Doe Ex Rel. Houdersheldt v. Blair
2016 U.S. App. LEXIS 5087
4th Cir.2016Background
- Jane Doe #1 sued Res-Care, Inc. and Matt Blair in West Virginia state court; later an amended complaint added Jane Doe #2 and the Houdersheldts.
- Res-Care removed the case to federal court asserting diversity jurisdiction; removal alleged Res-Care was incorporated in Kentucky but omitted its principal place of business.
- Defendants asserted diversity; plaintiffs were West Virginia residents and Blair was a Virginia resident.
- 191 days after removal the district court sua sponte remanded, stating federal diversity jurisdiction had not been established because Res-Care’s principal place of business was not alleged.
- Defendants moved to alter/reconsider, providing evidence (Louisville, Kentucky) of Res-Care’s principal place of business; the district court denied the motion and defendants appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether appellate court has jurisdiction to review a district court remand that was issued sua sponte for a perceived defect in the removal notice | Remand order is final and not reviewable under § 1447(d) | Appellate review is allowed where remand was based on a procedural defect and entered without a timely party motion | Court has jurisdiction because remand was based on a procedural defect in the removal notice, not true lack of subject-matter jurisdiction |
| Whether failure to allege a corporation’s principal place of business in the notice of removal is jurisdictional or procedural | Plaintiffs implicitly treat the omission as defeating federal jurisdiction and justify remand | Defendants argue omission is a procedural defect that can be cured and does not deprive courts of jurisdiction | Omission is procedural, not jurisdictional; it falls outside § 1447(c)’s unreviewable remands when the court remands sua sponte |
| Whether a district court may sua sponte remand for procedural defects in removal absent a party’s motion | Plaintiffs support remand based on procedural insufficiency | Defendants contend § 1447(c) assigns policing procedural defects to the parties and allows amendment under § 1653 | District court exceeded its authority by sua sponte remanding for a procedural defect; parties must raise such defects or they may be waived |
| Whether the removing party may amend defective jurisdictional allegations | Plaintiffs oppose or do not contest remand; district court denied reconsideration | Defendants seek leave to amend under 28 U.S.C. § 1653 to correct defective jurisdictional allegations | Appellate court grants leave to amend the removal notice under § 1653 to cure defective allegations |
Key Cases Cited
- Things Remembered, Inc. v. Petrarca, 516 U.S. 124 (limits reviewability of remand orders under § 1447(d))
- Powerex Corp. v. Reliant Energy Servs., Inc., 551 U.S. 224 (interpreting the scope of § 1447(d))
- Ellenburg v. Spartan Motors Chassis, Inc., 519 F.3d 192 (4th Cir. 2008) (remand based on procedural insufficiency is reviewable when entered sua sponte)
- In re Blackwater Sec. Consulting, LLC, 460 F.3d 576 (4th Cir. 2006) (look to substantive reasoning to determine if remand was jurisdictional)
- In re Allstate Ins. Co., 8 F.3d 219 (5th Cir. 1993) (failure to allege citizenship is procedural, not jurisdictional)
- Corp. Mgmt. Advisors, Inc. v. Artjen Complexus, Inc., 561 F.3d 1294 (11th Cir. 2009) (agreeing that remand for procedural defects without party motion is reviewable)
- Harmon v. OKI Sys., 115 F.3d 477 (7th Cir. 1997) (same conclusion on citizenship allegation being procedural)