Brown v. Tax Ease Lien Investments, LLC, 77 F. Supp. 3d 598

TELS (Tax Ease Lien Servicing, LLC) brought state-court foreclosure actions in Jefferson Circuit Court against homeowners (Harper/Goldsmith and the Julians) based on unpaid property-tax certificates of delinquency; those actions were consolidated.
Several defendants sought to file counterclaims and later intervenors (Brown, Cambrón, Leigh, Walther) filed an intervening complaint asserting RICO and related federal/state claims against TELS, TELI, and affiliated entities.
TELS moved to sever the RICO/intervening claims from the foreclosure actions; it also moved to voluntarily dismiss its original foreclosure suits (a motion the state court never ruled on).
The state court issued an April 2014 order stating it considered the Brown claim an intervening complaint and granted the severance motion only "to the extent" the matters were bifurcated pursuant to CR 42.02 (separate trials), not clearly creating separate independent suits.
TELS removed the entire consolidated proceeding to federal court; Brown et al. moved to remand, arguing the state court’s order effected only bifurcation/intervention (non-removable).
The federal court held removal statutes are narrowly construed, found the state-court order effected bifurcated trials (not severance or party realignment), treated the Brown filing as intervention (not a counterclaim that permits plaintiff-directed removal), and remanded the entire case to Jefferson Circuit Court.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether removal to federal court was proper	Brown et al.: state court only bifurcated and treated Brown as intervenors; removal improper	TELS: state court severed claims into separate actions, implicitly realigning parties so Brown were plaintiffs and TELS defendants, permitting removal	Held: Removal improper; order effectuated bifurcation/intervention, not severance or realignment; remand required
Whether intervening complaints permit removal	Brown et al.: intervenors cannot support removal	TELS: recharacterization and bifurcation created a removable civil action	Held: Intervention does not support removal; intervening complaints do not permit removal
Effect of unruled voluntary dismissal motion by plaintiff	Brown et al.: because state court never granted TELS’s voluntary dismissal, plaintiff remained master of complaint; removal not triggered	TELS: if plaintiff voluntarily dismissed foreclosure claims, party alignment would permit removal	Held: Because state court never ruled on voluntary dismissal, that avenue to removal did not occur and cannot be relied upon
Interpretation of "bifurcate" v. "sever" in state order	Brown et al.: court used CR 42.02 (separate trials) — meaning single action tried in phases	TELS: practical effect was severance into separate suits enabling removal	Held: The court construes the order as bifurcation (separate trials within one action), not severance into independent actions; thus removal fails

Long v. Bando Mfg. of Am., Inc., 201 F.3d 754 (6th Cir.) (party seeking removal bears burden to show removal proper)
Smith v. Nationwide Prop. & Cas. Ins. Co., 505 F.3d 401 (6th Cir.) (removing party must establish federal venue and jurisdictional prerequisites)
Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (U.S.) (Congress intended to preclude plaintiff-directed removal based on counterclaims)
Her Majesty the Queen in Right of the Province of Ontario v. City of Detroit, 874 F.2d 332 (6th Cir.) (removal statutes strictly construed; doubts resolved in favor of remand)
In re Mort. Elec. Registration Sys., Inc., 680 F.3d 849 (6th Cir.) (a counterclaim defendant is not a defendant who may remove)
First Nat’l Bank of Pulaski v. Curry, 301 F.3d 456 (6th Cir.) (“defendant” in removal statute means traditional defendant against whom original plaintiff asserts claims)
Crump v. Wal-Mart Group Health Plan, 925 F. Supp. 1214 (W.D. Ky.) (severance and subsequent party realignment can, in some circumstances, affect removability)
Phillips v. Unijax, Inc., 625 F.2d 54 (5th Cir.) (distinguishing severance from separate trials; severed claims become independent actions)
Frank v. Bear Stearns & Co., 128 F.3d 919 (5th Cir.) (federalism concerns require strict construction of removal statutes)