Opinion
Civil Action No. 2:20-cv-03038-RMG-MGB
09-29-2020
Elaine Kofa, Plaintiff, v. Bradley R. Marshall, Cynthia Marshall, Chartmans, LLC d/b/a Chartmans, Inc., Defendants.
REPORT AND RECOMMENDATION
Plaintiff originally filed this action in the Charleston County Court of Common Pleas, alleging state law claims against Defendants based on the allegedly deficient legal representation she received. (Dkt. No. 1-1.) On August 24, 2020, Defendants, appearing pro se, removed the action to Federal Court. (Dkt. No. 1.) This matter is now before the Court upon Plaintiff's Motion to Remand. (Dkt. No. 3.) All pretrial proceedings in this case were referred to the undersigned pursuant to the provisions of 28 U.S.C. § 636(b)(1)(A) and (B) and Local Rule 73.02(B)(2)(e), DSC. For the reasons set forth below, the undersigned recommends that Plaintiff's Motion to Remand (Dkt. No. 3) be granted.
BACKGROUND
Plaintiff filed this action in state court on August 10, 2020. (Dkt. No. 1-1.) The Complaint alleges that Plaintiff hired Defendant Bradley R. Marshall ("Mr. Marshall") to "represent her fully in her dispute arising from assault, harassment, and subsequent retaliatory termination from a job that she loved." (Dkt. No. 1-1 at 9.) Specifically, Plaintiff had been employed by "Six3 Systems Intelligence Solutions (CACI), a private company that contracts with the military to provide ISR support." (Id. at 8.) The Complaint alleges Plaintiff entered into a "representation agreement" wherein she agreed to pay Mr. Marshall $15,000 for his representation in her employment dispute. (Id. at 9.) The Complaint alleges that Plaintiff did not know when she entered into the agreement that Mr. Marshall had been disqualified from representing clients in legal matters before administrative agencies. (Id. at 5-7, 9.) More specifically, the Complaint alleges that Mr. Marshall was disbarred both by the State of Washington and the United States Supreme Court, and he is not "licensed to practice law in any United States' jurisdiction, federal or state." (Id. at 3-4.) The Complaint alleges that Mr. Marshall's "attempts to represent litigants before federal administrative agencies and before the Office of Administrative Law Judges have been deemed improper and unlawful when challenged," including in a decision issued by this Court. (Id. at 5-6.)
The Complaint further alleges that Mr. Marshall's representation was deficient in several ways and ultimately resulted in the dismissal of Plaintiff's complaint by the United States Equal Employment Opportunity Commission ("EEOC"). (Id. at 9-12.) According to the Complaint, Mr. Marshall "retained the entirety of [Plaintiff's] $ 15,000 payment," despite his deficient representation and his preclusion from representing her in the employment dispute. (Id. at 12.) The Complaint alleges that Defendant Chartmans LLC d/b/a Chartmans Inc. is a business offering legal representation, of which Mr. Marshall is the president and Defendant Cynthia Marshall is the vice president. (Id. at 2-3.)
The Complaint alleges causes of action under South Carolina law for negligence/gross negligence, negligent misrepresentation, breach of contract, breach of contract accompanied by fraudulent act, constructive fraud, fraud and misrepresentation, intentional infliction of emotional distress, violation of the South Carolina Unfair Trade Practices Act, and breach of fiduciary duty.
As noted above, Defendants removed this action on August 24, 2020, alleging this Court has "original jurisdiction pursuant to 28 U.S.C. § 1441(A), as a federal question relating to the lay representation of federal employees and contractors before federal administrative tribunals." (Dkt. No. 1 at 1.) Plaintiff filed a Motion to Remand the case on September 4, 2020. (Dkt. No. 3.) Defendants have filed a deficient response to the Motion.
On September 18, 2020, Defendants filed a "Response in Opposition to Reman[d] and Motion for Dismissal." (Dkt. No. 5.) This filing was deficient however, because it was not signed by the pro se Defendants. (Dkt. No. 6.) The Clerk of Court has notified Defendants of this deficiency and has advised Defendants they have ten days to correct the filing. (Id.) Even if this filing were properly before the Court, Defendants' arguments for removal contained within do not change the undersigned's recommendation that this case should be remanded to state court. Further, because the undersigned ultimately recommends this Court lacks subject matter jurisdiction, consideration of Defendants' "Motion for Dismissal" would be inappropriate.
