Healy, Esq., Attorneys for Defendant Jetro Cash and Carry Enterprises, LLC s/h/a Jetro Cash and Carry Enterprise, LLC.

 

 

MEMORANDUM & ORDER

Denis R. Hurley, United States District Judge

*1 This is an action to recover for personal injuries sustained by Plaintiff Winona Mae Palmiotti (“Plaintiff” or “Palmiotti”). Presently before the Court is a motion by the defendants challenging the existence of diversity subject matter jurisdiction and a motion by Plaintiff to amend her complaint. For the reasons set forth below, defendants’ motion is granted to the extent that this matter is remanded to the Supreme Court, Suffolk County, and Plaintiff’s motion is denied.

 

 

PROCEDURAL BACKGROUND

As commenced in state court, the complaint named as defendants JAF Carrier, LLC, s/h/a JAF Carrier, L.L.C. d/b/a Bagir Trucking (“JAF”), C.H. Robinson Company, Inc., C.H. Robinson Transportation Company Inc. and C.H. Robinson Worldwide, Inc. (collectively “Robinson Defendants”) and Jose Caranza a/k/a Jose Cruz (“Caranza”). That complaint identified the parties as follows: Plaintiff as a resident of New York; JAF as a “foreign limited liability company” organized under the laws of Virginia; and the Robinson defendants as foreign corporations organized under the laws of Minnesota (Company and Transportation) and Delaware (Worldwide). On April 27, 2015, the Robinson Defendants removed the action to this Court on the ground of diversity of citizenship.1

 

By stipulation of the parties approved by the Court, plaintiff filed an amended complaint on December 3, 2015 adding Jetro Cash and Carry Enterprise, LLC (“Jetro”) as a defendant. The amended complaint alleges that Jetro “is a domestic limited liability company, duly organized and existing under and by virtue of the laws of the State of New York.” (DE 25 at ¶ 11.)2

 

Shortly after answers to the amended complaint were filed, JAF sought leave to file a motion directed to subject matter jurisdiction and seeking dismissal of this action and its remand to state court. Similar requests by Jetro and the Robinson Defendants soon followed, as well as a request by plaintiff to file a motion to amend her complaint. Leave was granted and the following motions have been filed: (1) a motion to dismiss by JAF, in which the Robinson Defendants join; (2) a motion to dismiss and remand by Jetro; and (3) a motion to amend the complaint by plaintiff. The motions by JAF and Jetro both focus on Jetro’s citizenship.

 

 

DISCUSSION

1. Standard of Review
2. Federal Rule of Civil Procedure 12(b)(1)

“A case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it.” Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). “The party invoking federal jurisdiction bears the burden of proving facts to establish that jurisdiction.” Linardos v. Fortuna, 157 F.3d 945, 947 (2d Cir. 1998). “In resolving a motion to dismiss for lack of subject matter jurisdiction, the Court may consider affidavits and other materials beyond the pleadings to resolve jurisdictional questions.” Cunningham v. Bank of New York Mellon, N.A., 2015 WL 4101839, * 1 (E.D.N.Y. July 8, 2015) (citing Morrison v. Nat’l Australia Bank, Ltd., 547 F.3d 167, 170 (2d Cir. 2008)).

 

 

1. 28 U.S.C. § 1447

*2 28 U.S.C.§ 1447 provides for the procedure after a case has been removed to federal court. Subsection (c) explainns that “[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.” 28 U.S.C.§ 1447(c). It is the appropriate standard to apply where, as here, a complaint has been amended to add a party and it is claimed that the amendment has destroyed complete diversity thereby divesting the court of jurisdiction. Rosenfeld v. Lincoln Life Ins. Co., ––– F. Supp.3d ––––, 2017 WL 945114, *2 (E.D.N.Y. Mar. 9, 2017).

