United States District Court, N.D. Alabama, Western Division
DAVID PROCTOR UNITED STATES DISTRICT JUDGE.
case is before the court on CP Home Care Vance, LLC's
Motion to Strike First Amended Complaint (Doc. # 6),
Plaintiff's Motion to Remand (Doc. # 20), and
Defendants' Motion to Strike Affidavit of Veronica
Wilkerson-Fountain (Doc. # 28). A Motion for Temporary
Restraining Order and Preliminary Injunction (Doc. # 1-1 at
p. 79), three Motions to Dismiss (Docs. # 7, 8, 22), and a
Motion to Strike Plaintiff's Jury Demand (Doc. # 11) are
also pending before the court. For the reasons outlined
below, the court concludes that this case is not properly
before this court and is due to be remanded.
February 2, 2018, Plaintiff Techota LLC
(“Plaintiff” or “Techota”) filed a
complaint in the Circuit Court of Tuscaloosa County, Alabama,
against CP Home Care Vance, LLC (“CP Home Care”),
Parcim U.S. (AL) LLC (“Pacrim AL”), and Parcim
U.S. L.L.C. (“Pacrim US” and collectively with
Pacrim AL, the “Pacrim Defendants”), alleging (1)
breach of contract, (2) rescissions for breach of contract,
(3) promissory fraud, (4) suppression, (5) rescission for
fraud, and (6) unjust enrichment. (Doc. # 1-1 at p. 3-13).
The Complaint also sought an injunction against CP Home Care.
(Id. at p. 12). On February 23, 2018, Techota filed
its First Amended Complaint which added Von Hales
(“Hales”) and Amory Scarbrough
(“Scarbrough”) as defendants in the action,
sought a second injunction, and added additional claims of
conversion and tortious interference with business and
contractual relations. (Id. at p. 55-71). The First
Amended Complaint alleges that, since the commencement of
this litigation, CP Home Care, Hales, and Scarbrough have
taken wanton and intentional acts to retaliate against
Plaintiff for filing this lawsuit. (Id. at p. 58).
On February 27, 2018, Plaintiff filed a Motion for Temporary
Restraining Order and Preliminary Injunction (Id. at
p. 79-82), a brief in support of the motion (Id. at
p. 83-98), and exhibits in support of the motion (Docs. 1-1
at p. 98- 204; 1-2; 1-3 at p. 1-37). On the same day,
Defendants CP Home Care, Pacrim AL, and Pacrim U.S. removed
this action to federal court. (Doc. # 1). The filings were
March 6, 2018, the flurry really began: CP Home Care filed a
Motion to Strike First Amended Complaint (Doc. # 6); the
Pacrim Defendants filed a Motion to Dismiss (Doc. # 7); CP
Home Care filed a Motion to Dismiss Count VII of
Plaintiff's Complaint (Doc. # 8); CP Home Care filed a
Counterclaim against Techota, Phyllis J. Robertson
(“Robertson”), Shannon Hendon
(“Hendon”), Veronica Wilkerson-Fountain
(“Wilkerson-Fountain”), and Jeff Bauer
(“Bauer” and collectively the “Counter
Defendants”) (Doc. # 9); and CP Home Care filed an
answer to Plaintiff's Complaint (Doc. # 10). On March 7,
2018, CP Home Care filed a Motion to Strike Plaintiff's
Jury Demand. (Doc. # 11).
case was reassigned to the undersigned on March 8, 2018.
(Doc. # 13). The court held a hearing on this case on March
12, 2018. (Doc. # 14). Following the March 12, 2018 hearing,
Plaintiff filed a Motion to Remand (Doc. # 20) on March 21,
2018, and a Motion to Dismiss Counterclaims (Doc. # 22) on
March 27, 2018. The Motion to Remand has been fully briefed.
(Docs. # 20, 21, 29, 31). On April 4, 2018, CP Home Care and
the Pacrim Defendants moved to strike the Affidavit of
Wilkerson-Fountain (Doc. # 21-1) from Plaintiff's Motion
to Remand. (Doc. # 28).
CP Home Care, Pacrim AL, and Pacrim U.S. removed this action
pursuant to 28 U.S.C. §§ 1332, 1441, and 1446.
(Doc. # 1 at p. 1). They allege that this case is properly
removed under § 1441 because this court has original
jurisdiction under § 1332(a). (Id. at
¶¶ 6-7). Section 1332(a) establishes federal
jurisdiction for diverse actions “where the matter in
controversy exceeds the sum or value of $75, 000.”
