D Stadtler Trust 2015 Trust v. Gorrie

• Court: District Court, D. Arizona
• Decided: April 15, 2022
• Docket: 2:22-cv-00314
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 D Stadtler Trust 2015 Trust, et al., No. CV-22-00314-PHX-DWL

10 Plaintiffs, ORDER

11 v.

12 Pamela Gorrie, et al.,

13 Defendants. 14 15 Pending before the Court is Plaintiffs’ motion to remand. (Doc. 11.) For the 16 following reasons, the motion is denied. 17 BACKGROUND 18 On February 11, 2022, Plaintiffs filed a complaint in La Paz County Superior Court. 19 (Doc. 1-2 at 10-27.) The two named Plaintiffs are: (1) the D. Stadler Trust 2015; and (2) 20 Daniel Stadler. (Id. at 10-11.) The four named Defendants are: (1) Pamela Gorrie 21 (“Gorrie”); (2) Innovative Global Distributions, LLC (“IGD”); (3) Natural Footprints 22 Organic Farm LP (“NFOF”); and (4) NFF Management LLC (“NFF”). (Id. at 11.) 23 On February 27, 2022, Gorrie filed a notice of removal. (Doc. 1.) The notice states 24 that, as of the time of removal, none of the Defendants had been served. (Id. ¶ 1.) The 25 notice further states that removal is permissible because the Court would have original 26 jurisdiction over this action under 28 U.S.C. § 1332, the diversity-jurisdiction statute. (Id. 27 ¶ 4.) In support of the allegation of diversity jurisdiction, the notice alleges that both 28 Plaintiffs are citizens of California, Gorrie “is a citizen of Canada and not a permanent 1 resident of the United States,” and the remaining three Defendants are all Arizona entities. 2 (Id.) 3 On March 21, 2022, Plaintiffs filed the pending motion to remand. (Doc. 11.) 4 On April 4, 2022, Gorrie filed a response. (Doc. 15.) 5 On April 11, 2022, Plaintiffs filed a reply. (Doc. 16,) 6 On April 13, 2022, Plaintiffs filed a supplement in which they withdrew one of their 7 arguments in support of remand. (Doc. 18.) 8 DISCUSSION 9 I. Legal Standard 10 Under 28 U.S.C. § 1441(a), “any civil action brought in a State court of which the 11 district courts of the United States have original jurisdiction, may be removed by the 12 defendant or the defendants, to the district court of the United States for the district and 13 division embracing the place where such action is pending.” When, as here, removal is 14 sought based solely on diversity of citizenship, the action “may not be removed if any of 15 the parties in interest properly joined and served as defendants is a citizen of the State in 16 which such action is brought.” Id. § 1441(b)(2). 17 The procedure for removing a civil action from state court is set forth at 28 U.S.C. 18 § 1446, which provides that “[a] defendant or defendants desiring to remove any civil 19 action from a State court shall file in the district court of the United States for the district 20 and division within which such action is pending a notice of removal . . . containing a short 21 and plain statement of the grounds for removal, together with a copy of all process, 22 pleadings, and orders served upon such defendant or defendants in such action.” Id. 23 § 1446(a). The notice “shall be filed within 30 days after the receipt by the defendant, 24 through service or otherwise, of a copy of the initial pleading setting forth the claim for 25 relief upon which such action or proceeding is based, or within 30 days after the service of 26 summons upon the defendant.” Id. § 1446(b)(1). 27 The procedure for seeking the remand of an action to state court is set forth at 28 28 U.S.C. § 1447. As relevant here, it provides that “[a] motion to remand the case on the 1 basis of any defect other than lack of subject matter jurisdiction must be made within 30 2 days after the filing of the notice of removal under section 1446(a). If at any time before 3 final judgment it appears that the district court lacks subject matter jurisdiction, the case 4 shall be remanded.” Id. § 1447(c). 