 

 

1. Principles Regarding Diversity Jurisdiction

Diversity jurisdiction exists when all plaintiffs are citizens of states diverse from those of all defendants. Pennsylvania Pub. Sch. Employees’ Ret. Sys. v. Morgan Stanley & Co., Inc., 772 F.3d 111, 117-18 (2d Cir. 2014) (citing Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 553 (2005)). The party asserting diversity jurisdiction has the burden to prove the same. Pennsylvania Pub. Sch. Employees’ Ret. Sys., 772 F.3d at 118. “[D]iversity of citizenship should be distinctly and positively averred in the pleadings, or should appear with equal distinctness in other parts of the record[.]” Leveraged Leasing Admin. Corp. v. PacificCorp Capital, Inc., 87 F.3d 44, 47 (2d Cir. 1996) (internal quotation marks omitted). “A conclusory allegation in the Complaint regarding diversity of citizenship does not extinguish the Court’s responsibility to determine, on its own review of the pleadings, whether subject matter jurisdiction exists.” Richmond v. International Bus. Machs. Corp., 919 F. Supp. 107, 108 (E.D.N.Y. 1996), aff’d, 841 F.2d 1116 (2d Cir. 1988). For the purpose of diversity jurisdiction, “a statement of the parties’ residence is insufficient to establish their citizenship.” Davis v. Cannick, 2015 WL 1954491, at *2 (E.D.N.Y. 2015); Young-Gibson v. Patel, 476 Fed.Appx. 482, 483 (2d Cir. June 12, 2012).

 

“For purposes of diversity jurisdiction, [an individual’s] citizenship depends on his domicile.” Linardos v. Fortuna, 157 F.3d 945, 948 (2d Cir. 1998).

 

A corporation is deemed to be a citizen of the state in which it is incorporated and of the state or foreign state where it has its principal place of business. 28 U.S.C. 1332(c)(1); Carter v. HealthPort Tech., LLC, 882 F.3d 47, 60 (2d Cir. 2016). “A corporation’s principal place of business under § 1332 is ‘the place where a corporation’s officers direct, control, and coordinate the corporation’s activities.’ In practice, this ‘should normally be the place where the corporation maintains its headquarters—provided that the headquarters is the actual center of direction, control, and coordination, i.e., the nerve center.’ ” OneWest Bank, N.A. v. Melina, 827 F.3d 214, 218 (2d Cir. 2016) (quoting Hertz Corp. v. Friend, 559 U.S. 77, 92–93 (2010)).

 

The citizenship of a limited liability company (“LLC”) is determined by the citizenship of each of its members. See, e.g., Bayerische Landesbank, New York Branch v. Aladdin Capital Management LLC, 692 F.3d 42, 49 (2d Cir. 2012); Handelsman v. Bedford Vill. Assocs. Ltd P’ship, 213 F.3d 48, 51–52 (2d Cir. 2000). “A complaint premised upon diversity of citizenship must allege the citizenship of natural persons who are members of a limited liability company and the place of incorporation and principal place of business of any corporate entities who are members of the limited liability company.” New Millennium Capital Partners, III, LLC v. Juniper Grp. Inc., 2010 WL 1257325, at *1 (S.D.N.Y. Mar. 26, 2010), (citing Handelsman, 213 F.3d at 51–52); Bishop v. Toys “R” Us-NY LLC, 414 F. Supp.2d 385, 389 n.1 (S.D.N.Y. 2006), aff’d, 385 Fed.Appx. 38 (2d Cir. 2010). If the member or members of a limited liability company are themselves a limited liability company, citizenship is determined by an upstream analysis of its members and structure. Bayerische, 692 F.3d at 49.

 

 

1. Diversity Jurisdiction and the Amended Complaint

*3 The first issue to be addressed is whether this Court has subject matter based on the current pleading, viz. the amended complaint. The allegations in that pleading as to the named parties are as follows:

1. At all times hereinafter mentioned, plaintiff is a resident of the State of New York, County of Suffolk.
2. At all times hereinafter mentioned, defendant JAF Carriers L.L.C. (“JAF”) is a foreign limited liability company, duly organized and existing under and by virtue of the laws of the State of Virginia.
3. At all times hereinafter mentioned, defendant JAF is a trucking company doing business in the State of New York
4. At all times hereinafter mentioned, upon information and belief, defendant JAF does business under Bagir Trucking.
5. At all times hereinafter mentioned, defendant C.H. Robinson Company Inc. is a foreign corporation, duly organized and existing under and by virtue of the laws of the State of Minnesota, authorized to do business and doing business in the State of New York.
6. At all times hereinafter mentioned, defendant C.H. Robinson Transportation Company is a foreign corporation, duly organized and existing under and by virtue of the laws of the State of Minnesota, authorized to do business and doing business in the State of New York.
7. At all times hereinafter mentioned, defendant C.H. Robinson Worldwide, Inc. is a foreign corporation, duly organized and existing under and by virtue of the laws of the State of Delaware, doing business in the State of New York.
8. At all times hereinafter mentioned, the C.H. Robinson defendants act as truck brokers.
9. At all times hereinafter mentioned, defendant Jose Caranza (“Caranza”) is also known as Jose Cruz was acting as an agent, servant, and/ or employee of defendant JAF in further of its business.
10. At all times hereinafter mentioned, defendant Caranza was acting as an agent, servant, and/ or employee of the C.H. Robinson defendants in furtherance of their business.
11. At all times hereinafter mentioned, defendant Jetro Cash and Carry Enterprise, LLC (“Jetro”) is a domestic limited liability company, duly organized and existing under and by virtue of the laws of the State of New York.
12. At all times hereinafter mentioned, defendant Jetro owned the premises known as 1349 132nd Street in College Point, New York.
13. At all times hereinafter mentioned, defendant Jetro operated the aforementioned premises.
14. At all times hereinafter mentioned, defendant Jetro maintained the aforementioned premises.
15. At all times hereinafter mentioned, defendant Jetro managed the aforementioned premises

Amended Complaint (DE 25) ¶¶ 1-15.

 

Even a cursory review of the above allegations reveals that they are facially insufficient to establish diversity subject matter jurisdiction. First, that plaintiff is a “resident” of New York does not constitute a sufficient allegation of her state of domicile. Avant Capital Partners, LLC v. W108 Dev. LLC, 2016 WL 366056 (S.D.N.Y. June 30, 2016); Davis, 2015 WL 1954491, at *2; Young-Gibson, 476 Fed.Appx. at 483. Second, lacking are allegations as to the principal place of business of all three of the Robinson defendants. See Carter, 882 F.3d at 60. Third, there is no allegation as to the domicile of Caranza. See Leveraged Leasing, 87 F.3d 44, 47 (“[D]iversity of citizenship should be distinctly and positively averred in the pleadings, or should appear with equal distinctness in other parts of the record [.]”). Lastly, as both JAF and Jetro are “LLC’s” the allegations with respect to where they are “duly organized and existing under” does not state their citizenship. New Millennium Capital Partners, 2010 WL 1257325, at *1.

 

*4 As the amended complaint was already filed, the above deficiencies require remand, as opposed to dismissal, see Rosenfeld, 2017 WL 945114, at *2, unless subject matter exists under the proposed (second) amended complaint. Accordingly, the Court now turns to that pleading.

 

 

III. Diversity Jurisdiction and the Proposed (Second) Amended Complaint.

The Proposed (Second) Amended Complaint (“PAC”) contains the following allegations regarding the parties:

1. At all times hereinafter mentioned, plaintiff is a resident of the State of New York, County of Suffolk.
2. At all times hereinafter mentioned, defendant JAF Carriers L.L.C. (“JAF”) is a foreign limited liability company, duly organized and existing under and by virtue of the laws of the State of Virginia.
3. At all times hereinafter mentioned, defendant JAF is a trucking company doing business in the State of New York.
4. At all times hereinafter mentioned, upon information and belief defendant JAF does business under Bagir Trucking.
5. At all times hereinafter mentioned, defendant C.H. Robinson Company Inc. is a foreign corporation, duly organized and existing under and by virtue of the laws of the State of Minnesota, authorized to do business and doing business in the State of New York.
6. At all times hereinafter mentioned, defendant C.H. Robinson Transportation Company is a foreign corporation, duly organized and existing under and by virtue of the laws of the State of Minnesota, authorized to do business and doing business in the State of New York.
7. At all times hereinafter mentioned, defendant C.H. Robinson Worldwide, Inc. is a foreign corporation, duly organized and existing under and by virtue of the laws of the State of Delaware, doing business in the State of New York.
8. At all times hereinafter mentioned, the C.H. Robinson defendants act as truck brokers.
9. At all times hereinafter mentioned, defendant Jose Caranza (“Caranza”) is also known as Jose Cruz was acting as an agent, servant, and/ or employee of defendant JAF in further of its business.
10. At all times hereinafter mentioned, defendant Caranza was acting as an agent, servant, and/ or employee of the C.H. Robinson defendants in furtherance of their business.
11. At all times hereinafter mentioned, defendant Jetro Cash and Carry Enterprise, LLC (“Jetro”) is a foreign corporation organized under the laws of Delaware with a principal place of business outside of New York within the meaning of 28 USC Section 1332.