Count 1 of both the original Complaint and the First Amended
Complaint claim that CP Home Care breached a contract by
failing to make a payment of $674, 000. (Doc. # 1-1 at p. 4,
61). Therefore, the requisite amount-in-controversy for
diversity jurisdiction is met. See 28 U.S.C. §
based on diversity jurisdiction also requires “complete
diversity between all named plaintiffs and all named
defendants.” Lincoln Prop. Co. v. Roche, 546
U.S. 81, 84 (2005). Techota is an Alabama limited liability
company (“LLC”). (Doc. # 1-1 at p. 3, 55). An LLC
“is a citizen of any state of which a member of the
company is a citizen.” Rolling Greens MHP, L.P. v.
Comcast SCH Holdings L.L.C., 374 F.3d 1020, 1022 (11th
structure of the entities involved in this case is the stuff
from which corporate lawyers' dreams are made. Techota
has three members: Cahaba Valley Health Services, Inc.
(“Cahaba Valley”), Bibb County Health Care
Authority d/b/a Bibb Medical Center (“Bibb Medical
Center”), and Rubicon Research, Inc.
(“Rubicon”). (Doc. # 1 at ¶ 10). Cahaba
Valley and Bibb Medical Center are both citizens of Alabama,
and Rubicon is a citizen of Tennessee. (Id. at
¶¶ 11-15). Accordingly, Plaintiff is a citizen of
both Alabama and Tennessee. See Rolling Greens MHP,
L.P., 374 F.3d at 1022.
CP Home Care, Pacrim AL, and Pacrim U.S. are all LLCs.
(Id. at ¶ 16). Pacrim U.S. is the sole member
of Pacrim AL. (Id. at ¶ 17). Pacrim U.S. and CP
Home Care have the same single member, CP Holdings LLC.
(Id. at ¶ 18). The sole member of CP Holdings
LLC is PCII Holding LLC, and Pacrim Capital International
Inc. is the only member of PCII Holdings LLC. (Id.
at ¶¶ 19-20). Pacrim Capital International Inc. is
a Bahamian corporation with a principal place of business in
Hong Kong; therefore, Defendants CP Home Care, Pacrim AL, and
Pacrim U.S. are all citizens of foreign states. (Id.
at ¶¶ 22-23). (Note: This is not a third-year
Federal Jurisdiction final exam).
Hales and Defendant Scarbrough are both citizens of Alabama
and employees of CP Home Care. (Doc. # 1-1 at p. 56). Hales
is the Administrator for CP Home Care. (Id.).
Scarbrough is a Supply Coordinator for CP Home Care.
Defendants Robertson, Hendon, Wilkerson-Fountain, and Bauer
are all former employees of CP Home Care, whose employments
were terminated on February 7, 2018. (Doc. # 9 at
¶¶ 3-6). Robertson, Hendon, and Bauer own Rubicon
and are all citizens of Tennessee. (Id. at
¶¶ 2, 3-5). Wilkerson-Fountain is a citizen of
Alabama. (Id. at ¶ 6).
Motion to Remand Standard of Review
long been recognized that federal courts are courts of
limited jurisdiction. Burns v. Windsor Ins. Co., 31
F.3d 1092, 1095 (11th Cir. 1994). Indeed, federal courts may
only exercise jurisdiction conferred upon them by Congress.
Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716
(1996). Anytime a “federal court acts outside its
statutory subject matter jurisdiction, it violates the
fundamental constitutional precept of limited federal
power.” Univ. of S. Ala. v. Am. Tobacco Co.,
168 F.3d 405, 409 (11th Cir. 1999) (quoting Victory
Carriers, Inc. v. Law, 404 U.S. 202, 212 (1971)).
any action filed in state court, over which a district court
would have original jurisdiction, “may be removed by
the defendant or defendants, to the district court of the
United States for the district and division embracing the
place where such action is pending.” 28 U.S.C. §
1441(a). The burden of establishing subject matter
jurisdiction for the purpose of a valid removal to this court
is squarely on the removing party. Friedman v. N.Y. Life
Ins. Co., 410 F.3d 1350, 1353 (11th Cir. 2005). Federal
courts strictly construe removal statutes and resolve all
doubts in favor of remand. Miedema v. Maytag Corp.,
450 F.3d 1322, 1328-30 (11th Cir. 2006).
face of the First Amended Complaint, diversity jurisdiction
does not exist here because Plaintiff Techota, Defendant
Hales, and Defendant Scarbrough are all Alabama citizens.
This destroys complete diversity. See Lincoln Prop.
Co., 546 U.S. at 84. CP Home Care and the Pacrim
Defendants argue that the citizenships of Hales and
Scarbrough should be ignored for the purpose of evaluating
complete diversity because (1) First Amended Complaint has no
legal effect and (2) Hales and Scarbrough were fraudulently
joined to this action. (Doc. # 1 at ¶ 25). The court
explores each of these arguments, in turn.
Contrary to Defendants' Position, the First Amended