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Ziegler v. Subalipack (M) SDN BHD, A.C.T. Logistics, LLC

United States District Court, S.D. Texas, Houston Division

June 21, 2017

Robert Ziegler, Plaintiff,
Subalipack (M) SDN BHD, A.C.T. Logistics, LLC, Mediterranean Shipping Company USA, Inc., St. George Logistics, Courtney International Forwarding, Inc., Masterpiece International Limited, Graebel Movers International, Inc., and John Does 1-3, Defendants.


          Gray H. Miller United States District Judge

         Pending before the court is plaintiff Robert Ziegler's motion to remand. Dkt. 17. Having considered the motion, responses, reply, surreply, complaint, and the applicable law, the court is of the opinion that the motion (Dkt. 17) should be DENIED.

         I. Background

         This case arises from Ziegler's claims against multiple defendants for property damage and loss sustained during an overseas shipment of household goods. In 2014, Ziegler moved from Kuala Lumpur, Malaysia, to Hilltop Lakes, Texas. Dkt. 36 at 3. In order to transport his household goods from Malaysia to Texas, Ziegler contracted with a Malaysian multimodal transport company, Subalipack (M) SDN BHD (“Subalipack”). Dkt. 36 at 3. Ziegler paid Subalipack RM25, 400.00 (approximately $8, 000 (USD)) for door-to-door transport of his household goods. Dkt. 2-2 at 18; Dkt. 36 at 3. Subalipack packed Ziegler's goods into 310 boxes, and loaded these boxes into a forty- foot shipping container. Dkt. 36 at 4. Then, Subalipack subcontracted with another Malaysian transport company, Honour Lane Logistics SDN BHD (“Honour Lane”), for transportation of the shipping container. Id. Honour Lane further subcontracted with Mediterranean Shipping Company, S.A. (“MSC SA”), a foreign shipping company, for the port-to-port transport of the shipping container from Port Klang, Malaysia to Houston, Texas. Dkt. 25 at 3.

         MSC SA transported the shipping container aboard the M/V MSC SOLA from Port Klang, Malaysia to the Port of Long Beach, California. Dkt. 25 at 4. Ziegler claims that A.C.T. Logistics, LLC (“A.C.T.”) transferred the shipping container from the M/V MSC SOLA to a rail line. Dkt. 36 at 4. MSC SA then transported the shipping container by rail from Long Beach, California to Houston, Texas. Dkt. 36, 4-5; Dkt. 39 at 5. Before offloading in Houston, MSC SA, or its United States agent, Mediterranean Shipping Company (USA) Inc. (“MSC USA”), placed a cargo lien on the shipping container and Ziegler's household goods for nonpayment of certain charges assessed by MSC SA or MSC USA. Dkt. 36 at 4-5; Dkt. 39 at 5. Ziegler expected Subalipack to pay all incidental shipping charges according to the terms of their contract. Dkt. 36 at 7. However, when Subalipack refused to pay for removal of the lien, Ziegler paid the charges. Id. at 5.

         After arrival in Houston, Ziegler's household goods were stored in a warehouse owned by St. George Warehouse & Trucking Co. of Texas, Inc. (“STG”) while the goods awaited U.S. Customs (“Customs”) importation approval. Dkt. 36, 5-6; Dkt. 57 at 4. Zeigler alleges that he hired an import attorney at his own expense because Subalipack was unsuccessful in obtaining a Customs clearance for his household goods. Dkt. 36 at 5. Zeigler's import attorney was successful in obtaining Customs clearance, but when his belongings were delivered to him, many items were damaged, destroyed, or missing. Dkt. 36 at 6. It is unclear at what point during shipment, or in the custody of which defendant or defendants, Zeigler's property sustained damage or went missing. However, Zeigler claims loss of or damage to his property exceeding $78, 000. Dkt. 36 at 7.