Ex. U to Frowley Aff. (DE 65-21) ¶¶ 1-11.

 

A comparison of the allegations regarding the parties contained in the amended complaint to the allegations recited above readily reveals that the only difference relates to Jetro. Thus, the deficiencies noted with respect to Plaintiff, the Robinson Defendants, Caranza and JAF remain and thus remand remains appropriate.

 

Nonetheless, given that based on the allegations in the notice of removal3 plaintiff may well be able to cure these deficiencies, the Court will address the issue raised by the parties—the citizenship of Jetro for diversity purposes.

 

*5 Jetro maintains that diversity does not exist because it, like Plaintiff, is a citizen of New York. In support of its position, it submits the affidavit of Brian E. Emmert, an officer of Jetro and of JRD Unico, Inc. (“JRD Unico”). Emmert Aff. (DE 61-7) ¶ 1. According to that affidavit, (1) the sole member of Jetro is Jetro Holdings, LLC (“ Jetro Holdings”), a Delaware limited liability company; (2) the sole member of Jetro Holdings is JRD Holdings, LLC (“JRD Holdings”), another limited liability company; (3) the sole member of JRD Holdings is JRD Unico, which is a Delaware corporation; and (4) the principal place of business of Jetro “and all of the aforementioned entities is located in the State of New York at 15-24 132nd Street in College Point.” Id. at ¶ 2. It is further averred: “The decision making and coordination for all of the aforementioned Jetro entities takes place in the State of New York at the College Point location…. JRD Unico, Inc.’s officers direct, control and coordinate the corporation’s activities solely from the College Point headquarters at 15-24 132nd Street. The College Point, New York headquarters is the nerve center of JRD Unico, Inc.” Id. at ¶¶ 2,4.

 

Plaintiff’s response to the assertion that New York is the principal place of business of JRD Unico and therefore diversity jurisdiction does not exist is best exemplified by the following excerpt from her reply brief:

Although it has taken some “digging” to get to the bottom of the “nerve center” issue, counsel for Jetro’s suggestion that JRD Unico, Inc. is at the “top of the corporate structure” has led us to discover we were incorrect in some of our allegations on this motion but correct in the more essential ones. JRD Unico Inc. is not at the top of the corporate structure, as defense counsel for Jetro alleges. It is evidently just one of about 28 different companies, ten of which are active, including Restaurant Depot, LLC, Restaurant Depot Enterprises, LLC and Jetro Management and Development Corp. all of which are overseen by one Stanley Fleishman, as CEO (Exhibit “A”).

But all of these entities are either owned in whole or significant part and are controlled by a South African holding company called Kirsh Holdings (Exhibit “B”). Kirsh Holdings is owned and controlled by a South African billionaire named Nathan “Natie” Kirsh who at one time sold 80 percent of his business to the Swiss supermarket conglomerate Metro Holding, now called Grospart. But that company later sold its share back to him. So we were incorrect in our allegation that at the time of this occurrence the defendant Jetro was owned by Grospart. But, most respectfully, we were not incorrect in our allegation that Jetro is part of a large group of corporations whose nerve center is in a foreign country. The foreign country in this case is South Africa where Kirsh Holdings is located.

… Plaintiff is not claiming that diversity is based on the citizenship of Jetro’s corporate parent. Instead, it is plaintiff’s assertion based on the reality of the circumstances that Jetro’s “nerve center” for jurisdictional purposes is outside of New York. The fact that the entire Jetro organization is owned and inferentially controlled by a holding corporation overseas is substantial proof that Jetro’ s nerve center is not in Queens, New York, but in a foreign jurisdiction.

Frowley Reply Aff. (DE 66) at ¶¶ 4-6.

