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Sea Greens Holdings, LLC v. Angera

United States District Court, D. Connecticut

April 11, 2018

ANDREA A. ANGERA, JR., Defendant.


          Michael P. Shea, U.S.D.J.

         Plaintiff Sea Green Holdings, LLC (“Sea Green”) brought this suit against the defendants-Andrea A. Angera, Jr.; Tikal Consulting Company, LLC (“Tikal”); Maine Seaweed Exchange, LLC (“Maine Seaweed”); and Springtide Seaweed, LLC (“Springtide Seaweed”)- for various causes of action related to the defendants' purported breach of contract and misappropriation of the plaintiff's trade secrets. (See ECF No. 1-1.) Defendant Angera, Jr. removed the case to this Court, citing diversity jurisdiction and “ancillary and/or supplemental jurisdiction.” (ECF No. 1 at 3.) I issued an order to show cause shortly thereafter identifying “various defects” in the notice of removal. (ECF No. 5 at 1.) In particular, I noted that Defendant Angera, Jr. had failed to: (1) file a statement noting the citizenship of each member of the defendant limited liability companies (“LLCs”) so that the Court could determine if diversity existed in this case; (2) file a notice of pending motions; (3) establish complete diversity; (4) establish the existence of supplemental jurisdiction in this matter; and (5) establish the consent of his corporate co-defendants to removal. (ECF No. 5 (“February 16 Order”) at 5.)

         Defendant Angera, Jr. responded to the February 16 Order by filing several items on the docket. The first of these documents sets out the dates on which the defendants were served in the state court action, lists the citizenship of the members of the LLCs (along with the citizenship of the plaintiff LLC's members), and notes that “[a]ll Defendants have joined or consented to the removal of this action.” (ECF No. 9 (“Notice”).)[1] The second document posted by the defendant consisted of a notice of pending motions in state court averring that the “removing party had not been served [at the time the notice of removal was filed] and knows of no pending motions that require action by a Judge of this court.” (ECF No. 10.) Finally, Defendant Angera, Jr. posted a formal response to the Court's order to show cause contending that diversity jurisdiction and supplemental jurisdiction exist in this case and that he had the power to consent to removal on behalf of his corporate co-defendants. (ECF No. 12 at 1-3.)

         Before me now is the plaintiff's motion to remand the case back to state court and for costs and attorney's fees. (ECF No. 13.) For the reasons set forth below, the plaintiff's motion is granted. I remand this case to Connecticut Superior Court and award the plaintiff its costs and attorney's fees.

         I. Discussion

         a. Removal

         Defendant Angera, Jr. defends his removal of this matter on three bases. First, he contends that diversity jurisdiction exists in this case. (ECF No. 16 at 2.) Second, he argues that the Court possesses jurisdiction over this matter on the basis of his “Constitutional right to a federal forum.” (Id. at 1-2.) Third, he argues that the Court possesses ancillary jurisdiction and supplemental jurisdiction over this case because it “is grounded in the same core of operative facts” as another matter before the Court. (Id. at 1.) I address each of these proposed bases for jurisdiction in turn.

         i. Diversity Jurisdiction

         “In evaluating the propriety of a removal, courts start with the baseline principle that federal courts are courts of limited jurisdiction.” Veneruso v. Mount Vernon Neighborhood Health Center, 933 F.Supp.2d 613, 618 (S.D.N.Y. 2013). Thus, “removal jurisdiction exists in a given case only when that jurisdiction is expressly conferred on the courts by Congress.” Id. (internal quotation marks omitted). Under “28 U.S.C. § 1441, a civil action filed in state court may be removed by the defendant to federal district court if the district court has original subject matter jurisdiction over the plaintiff's claim.” Lupo v. Human Affairs Intern., Inc., 28 F.3d 269, 271 (2d Cir. 1994); see also 28 U.S.C. § 1441(a) (“Except as otherwise expressly provided by Act of Congress, any 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.”).

         “Federal courts have original jurisdiction over civil actions” in which diversity jurisdiction exists. MBIA Ins. Corp. v. Royal Bank of Canada, 706 F.Supp.2d 380, 385 (S.D.N.Y. 2009). Diversity jurisdiction “exists over ‘civil actions where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, and is between . . . citizens of different States.” Hallingby v. Hallingby, 574 F.3d 51, 56 (2d Cir. 2009) (quoting 28 U.S.C. § 1332(a)(1)). “Citizens of different States means that there must be complete diversity, i.e., that each plaintiff's citizenship must be different from the citizenship of each defendant.” Id. (internal quotation marks omitted). In determining whether complete diversity exists between LLC parties, courts look to the membership of each member of the LLCs. See Carden v. Arkoma Associates, 494 U.S. 185, 195 (1990) (“In sum, we reject the contention that to determine, for diversity purposes, the citizenship of an artificial entity, the court may consult the citizenship of less than all of the entity's members. We adhere to our oft-repeated rule that diversity jurisdiction in a suit by or against the entity depends on the citizenship of all the members. . . .” (internal quotation marks omitted)); Handelsman v. Bedford Vill. Assocs. Ltd. P'ship, 213 F.3d 48, 51-52 (2d Cir. 2000) (looking to citizenship of members of LLC parties to determine whether complete diversity existed).

         Although there are several reasons to doubt whether diversity jurisdiction exists in this case, Defendant Angera, Jr.'s own representations about the citizenship of the parties demonstrate the absence of complete diversity.[2] His Notice states that defendants Springtide Seaweed and Maine Seaweed Exchange both have Maine members. (See Notice at 1.) The Notice also states that plaintiff Sea Green Holdings “has upon information and belief, two California members, a Connecticut member, and a Maine [m]ember.” (Id. (emphasis added).) Complete diversity therefore does not exist between all members of the defendant LLCs and all members of the plaintiff LLC. As such, diversity jurisdiction does not exist in this case.[3] See Carden, 494 U.S. at 195.

         ii. Jurisdiction Based on “Right to a Federal Forum”

         Defendant Angera, Jr.'s argument that the Court possesses jurisdiction over this matter on the basis of his “Constitutional right to a federal forum” (ECF No. 16 at 1-2) also lacks merit. He contends that the “[p]laintiff filed the action being removed naming what it believes to be non-diverse parties to improperly harass and harm Defendants, and deprive Petitioner of his Constitutional right to a federal forum.” (Id. at 2.) In support of this contention, he cites the Supreme Court's decision in Terral v. Burke Const. Co., 257 U.S. 529 (1922). (See id.) Terral provides that “a state may not, in imposing conditions upon the privilege of a foreign corporation's doing business in the state, exact from it a waiver of the exercise of its constitutional right to resort to the federal courts, or thereafter withdraw the privilege of doing business because of its exercise of such right, whether waived in advance or not.” Id. at 532. This principle has little application to the present situation, which does not concern conditions imposed by state law but, rather, the bases for removal under federal law, 28 U.S.C. § 1441.

         iii. Ancillary and ...

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