United States District Court, M.D. Alabama, Northern Division
MEMORANDUM OPINION AND ORDER
EMILY
C. MARKS, CHIEF UNITED STATES DISTRICT JUDGE.
Plaintiff
First Community Bank of Central Alabama filed a Complaint in
the Circuit Court of Autauga County, Alabama, on August 24,
2017. (Doc. 1-1). The Complaint alleged claims against
Defendants George P. Walthall, Jr., the Internal Revenue
Service (the “IRS”), and three parcels of land in
Autauga County (the “Property”). The Complaint
sought a judicial foreclosure as to the Property, alleged
breach of a promissory note and unjust enrichment against
Defendant Walthall, and two counts seeking a declaration of
quiet title to the Property free from any IRS liens. On
January 23, 2018, the IRS answered the Complaint in the state
court. (Doc. 1-2). On April 9, 2018, the IRS filed a motion
for summary judgment in the state court. On April 26, 2018,
Plaintiff moved for leave to file an Amended Complaint in the
state court “substituting the United States as a party
Defendant in the place of the Internal Revenue
Service.” (Doc. 1-4 at 1). The state court granted
Plaintiff's motion to amend the complaint on April 29,
2018. (Doc. 1-5 at 41). On May 10, 2018, the United States
removed this action to this Court pursuant to 28 U.S.C.
§§ 1442(a)(1) and 1444. (Doc. 1). This matter comes
before the Court on Plaintiffs' Motion to Remand. (Doc.
4). This matter has been fully briefed and taken under
submission.
Federal
courts are courts of limited jurisdiction. Kokkonen v.
Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994);
see also Burns v. Windsor Ins. Co., 31 F.3d 1092,
1095 (11th Cir. 1994). A federal district court is
“‘empowered to hear only those cases within the
judicial power of the United States as defined by Article III
of the Constitution,' and which have been entrusted to
them by a jurisdictional grant authorized by Congress.”
Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405,
409 (11th Cir. 1999) (quoting Taylor v. Appleton, 30
F.3d 1365, 1367 (11th Cir. 1994)). Therefore, a federal court
is obligated to inquire into subject matter jurisdiction
“at the earliest possible stage in the
proceedings.” Id. at 410. “It is to be
presumed that a cause lies outside this limited jurisdiction,
and the burden of establishing the contrary rests upon the
party asserting jurisdiction.” Kokkonen, 511
U.S. at 377. Moreover, “[c]ourts have an independent
obligation to determine whether subject-matter jurisdiction
exists, even when no party challenges it.” Hertz
Corp. v. Friend, 559 U.S. 77, 94 (2010).
Defendant
United States removed the action to this Court pursuant to 28
U.S.C. §§ 1442(a)(1) and 1444, stating that
“[t]he United States Attorney's Office first
received a copy of the amended complaint on 26 April 2018,
and this removal is timely under 28 U.S.C. § U.S.C.
1446(b)(1).” (Doc. 1 at ¶ 3). Federal court
removal is governed by 28 U.S.C. § 1441(a), which
provides in pertinent part that “[a] civil action
… that is commenced in a State court and that is
against or directed to any of the following may be removed by
them to the district court of the United States for the
district and division embracing the place wherein it is
pending: (1) The United States or any agency
thereof….” Removal statutes are to be strictly
construed against removal. Shamrock Oil & Gas Corp.
v. Sheets, 313 U.S. 100, 108 (1941); Burns v.
Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994)
(“[R]emoval statutes are construed narrowly; when the
parties dispute jurisdiction, uncertainties are resolved in
favor of remand.”). The removing party has the burden
of proving that federal jurisdiction exists by a
preponderance of the evidence, and the removing party must
present facts establishing its right to remove. Williams
v. Best Buy Company, Inc., 269 F.3d 1316, 1319 (11th
Cir. 2001). When the defendant fails to do so, the case must
be remanded. Williams, 269 F.3d at 1321.
