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Mitnick v. Mark Foods, Inc.

United States District Court, D. New Jersey

April 30, 2018

STEVEN MITNICK, as assignee for the benefit of creditors of A.E. Seafood Distributions, Inc. d/b/a Oceanline Seafood, Plaintiff,
v.
MARK FOODS, INC., NORTHERN WIND, INC., OCEAN EDGE FOODS, OCEAN GARDEN PRODUCTS, INC., PRIME SEAFOOD IMPORTS, ROYAL HUNAN SEAFOOD CORP., SEA LION INTERNATIONAL, INC., and SEAQUEST SEAFOOD CORP., Defendants.

          REPORT AND RECOMMENDATION

          LEDA DUNN WETTRE, UNITED STATES MAGISTRATE JUDGE

         Before the Court is plaintiffs motion to remand this matter to the Superior Court of New Jersey pursuant to 28 U.S.C. §§ 1446 and 1447 and for attorney's fees. ECF No. 6. Defendants oppose the motion. ECF No. 9. United States District Susan D. Wigenton referred this motion to the undersigned for a Report and Recommendation. This matter has been decided without oral argument pursuant to Federal Rule of Civil Procedure 78. Having considered the parties' submissions, for the reasons set forth herein, this Court recommends that the motion to remand be GRANTED.

         I. BACKGROUND

         Plaintiffbrings this action in his capacity as Assignee for the Benefit of Creditors of A.E. Seafood Distributors, Inc. d/b/a Oceanline Seafood ("Oceanline Seafood") pursuant to N.J.S.A.

         § 2A:19-3 to recover allegedly preferential transfers. Plaintiff was designated Assignee for the Benefit of Creditors of Oceanline Seafood by execution of a Deed of Assignment on May 12, 2017. ECF No. 2-1 ¶ 1. Pursuant to N.J. S. A. § 2A: 19-3, any preferential transfer of property from an insolvent person within four months of that person making a general assignment shall be void. The Complaint alleges Oceanline Seafood made a number of payments to defendants in this matter within the four months prior to filing the Deed of Assignment, with the intent to prefer those creditors. Plaintiff, therefore, seeks relief to avoid the conveyance of those transfers and an entry of judgment in favor of the Assignee against the defendants.

         Plaintiff filed this action in the Superior Court of New Jersey, Law Division, Union County, in October 2017 against twenty-eight defendants. Of the twenty-eight named defendants, only a subset of eight defendants filed a Notice of Removal in this Court in December 2017, claiming federal question jurisdiction, 28 U.S.C. § 1331.[1] ECF Nos. 2, 2-1. In other words, the entire action was not removed to this Court and the Notice of Removal effectively split this matter, leaving twenty defendants with this Complaint pending before them in the Superior Court of New Jersey. See ECF No. 6 at 6. Defendants admit that twelve of the twenty non-removing defendants were served before the Notice of Removal was filed. See ECF No. 9 at 6.

         Plaintiff moves to remand this action to the Superior Court of New Jersey for failure to obtain consent of all served defendants and for lack of subject matter jurisdiction. ECF No. 6. Defendants oppose the motion. ECF No. 9.

         II. REMOVAL

         A. LEGAL STANDARD

         By statute, "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." 28 U.S.C. § 1441(a). Section 1446, governing the procedure for removal of civil actions requires, inter alia, that "[w]hen a civil action is removed solely under section 1441(a), all defendants who have been properly joined and served must join in or consent to the removal of the action." 28 U.S.C. § 1446(b)(2)(A). In other words, the rule of unanimity requires that when there is more than one defendant in an action, all properly joined and served defendants must consent to removal. See Di Loreto v. Costigan, 351 Fed.Appx. 747, 752 (3d Cir. 2009).[2]

         B. DISCUSSION

         Plaintiff moves to remand for defendants' failure to obtain the consent of all served defendants pursuant to 28 U.S.C. §§ 1446 and 1447 and for lack of subject matter jurisdiction.[3]

         The Court recommends that the District Court find the Notice of Removal is improper because removal requires that an entire action be removed, and not merely the claims against a subset of defendants, and because the removal violates the rule of unanimity. In fact, because not all defendants sought to remove, the action below apparently remains pending in the State Court, Section 1441 (a) provides that "any civil action brought in a State court... may be removed by the defendant or the defendants." 28 U.S.C. § 1441(a) (emphasis added). The statute governing removal procedure requires that "all defendants who have been properly joined and served must join in or consent to the removal of the action, " 28 U.S.C. A. § 1446(b)(2)(A), and that

[p]romptly after the filing of such notice of removal of a civil action the defendant or defendants ... shall file a copy of the notice with the clerk of such State court, which shall effect the removal and the State court shall ...

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