 

Putting aside that Plaintiff’s assertions regarding these other companies and their relationship to Jetro are supported by internet articles, the veracity of which cannot be verified, the citizenship of the shareholder of JRD Unico or where the shareholder is located is irrelevant to the citizenship of Jetro. The upstream analysis mandated by Bayerische does not go on ad infinitum. As the Circuit’s discussion makes clear, the analysis stops when there are no more entities whose citizenship is dependent on another entity. See 692 F.3d at 49 (“Defendant Aladdin is a limited liability company that takes the citizenship of each of its members. Defendant Aladdin has one member: ACH. ACH, [an LLC,] in turn, has ten members: four United States citizens who are domiciled in states of the United States and are thus citizens of those states; four companies with domestic places of incorporation and principal places of business; one limited partnership with its principal place of business and all three of its U.S.-citizen partners domiciled in Connecticut; and a company incorporated in Delaware with its principal place of business in Tokyo, Japan.”) (internal citations omitted).

 

*6 Nor do the materials submitted by Plaintiff support its assertion that JRD Unico’s principal place of business is “outside New York.” Jetro has properly supported its position that JRD Unico’s principal place of business is in New York. The evidence as to the locale, activities, and other corporate holdings of JRD Unico’s shareholder, in addition to being inadmissible hearsay, is not relevant in this case to JRD Unico’s principal place of business and ergo Jetro’s citizenship for diversity purposes. See OneWest Bank, N.A. v. Melina, 2015 WL 5098635, *2 (E.D.N.Y. Aug. 31, 2015) (“[T]he citizenship of any actual or proposed parent of OneWest does not control OneWest’s citizenship for purposes of diversity jurisdiction.”) (citing Frisone v. Pepsico, Inc., 369 F. Supp.2d 464, 472 (S.D.N.Y. 2005) (“As a general rule, a separately incorporated entity is … considered to have its own principal place of business.”) (internal quotation marks omitted); Charles Alan Wright et al., 13F Federal Practice & Procedure § 3625 (3d ed.) (“The general rule applied by the federal courts in numerous cases in this situation is that a subsidiary corporation has its own principal place of business for purposes of diversity of citizenship jurisdiction, unless it is merely an ‘alter ego’ or agent of the parent corporation.”)), aff’d, 827 F.3d 214 (2016).

 

 

CONCLUSION

For the reasons set forth above, the motions of defendants are granted to the extent that this case is remanded to the Supreme Court, Suffolk Court. Plaintiff’s motion to amend her complaint is denied.

 

SO ORDERED.

 

All Citations

Slip Copy, 2017 WL 1166364

 

 

Footnotes

1

While the state court complaint did not allege the citizenship of Caranza, the notice of removal identified him as a citizen of Virginia. After the action was removed, Plaintiff dismissed her claims against Caranza.

2

The Court notes that Jetro’s answer denies the allegation that it was organized under the laws of New York.

3

According to the notice of removal, Plaintiff is a citizen of New York, the principle places of business of all the Robinson Defendants is Minnesota and Caranza is a citizen of Virginia. [DE 1.]

 

 

 

United States District Court,

E.D. New York.

Robert PONDEXTER, Plaintiff,

v.

Morras ORUZIO, Paul Dave Lee, and Teal’s Express Inc., Defendants.

15-CV-5617 (CBA) (MDG)

|

Signed 03/20/2017

|

Filed 03/21/2017

Attorneys and Law Firms

Michael B. Palillo, Michael B. Palillo, P.C., New York, NY, for Plaintiff.

Matthew Libroia, Goldberg Segalla, Garden City, NY, Paul S. Devine, Goldberg Segalla LLP, Mineola, NY, for Defendants.

 

 

MEMORANDUM & ORDER

Carol Bagley Amon, United States District Judge

*1 On October 3, 2014, plaintiff Robert Pondexter filed a summons and complaint in the Supreme Court for the State of New York seeking monetary damages from defendants Carlos Orozco-Morras s/h/a Morras Oruzio (“Orozco-Morras”), Dave Seepaul s/h/a Paul Dave Lee (“Seepaul”), and Teal’s Express, Inc. (“Teal’s Express” or “Teal’s”) for personal injuries suffered as a result of an automobile accident.1 (D.E. # 1-2, (“Compl.”).) Defendants removed the case to federal court on September 29, 2015, on the basis of diversity jurisdiction. (D.E. # 1, (“Notice of Removal”).) On October 26, 2015, Pondexter filed a motion to remand the case to state court. (D.E. # 4, (“Mot. to Remand”).) For the following reasons, the Court concludes that Teal’s Express has not been properly joined and that, as a result, complete diversity exists among the parties. The Court therefore denies Pondexter’s motion to remand.

