Woods v. Ross Dress For Less

Procedural entryThis page is a short order in Woods v. Ross Dress For Less. Read the opinion of the Court — 985 F.3d 775
Court of Appeals for the Tenth Circuit·Decided January 15, 2021·No. 19-5089·Unpublished

Opinion

FILED

United States Court of Appeals UNITED STATES COURT OF APPEALS Tenth Circuit

FOR THE TENTH CIRCUIT January 15, 2021

Christopher M. Wolpert

Clerk of Court

ROSE WOODS,

Plaintiff - Appellant,

v. No. 19-5089 (D.C. No. 4:18-CV-00327-TCK-JFJ)

ROSS DRESS FOR LESS, INC., a foreign (N.D. Okla.) corporation,

Defendant - Appellee, and MEGAN BUTLER, an individual,

Defendant.

ORDER AND JUDGMENT *

Before HARTZ, MATHESON, and CARSON, Circuit Judges.

Rose Woods tripped and fell over a “Ross is hiring” sign outside a Ross Dress for Less, Inc. (“Ross”) store in Oklahoma. She sued Ross and the store’s manager, Megan Butler, in Oklahoma state court, seeking damages under state law. Ross removed the action to federal court, invoking diversity jurisdiction under 28 U.S.C. § 1332(a)(1).

*

This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. It may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.

The district court denied Ms. Woods’s motion to remand and granted summary judgment in favor of Ross. Ms. Woods appeals both rulings. Because the district court erred in denying the motion to remand and lacked jurisdiction to enter summary judgment, we reverse and remand with instructions to vacate the judgment and either ascertain a basis for federal jurisdiction or remand the action to state court.

I. BACKGROUND

Ms. Woods was attempting to enter a Ross store in Broken Arrow, Oklahoma, when she tripped and fell over a “Ross is hiring” sign that had fallen near the store’s entrance. Ms. Butler was the store manager on duty. Ms. Woods and Ms. Butler are citizens of Oklahoma. Ross is a non-Oklahoma corporation that is headquartered and has its principal place of business in California.

Ms. Woods sued Ross and Ms. Butler in Oklahoma state court, asserting premises liability under Oklahoma state law. After Ms. Woods served Ross but before she could serve Ms. Butler, Ross removed the action to the U.S. District Court for the Northern District of Oklahoma, invoking diversity jurisdiction under 28 U.S.C. § 1332(a)(1). See 28 U.S.C. § 1441(a) (authorizing removal of an action that could originally have been filed in federal court). Ross asserted Ms. Butler’s nondiverse citizenship did not affect diversity because she had not been served. It relied on 28 U.S.C. § 1441(b)(2), which bars diversity-based removal if any “properly joined and served” defendant is a citizen of the forum state.

Ms. Woods moved to remand, arguing removal was improper under §§ 1441(a)

and 1332(a)(1) because she and Ms. Butler were both citizens of Oklahoma. Ms.

Woods contended Ms. Butler’s citizenship must be considered even though she had not been served.

The district court denied Ms. Woods’s remand motion in a three-page order.

Overlooking § 1441(a) and the lack of diversity under § 1332(a)(1), the court relied on § 1441(b)(2). It held removal was appropriate because no “properly joined and served” defendant was an Oklahoma citizen at the time of removal. Id. at 50. Ms. Butler has remained a named defendant to this day.

Ross moved for summary judgment, which the district court granted. Ms.

Woods timely appealed the court’s denial of remand and grant of summary judgment.

II. DISCUSSION

The district court erred in denying the motion to remand. It lacked removal jurisdiction under § 1441(a) and § 1332(a)(1) and lacked diversity subject matter jurisdiction to enter summary judgment because Ms. Woods and Ms. Butler were not diverse. We thus do not reach the merits of the summary judgment.

A. Legal Background

“Federal courts are courts of limited jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). “We must presume no jurisdiction exists absent an adequate showing by the party invoking federal jurisdiction.” Dutcher v. Matheson, 840 F.3d 1183, 1189 (10th Cir. 2016) (quotations omitted). We “review de novo the district court’s denial of a motion to remand for lack of removal jurisdiction.” Salzer v. SSM Health Care of Okla. Inc., 762 F.3d 1130, 1134 (10th Cir. 2014) (citing Garley v. Sandia Corp., 236 F.3d 1200, 1207 (10th Cir. 2001)).

1. Removal Based on Diversity Jurisdiction A defendant may remove “any civil action brought in a State court of which the district courts of the United States have original jurisdiction . . . to the district court of the United States” where the action is pending. 28 U.S.C. § 1441(a); see Lincoln Prop. Co. v. Roche, 546 U.S. 81, 83 (2005). To warrant removal under § 1441(a) based on diversity jurisdiction, the matter must satisfy (a) § 1332(a)’s diversity requirements and (b) § 1441(b)(2)’s limitation on diversity-based removal.

a. Sections 1332(a) and 1441(a)

A federal court has original jurisdiction based on diversity if “the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between . . . citizens of different States.” 28 U.S.C. § 1332(a)(1). “[T]he statutory formulation ‘between . . . citizens of different States’ . . . require[s] complete diversity between all plaintiffs and all defendants.” Roche, 546 U.S. at 89 (quoting Caterpillar v. Lewis, 519 U.S. 61, 68 (2005)). Courts generally determine diversity based on the citizenship of the parties named in the complaint. See id. at 84. 1

1 An exception to this rule occurs when a party has been fraudulently joined to defeat federal jurisdiction. See Dutcher v. Matheson, 733 F.3d 980, 987-88 (10th Cir. 2016) (describing fraudulent-joinder analysis). Ross suggested at oral argument that Ms. Butler could be ignored for purposes of diversity because she had been fraudulently joined. Because Ross did not raise this argument in its brief on appeal, we decline to consider it here. See Rivero v. Bd. of Regents of the Univ. of N.M., 950 F.3d 754, 760 n.5 (10th Cir. 2020); see also 14C Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure – Jurisdiction and Related Matters § 3723.1 (4th ed., July 2020 update) (“A contention that the plaintiff has engaged in fraudulent joinder must be alleged with particularity by the party seeking removal, and supported by clear and convincing evidence.”).

When diversity jurisdiction is the basis for removal, diversity must exist both at the time the action is filed in state court and at the time the case is removed to federal court. See Grupo Dataflux v. Atlas Glob. Grp., L.P., 541 U.S. 567, 570-71, 574 (2004); 14C Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure – Jurisdiction and Related Matters § 3723 (4th ed., July 2020 update) (“Wright & Miller”). Under the “time-of-filing” rule, the citizenship of every plaintiff must be diverse from the citizenship of every defendant when the complaint is filed. Grupo Dataflux, 541 U.S. at 570-71. Under § 1441(a), there also must “be complete diversity at the time of removal.” Id. at 574.

A defendant’s citizenship is part of the diversity analysis regardless of whether the defendant has been served. See United States ex rel. Gen. Rock & Sand Corp. v. Chuska Dev. Corp., 55 F.3d 1491, 1495 (10th Cir. 1995). “[T]he existence of diversity is determined from the fact of citizenship of the parties named and not from the fact of service.” N.Y. Life Ins. Co. v. Deshotel, 142 F.3d 873, 883 (5th Cir. 1998); see Howell by Goerdt v. Trib. Ent. Co., 106 F.3d 215, 217-18 (7th Cir. 1997) (same); see also Wright & Miller §§ 3723, 3723.1.

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