LEGAL STANDARD
"The burden of establishing federal jurisdiction is placed upon the party seeking removal." Mulcahey v. Columbia Organic Chem. Co., 29 F.3d 148, 151 (4th Cir. 1994) (citing Wilson v. Republic Iron & Steel Co., 257 U.S. 92 (1921)). The right to remove a case from state to federal court derives solely from 28 U.S.C. § 1441, which states, in relevant part, that "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). On a motion to remand, courts are obligated to "construe removal jurisdiction strictly because of the 'significant federalism concerns' implicated." Dixon v. Coburg Dairy, Inc., 369 F.3d 811, 816 (4th Cir. 2004) (quoting Mulcahey, 29 F.3d at 151). "If federal jurisdiction is doubtful, a remand is necessary." Mulcahey, 29 F.3d at 151 (citing In re Business Men's Assurance Co. of Am., 992 F.2d 181, 183 (8th Cir. 1993); Cheshire v. Coca-Cola Bottling Affiliated, Inc., 758 F. Supp. 1098, 1102 (D.S.C. 1990)).
DISCUSSION
In her Motion, Plaintiff asserts that the instant action should be remanded to the Charleston County Court of Common Pleas because this Court lacks subject-matter jurisdiction over Plaintiff's claims. (Dkt. No. 3 at 1.) In their Notice of Removal, Defendants assert this Court has "original jurisdiction" over Plaintiff's claims because a federal question exists "relating to the lay representation of federal employees and contractors before federal administrative tribunals." (Dkt. No. 1.) Accordingly, the propriety of removal depends upon whether this case falls within the "federal question" jurisdiction as set forth in 28 U.S.C. § 1331. See Mulcahey, 29 F.3d at 151. Section 1331 states, "The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. If Plaintiff's claims do not "aris[e] under the Constitution, laws, or treaties of the United States," remand is proper. Dixon, 369 F.3d at 816 (quoting 28 U.S.C. § 1331).
In support of their federal jurisdiction argument, Defendants cite the Fourth Circuit case, Lontz v. Tharp, 413 F.3d 435, 438 (4th Cir. 2005). It is unclear why Defendants believe Lontz is applicable here, given that the Fourth Circuit found it did not have subject-matter jurisdiction over the claims at issue in that case. More specifically, in Lontz, the Fourth Circuit held that when an action is removed to federal court, the "propriety of removal . . . depends on the scope of the district court's original jurisdiction." Id. at 439. "This is because the removal statute allows defendants to remove a case to federal court only if 'the district courts of the United States have original jurisdiction' over it." Id. (quoting 28 U.S.C. § 1441(a) (2000); Rivet v. Regions Bank of La., 522 U.S. 470, 474 (1998)). Thus, the Fourth Circuit framed the question before it as being "'whether [this] claim could have been brought originally in federal district court."' Id. (quoting King v. Marriott Int'l, Inc., 337 F.3d 421, 424 (4th Cir. 2003)). Applying this framework, the Fourth Circuit found that the claims before it, even if they were preempted by federal law, could never have been brought originally in the federal district court. Accordingly, the Fourth Circuit held in Lontz that removal was improper and ordered remand of the case to the state court.
Here, Plaintiff's claims arise under South Carolina statutory and common law. (Dkt. No. 1-1.) Relevant here, Defendants appear to assert as a defense to Plaintiff's claims that a disbarred attorney may act as "lay representation" for federal employees and contractors "before federal administrative tribunals." (Dkt. No. 1.) Critically, "merely having a federal defense to a state law claim is insufficient to support removal, since it would also be insufficient for federal question jurisdiction in the first place." Lontz, 413 F.3d at 439; see also Cook v. Georgetown Steel Corp., 770 F.2d 1272, 1275 (4th Cir. 1985) ("A federal defense to a state cause of action is not sufficient to invoke federal jurisdiction."); Burbage v. Richburg, 417 F. Supp. 2d 746, 749 (D.S.C. 2006) ("[W]hen the plaintiff's case is properly brought under state law, a defendant is not entitled to remove the action simply because federal law will provide a defense to the plaintiff's state law claims."). There is no basis to find that this case depends on the resolution of a federal question sufficiently substantial to arise under federal law within the meaning of 28 U.S.C. § 1331. Accordingly, no federal question jurisdiction supports the assertion of removal jurisdiction under 28 U.S.C. § 1441.
