Bay Park Center for Nursing & Rehabilitation LLC v. Philipson, 2:20-cv-06291

Background

29 related lawsuits implicated; 18 state-court actions were coordinated and transferred to Oneida County and later removed to federal court by putative "Class Representatives"; 11 actions were originally filed in federal court by the same counsel.
Oriska Corporation (an insurer) was plaintiff/intervenor in many state suits; the Class Representatives (added as defendants in state pleadings) sought removal and/or filed near-identical federal suits asserting claims tied to a workers’-compensation "Percy Plan."
The federal complaints named an extraordinarily large set of defendants (over 8,700), often without individualized factual allegations tying each defendant to the claims.
Counsel for the Class Representatives, James M. Kernan, has a significant disciplinary and criminal history: a felony plea for permitting a convicted felon to be involved in the insurance business, NYSDFS restrictions, state-court suspension, and readmission complications; those facts informed the court’s view of counsel’s motives and conduct.
The court remanded all 18 Removed Actions to New York Supreme Court, Oneida County (procedural defects including failure of unanimity and improper venue) and dismissed the 11 Federal Actions with prejudice for abusive litigation practice and counsel misconduct.
The court awarded attorneys’ fees and costs to the remanding parties and ordered Kernan to show cause why he should not be referred to the District’s Disciplinary Committee.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Rule of unanimity for removal	Removal valid because some defendants had not been served; service exception applies	Removers failed to obtain consent of all properly joined and served defendants	Remand: unanimity lacking; New York e‑filing constituted service on existing parties, so consent was required and not obtained
Proper venue for removal	Removal to EDNY acceptable	Cases were pending in Oneida County (Northern District); removal must be to the district where the action is pending	Remand: removals to EDNY improper; Oneida County lies in NDNY, so removals to EDNY were in wrong venue
Federal-question jurisdiction / complete preemption (ERISA)	Removals justified because intervenor/third-party pleadings raise ERISA claims that completely preempt state law	Well‑pleaded complaint rule bars removal based on intervenor/third‑party claims; operative state pleadings asserted state law claims	Remand: Nassau action had only state breach‑of‑contract claim; removal improper under well‑pleaded complaint rule and voluntariness principle; court declined to resolve jurisdiction for all other removed actions because procedural defects resolved remand
Dismissal of federal actions for abusive filings	Plaintiffs argued merits and sought nationwide relief; no abusive intent alleged	Removals and mass‑naming of thousands of defendants were harassing, burdensome, and administratively abusive; counsel violated prior disciplinary/administrative restrictions	Dismissal with prejudice: court used inherent authority and FRCP 41(b) to dismiss the 11 Federal Actions for extreme abuses of process and counsel misconduct
Attorneys’ fees under 28 U.S.C. § 1447(c)	Removers offered grounds for removal	Removals objectively unreasonable (violated unanimity, venue, well‑pleaded rule; apparent evasion of NDNY restrictions on counsel)	Fees and costs awarded to remanding parties; court retains jurisdiction to determine amount if parties cannot agree

Key Cases Cited

Syngenta Crop Protection, Inc. v. Henson, 537 U.S. 28 (2002) (removal statutes are creatures of statute and strictly construed)
Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (1941) (deference to plaintiff’s choice of state forum; removal construed narrowly)
Lupo v. Human Affairs Int’l, Inc., 28 F.3d 269 (2d Cir. 1994) (resolve doubts against removability)
R.G. Barry Corp. v. Mushroom Makers, Inc., 612 F.2d 651 (2d Cir. 1979) (burden on removing party to demonstrate right to federal forum)
Caterpillar Inc. v. Williams, 482 U.S. 386 (1987) (well‑pleaded complaint rule governs federal‑question removal)
Aetna Health Inc. v. Davila, 542 U.S. 200 (2004) (ERISA § 502 complete‑preemption doctrine permits removal only in limited circumstances)
Link v. Wabash R.R. Co., 370 U.S. 626 (1962) (federal courts’ inherent authority to manage docket and dismiss for abuse)
Martin v. Franklin Capital Corp., 546 U.S. 132 (2005) (attorney’s fees under § 1447(c) when removal objectively unreasonable)
Calabro v. Aniqa Halal Live Poultry Corp., 650 F.3d 163 (2d Cir. 2011) (removal premised on federal claims in third‑party pleadings can be objectively unreasonable; supports fee award)
Minnette v. Time Warner, 997 F.2d 1023 (2d Cir. 1993) (dismissal is a harsh remedy appropriate only in extreme situations)
Snakepit Auto., Inc. v. Superperformance Int’l, LLC, 489 F. Supp. 2d 196 (E.D.N.Y. 2007) (exceptions to unanimity rule explained)