         On July 6, 2016, Zeigler filed a complaint against Subalipack, A.C.T., MSC USA, STG, and other parties in the 55th District Court of Harris County, Texas.[1] Dkt. 2-2 at 4. On August 4, 2016, MSC USA's registered agent for service of process received service. Dkt. 2-2 at 42. On August 26, 2016, MSC USA removed the matter to this court on the basis of diversity and federal question jurisdiction. Dkt. 2 at 6. On September 26, 2016, Ziegler filed a motion to remand. Dkt. 17. Ziegler seeks remand on the following grounds: (1) the removal is procedurally defective because MSC USA failed to obtain consent from STG and Subalipack prior to removal (Dkt. 17 at 9-11); (2) the court cannot exercise diversity jurisdiction because STG is a Texas entity (Dkt. 17 at 8-9); and (3) the court cannot exercise federal subject matter jurisdiction because the Carriage of Goods by Sea Act (“COGSA”), the federal law that MSC USA argues preempts Ziegler's claims, is not applicable. Dkt. 17 at 4-7. The court will address the procedural arguments first and then turn to the jurisdictional arguments.

         II. Removal Procedure

         A. Legal Standard

         A party may remove to federal court “any civil action brought in a State court of which the district courts of the United States have original jurisdiction.” 28 U.S.C. § 1441 (2012). The party seeking removal bears the burden of establishing federal jurisdiction. Willy v. Coastal Corp., 855 F.2d 1160, 1164 (5th Cir. 1988). This statutory right to removal is strictly construed because “removal jurisdiction . . . raises significant federalism concerns.” Id. (citations omitted). Therefore, “any doubt about the propriety of removal must be resolved in favor of remand.” Gasch v. Hartford Accident & Indem. Co., 491 F.3d 278, 281-82 (5th Cir. 2007).

         The removal statute mandates that the removing party satisfy certain procedural requirements. 28 U.S.C. § 1446. First, the notice of removal must be timely filed within thirty days of service of the initial complaint upon the removing defendant. Id. § 1446(b). Further, the removing defendant must obtain consent from all other “properly joined and served” defendants in the action. Id. § 1446(b)(2)(A). Failing to obtain such consent would “render[] the petition defective” and require remand of the case to state court. Getty Oil Corp. v. Ins. Co. of N. Am., 841 F.2d 1254, 1262 (5th Cir. 1988). However, district courts have frequently held that removing defendants need only obtain consent from “those defendants: (1) who have been served; and, (2) whom the removing defendant(s) actually knew or should have known had been served.” See, e.g., Milstead Supply Co. v. Casualty Ins. Co., 797 F.Supp. 569, 573 (W.D. Tex. July 31, 1992); see also Conner v. Juarez, No. SA:15-CV-416-DAE, 2015 WL 4876530, at *7 (W.D. Tex. Aug. 13, 2015).

         B. Analysis

         Here, Ziegler argues that MSC USA's removal was procedurally defective because MSC USA did not obtain consent from either STG or Subalipack for the removal. Dkt. 17 at 10. MSC USA counters that STG and Subalipack were not properly served before MSC USA's removal, and therefore that MSC USA was not required to obtain the consent of either STG or Subalipack in order to remove. Dkt. 25 at 17. MSC USA argues that there were two defects in the service of process upon STG and Subalipack: (1) there are no Whitney certificates in the state court record to evidence service of process; and (2) the record indicates that Ziegler provided only a single copy of the processes for STG and Subalipack to the Secretary of State, but the Texas code requires that duplicate copies. Id. (citing Whitney); Tex. Bus. Orgs. Code Ann. § 5.252(a)(1) (West 2006).

         With respect to the Whitney certificates, the Supreme Court of Texas held in Whitney v. L.&L. Realty Corp. that proper service on the Texas Secretary of State requires proof of forwarding. Whitney v. L.&L. Realty Corp., 500 S.W.2d 94, 96 (Tex. 1973). When service is made upon the Texas Secretary of State as an agent for service of a foreign defendant, the Secretary of State must forward the service to the defendant “for the Secretary of State to be conclusively presumed to be the attorney for the [foreign] defendant.” Id. The Whitney court explained that “a showing in the record that the Secretary of State forwarded a copy of the process is essential to establish the jurisdiction of the court over the defendants' persons.” Id. Although Whitney involved review of a default judgment, the critical holding of Whitney is that service through the Texas Secretary of State is insufficient to establish personal jurisdiction over a foreign defendant if the record does not show that the ...

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