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Pathmanathan v. Jackson National Life Insurance Co.

United States District Court, M.D. Alabama, Eastern Division

July 30, 2015

SIVA PATHMANATHAN, M.D., Plaintiff,
v.
JACKSON NATIONAL LIFE INSURANCE COMPANY, et al., Defendants.

MEMORANDUM OPINION AND ORDER

W. HAROLD ALBRITTON, Senior District Judge.

I. Introduction

This cause is before the court on Plaintiff Siva Pathmanathan, M.D.'s ("Plaintiff") Motion to Remand (Doc. # 7). Also before the court are Defendant Jackson National Life Insurance Company's ("Jackson National") Response to the Motion (Doc. # 9) and the Plaintiff's Reply thereto (Doc. # 11). On July 14, 2015, Defendant Lonnie Correll d/b/a Lonnie Correll Insurance Agency ("Lonnie Correll") joined in the Plaintiff's motion by filing its own Motion to Remand (Doc. # 10).

The Plaintiff contends that remand is proper because some of the later-served Defendants in this case are citizens of Alabama, and their residency in this forum requires remand pursuant to 28 U.S.C. § 1441(b). Jackson National responds that because the resident Defendants were served after removal, § 1441(b), by its plain language, does not require remand and removal remains proper. For the reasons to be discussed below, the Motions to Remand are due to be DENIED.

II. Motion to Remand Standard

Federal courts are courts of limited jurisdiction. See Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (1994); Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (1994); Wymbs v. Republican State Exec. Comm., 719 F.2d 1072, 1076 (11th Cir. 1983), cert. denied, 465 U.S. 1103 (1984). As such, federal courts only have the power to hear cases that they have been authorized to hear by the Constitution or the Congress of the United States. See Kokkonen, 511 U.S. at 377. Because federal court jurisdiction is limited, the Eleventh Circuit favors remand of removed cases where federal jurisdiction is not absolutely clear. See Burns, 31 F.3d at 1095.

Because this case was originally filed in state court and removed to federal court, Jackson National bears the burden of proving that federal jurisdiction exists. Williams v. Best Buy Co., Inc., 269 F.3d 1316, 1319 (11th Cir. 2001).

III. Facts and Procedural Background

This action was first filed in the Circuit Court of Tallapoosa County, Alabama on January 17, 2015. The original Complaint alleged breach of contract on an insurance policy. The Plaintiff has amended the state court complaint a total of five times. Jackson National has alleged that it filed its Notice of Removal within thirty days of the Third Amended Complaint, which claimed damages for mental and emotional distress and for punitive damages for the first time. Jackson National contends that it was the request for these damages that put it on notice that the amount in controversy in the case exceeds $75, 000. The Plaintiff has not challenged the timeliness of removal.

Plaintiff's Motion to Remand is based upon the presence of forum Defendants in this case. Plaintiff's Fourth and Fifth Amended Complaints allege that Defendants Dark Insurance Agency, Inc. ("Dark Insurance Agency") and Lonnie Correll are both domestic corporations in Alabama. The Plaintiff concedes in the Motion to Remand that Lonnie Correll was served after removal. ( See Doc. # 7 at 1 ("[R]emoval was done before service could be perfected on... Lonnie Correll Insurance Agency.")). The Plaintiff has not stated whether Dark Insurance Agency has been properly served, but Jackson National alleges that Dark Insurance Agency had also not been served when it filed its Notice of Removal.

IV. Discussion

A. The "Forum Defendant Rule"

Federal diversity jurisdiction exists when the parties have complete diversity of citizenship and the amount in controversy exceeds $75, 000. 28 U.S.C. § 1332(a). In addition, under § 1441(b) a federal court may not exercise diversity jurisdiction if one or more defendants are citizens of the state where the action is brought. Specifically, the statute states that an action may not be removed on the basis of diversity jurisdiction "if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought." 28 U.S.C. § 1441(b)(2) (emphasis added). The Eleventh Circuit has noted that this "forum defendant rule" is a procedural requirement that can be waived. See Pacheco de Perez v. AT&T Co., 139 F.3d 1368, 1372 n.4 (11th Cir. 1998).

The issue in this case is whether the failure of the Plaintiff to serve either of the Alabama citizen Defendants[1] before the case was ...


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