A
defendant desiring to remove a civil action must file a
notice of removal, together with all process, pleadings, and
orders served upon the defendant in the appropriate United
States District Court. 28 U.S.C. § 1446. The federal
removal statute sets forth the proper procedure for removal
of state actions to federal court and provides in relevant
part:
The notice of removal of a civil action or proceeding shall
be filed within 30 days after the receipt by the defendant,
through service or otherwise, of a copy of the initial
pleading setting forth the claim for relief upon which such
action or proceeding is based, or within 30 days after the
service of summons upon the defendant if such initial
pleading has then been filed in court and is not required to
be served on the defendant, whichever period is shorter.
28 U.S.C. § 1446(b)(1).
The
Eleventh Circuit has clarified the requirements of this
statutory provision:
Under the second paragraph, a case becomes removable when
three conditions are present: there must be (1) an amended
pleading, motion, order or other paper, which (2) the
defendant must have received from the plaintiff (or from the
court, if the document is an order), and from which (3) the
defendant can first ascertain that federal jurisdiction
exists.
Lowery v. Ala. Power Co., 483 F.3d 1184, 1215 n. 63
(11th Cir. 2007)(citations and quotation marks omitted).
According to the Lowery court, “the documents
received by the defendant must contain an unambiguous
statement that clearly establishes federal
jurisdiction.” Id. (citations omitted).
The
parties do not dispute that as an action brought under 28
U.S.C. § 2410 in which Plaintiff seeks quiet title to
real property on which the United States has or claims a
lien, this case is otherwise removable to this Court pursuant
to § 1444. Rather, the issue before this Court on
Plaintiff's motion to remand is whether this motion was
removed within the statutorily mandated time based on the
service to and participation of the United States as a party
in the state court action.
Plaintiff
filed its original Complaint in state court on August 24,
2017, naming the IRS as a Defendant, specifically stating
that the “Internal Revenue Service (hereinafter
referred to as ‘IRS') is a United States
agency.” (Doc. 1-1 at ¶ 3). A civil summons in the
state court action was served by certified mail upon the
“US Attorney Middle District of Alabama, Clark Morris
131 Clayton Street, Montgomery, AL 36104.” (Doc. 1-5 at
2). The United States Attorney entered an appearance on
behalf of the IRS on September 27, 2018, and that same day
filed a motion to dismiss, arguing that “the IRS is not
a proper party defendant in a suit under § 2410, and
First Community's claims against the IRS, as opposed to
the United States itself, should be dismissed on sovereign
immunity grounds.” (Doc. 1-5 at ¶ 9). The state
court set a hearing for January 9, 2018 on the IRS's
motion to dismiss. Id. at 17. On January 9, 2018,
the state court entered an order stating that “Motion
to Dismiss is denied as no defendant or representative
appearing.” Id. at 18. The IRS filed its
Answer to the state court Complaint on January 23, 2018.
Id. at 19- 24. The state court scheduled the matter
for trial on May 29, 2018. Id. at 26. The IRS filed
a motion for summary judgment in the state court on April 9,
2018, again arguing that the claims against the IRS, as
opposed to the United States, should be dismissed on the
grounds of sovereign immunity. Id. at 31. On April
26, 2018, Plaintiff moved the state court for leave to amend
its Complaint “to substitute the United States of
America on behalf of the Internal Revenue Service for the
Internal Revenue Service as a party Defendant, ” which
the state court granted on April 29, 2018. Id. at
38, 41.
Plaintiff's
argument is that “[t]he U.S. could have removed the
action at the time of its original filing. Stated
differently, although the U.S. rather than the IRS is the
proper party, a misnomer does not preclude removal under 28
U.S.C. § 1444.” (Doc. 5 at 9). Plaintiff further
argues that “the U.S. manifested an intent to litigate
in the state court by filing a general notice of appearance,
foregoing its right to intervene, filing a Motion to Dismiss
and a Motion for Summary Judgment before it sought to remove
the case.” Id. at 4. The United States argues
in response that its removal was timely because it was filed
on “May 10, 2018, well within 30 days of receipt of the
amended complaint first naming it as a
defendant…” (Doc. 10 at ¶ 3). Specifically,
the United States argues that the 30-day removal ...