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Unifoil Corp. v. Southeast Personnel Leasing, Inc.

United States District Court, D. New Jersey

September 28, 2018

UNIFOIL CORPORATION, Plaintiff,
v.
SOUTHEAST PERSONNEL LEASING, INC., et al., Defendants.

          ORDER

          Hon. Madeline Cox Arleo, United States District Judge.

         THIS MATTER having come before the Court by way of Magistrate Judge Mannion's Report and Recommendation dated September 14, 2018, in which Judge Mannion recommended that the District Court grant Plaintiff Unifoil Corporation's ("Plaintiff) Motion to Remand, ECF Nos. 11, 53;

         and having considered Defendant Navigators Insurance Company's ("Navigators") Objections to Report and Recommendation, ECF No. 57;

         and it appearing that this is an insurance coverage action ("Coverage Action") in which Plaintiff seeks indemnification from Defendant Lion Insurance Company ("Lion"), Defendant Zurich American Insurance Company ("Zurich"), and Navigators, as well as damages from Defendant Southeast Personnel Leasing, Inc. ("Southeast" and, collectively with Lion, Navigators, and Zurich, "Defendants"), all in connection with a pending personal injury action ("Underlying Action"), see Report and Recommendation, ECF No. 11, at 2 ("R&R");

         and it appearing that on December 7, 2017, Plaintiff filed the Coverage Action in the Superior Court of New Jersey, Essex County Law Division, see Id.;

         and it appearing that on January 2, 2018, Navigators removed the Coverage Action to this Court pursuant to 28 U.S.C. §§ 1332(a)(1), 1441, and 1446, see Notice of Removal, ECF No. 1;

         and it appearing that on December 18, 2017, prior to Navigators' purported removal, the Honorable Dennis F. Carey, III, P.J. Cv. consolidated the Coverage Action and the Underlying Action under the new caption Perez, et al. v. Unifoil Corp., et al., Dkt. No. ESX-L-5061-14 (the "Consolidated Action"), see R&R, at 2;

         and it appearing that on January 12, 2018, Plaintiff moved to remand, arguing the consolidation destroyed diversity jurisdiction pursuant to 28 U.S.C. § 1332(a)(1), and the Court therefore lacked subject matter jurisdiction, see Id. at 3;

         and it appearing that Defendants argue that the consolidation order (1) could or should not have merged the Coverage Action and the Underlying Action into a single action for removability purposes, (2) did not, in fact, do so, and (3) even if it did, does not operate to destroy diversity jurisdiction. They argue that under both federal and New Jersey law, consolidated cases maintain their own separate identities for purposes of determining diversity jurisdiction, and consolidation does not make parties to one suit parties to another. See id. at 2-5; see also Navigators Br. in Opposition to Remand, ECF No. 16; Lion Br. in Support of Cross-Motion to Sever and Opposition to Remand, ECF 17.2; Navigators Objection to Report and Recommendation, ECF No. 57 ("Navigators Obj.");

         and it appearing that in a removal dispute, defendants bear the burden of proving that the case belongs in federal court, see, e.g.. Constantino v. Cont'l Airlines, Inc., No. 13-1770, 2014 WL 2587526, at *1 (D.N.J. June 9, 2014);

         and it appearing that courts must strictly construe 28 U.S.C. § 1441 against removal and resolve any ambiguities in favor of remand, see Johnson v. SmithKline Beecham Corp., 724 F.3d 337, 346 (3d Cir. 2013);

         and it appearing that courts should also assume that they "lack jurisdiction unless the contrary appears affirmatively from the record," Philadelphia Fed'n of Teachers. Am. Fed'n of Teachers. Local 3. ALF-CIO v. Ridge, 150 F.3d 319, 323 (3d Cir. 1998) (quoting Renne v. Geary, 501 U.S. 312, 316(1991));

         and it appearing that Judge Mannion properly found that the Court's role "is not to decide whether it was proper for the state court to consolidate the actions, but whether the consolidation affects the Court's jurisdiction[.]" see Amadu v. Bradshaw., No. 15-8033, 2016 WL 3676474, at *2 (D.N.J. July 11, 2016) (citing D.C. Court of Appeals v. Feldman, 460 U.S. 462, 482 (1983));

         and it appearing that Judge Mannion properly found that the consolidation order contains no indication that it consolidated the Coverage Action and Underlying Action for discovery purposes only, but rather plainly appears to combine "[t]he above-captioned matters" into a new action with a new caption entirely, see Id. at 5-6; see also ...


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