Likewise, removal of this case is also improper based on diversity jurisdiction. While the Complaint alleges that Plaintiff is a resident and citizen of a different state than Defendants, removal on the basis of diversity jurisdiction is limited by 28 U.S.C. § 1441(b)(2). Section 1441(b)(2) provides, "A civil action otherwise removable solely on the basis of the jurisdiction under section 1332(a) of this title [diversity jurisdiction] may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought."
Here, the Complaint alleges that Defendants Bradley R. Marshall and Cynthia Marshall are "residents and citizens of Charleston County, South Carolina," and Defendant Chartmans LLC is a business incorporated in South Carolina with its principal place of business in Mount Pleasant, South Carolina. (Dkt. No. 1-1 at 2.) Further, the record shows at least one Defendant was properly served prior to removal—Defendant Cynthia Marshall was personally served on August 10, 2020, and she accepted service on behalf of Defendant Bradley R. Marshall as well. (Dkt. No. 3-1 at 2.) (Dkt. No. 3-1 at 2); see Fed. R. Civ. P. 4(e)(1) (stating "an individual . . . may be served in a judicial district of the United States by . . . following state law for serving a summons in an action brought in courts of general jurisdiction in the state where the district court is located or where service is made"); S.C.R.C.P. 4(d)(1) (stating service on an individual is accomplished "by delivering a copy of the summons and complaint to him personally or by leaving copies thereof at his dwelling house or usual place of abode with some person of suitable age and discretion then residing therein, or by delivering a copy to an agent authorized by appointment or by law to receive service of process."). Based on the foregoing, the undersigned finds that 28 U.S.C. § 1441(b)(2) bars removal on the basis of diversity jurisdiction. See Wells Fargo Fin. S.C., Inc. v. Mack, No. 2:18-cv-1479-RMG-BM, 2018 WL 3687978, at *2 (D.S.C. July 13, 2018) (citing 28 U.S.C. § 1441(b)(2); "to the extent that the Macks are attempting to instead assert diversity jurisdiction, they are precluded as a matter of law from removing this case on the basis of diversity of citizenship since the Macks are citizens of the state in which the action was brought (South Carolina)"), adopted by, 2018 WL 3682485 (D.S.C. Aug. 2, 2018).
In their Notice of Removal, Defendants dispute that Defendants Bradley R. Marshall and Chartmans LLC were properly served. (Dkt. No. 1 at 2.) However, the Court need not reach this issue as this time because the record supports finding the applicability of section 1441(b)(2) based on the residence and proper service of Cynthia Marshall, as discussed above.
Because there is no basis to support removal under 28 U.S.C. § 1441, this action should be remanded to state court. See, e.g., S.C. Dep't of Soc. Servs. v. Capers, No. 1:17-cv-1418-JMC-SVH, 2017 WL 9289438, at *1 (D.S.C. June 9, 2017) ("A federal court should remand the case to state court if there is no federal subject matter jurisdiction evident from the face of the notice of removal and any state court pleadings provided."), adopted by, 2017 WL 6462405 (D.S.C. Dec. 19, 2017).
CONCLUSION
Based on the foregoing, the undersigned RECOMMENDS that the Court GRANT Plaintiff's Motion to Remand. (Dkt. No. 3.)
IT IS SO RECOMMENDED. September 29, 2020
Charleston, South Carolina
/s/_________
MARY GORDON BAKER
UNITED STATES MAGISTRATE JUDGE
Notice of Right to File Objections to Report and Recommendation
The parties are advised that they may file specific written objections to this Report and Recommendation with the District Judge. Objections must specifically identify the portions of the Report and Recommendation to which objections are made and the basis for such objections. "[I]n the absence of a timely filed objection, a district court need not conduct a de novo review, but instead must 'only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.'" Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d 310 (4th Cir. 2005) (quoting Fed. R. Civ. P. 72 advisory committee's note).
Specific written objections must be filed within fourteen (14) days of the date of service of this Report and Recommendation. 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b); see Fed. R. Civ. P. 6(a), (d). Filing by mail pursuant to Federal Rule of Civil Procedure 5 may be accomplished by mailing objections to:
Robin L. Blume, Clerk
United States District Court
Post Office Box 835
Charleston, South Carolina 29402
Failure to timely file specific written objections to this Report and Recommendation will result in waiver of the right to appeal from a judgment of the District Court based upon such Recommendation. 28 U.S.C. § 636(b)(1); Thomas v. Arn, 474 U.S. 140 (1985); Wright v. Collins, 766 F.2d 841 (4th Cir. 1985); United States v. Schronce, 727 F.2d 91 (4th Cir. 1984).