Wakefield v. Crinnian

44 F. Supp. 3d 1195, 2014 U.S. Dist. LEXIS 120806, 2014 WL 4388339
CourtDistrict Court, N.D. Alabama
DecidedAugust 29, 2014
DocketCase Nos. 1:14-CV-0718-VEH, 1:14-CV-0715-VEH
StatusPublished
Cited by3 cases

This text of 44 F. Supp. 3d 1195 (Wakefield v. Crinnian) is published on Counsel Stack Legal Research, covering District Court, N.D. Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wakefield v. Crinnian, 44 F. Supp. 3d 1195, 2014 U.S. Dist. LEXIS 120806, 2014 WL 4388339 (N.D. Ala. 2014).

Opinion

MEMORANDUM OPINION

VIRGINIA EMERSON HOPKINS, District Judge.

I. Introduction

Plaintiff William M. Wakefield (“Mr. Wakefield”) initiated this declaratory judgment action in the Circuit Court of Calhoun County, Alabama on March 12, 2014. (Doc. 1-1 at 3).1 Mr. Wakefield sued the following four defendants: Wakefield’s Inc. (the “Family Company”), Susan Wakefield Crinnian (“Ms. Crinnian”), the Susan Wakefield Crinnian Trust (the “Trust”), and John W. Gordon (“Mr. Gordon”). (Doc. 1-1 at 3-4 ¶¶ 2-5).

The lawsuit arises out of a dispute between Ms. Crinnian and Mr. Wakefield about Mr. Wakefield’s alleged mismanagement of the Family Company, a closely-held clothing business, and his unfair treatment of the Trust. (Doc. 1-1 at 8 ¶¶ 21-22; id. at 4 ¶ 8). Mr. Wakefield is the majority shareholder and president of the Family Company. (Doc. 1-1 at 3 ¶ 1). The Trust, Mr. Gordon, and Mr. Wake-field’s wife are the Family Company’s current minority shareholders. (Id. at 7 ¶ 16). Ms. Crinnian is a former minority shareholder.

The complaint seeks the following forms of declaratory relief:

a. That in all transactions with [Mr.] Gordon, [Mr.] Wakefield has acted consistently with the Articles of Incorporation, Bylaws, and his duties [1198]*1198owed to the Company and its shareholders;
b. That in all transactions with [Mr.] Gordon, [Mr.] Wakefield has protected the interests and rights of the Trust as a minority shareholder, and all other minority shareholders;
c. That in his actions as President and majority shareholder, [Mr.] Wake-field has acted in accordance with his legal and fiduciary duties set forth in the Articles of Incorporation, Bylaws, and Alabama law;
d. That [Mr.] Wakefield’s actions are consistent with and protected by the Business Judgment Rule; and
e. For such other, additional relief to which Plaintiff may be entitled, premises considered.

(Doc. 1-1 at 9 ¶ 23).

Ms. Crinnian and the Trust removed the action arising under the Alabama Declaratory Judgment Act to federal court on April 18, 2014, asserting the presence of diversity jurisdiction under 28 U.S.C. § 1332 in conjunction with the fraudulent joinder of the Family Company and Mr. Gordon. (Doc. 1 at 1; id. at 3-4 ¶ 9-10). Alternatively, Ms. Crinnian and the Trust contend that “an alignment of actual interests ... mandates that [the Family Company and Mr. Gordon] be aligned with [Mr. Wakefield] and not [Ms.] Crinnian and the Crinnian Trust.” (Id. at 5 ¶ 12).

This litigation was reassigned to the undersigned on June 24, 2014. (Doc. 10). By a separate order, the court has consolidated 1:14-CV-0715-VEH with this lawsuit as a counterclaim asserted against .counterdefendant Mr. Wakefield.

Pending before the court are: (i) Ms. Crinnian and the Trust’s Motion To Dismiss for Lack of Subject Matter Jurisdiction (Doc. 3) (the “Dismissal Motion”) filed on April 18, 2014; (ii) Mr. Wakefield’s Motion To Remand (Doc. 8) (the “Remand Motion”) filed on May 5, 2014; and (iii) Mr. Wakefield’s Request for Oral Argument on His Motion To Remand (Doc. 14) (the “OA Request”) filed on July 7, 2014.

The parties have briefed the Dismissal and Remand Motions to some degree (Docs. 4, 9), and all motions are now ready for disposition. For the reasons explained below, the Remand Motion is due to be granted, the Dismissal Motion is due to be termed as moot, and the OA Request is due to be denied.

II. Standards

A. General Jurisdictional Principles

“It is by now axiomatic that the inferior courts are courts of limited jurisdiction. They are ‘empowered to hear only those cases within the judicial power of the United States as defined by Article III of the Constitution,’ and which have been entrusted to them by a jurisdictional grant authorized by Congress.” Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 409 (11th Cir.1999) (quoting Taylor v. Appleton, 30 F.3d 1365, 1367 (11th Cir.1994)). “Accordingly, ‘[w]hen a federal court acts outside its statutory subject-matter jurisdiction, it violates the fundamental constitutional precept of limited federal power.’ ” Univ. of S. Ala., 168 F.3d at 409 (quoting Victory Carriers, Inc. v. Law, 404 U.S. 202, 212, 92 S.Ct. 418, 425, 30 L.Ed.2d 383 (1971)). “Simply put, once a federal court determines that it is without subject matter jurisdiction, the court is powerless to continue.” Univ. of S. Ala., 168 F.3d at 410.

“A necessary corollary to the concept that a federal court is powerless to act without jurisdiction is the equally unremarkable principle that a court should inquire into whether it has subject matter jurisdiction at the earliest possible stage in the proceedings.” Univ. of S. Ala., 168 [1199]*1199F.3d at 410. “Indeed, it is well settled that a federal court is obligated to inquire into subject matter jurisdiction sua sponte whenever it may be lacking.” Id. (citing Fitzgerald v. Seaboard Sys. R.R., 760 F.2d 1249, 1251 (11th Cir.1985) (per curiam)).

Moreover, “[t]he jurisdiction of a court over the subject matter of a claim involves the court’s competency to consider a given type of case, and cannot be waived or otherwise conferred upon the court by the parties. Otherwise, a party could “work a wrongful extension of federal jurisdiction and give district courts power the Congress denied them.’ ” Jackson v. Seaboard Coast Line R.R., 678 F.2d 992, 1000-01 (11th Cir.1982) (quoting American Fire & Cas. Co. v. Finn, 341 U.S. 6, 18, 71 S.Ct. 534, 542, 95 L.Ed. 702 (1951)) (footnote and citation omitted). Furthermore, “[b]ecause removal jurisdiction raises significant federalism concerns, federal courts are directed to construe removal statutes strictly.” Univ. of S. Ala., 168 F.3d at 411 (citing Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09, 61 S.Ct. 868, 872, 85 L.Ed. 1214 (1941)).

Lastly, Congress has decreed and the Supreme Court has confirmed that—with the express exception of civil rights cases that have been removed—orders of remand by district courts based upon certain grounds, including in particular those premised upon lack of subject matter jurisdiction, are entirely insulated from review. More specifically, § 1447(d) provides:

An order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise, except that an order remanding a case to the State court from which it was removed pursuant to section 1443 of this title shall be reviewable by appeal or otherwise.

28 U.S.C.

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Cite This Page — Counsel Stack

Bluebook (online)
44 F. Supp. 3d 1195, 2014 U.S. Dist. LEXIS 120806, 2014 WL 4388339, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wakefield-v-crinnian-alnd-2014.