OPINION AND ORDER GRANTING PLAINTIFF’S MOTION TO REMAND
On May 25, 2007, Delphi Automotive Systems, LLC (“Plaintiff’ or “Delphi”) filed a six-count Complaint in the Oakland County Circuit Court against Segway Inc. (“Defendant” or “Segway”). 1 On June 29, 2007, Defendant removed the action to this Court pursuant to 28 U.S.C. §§ 1332 and 1441, contending that there is diversity jurisdiction or, in the alternative, that “jurisdiction is proper because the instant case is related to Delphi’s bankruptcy case.” (Notice of Removal ¶ 12.) Presently before this Court is Plaintiffs Motion to Remand, filed on July 30, 2007. Plaintiffs motion has been fully briefed. The Court held a hearing on Plaintiffs motion on October 11, 2007.
I. Factual Background
Delphi manufactures, among other products, lithium battery technology. “Segway develops products for the personal trans
“As of 2000, Delphi and Segway’s predecessor corporation, DEKA Research & Development Corp. (‘DEKA’), had a production program agreement in which Delphi was to develop battery technology and prototype batteries for DEKA’s Independent IBOT Mobility System, a self-balancing mobility device designed to replace the wheelchair, which enables users to climb stairs and negotiate sand, rocks, and curbs.” (Comply 9.) During the development program for the IBOT battery technology, Dean Kamen, “DEKA’s President and founder,” “introduced Delphi officials to the Personal Transporter concept, informing them that he intended to go into production with it, and that he wanted Delphi to develop a lithium ion battery for its power source.” (Id. ¶ 10.)
According to Plaintiffs Complaint, Ka-men offered to enter into an agreement with Delphi for the engineering development of a lithium ion battery system for the Personal Transporter. (Id. ¶ 11.) Plaintiff alleges that Delphi accepted Ka-men’s offer. (Id.)
In the present dispute, Plaintiff seeks monetary damages for Defendant’s alleged breach of the battery development contract.
II. Applicable Law and Analysis
A. Removal Generally
Generally, a civil action brought in state court can be removed to the proper federal court if it could have been brought there originally. 28 U.S.C. § 1441. Federal district courts have original diversity jurisdiction when the amount in controversy “exceeds the sum or value of $75,000, exclusive of interest and costs, and is between ... citizens of different states.” 28 U.S.C. § 1332(a). In addition, with respect to bankruptcy cases and as relevant to this case, district courts have “original but not exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or related to cases under title 11.” 28 U.S.C. § 1334(a)-(b). Moreover, “a defendant desiring to remove a case has the burden of proving the diversity jurisdiction requirements.”
Gafford v. Gen. Electric Co.,
In its Notice of Removal, Defendant asserts that this Court can properly exercise diversity jurisdiction over the parties’ dispute. As an alternative basis for removal, Defendant contends that this case is related to Plaintiffs bankruptcy case, and thus, subject matter jurisdiction exists on that basis. Plaintiffs Motion to Remand challenges both asserted bases for jurisdiction.
B. Diversity Jurisdiction and The Forum Doctrine
Defendant’s principal basis for removal is diversity jurisdiction. For purposes of diversity jurisdiction, a corporation is a citizen of “any State by which it has been incorporated and of the State where it has its principal place of business ....” 28 U.S.C. § 1332(c)(1). Unlike a corporation, “the citizenship of [a limited liability company] for purposes of the diversity jurisdiction is the citizenship of its members.”
Cosgrove v. Bartolotta,
In the case at bar, the parties do not dispute that the amount in controversy
According to Defendant, “the forum doctrine provides that, when a multi-state corporation sues or is sued in one of its states of citizenship, it is considered a citizen of only that state for diversity jurisdiction purposes.” 4 (Dft.’s Resp. Br. at 4.) Thus, Defendant contends that because Plaintiff sued in Michigan, its principal place of business, it is considered a citizen of only Michigan for diversity jurisdiction purposes. Plaintiff contends that the forum doctrine was effectively abolished in 1958 when Congress amended the diversity statute to what is now 28 U.S.C. § 1332(c)(1), and even if the forum doctrine is still viable, Plaintiff argues that it does not apply in this case.
In this Court’s view, the forum doctrine was effectively abolished when Congress enacted the current diversity statute in 1958. There is no recent case law on the forum doctrine in the Sixth Circuit or elsewhere. 5 Nonetheless, the majority of federal district courts addressing the issue have held that the forum doctrine was effectively abolished by the 1958 amendment to the diversity statute. As stated by the District Court in Utah:
It appears ... that the weight of authority goes in the other direction, supporting the position that the 1958 amendment effectively abolished the forum doctrine. Both the Third and the Fifth Circuits have adopted this position, while no circuits have upheld the forumdoctrine since section 1332(c) was amended. Significantly, the New York District Court that took the lead in upholding the forum doctrine after the 1958 amendment in Hudak has since renounced that position in Oslick v. The Port Authority of New York and New Jersey, 83 F.R.D. 494 (S.D.N.Y.1979). Other district court cases that follow this more prevalent view include French v. Clinchfield Coal Company,407 F.Supp. 13 (D.C.Del.1976), Evans-Hailey Company v. Crane Company,207 F.Supp. 193 (D.C.Tenn.1962), Nayer v. Sears, Roebuck & Company,200 F.Supp. 319 (D.C.N.H.1961), Stroup v. Pittsburgh & Lake Erie Railroad Company,186 F.Supp. 154 (D.C.Ohio 1960), Diesing v. Vaughn Wood Products, Inc.,175 F.Supp. 460 (W.D.Va.1959), Harker v. Kopp, et al.,172 F.Supp. 180 (N.D.Ill.1959).
