Limehouse v. Hulsey
744 S.E.2d 566
S.C.2013Background
- Father and Son (owners of L & L Services) sued attorney Paul Hulsey in South Carolina state court for defamation based on Hulsey’s public statements about L & L allegedly engaging in RICO-type misconduct.
- Hulsey removed the suits to federal court as related to an underlying RICO action; plaintiffs moved to remand.
- The federal court entered a remand order for lack of federal-question jurisdiction, but the district clerk did not mail a certified copy to the state court; Charleston County received only an uncertified copy.
- While the certified remand had not yet been received by the state clerk, the state court entered defaults against Hulsey; damages hearings followed and juries awarded large actual and punitive damages.
- After learning no certified remand had been mailed, Hulsey moved to set aside defaults and later appealed; the South Carolina Supreme Court consolidated the appeals and addressed whether the state court had jurisdiction and related procedural issues.
Issues
| Issue | Limehouse (Plaintiffs) Argument | Hulsey (Defendant) Argument | Held |
|---|---|---|---|
| Whether state court jurisdiction revests on entry of a federal remand order or only after a certified copy is mailed | State court jurisdiction revested when the federal court entered the remand order; mailing is procedural | Federal statute (28 U.S.C. §1447(c)) requires the clerk to mail a certified remand; state court lacks power until receipt | The Court held jurisdiction did not resume until the state clerk received a certified remand; state proceedings after uncertified remand were void and judgments vacated |
| Whether removal tolls time to file responsive pleadings in state court and whether defendant gets a fresh answer period after remand | Plaintiffs: time tolled during removal; no new 30-day period begins upon remand | Hulsey: remand notice restarts the answer period and he was entitled to file within 30 days after notice | Court held removal tolls the responsive-pleading period; time to answer was tolled until jurisdiction resumed (i.e., until certified remand received) |
| Whether defaults entered before certified remand are valid and whether relief from default should be assessed under "good cause" standard | Plaintiffs: defaults valid because defendant failed to timely answer under tolled/timetabled rules | Hulsey: defaults invalid because state court lacked jurisdiction; alternatively, relief from default should be considered under Sundown/good-cause analysis | Because state court lacked jurisdiction, proceedings were void; Court did not reach full Sundown analysis but directed recommencement once certified remand mailed |
| Scope of participation by a defaulting defendant at damages hearing (Rule 55) | Plaintiffs: follow Howard — defendant limited to cross-examination and objections | Hulsey: Rule 55(b)(2) permits broader participation (calling witnesses, discovery) and Howard should be revisited | Court reaffirmed Howard: defaulting defendant may be limited to cross-examination and objections; proof of damages still must be competent and reviewed for excessiveness |
Key Cases Cited
- In re Lowe, 102 F.3d 731 (4th Cir. 1996) (held remand effective on entry; cited by courts adopting entry-as-effective rule)
- Trans Penn Wax Corp. v. McCandless, 50 F.3d 217 (3d Cir. 1995) (mailing certified remand required; remand not effective until mailed)
- Arnold v. Garlock, Inc., 278 F.3d 426 (5th Cir. 2001) (remand order is not self-executing; federal court retains jurisdiction until certified mailing)
- Spanair S.A. v. McDonnell Douglas Corp., 172 Cal.App.4th 348 (Cal. Ct. App. 2009) (traces legislative history and holds certified mailing is the determinative event vesting state court jurisdiction)
- Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (U.S. 1941) (removal statute must be applied uniformly and construed according to congressional criteria)