Lerma v. Univision Communications, Inc.

52 F. Supp. 2d 1011, 1999 U.S. Dist. LEXIS 9251, 1999 WL 395123
CourtDistrict Court, E.D. Wisconsin
DecidedJune 11, 1999
Docket99-C-447
StatusPublished
Cited by8 cases

This text of 52 F. Supp. 2d 1011 (Lerma v. Univision Communications, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Wisconsin primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lerma v. Univision Communications, Inc., 52 F. Supp. 2d 1011, 1999 U.S. Dist. LEXIS 9251, 1999 WL 395123 (E.D. Wis. 1999).

Opinion

DECISION AND ORDER

ADELMAN, District Judge.

Issues of fraudulent joinder and antitrust coalesce in this case involving the decision of the sole provider of Spanish-language television programming in the Milwaukee area to switch from over-the-air broadcasting to a direct cable feed.

I. PROCEDURAL HISTORY

Plaintiffs filed this lawsuit and a motion for a temporary restraining order on Wednesday, April 28, 1999, seeking to prevent defendant Univision Communications, Inc. from terminating plaintiff W46AR Channel 46’s over-the-air broadcast of Univision’s Spanish-language network programming. Channel 46’s contractual right to broadcast *1013 Univision programming was due to expire on April 30.

Plaintiffs filed the case in Milwaukee County Circuit Court and waited in the courtroom of the assigned judge, Lee Wells, 1 for an opportunity to address the TRO request. When the case was called, Judge Wells telephoned defendant’s general counsel, located in Los Angeles, California, who then conferenced in outside counsel, also located in California. The court and parties discussed the matter and then scheduled an expedited hearing for the next day, Thursday, April 29, at 2:00 p.m. At the end of the telephone conference, however, Judge Wells stated as follows:

Here’s what I’m going to do, though, so that the status quo is retained until we have our hearing tomorrow, and that is as follows:
That is, I am verbally ordering that the status quo procedure remain now and intact until such time as at the conclusion of tomorrow’s hearing, at which time I’ll take some action one way or the other, and that is that Channel 46 must remain in business. They must continue to be able to transmit programming through — provided by Univision in the same manner that they are right now, not being on cable but being regular television programming without Cable TV, and that will be the order at least until tomorrow until I can make some decision on what I hear tomorrow; and tomorrow I’ll make a new order one way or the other, one way on this aspect as well as the other aspects requested by the plaintiff or the defendant or both.

(Tr. of 4/28/99 at 36.) Upon an objection by Univision’s attorneys because the “order is unnecessary ... because the contract doesn’t expire until the 30th,” the judge indicated: “I know. But the reason I’m doing this is I wouldn’t want somebody down there in your office to haphazardly decide to cancel tomorrow and, therefore, claim we’re not retaining the status quo; and that’s why I’m doing it to protect the status quo.” (Id. at 36-37.)

At 1:23 p.m. the next day, Univision removed the case to federal court, where it was assigned to me. Counsel for Univision attended the state court’s hearing at 2:00 p.m. but made no formal appearance, instead informing Judge Wells of the removal. Noting that removal prevented him from doing anything further in the case, Judge Wells nevertheless noted that

because of ... the needs of the community to have the benefit of ongoing free television for Hispanics and Latinos in this community, I did order a temporary restraining order on the record, and that order remains intact and in place until there’s further order of this Court. Since I cannot make further order of this Court, it remains intact unless otherwise changed or altered or removed by some other Court of appropriate jurisdiction.

(Tr. of 4/29/99 at 4-5.)

On Friday, April 30, my chambers contacted the parties’ attorneys to arrange a TRO hearing and further proceedings in the case. Also on April 30, plaintiffs filed a motion to remand the case to state court. Upon the setting of an in-person status conference for the following Tuesday, May 4, Univision’s counsel questioned the validity of Judge Wells’s order but agreed to abide by it until the status conference could be held.

Defendants removed this case under 28 U.S.C. § 1332 based on diversity jurisdiction. It is undisputed that more than $75,000 is involved. But according to the complaint and notice of removal, plaintiffs Ramon Lerma and Mario Omar are citizens of California, and defendant Univision Communications, Inc. has its principal place of business in California. Lerma, Omar and Univision thus are citizens of the same state, which ordinarily defeats federal court subject matter jurisdiction. *1014 Hoosier Energy Rural Elec. Co-op., Inc. v. Amoco Tax Leasing TV Corp., 34 F.3d 1310, 1314-15 (7th Cir.1994) (diversity must be “complete,” meaning that no plaintiff may be a citizen of the same state as any defendant). Whether the case should remain in this court therefore was a serious question.

At the May 4 status conference I indicated that I would address the motion to remand before dealing with the TRO because of my belief that in the absence of federal subject matter jurisdiction, the decision on the TRO should be handled by the state court. The parties agreed to a briefing schedule for the remand motion and Univision agreed to continue supplying Channel 46 with broadcasting until I could issue a decision. On May-24, 1999, I heard oral argument on the remand motion.

Since then Univision filed a motion to dismiss. Plaintiffs in turn moved to stay briefing on and consideration of the motion to dismiss until the remand issue is decided.

II. FRAUDULENT JOINDER

While diversity ordinarily must be complete for federal.court subject matter jurisdiction to exist, plaintiff cannot avoid diversity jurisdiction by fraudulently joining nondiverse parties. Id. at 1315. Thus, if Univision can show that the joinder of Lerma and Omar was fraudulent, as it alleged in its notice of removal, removal will nevertheless be allowed. See Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97, 42 S.Ct. 35, 66 L.Ed. 144 (1921); Poulos v. Naas Foods, Inc., 959 F.2d 69, 73 (7th Cir.1992).

Joinder is fraudulent when there are false allegations of jurisdictional fact, or more commonly and as is alleged here, when the claim against the nondiverse defendant has no possible chance of success in state court. Hoosier Energy, 34 F.3d at 1315. Even though plaintiffs filed the motion to remand, the removing party bears the burden of proving fraudulent joinder, see Wilson, 257 U.S. at 97, 42 S.Ct. 35, and the burden is a heavy one. The removing party must show that, after resolving all issues of fact and law in favor of the plaintiffs, the nondiverse plaintiffs cannot establish a cause of action against the defendant. Poulos, 959 F.2d at 73. If there is any. reasonable possibility that a state court would rule against the nondiverse defendant, then joinder is not fraudulent. Id. If there is any doubt as to the right of removal, ambiguities are to be resolved against removal. Tom’s Quality Millwork. Inc. v. Delle Vedove USA, Inc., 10 F.Supp.2d 1042, 1044 (E.D.Wis.1998).

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Cite This Page — Counsel Stack

Bluebook (online)
52 F. Supp. 2d 1011, 1999 U.S. Dist. LEXIS 9251, 1999 WL 395123, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lerma-v-univision-communications-inc-wied-1999.