 

 

BACKGROUND

When determining subject matter jurisdiction, courts may “look outside the pleadings” to “documents appended to a notice of removal or a motion to remand that convey information essential to the court’s jurisdictional analysis.” Romano v. Kazacos, 609 F.3d 512, 520 (2d Cir. 2010) (citing Davenport v. Procter & Gamble Mfg. Co., 241 F.2d 511, 514 (2d Cir. 1957)). The following facts are therefore drawn from the documents attached to the notice of removal and the motion to remand in this case as well as the evidence presented in the parties’ supplemental filings.

 

The instant case arises from a complaint filed in the Supreme Court for the State of New York seeking monetary damages for “personal injuries allegedly suffered by Pondexter as a result of an automobile accident on August 26, 2013.” (Notice of Removal ¶ 5.) Pondexter is a resident of New York. (Id. ¶ 1.) Orozco-Morras and Seepaul are residents of New Jersey. (Id. ¶¶ 7-8.) Teal’s Express is incorporated in New York. (Id. ¶ 9.) Orozco-Morras works for a company named DT Trucking. DT Trucking was hired by Jake’s Cartage to carry out an order of Teal’s Express. Seepaul owns DT Trucking.

 

The complaint in this case alleges that Orozco-Morras was operating the truck involved in this accident and that Seepaul and Teal’s Express were Orozco-Morras’s employers and the registrant or owner of the truck. (Compl. ¶¶ 6-8.) Although Pondexter filed the summons and complaint in state court on October 3, 2014, (Notice of Removal ¶ 1), defendants were not served until October 15 or October 16, 2014, (id. ¶ 3).

 

On January 12, 2015, defendants answered the complaint in state court. (D.E. # 1-3.) In their answer, defendants asserted that Teal’s Express did not own the truck involved in the accident or employ the operator of the truck at the time of the accident and denied all allegations to the contrary. (Id. at 2, 4.) After attending a number of conferences and submitting discovery requests to Pondexter, (see D.E. # 4-2, (“Pallilo Decl.”) ¶¶ 10-13), on August 4, 2015, defendants mailed a letter to Pondexter’s counsel asserting that Teal’s Express “has no relation to the accident at issue,” which included an affidavit by Joseph Teal, Vice President of Teal’s Express, making representations to that effect, and a proposed stipulation of dismissal to that effect. (D.E. # 1-4.) Over one month later, on September 17, 2015, defendants mailed another letter to Pondexter’s counsel, this time indicating that they planned to remove the case to federal court unless Pondexter was “willing to stipulate that plaintiff is not seeking damages in excess of $75,000.” (D.E. # 1-5.) The defendants then filed a notice of removal in this Court on September 29, 2015, seeking to remove on the basis of diversity jurisdiction. (See Notice of Removal.)

 

*2 In their notice of removal, defendants argued that the Court has diversity jurisdiction over this case because the non-diverse defendant, Teal’s Express, is not properly joined. (Id. ¶ 9.) On October 26, 2015, Pondexter filed a motion to remand the case to state court. (Mot. to Remand.) The parties treated the motion to remand as an opposition to defendants’ notice of removal. (D.E. #5.) On February 11, 2016, the Court denied Pondexter’s motion to remand without prejudice and directed the parties to conduct limited discovery as to the Court’s subject matter jurisdiction. (D.E. dated February 11, 2016.) On August 18, 2016, after the parties completed the limited discovery and submitted renewed motion papers, (see D.E. # 12, 13), the Court directed the parties to file supplemental briefing in support of their respective positions. (D.E. dated August 18, 2016.) The parties subsequently submitted affidavits/declarations in support of their respective motion and opposition papers, in which they both presented facts from evidence uncovered in the course of the limited discovery. (See D.E. # 14 (“Defs. Aff.”); D.E. # 15 (“Pl. Aff.”).)

 

 

DISCUSSION

Defendants may remove an action to federal district court in “any civil action brought in a State court of which the district courts of the United States have original jurisdiction.” 28 U.S.C. § 1441(a). The district courts “have original jurisdiction of all civil actions where the matter in controversy exceeds the sum of $75,000, exclusive of interest and costs, and is between … citizens of different States.” 28 U.S.C. § 1332(a). The “right to remove a state court action to federal court on diversity grounds is statutory, and must therefore be invoked in strict conformity with statutory requirements.” Lupo v. Human Affairs Int’l, Inc., 28 F.3d 269, 274 (2d Cir. 1994) (citing Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108 (1941)).