5 II. The Parties’ Arguments 6 Plaintiffs argue that Gorrie’s effort to remove this action from state court was flawed 7 for two reasons. (Doc. 11.) First, Plaintiffs argue the removal effort is barred by the so- 8 called “forum defendant rule” set forth at 28 U.S.C. § 1441(b)(2) because all four 9 Defendants are citizens of Arizona. (Id. at 5-12.) As for Gorrie, Plaintiffs do not appear 10 to dispute Gorrie’s assertion in the removal notice that she is a Canadian citizen—rather, 11 Plaintiffs argue that “[w]hether Ms. Gorrie is a Canadian citizen is not determinative” 12 because Gorrie has also established domicile in Arizona by residing in Arizona since 2020, 13 not visiting Canada since 2020, entering into various property transactions in Arizona since 14 2016, possessing an Arizona-based phone number, making statements to others that she 15 has no intention of returning to Canada and wishes to settle in Arizona, potentially 16 obtaining a Social Security number, forming various Arizona entities, and obtaining 17 licenses from Arizona agencies. (Id.) According to Plaintiffs, “[t]he sum of the above 18 factors shows that Ms. Gorrie’s ‘fixed habitation or abode’ is in Arizona and that she 19 ‘intends to remain there permanently or indefinitely.’” (Id. at 12.) Plaintiffs further 20 contend that “[f]or the purposes of diversity jurisdiction, Ms. Gorrie is domiciled in 21 Arizona” and “Ms. Gorrie is therefore a home-state Defendant and, pursuant to 28 U.S.C.A. 22 § 1441(b)(2), removal to this Court is improper.” (Id.) As for the two entity Defendants 23 that are organized as LLCs (IGD and NFF), Plaintiffs argue that each entity qualifies as an 24 Arizona citizen because Gorrie is each entity’s sole member and LLCs take on the 25 citizenship of their members. (Id. at 8 & n.1.)1 As for the final entity Defendant that is 26 organized as a limited partnership (NFOF), Plaintiffs argue that it qualifies as an Arizona 27 1 Although Plaintiffs initially argued that IGD also had another member who is an 28 Arizona citizen (Doc. 11 at 5-7), Plaintiffs have since withdrawn their arguments as to the other member (Doc. 18). 1 citizen because its sole partner (NFF) is an Arizona citizen and limited partnerships take 2 on the citizenship of their partners. (Id. at 8.) Second, and alternatively, Plaintiffs argue 3 that Gorrie’s removal effort was premature because Gorrie filed the removal notice before 4 being served and there is a “growing trend” to disallow pre-service removal efforts. (Id. at 5 12-13.) 6 Gorrie opposes the motion to remand. (Doc. 15.) According to Gorrie, all of 7 Plaintiffs’ objections “overlook[] crucial facts underpinning the statutory basis for Gorrie’s 8 removal of the instant action; namely Gorrie’s Canadian citizenship and the fact that she is 9 the sole member of the unincorporated defendant entities and sole limited partner of the 10 limited partnership.” (Id. at 1.) Gorrie argues that this “oversight means that [Plaintiffs’] 11 discussion of the forum defendant rule, snap removal and domiciliary analysis do not bear 12 upon Gorrie’s citizenship for diversity purposes.” (Id. at 1-2.) Gorrie contends that, under 13 Coury v. Prot, 85 F.3d 244 (5th Cir. 1996), the fact that she is a Canadian citizen necessarily 14 means she cannot also be a citizen of the United States “or any American state” irrespective 15 of her desire to remain in that state, and thus she cannot be a forum defendant for purposes 16 of § 1441(b)(2). (Id. at 3-4.) Gorrie also submits a declaration avowing that she is a citizen 17 of Canada, is not a lawful permanent resident (“LPR”) of the United States, does not have 18 a Social Security number, and is currently in the United States under an E-2 visa that 19 expires in May 2023. (Doc. 15-1 ¶¶ 3-7.) 20 In reply, Plaintiffs characterize Gorrie’s position as “that a non-citizen can never be 21 sued in state court” and argue that the cases cited by Gorrie do not support her position 22 because they involved distinguishable facts. (Doc. 16 at 2, 6-10.) Plaintiffs also contend 23 that Gorrie has “fail[ed] to carry her burden of proving she is a non-citizen” because “[t]he 24 only proof that Gorrie offers of her non-citizenship is her own say-so” and “she fails to 25 attach a single document to her declaration to carry her burden of proving that she is a non- 26 citizen.” (Id. at 10-11.) Finally, Plaintiffs argue that, because Gorrie failed to respond to 27 their alternative argument about the premature timing of the removal notice, she has 28 conceded that a remand is warranted on that ground. (Id. at 2, 5.) 1 III. Analysis 2 The Court agrees with Gorrie that the removal effort in this case was permissible. 