GE Betz, Incorporated v. Zee Company, Incorporated
2013 U.S. App. LEXIS 9047
| 7th Cir. | 2013Background
- GE Betz won a NC final judgment against Zee and learned Zee had tied up assets in a Harris credit facility before judgment.
- GE Betz registered the NC judgment in Cook County, Illinois, and served Harris with a citation to discover Zee’s assets.
- Zee removed the Cook County case to the Northern District of Illinois based on diversity; Harris did not join the removal.
- GE Betz moved to remand, arguing lack of subject-matter jurisdiction and violation of the forum-defendant rule; the district court denied remand and dismissed the case.
- GE Betz appeals; the Seventh Circuit vacates and remands to Cook County Circuit Court, holding removal was improper under the forum-defendant rule and that remand is appropriate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Zee’s removal was proper under 1441(a)/1963. | Betz argues removal was proper as an independent proceeding; Harris’s involvement does not bar removal. | Zee argues 1441(a) excludes ancillary actions; §1963 bars registering state judgments in federal court. | Removal proper under 1441(a); §1963 does not bar removal. |
| Whether the forum-defendant rule barred removal because Harris is the forum defendant. | Betz contends Harris’s Illinois citizenship makes removal improper under 1441(b)(2). | Zee/Harris argue Harris is not a ‘defendant’ or that waiver applies. | Forum-defendant rule violated; remand required. |
| Whether this case should be remanded given the removal defect rather than proceed to merits. | Remand to Cook County is proper to avoid irreparable harm and preserve state-law processes. | Zee/Harris urge reliance on finality/economy under Caterpillar, arguing no remand is needed. | District court should have remanded; case remanded to Cook County Circuit Court. |
Key Cases Cited
- Travelers Property Cas. v. Good, 689 F.3d 714 (7th Cir. 2012) (distinguishes independent/removable proceedings versus ancillary ones)
- Abbott Labs. v. CVS Pharmacy, Inc., 290 F.3d 854 (7th Cir. 2002) (discusses removal and jurisdictional limits)
- Chicago, R.I. & P.R. Co. v. Stude, 346 U.S. 574 (U.S. 1954) (labels don't control for removal; federal law defines defendant)