 

One of the statutory requirements is that the defendants’ notice of removal must “contain[ ] a short and plain statement of the grounds for removal, together with a copy of all process, pleadings, and orders served upon [them].” 28 U.S.C. § 1446(a). “When a party removes a state court action to the federal court on the basis of diversity of citizenship, and the party seeking remand challenges the jurisdictional predicate for removal, the burden falls squarely upon the removing party to establish its right to a federal forum by ‘competent proof.’ ” R. G. Barry Corp. v. Mushroom Makers. Inc., 612 F.2d 651, 655 (2d Cir. 1979). The Court must therefore carefully consider whether defendants’ notice of removal has adequately established subject matter jurisdiction.

 

For the Court to have subject matter jurisdiction on the basis of 28 U.S.C. § 1332, diversity of citizenship jurisdiction, “complete diversity” is required, meaning that “all plaintiffs must be citizens of states diverse from those of all defendants.” Pa. Public School Employees’ Retirement System v. Morgan Stanley & Co., Inc., 772 F.3d 111, 117-18 (2d Cir. 2014) (citing Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 553 (2005)). Diversity jurisdiction also requires that the “matter in controversy exceeds the sum or value of $75,000.” 28 U.S.C. § 1332.

 

 

1. Complete Diversity

Pondexter argues that the Court should remand the case because the parties are not completely diverse. Pondexter is a citizen of New York. (Notice of Removal ¶ 6.) Although Orozco-Morras and Seepaul are citizens of New Jersey, Teal’s Express, a New York corporation with its principal place of business in Watertown, New York, is a citizen of New York. (Id. ¶¶ 7-9.) If Teal’s Express is properly joined, then the parties are not diverse and remand to the state court would be required. However, “[a] plaintiff may not defeat federal court diversity jurisdiction by improperly joining as a defendant a non-diverse party with no real connection to the controversy.” Bounds v. Pine Belt Mental Health Care Res., 593 F.3d 209, 215 (2d Cir. 2010). In fact, courts may “overlook the presence of a non-diverse defendant if from the pleadings there is no possibility that the claims against that defendant could be asserted in state court.” Briarpatch Ltd., L.P. v. Phoenix Pictures. Inc., 373 F.3d 296, 302 (2d Cir. 2004). “In order to show that naming a non-diverse defendant is a fraudulent joinder effected to defeat diversity, the defendant must demonstrate, by clear and convincing evidence, either that there has been outright fraud committed in the plaintiff’s pleadings, or that there is no possibility, based on the pleadings, that the plaintiff can state a cause of action against the non-diverse defendant in state court.” Pampillonia v. RJR Nabisco, Inc., 138 F.3d 459, 461 (2d Cir. 1998) (emphasis added). In analyzing fraudulent joinder, the Court is permitted to look beyond the pleadings to resolve the jurisdictional question. Bldg. & Const. Trades Council of Buffalo, N.Y. & Vicinity v. Downtown Dev., Inc., 448 F.3d 138, 150 (2d Cir. 2006).

 

*3 In their opposition letter, defendants claim that Teal’s Express has been fraudulently joined, and that its citizenship can therefore be ignored for purposes of diversity jurisdiction. They argue that Teal’s Express hired Jake’s Cartage solely as an independent contractor and thus Teal’s Express cannot be held liable for the actions of Jake’s Cartage or any of its own independent subcontractors. Defendants have presented evidence to support this claim. First, defendants offer affidavits from the Vice President of Teal’s Express and from Dave Seepaul, (D.E. # 1-4, (“Teal Aff.”); D.E. #6-1, (“Seepaul Aff.”)), in which both state that Teal’s Express did not own the truck involved in the accident and that Orozco-Morras was not employed by Teal’s Express at the time of the accident. (Teal Aff. ¶¶ 7-10; Seepaul Aff. ¶¶ 6-8.) Defendants also attach a certificate of title and vehicle registration showing that Seepaul was the owner of the truck involved in the accident. (D.E. # 6-1.) Additionally, along with their affidavit/declaration in support of their opposition, defendants included the transcript of the deposition of Joseph Teal—which was taken during the limited discovery—to support their arguments. Teal stated under oath that Teal’s Express does not exercise any control over the manner and method of shipment used by the drivers selected by Jake’s Cartage. (See D.E. # 14-1.) He further testified in his deposition that Teal’s is not involved in the process of selecting the driver or subcontracted trucking company and that Teal’s does not have the authority to stop Jake’s Cartage from using any particular trucking companies to carry out Teal’s Express’s orders. (Id. at 32.)

