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ORLICK v. J.D. CARTON & SON INC.

May 2, 2001

HARVEY ORLICK AND EVELINE ORLICK, PLAINTIFFS,
v.
J.D. CARTON & SON, INC. AND ALLIED VAN LINES OPINION DEFENDANTS.



The opinion of the court was delivered by: Joseph A. Greenaway, Jr., U.S. District Judge.

  OPINION

This matter comes before the Court on the motion of Plaintiffs Harvey and Eveline Orlick ("Plaintiffs") to remand this action to the Superior Court of New Jersey, Law Division, Morris County, pursuant to 28 U.S.C. § 1447 (c) (West 2000). Plaintiffs also seek reasonable attorneys' fees, pursuant to 28 U.S.C. § 1447 (c), for costs incurred because of this motion to remand. Defendants oppose the motion to remand. This Court referred the instant matter to the Honorable G. Donald Haneke, U.S.M.J., for an appropriate Report and Recommendation. Magistrate Judge Haneke issued a Report and Recommendation, pursuant to L. Civ. R. 72.1(a)(2) and Fed. R. Civ. P. 72(b). In his Report and Recommendation, Magistrate Judge Haneke recommended that this Court grant Plaintiffs' motion, but deny an award of attorneys' fees. Defendants timely filed objections to Magistrate Judge Haneke's Report and Recommendation.

A motion to remand, pursuant to 28 U.S.C. § 1447 (c), is a dispositive motion. In re U.S. Healthcare, 159 F.3d 142, 146 (3d Cir. 1998). As such, Magistrate Judge Haneke's Report and Recommendation is reviewed de novo. In re U.S. Healthcare, 159 F.3d at 145-56; Temptations, Inc. v. Wager, 26 F. Supp.2d 740, 743 (D.N.J. 1998). For the reasons set forth below, this Court does not adopt Magistrate Judge Haneke's Report and Recommendation as the opinion of the Court. Further, Plaintiffs motion to remand is DENIED.

Background

Plaintiffs hired defendants, J.D. Carton & Son, Inc. ("Carton") and Allied Van Lines ("Allied"), to transport their belongings from New Jersey to Florida. Plaintiffs purchased an "Extra Protection Plan" from Defendants.*fn1 Plaintiffs assert that goods were missing from the shipment and that Defendants fraudulently inserted "X's" into certain areas of the bills of lading, thereby falsely indicating Plaintiffs' receipt and acceptance of their belongings when no such acceptance took place.

Plaintiffs filed a complaint against Defendants Carton and Allied on May 22, 2000, seeking damages for breach of contract, common law fraud, and fraud in violation of the New Jersey Consumer Fraud Act, N.J. STAT. ANN. §§ 56:8-1 to 8-106 (West 2000), slander of credit, and punitive damages. On July 18, 2000, Defendant Allied, in a petition to which Defendant Carton consented, filed a notice of removal ("Notice") with the United States District Court, District of New Jersey, alleging that removal was appropriate because Plaintiffs' complaint arose under federal law, pursuant to 28 U.S.C. § 1331.

Plaintiffs now assert that the Notice was defective for two reasons. First, Plaintiffs explain that Defendant Carton was served on June 6, 2000, but at no time within thirty days thereafter did Defendant Carton file a Notice. Therefore, Defendant Carton could not consent to Defendant Allied removing to federal court. Second, Plaintiffs assert that Defendants' Notice is invalid because none of Plaintiffs' allegations "arise under" federal law, as that term is understood by statutory law. Defendants respond that the Notice is valid because Defendant Allied filed its Notice within 30 days of proper service upon Defendant Allied. Allied further argues that the Notice is valid because Plaintiffs' claims are completely preempted by the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706 (West 2000).*fn2

Discussion

I. The Process of Removal Pursuant to 28 U.S.C. § 1446

Pursuant to 28 U.S.C. § 1441 (a), "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." City of Chicago v. Int'l Coll. of Surgeons, 522 U.S. 156, 163-64 (1997). A defendant seeking removal of an action initiated in a state court must file a notice of removal with the district court within thirty days of service of the complaint upon the defendant. 28 U.S.C. § 1446 (b); Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 352-53 (1999); Foster v. Mut. Fire, Marine & Inland Ins. Co., 986 F.2d 48, 53 (3d Cir. 1992).

If a claim is removed improperly, due to lack of subject matter jurisdiction, the matter must be remanded to state court. 28 U.S.C. § 1447 (c); City of Chicago 522 U.S. at 163-64. Upon issuing an order remanding a case due to lack of subject matter jurisdiction, a district court may require payment of reasonable costs, including attorneys' fees, incurred as a result of the removal. 28 U.S.C. § 1447 (c). A removing party bears the burden of establishing that federal jurisdiction exists and that the case should not be remanded. Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990). Further, the removal statutes "are to be strictly construed against removal and all doubts should be resolved in favor of remand." Id.

In 1999, the Supreme Court clarified the time within which a Defendant named in a state court action may seek removal to federal court. Murphy Bros., 526 U.S. at 347. In Murphy Brothers, plaintiff filed suit against defendant in state court. Three days later, plaintiff faxed a "courtesy copy" of the file-stamped complaint to the defendant. Id. at 348. Seventeen days later, plaintiff properly served defendant. Thirty days after proper service, and forty-four days after receiving the courtesy copy of the complaint, defendant removed the case to federal court. Id. Plaintiff moved to remand the case to state court, asserting that defendant's removal was untimely. Plaintiff argued that defendant's thirty-day removal period commenced on the day that plaintiff faxed a copy of the complaint to defendant. The district court denied plaintiffs motion to remand and the Eleventh Circuit reversed. Michetti Pipe Stringing, Inc. v. Murphy Bros., Inc., 125 F.3d 1396 (11th Cir. 1997). The Supreme Court granted certiorari. 525 U.S. 960 (1998).

In reversing the Eleventh Circuit, the Supreme Court observed that "service of process is fundamental to any procedural imposition on a named defendant." Murphy Bros., 526 U.S. at 350. The Court explained that the absence of service of process prevents a court from exercising power over a party named as a defendant in a complaint. Only after a plaintiff has rendered proper service is a defending party obligated to take action. Id. Mindful of this premise, the Court explained that Congress amended the removal statute several times. Rather than allowing removal at "any time prior to the expiration of [his or] her time to respond to the complaint under state law," the 1948 amendment to the removal statute allowed a defendant to seek removal within twenty-eight days after commencement of the action. Id. The 1949 amendment to the removal statute allowed a defendant to seek removal within twenty-eight days of receiving a copy of the "initial pleading setting forth the claim for relief upon which such action or proceeding is based." Id.*fn3 The Court concluded that in light of the language of the removal statute and the premise that only proper service of process obligates a party to engage in litigation, "a defendant's time to remove is triggered by simultaneous service of the summons and complaint" upon a named defendant. Id. at 347-48. Notably, the Third Circuit reached a similar conclusion six years before the Supreme Court's decision in Murphy Brothers. Foster, 986 F.2d at 53.

II. The Circuit Split on the Question of Removal with Multiple ...

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