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Ryan Enterprises LLC v. Independence Professional Hockey, LLC

United States District Court, N.D. Texas, Dallas Division

July 31, 2017

RYAN ENTERPRISES LLC, Plaintiff,
v.
INDEPENDENCE PROFESSIONAL HOCKEY, LLC, et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          SIDNEY A. FITZWATER, UNITED STATES DISTRICT JUDGE

         Plaintiff Ryan Enterprises, LLC's (“Ryan's”) May 31, 2017 motion to remand or transfer is denied, and defendants' July 12, 2017 motion for leave to amend is granted.[1]

         I

         At the outset, it should be noted that this case was not removable in the first place due to the presence of several Texas-citizen defendants, but Ryan waived this procedural defect by failing to file a timely motion to remand.

         According to defendants' amended notice of removal-which they filed at the court's direction-defendant Independence Professional Hockey, LLC (“Independence”) is a Texas citizen because three of its four members are Texas citizens.[2] Defendant Central Partners, LLC (“Central”) is a Texas citizen at least because Independence is one of its members, and three of Independence's members are Texas citizens, and another of Central's members is QCM Holdings, Inc., which is also alleged to be a Texas citizen. And defendant Matt Adams is also alleged to be a Texas citizen. A case cannot be removed to federal court on the basis of diversity of citizenship when a properly joined and served in-state citizen is a defendant. See 28 U.S.C. § 1441(b). In other words, even when, as here, there is complete diversity of citizenship, [3] the removal statute does not permit removal to a federal district court in Texas when there is a properly joined and served Texas citizen defendant.

         Nevertheless, this type of defect is procedural. See, e.g., Halmekangas v. State Farm Fire & Cas. Co., 603 F.3d 290, 295 n.18 (5th Cir. 2010) (“[A] procedural defect is any defect that does not go to the question of whether the case originally could have been brought in federal district court.” (citing Williams v. AC Spark Plugs Div. of Gen'l Motors Corp., 985 F.2d 783, 787 (5th Cir.1993))).

If a plaintiff initially could have filed his action in federal court, yet chose to file in state court, even if a statutory provision prohibits the defendant from removing the action and the defendant removes despite a statutory proscription against such removal, the plaintiff must object to the improper removal within thirty days after the removal, or he waives his objection.

Williams, 985 F.2d at 787.

         Ryan was therefore required to raise this procedural defect within 30 days of the date the wrong division of this court)[4] on April 27, 2017. Ryan did not file its motion to remand until May 31, 2017 (and even then it did not raise this ground as a basis for its remand motion). Because more than 30 days elapsed, Ryan waived this procedural defect.

         II

         A

         Ryan moves to remand on the ground that defendants have neither asserted nor established that the amount in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs. If the plaintiff's state court petition demands monetary relief of a stated sum, that sum, if asserted in good faith, is deemed to be the amount in controversy. Dart Cherokee Basin Operating Co. v. Owens, __ U.S. __, 135 S.Ct. 547, 551 (2014). But when, as here, the plaintiff's state court petition does not state the amount in controversy, the defendants' notice of removal must make “a plausible allegation that the amount in controversy exceeds the jurisdictional threshold.” Id. at 553-54. No evidence is required unless and until the plaintiff contests, or the court questions, the allegation. See Id. at 551, 554.

         If the plaintiff contests the allegation, then the defendant must prove, by a preponderance of the evidence, that the amount in controversy requirement has been satisfied. Id. at 554 (explaining that, if plaintiff contests defendant's allegation, then “both sides submit proof and the court decides, by a preponderance of the evidence, whether the amount-in-controversy requirement has been satisfied”); see also Allee Corp. v. Reynolds & Reynolds Co., 2015 WL 1914663, at *3 (N.D. Tex. Apr. 28, 2015) (Fitzwater, J.). The defendant's burden “is met if (1) it is apparent from the face of the petition that the claims are likely to exceed $75, 000, or, alternatively, (2) the defendant sets forth summary judgment type evidence of facts in controversy that support a finding of the requisite amount.” Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002) (internal quotation marks omitted). If the defendant can produce evidence sufficient to show by a preponderance of the evidence that the amount in controversy exceeds the jurisdictional threshold, the plaintiff can defeat diversity jurisdiction only by showing to a legal certainty that the amount in controversy does not exceed the sum or value of $75, 000, exclusive of interest and costs. See De Aguilar v. Boeing Co., 47 F.3d 1404, 1411 (5th Cir. 1995).

         In the present case, even if the court assumes that it is not apparent from the face of Ryan's state court petition that the amount in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs-because the petition does not actually make that claim-it concludes that defendants by their analysis of the petition have proved by a preponderance of the evidence that the amount in controversy requirement is met. See Ds. Resp. 3, ΒΆ 8 (explaining that Ryan alleges that Stephen M. Ryan, Jr. worked for nearly one year as Commissioner and Chief Executive Officer of the Central Hockey League without being paid his base monthly ...


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