DAVID BRAMLETTE, District Judge.
This cause is before the Court on Plaintiff McRae Law Firm, PLLC's Motion to Remand
This is a long-running fee dispute between two Mississippi law firms. The parties are non-diverse, the complaint rests upon purely state-law theories, and the case has twice been remanded. And now — for a third time — the defendant law firm removes this action to this Court. In so doing, it posits that a complaint filed by the plaintiff law firm in another case is an "other paper" upon which this Court may base its jurisdictional determination. The plaintiff law firm moves to remand and requests sanctions.
On July 21, 2016, Plaintiff McRae Law Firm, PLLC ("McRae") sued Defendant Barry W. Gilmer and his law firm (collectively, "Gilmer") in the Chancery Court of the First Judicial District of Hinds County on state-law quasi-contract and breach of fiduciary duty theories.
McRae complains that Gilmer wrongfully retained settlement proceeds from a legal malpractice suit. Although both firms assisted the plaintiff in that suit, McRae insists that Gilmer's involvement was minimal and that his fee should so reflect.
Less than one month after McRae filed the state-court complaint, Gilmer removed the case. [Doc. 3-2] Gilmer's notice of removal invoked diversity and federal-question jurisdiction, however, the Court disclaimed the existence of either and remanded the case. [Doc. 3-3]
One month after the Court's Order of Remand, Gilmer again removed the case. [Doc. 3-5] This time, Gilmer premised federal jurisdiction on his "federally protected right to a jury trial." [Doc. 3-5]. The Court remanded the case in a one-page order. [Doc. 3-6]
For the third time, Gilmer removes this action to this Court. [Doc. 1] Gilmer's latest jurisdictional theory is that a RICO complaint McRae filed in another federal-court case is an "other paper" creating federal-question jurisdiction in this case.
Gilmer may remove McRae's state-court suit to this Court if the suit is one which McRae could have originally brought in federal court. 28 U.S.C. § 1441(a). Original jurisdiction may be based on diversity or federal-question jurisdiction. 28 U.S.C. §§ 1331, 1332.
The Court is without diversity jurisdiction because McCrae's state-court complaint confirms that McRae and at least one of the Gilmer Defendants are Mississippi citizens.
The Court has federal-question jurisdiction if McRae's statecourt complaint asserts a claim "arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. Courts apply the well-pleaded complaint rule to decide whether a complaint asserts a claim arising under federal law.
The well-pleaded complaint rule holds that "a federal court does not have federal-question jurisdiction unless a federal question appears on the face of the plaintiff's well-pleaded complaint."
But the well-pleaded complaint rule has an exception — the "artful pleading" doctrine. It allows a defendant to remove a case "if the plaintiff fails to plead necessary federal questions."
Next, Gilmer invites the Court to overlook the absence of a federal question on the face of McRae's state-court complaint and to instead consider federal claims presented in a federal-court complaint McRae has filed in another case. [Doc. 11, pp. 17-21]
A defendant may remove a case that initially appeared nonremovable within thirty days of receipt of a copy of "an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable." 28 U.S.C. § 1446(b)(3). Resisting remand, Gilmer contends McRae's federal-court complaint in another case is an "other paper" under § 1446(b)(3).
Subject to one exception not relevant here, courts interpret "other paper" under § 1446(b)(3) as a paper generated in the statecourt action that the defendant has removed.
The only law which could conceivably support Gilmer's theory of jurisdiction is a sixty-year-old district court opinion characterizing as an "other paper" an answer filed in a concurrent lawsuit "so clearly incidental and ancillary to the original action as to be, in purpose and effect, a continuation of it."
Gilmer's novel theory of removal jurisdiction is as unmoored from relevant policies as it is unsupported by law. Indeed, the "other paper" doctrine is sparingly applied when federal-question jurisdiction is claimed.
Besides dislodging the well-pleaded complaint rule itself, Gilmer's theory would erode the policies undergirding it. For starters, Gilmer's expansive interpretation of "other paper" would restrict a plaintiff's ability to litigate her claim as she sees fit.
Gilmer's theory of removal jurisdiction would, practically speaking, bar a plaintiff from concurrently litigating her statelaw claims in state court and her federal claims in federal court. Indeed, any time a plaintiff desired to so litigate, the defendant could simply point to the federal-court complaint and remove the state-court action. That is not federalism.
The Court declines Gilmer's invitation to construe McRae's federal-court complaint in another case as a basis for federalquestion jurisdiction in this case. Accordingly, the Court lacks subject-matter jurisdiction and remand is required.
The Court is empowered to require Gilmer, as the removing party, to pay "just costs and any actual expenses, including attorney fees, incurred as a result of the removal." 28 U.S.C. § 1447(c). An award of costs under § 1447(c) is not a sanction,
To determine objective reasonableness, the Court considers "relevant case law on subject-matter jurisdiction at the time of removal."
An award of "just costs" is appropriate. Gilmer lacked an objectively reasonable basis to remove McRae's state-court complaint because his position — that a plaintiff's complaint in a separate federal-court case is an "other paper" upon which this Court may obtain federal-question jurisdiction — finds no support in any opinion, binding or otherwise, and contravenes settled law limiting the application of the "other paper" doctrine in federalquestion-based removals. This is not a complex issue on which the law is uncertain.
This is the third time Gilmer has removed this case. Gilmer's repeated removals have "delay[ed] resolution of the case, impose[d] additional costs on both parties, and waste[d] judicial resources."
The parties shall confer on an appropriate award of fees and expenses, and shall, within ten days, notify the Court of the amount agreed. If the parties cannot agree, the Court shall schedule an evidentiary hearing to determine the amount.
McRae moves for sanctions under Federal Rule of Civil Procedure 11 and asks the Court to excuse his non-compliance with the rule's notice and safe-harbor requirements.
The twenty-one day safe-harbor provision is mandatory.
The Court may on its own initiative sanction a party or its attorney. FED. R. CIV. P. 11(c)(3);
The Court may impose a pre-filing injunction to "deter vexatious, abusive, and harassing litigation."
A pre-filing injunction may be necessary to deter Gilmer from removing this action for a fourth time.
The Court therefore orders Gilmer to show cause why the Court should not enjoin him from submitting any additional filings under 28 U.S.C. §§ 1441 and 1446 in federal court or in the Chancery Court of the First Judicial District of Hinds County with regard to the state-court complaint without first obtaining approval to do so from this Court.
A separate Order of Remand transferring the above-styled cause to the Chancery Court of the First Judicial District of Hinds County shall issue this day. The Court retains collateral jurisdiction over the discrete issues of the amount of just costs due to Plaintiff and the propriety of a pre-filing injunction sanction under Federal Rule of Civil Procedure 11.