3 As an initial matter, the Court is satisfied with Gorrie’s showing that she is a citizen 4 of Canada. In the removal notice, Gorrie asserted that she is a Canadian citizen. (Doc. 1 5 ¶ 4c.) In the motion to remand, Plaintiffs did not appear to dispute this assertion—to the 6 contrary, they argued that “[w]hether Ms. Gorrie is a Canadian citizen is not determinative” 7 because she has also expressed an intent to remain in Arizona indefinitely. (Doc. 11 at 7, 8 9-12.) Nevertheless, in response to the motion to dismiss, Gorrie submitted competent 9 evidence—in the form of her own declaration—that she is a Canadian citizen. (Doc. 15-1 10 ¶ 3.) Given this backdrop, Plaintiffs’ complaint that Gorrie did not submit documentary 11 evidence in support of her claim of Canadian citizenship is unavailing—the Court is 12 unaware of any rule holding that a witness’s sworn testimony on an issue within the 13 witness’s personal knowledge, where the issue doesn’t even appear to be disputed by the 14 opposing party, is insufficient unless also corroborated with documentary evidence. 15 The parties’ apparent factual dispute over whether Gorrie has a Social Security 16 number does not change this analysis. Plaintiffs acknowledge that a Canadian citizen may, 17 under certain circumstances, obtain a Social Security number. (Doc. 11 at 11 [“This Court 18 can take judicial notice that a noncitizen only requires and is entitled to a Social Security 19 Number if he or she is authorized to work in the United States by the Department of 20 Homeland Security.”].) 21 Finally, the Court is also satisfied with Gorrie’s showing that she is not an LPR of 22 the United States and is instead in the country on an E-2 visa that is set to expire in May 23 2023. (Doc. 15-1 ¶¶ 5-7.) Although Plaintiffs assert in their reply that Gorrie is “seeking” 24 LPR status and is “highly likely” to obtain that status in the future (Doc. 16 at 5 n.1, 10), 25 the bottom line is that Gorrie does not possess LPR status right now (and was not an LPR 26 at the time of the removal effort). 27 With these clarifications in mind, Gorrie’s citizenship for purposes of the 28 1 jurisdictional analysis in this case is that of a foreign state (Canada), not Arizona.2 The 2 overwhelming weight of authority is that a citizen of a foreign state may also be considered 3 a citizen of a State of the United States for jurisdictional purposes only if she has been 4 granted LPR status. See, e.g., S Rock Partners, LLC v. Kiselev, 2018 WL 888725, *4 (D. 5 Conn. 2018) (“[A]n alien who has been accorded lawful permanent residence from the 6 United States . . . is considered a citizen of the state in which he is domiciled. In contrast, 7 one who is admitted into the United States on a temporary, non-immigrant visa . . . is an 8 alien for purposes of citizenship.”); Valladares v. Arceius-Jones, 2013 WL 6504655, *2 9 (E.D.N.Y. 2013) (“Plaintiff does not have lawful permanent resident status . . . . Therefore, 10 notwithstanding plaintiff’s 16-year residence in the United States, . . . he is considered a 11 citizen of a foreign state suing a U.S. resident for purposes of diversity jurisdiction.”). 12 Accordingly, courts have concluded that an alien (such as Gorrie) who lacks LPR status 13 and is present in the United States on a non-immigrant visa is only considered a citizen of 14 a foreign state, regardless of her desire and intent to reside indefinitely in a particular State. 15 See, e.g., Fungyin v. Yukos Oil Co., 2005 WL 1840147, *2 (S.D. Tex. 2005) (even though 16 the plaintiff had been in Texas for approximately seven years, held a graduate degree from 17 Texas, worked for an oil company in Texas, possessed property and bank accounts in 18 Texas, and paid taxes in Texas, the plaintiff’s “declaration concerning his current H1-B 19 immigration status . . . proves he is not a United States citizen who could be domiciled in 20 Texas”); Abbott v. Good Shepherd Med. Ctr., 2004 WL 2847903, *4 (D. Or. 2004) 21 (“[P]laintiff’s possession of a B1/B2 visa precludes him from having the legal capacity to 22 establish a U.S. domicile.”). Courts have applied this principle in cases involving the exact 23 type of visa that Gorrie possesses. Kato v. County of Westchester, 927 F. Supp. 714, 716 24 (E.D.N.Y. 1996) (“As a Japanese citizen present in the United States on an E-2 visa, Isao 25 Kato is not admitted for permanent residence in the United States. Therefore, he is treated 26 as an alien for diversity purposes.”).

