Mackler v. SME, Inc. USA
7:24-cv-00992
E.D.N.C.Mar 11, 2025Background
- Plaintiffs, all citizens of Pennsylvania, brought six North Carolina state law claims in New Hanover County Superior Court against defendants, who are citizens of North Carolina and officers of SME, Inc. USA.
- Defendants removed the case to federal court based on diversity jurisdiction.
- The plaintiffs' claims center on alleged anti-Semitic conduct, breach of fiduciary duty, contract violations, and improper termination from SME.
- This case had a prior federal filing in Pennsylvania, which was transferred to this court before plaintiffs voluntarily dismissed and refiled in state court.
- Defendants responded with motions to dismiss and for costs; plaintiffs moved to remand the case to state court, arguing the forum-defendant rule applied.
- The court's order resolves only the motion to remand, not the merits of the underlying state law claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Forum-defendant rule bars removal | All defendants are citizens of NC; rule applies | Plaintiffs waived the rule via litigation conduct or contract | Rule applies; no waiver by plaintiffs |
| Waiver through bad faith litigation | No inequitable or bad faith conduct | Plaintiffs dismissed & refiled in state court strategically | No evidence of bad faith or inequity |
| Waiver via forum-selection clause | Clause allows state or federal court; not exclusive | Clause waives objection to venue, so forum-defendant waived | Clause lacks clear waiver of removal |
| Attorney's fees for improvable removal | Removal unjustified; should award fees | Removal had reasonable basis under unsettled law | No fees; defendants' removal reasonable |
Key Cases Cited
- Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148 (4th Cir. 1994) (party seeking removal bears burden, removal jurisdiction strictly construed)
- Hartley v. CSX Transp., Inc., 187 F.3d 422 (4th Cir. 1999) (fraudulent joinder doctrine allows dismissal of non-diverse party to preserve jurisdiction)
- Davis v. USX Corp., 819 F.2d 1270 (4th Cir. 1987) (voluntary dismissal to refile in state court not inequitable)
- Grubb v. Donegal Mut. Ins. Co., 935 F.2d 57 (4th Cir. 1991) (waiver of removal requires clear, unequivocal intent)