Opinion
Case No. C-3-01-257
September 4, 2001
Attorney for Plaintiff: Ralph Buss/David Lester/Alexander Andrews/Jeffery Sniderman.
Attorney for Defendant: Nicholas Subashi.
The Plaintiffs initiated this litigation in the Common Pleas Court for Montgomery County, Ohio, seeking a declaratory judgment concerning underinsured motorist coverage in an insurance policy issued by Defendant and Third-Party Plaintiff American Insurance Company ("American"). American subsequently filed a Third-Party Complaint against Third-Party Defendant Nationwide Agribusiness Insurance Company ("Nationwide"). Nationwide then timely removed this litigation to this Court pursuant to 28 U.S.C. § 1441(a), which permits the removal of civil actions over which a District Court has original jurisdiction. Nationwide alleged that diversity of citizenship was the manner in which this Court could exercise original jurisdiction over this litigation. See Doc. #1. See also, 28 U.S.C. § 1332(a).
According to American, the parties have incorrectly identified it in the pleadings as Fireman's Fund Insurance Company. This Court uses American's correct name in both the caption and the body of its Decision.
This case is now before the Court on the Plaintiff's Motion to Remand (Doc. #5). Therein, Plaintiffs argue that the Court is without subject matter jurisdiction over this litigation, because the amount in controversy does exceed $75,000. Alternatively, the Plaintiffs argue that this Court should decline to exercise subject matter jurisdiction, because a state court is a better forum to resolve this state law dispute. For reasons which follow, this Court concludes that it cannot exercise subject matter over this litigation, since third-party defendants, such as Nationwide, are without statutory authority to remove a civil action. Consequently, the Court remands this matter to the Common Pleas Court for Montgomery County, Ohio, without addressing the reasons for remand set forth in Plaintiffs' motion.
Plaintiffs also contend that the Court cannot exercise federal question jurisdiction over this litigation. Given that Nationwide has not alleged in its Notice of Removal (Doc. #1) that such subject matter jurisdiction exists, it is not necessary to address Plaintiff's contention concerning the lack of same.
Accordingly, the Court overrules the Plaintiff's Motion to Remand (Doc. #5), as moot.
The majority of courts which have considered the question have concluded that a third-party defendant is without statutory authority to remove an action. See e.g., Lewis v. Windsor Door Co., 926 F.2d 729 (8th Cir. 1991); Thomas v. Shelton, 740 F.2d 478 (7th Cir. 1984); Johnston v. St. Paul Fire and Marine Insurance Co., 134 F. Supp.2d 879 (E.D.Mich. 2001); Caringal v. Karteria Shipping, Ltd., 108 F. Supp.2d 651 (E.D.La. 2000); Galen-Med, Inc. v. Owens, 41 F. Supp.2d 611 (W.D.Va. 1999);Neibuhr v. National R.R. Passenger Corp., 955 F. Supp. 135 (D.D.C. 1997); Garner v. MIC Gen. Ins. Corp., 869 F. Supp. 497 (E.D.Mich. 1994);Wormley v. Southern Pacific Transp. Co., 863 F. Supp. 382 (E.D.Tex. 1994); Andrews v. Electric Motor Systems, 767 F. Supp. 853 (S.D.Ohio 1991). Accord, 14C Wright, Miller Cooper, Federal Practice and Procedure, § 3731 at 253-54; 16 Moore's Federal Practice, § 107.11(1)(b)(iv) at 107-31 ("The better view, consistent with the principle that removal jurisdiction is to be strictly construed, is that third-party claims are not removable, because only a party defending against claims asserted by a plaintiff ought to be able to remove."). Contra, Carl Heck Engineers, Inc. v. Lafourche Parish Police Jury, 622 F.2d 133 (5th Cir. 1980); Hayduk v. United Parcel Service, Inc., 930 F. Supp. 584 (S.D. Florida 1996). This Court agrees with the result reached and the rationale employed by the majority of courts.
In some of the decisions cited above, courts addressed the question of whether a third-party defendant may remove an action pursuant to 28 U.S.C. § 1441(c). Compare Thomas, supra (holding that a third-party defendant cannot remove an action pursuant to § 1441(c)); with Carl Heck Engineers, supra (holding that a third-party defendant may remove an action pursuant to § 1441(c)). After those cases were decided, that statutory provision was amended to permit the removal of an action to which a separate and independent claim has been joined, which is within the District Court's federal question jurisdiction ( 28 U.S.C. § 1331). Prior to the amendment, § 1441(c) had not been limited to instances in which the separate and independent claim was within the District Court's federal question jurisdiction. Herein, since the third-party complaint does not contain a claim which is within this Court's federal question jurisdiction, § 1441(c) cannot serve as the basis for removal.
This Court begins its analysis with the general principal that removal statutes must be construed narrowly, because removal jurisdiction encroaches on a state court's jurisdiction. Brierly v. Alusuisse Flexible Packaging, Inc., 184 F.3d 527, 534 (6th Cir. 1999), cert.denied, 528 U.S. 1076 (2000). See also, Long v. Bando Manufacturing Co. of America, Inc., 201 F.3d 754, 757 (6th Cir. 2000) (noting that "because they implicate federalism concerns, removal statutes are to be narrowly construed"). The general right to removal is set forth in 28 U.S.C. § 1441(a), which provides in pertinent part:
(a) Except as otherwise expressly provided by Act of Congress, 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.
(Emphasis added). As can be seen, Congress authorized a defendant or defendants to remove a civil action from state to federal court. Courts have held that the terms "defendant" and "defendants," as used in § 1441(c), should be given its normal meaning, which does not include a third-party defendant. See e.g., Johnston, 134 F. Supp.2d at 880. Congress did not authorize third-party defendants to remove civil actions. Indeed, interpreting the terms "defendant" and "defendants' to include third-party defendants would cause this Court to construe § 1441(a) broadly, rather than narrowly as it must. Brierly, supra.
Since Congress authorized only defendants to remove civil actions, the Supreme Court has held that a plaintiff, against whom a counterclaim has been asserted, is without statutory authority to remove the action.Shamrock Oil Gas Corp. v. Sheets, 313 U.S. 100 (1941).
Moreover, Congress had a rational basis for treating defendants and third-party defendants differently. When a defendant removes a civil action from state to federal court, that party upsets the plaintiff's choice of forum. However, when a third-party defendant removes an action the choices of both the plaintiff and the defendant concerning the forum in which to resolve the litigation are upset. In addition, a third-party complaint will frequently be filed relatively late in a lawsuit. Permitting a third-party defendant to remove the action could, therefore, contravene Congress' intention that removal be accomplished quickly, before a case has been permitted to proceed very far in state court. See 28 U.S.C. § 1446(b) (establishing a 30-day limit for removing a case).
In sum, the Third-Party Defendant has removed this action on the basis of § 1441(a), which authorizes a defendant or defendants to remove a civil action. Nationwide, as the Third-Party Defendant, is not a defendant; therefore, it is without statutory authority to remove this litigation. Consequently, this Court is without subject matter jurisdiction over this matter. Under 28 U.S.C. § 1447(c), this Court must remand a civil action, if "it appears the district court is without subject matter jurisdiction." Accordingly, the Court remands this matter to the Common Pleas Court for Montgomery County, Ohio, pursuant to 28 U.S.C. § 1447(c), for want of subject matter jurisdiction.
Judgment is to be entered, remanding this litigation, pursuant to 28 U.S.C. § 1447(c), for lack of subject matter jurisdiction.
The captioned cause is hereby ordered terminated upon the docket records of the United States District Court for the Southern District of Ohio, Western Division, at Dayton.