27 2 The Court also concludes that the remaining Defendants in this action (IGD, NFOF, and NFF) share the citizenship of Gorrie. Although the removal notice is facially deficient 28 because it fails to affirmatively set forth the facts necessary to determine the citizenship of IGD, NFOF, and NF, those deficiencies have since been cured by Defendant’s response. 1 For these reasons, Gorrie’s effort to remove this action from Arizona state court did 2 not violate the “forum defendant rule” set forth at 28 U.S.C. § 1441(b)(2), which provides 3 that a civil action otherwise removable based upon diversity jurisdiction “may not be 4 removed if any of the parties in interest properly joined and served as defendants is a citizen 5 of the State in which such action is brought.” Because Gorrie and the remaining 6 Defendants are not citizens of Arizona, § 1441(b)(2) is not implicated. 7 Plaintiffs’ final objection to the removal effort is that it was premature because 8 Gorrie had not yet been served when she filed her removal notice. This argument lacks 9 merit. Under 28 U.S.C. § 1446, which is entitled “Procedure for removal of civil actions,” 10 the general rule is that “[t]he notice of removal of a civil action or proceeding shall be filed 11 within 30 days after the receipt by the defendant, through service or otherwise, of a copy 12 of the initial pleading setting forth the claim for relief upon which such action or proceeding 13 is based.” Id. § 1446(b)(1) (emphasis added). The italicized language strongly suggests 14 that a defendant may become aware of a complaint through means other than formal service 15 and then seek removal within 30 days of obtaining such notice. Any contrary interpretation 16 would render the phrase “or otherwise” superfluous. Cf. Awa v. Guam Mem'l Hosp. Auth., 17 726 F.2d 594, 597 (9th Cir. 1984) (“This court has held that statutes should not be construed 18 to make mere surplusage of any statutory provision.”); Planned Parenthood of Idaho, Inc. 19 v. Wasden, 376 F.3d 908, 928 (9th Cir. 2004) (“[I]t is a cardinal principle of statutory 20 construction that a statute ought, upon the whole, to be so construed that, if it can be 21 prevented, no clause, sentence, or word shall be superfluous, void, or insignificant.”) 22 (citations and internal quotation marks omitted). 23 The cases cited by Plaintiffs are not to the contrary. In those cases, the question 24 wasn’t whether the removal attempt was categorically invalid under § 1446 because it came 25 too soon. Rather, the issue was whether the removing defendant could avoid application 26 of § 1441(b)(2)’s forum-defendant rule—which, as noted, bars removal “if any of the 27 parties in interest properly joined and served as defendants is a citizen of the State in which 28 such action is brought”—by removing before any of the forum defendants had been served. || Inthe cases cited by Plaintiffs, courts recognized that such an interpretation of § 1441(b)(2) 2|| would “allow a loophole” and “lead to an absurd result.”, DHINH, LLC v. Int’l B’hood of 3|| Teamsters, Local 251, 319 F. Supp. 3d 604, 606 (D.R.I. 2018). Accord Phillips Constr., 4|| LLC v. Daniels L. Firm, PLLC, 93 F. Supp. 3d 544, 556 (S.D.W. Va. 2015) (“[I]n cases 5 || involving only resident defendants, the forum-defendant rule bars resident defendants from 6 || removing an action pursuant to diversity jurisdiction before effectuation of service.”’); 7\| Perez v. Forest Labs., Inc., 902 F. Supp. 2d 1238, 1244 (E.D. Mo. 2012) (“The rationale 8 || underlying the forum defendant rule is most clearly contravened when a forum defendant 9|| itself removes the action before being served. ... Removal under such circumstances 10 || frustrates the policy underlying the forum defendant rule.”); Ethington v. General Electric || Co., 575 F. Supp. 2d 855, 858-59 (N.D. Ohio 2008) (“The ultimate question here . . . is || whether the ‘properly joined and served’ language constitutes a loophole through which 13 || the GE Defendants can avoid the prohibition on forum defendants removing a case.”). But 14|| that is not the situation here—as discussed above, none of the Defendants are Arizona 15} citizens and § 1441(b)(2) isn’t implicated by Gorrie’s removal effort. 16 Accordingly, 17 IT IS ORDERED that Plaintiffs’ motion to remand (Doc. 11) is denied. 18 IT IS FURTHER ORDERED that Plaintiffs’ motion to stay (Doc. 20) is denied || as moot. 20 Dated this 15th day of April, 2022. 21 22 Am ee 23 f Dominic W. Lanza IA United States District Judge 25 26 27 28

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