 

In response, Pondexter alleges that the defendants are “hiding” a relationship between Orozco-Morras, Seepaul, and Teal’s Express. In response to defendants’ argument that Teal’s did not own, operate, control, or manage any part of the delivery truck or the services rendered on the date of the incident, Pondexter argues that Teal’s Express “was still involved with the services being rendered on their behalf.” (Pl. Aff. ¶ 27.) In support, Pondexter asserts, inter alia, that Teal’s “was able [to] track the shipment and see whether it had been delivered” via a computer system that Teal’s shared with Jake’s Cartage and DT Trucking. (Id. at ¶ 28.) Pondexter also asserts that DT and Orozco-Morras were agents of Teal’s due to the utilization of Teal’s time keeping system to track Orozco-Morras’s hours. (Id. ¶ 41.) Finally, Pondexter asserts that if issues with the delivery arose, including the performance of DT, customers would contact Teal’s Express. (Id. ¶ 29.)

 

The ultimate determination as to whether Teal’s is a proper party rests on whether Orozco-Morras and/or DT Trucking were acting as independent contractors or employees/agents for Teal’s at the time of the incident. Under New York law, as a general rule, “a party who retains an independent contractor, as distinguished from a mere employee or servant, is not liable for the independent contractor’s negligent acts.” Kleeman v. Rheingold, 81 N.Y.2d 270, 273 (1993). “Control of the method and means by which the work is to be done … is the critical factor in determining whether one is an independent contractor or an employee for the purposes of tort liability.” Berger v. Dykstra, 610 N.Y.S.2d 401, 402 (1994).

 

Having reviewed the evidence presented by both parties, the Court finds that there is no possibility that a trier of fact could find that Teal’s exercised operation and control over DT Trucking or Orozco-Morras. Both Teal and Seepaul testified in affidavits that Teal’s Express does not own the truck involved in the accident and that the driver was not employed by Teal’s Express at the time of the accident. In fact, the certificate of title and vehicle registration presented to the Court shows that Seepaul was the owner of the truck involved in the accident. Teal also testified in his deposition that Teal’s Express does not exercise any control over the manner and method of shipment used by the drivers selected by Jake’s Cartage, nor is it involved in the process of selecting the driver or subcontracted trucking company. Plaintiffs offer no evidence to dispute these basic facts. Even though, as plaintiff argues, Teal’s express was able to track the shipment to determine whether it had been delivered via a computer system that Teal’s shared with Jake’s and DT, and even though Teal testified that if problems with shipments arose, customers would call Teal, none of this evidence demonstrates that Teal’s had any “control” over Jake’s or DT’s actions concerning the shipment. The evidence indicates that Teal’s Express hired Jake’s Cartage as a mere independent contractor and Teal’s therefore cannot be held liable for any actions of Jake’s Cartage or its independently hired agents. The Court thus finds that defendants have met their burden of demonstrating that there is no possibility that a claim can be stated against Teal’s Express, and thus, Teal’s Express has been fraudulently joined. As a result, complete diversity exists among the plaintiff and the defendants.

 

 

1. Amount in Controversy

*4 The Court finds that the defendants have made sufficient allegations in their notice of removal that the amount in controversy in the present action exceeds $75,000.00. Indeed, plaintiff fails to dispute the allegation that the amount in controversy exceeds that amount.

 

 

CONCLUSION

For these reasons, the Court holds that Teal’s Express has been fraudulently joined and thus complete diversity exists in the present action. The Court also finds that defendants have sufficiently alleged that the amount in controversy exceeds $75,000.00. Plaintiff’s motion to remand the action to state court is therefore denied.

 

SO ORDERED.

 

All Citations

Slip Copy, 2017 WL 1079974

 

 

Footnotes

1

 

Defendants state in their notice of removal that Morras Oruzio and Paul Dave Lee’s names are actually Carlos Orozco-Morras and Dave Seepaul, respectively. (D.E. # 1 ¶¶ 7-8.)