V-1 Oil Co. v. CC&T, Inc.,
Defendant provides a number of different explanations as to why it believes the forum doctrine survived the 1958 amendment of 28 U.S.C. § 1332. First, Defendant argues that “[a] predecessor proposal to the bill that ultimately resulted in section 28 U.S.C. § 1332(c) (1) would have made a corporation ‘a citizen
both
of the States of its creation and the State in which it has its principal place of business.’ ” (Dft.’s Memo. In Opp. at 6 (citing S.Rep. No. 85-1830 (1958),
as reprinted in
1958 U.S.C.C.A.N. 3099, 3100) (emphasis added by Defendant).) According to Defendant, “Congress’s adoption of ‘any’ instead of ‘both’ allowed courts to continue to deem multi-state corporations citizens of only the forum state in cases in which the corporation sued or was sued in one of its states of citizenship, since the forum state would be one of ‘any’ of the states permitted for the purposes of diversity jurisdiction.”
{Id.
(citing
Hudak,
Second, Defendant argues that a 1990 report by a Federal Courts Study Committee (“Committee”) provides evidence that the forum doctrine survived the 1958 amendment. The Committee, which was charged with recommending to Congress ways to limit federal jurisdiction, recommended “that Congress simply reject the forum doctrine.” Federal Courts Study Committee, Working Papers and Subcommittee Reports, Volume I, at p. 467 (July 1,1990). Defendant contends that because Congress never heeded the Committee’s recommendation, the forum doctrine is still alive and well. Defendant’s reliance on Congress’ inaction is unpersuasive. It is also equally as plausible that Congress’ inaction can be attributed to the fact that it did not believe that an express rejection of the forum doctrine was necessary after the 1958 amendment (either because the cases where it allegedly applies are rare or the language of the 1958 amendment speaks for itself).
See Pension Benefit Guaranty Corp. v. LTV Corp.,
Because the Court has concluded that the forum doctrine was effectively abolished by the 1958 amendment to the diversity statute, there is no complete diversity between the parties. Therefore, this Court does not have diversity jurisdiction.
B. Jurisdiction Based on Bankruptcy and Abstention
In the alternative, Defendant argues that removal is appropriate pursuant to 28 U.S.C. § 1452, which allows removal where a “district court has jurisdiction ... under section 1334 of this title.” As stated above, section 1334 confers “original but not exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or related to cases under title 11.” 28 U.S.C. § 1334(b). In its Notice of Removal, Defendant states that “federal jurisdiction is proper because the instant case is related to Delphi’s bankruptcy case.” (Dft.’s Memo. In Opp. at 4.) Plaintiff does not dispute this allegation. Instead, Plaintiff argues that mandatory abstention applies to this case pursuant to 28 U.S.C. § 1334(c)(2). 8 Alternatively, Plaintiff contends that permissive abstention applies pursuant to 28 U.S.C. § 1334(c)(1).
With respect to mandatory abstention, 28 U.S.C. § 1334(c)(2) provides:
Upon timely motion of a party in a proceeding based upon a State law claim or State law cause of action, related to a case under title 11 but not arising under title 11 or arising in a ease under title 11, with respect to which an action could not have been commenced in a court of the United States absent jurisdiction under this section, the district court shall abstain from hearing such proceeding if an action is commenced, and can be timely adjudicated, in a State forum of appropriate jurisdiction.
As summarized by the Sixth Circuit:
[F]or mandatory abstention to apply to a particular proceeding, there must be atimely motion by a party to that proceeding, and the proceeding must: (1) be based on a state law claim or cause of action; (2) lack a federal jurisdictional basis absent bankruptcy; (3) be commenced in a state forum of appropriate jurisdiction; (4) be capable of timely adjudication; and (5) be a non-core proceeding.
Lindsey v. Dow Chemical Company (In re Dow Corning Corp.),
In this Court’s opinion, there is no real dispute that factors (1) through (3) are satisfied in this case. Plaintiffs Complaint asserts six separate counts, all based on state law. As this Court has already determined, there is no complete diversity; thus, there is no federal jurisdictional basis absent bankruptcy. Moreover, this case was commenced in the Oakland County Circuit Court, a state forum of appropriate jurisdiction.
Defendant, relying on
In re DeLorean Motor Co.,
Finally, Defendant contends that this case is a core proceeding. As stated by the Sixth Circuit, “[i]f the proceeding does not invoke a substantive right created by federal bankruptcy law and is one that could exist outside of the bankruptcy, then it is not a core proceeding.”
Michigan Employment Sec. Comm’n v. Wolverine Radio Co., Inc. (In re Wolverine Radio Co.),
This Court does not believe that this is a core proceeding. Defendant does not cite a case holding that a state law breach of contract action, with alternative state law claims, is a core proceeding. Furthermore, this Court does not believe that the case at bar involves “matters concerning the administration of the estate,” “orders to turn over property of the estate,” or “other proceedings affecting the liquidation of assets of the estate .... ” 28 U.S.C. §§ 157(b)(2)(A), 157(b)(2)(E) and 157(b)(2)(0).
11
Moreover, even if Plaintiffs Complaint could be characterized as one seeking collection of accounts receivable, “[tjhere is an abundance of reported decisions with no clear consensus on that issue, the varying results typically being dependent on the particular facts of each case.”
BN1 Telecomms., Inc. v. Lomaz (In re BN1 Telecomms., Inc.),
Assuming arguendo that mandatory abstention is not proper, this Court believes that permissive abstention is appropriate. See 28 U.S.C. § 1334(c)(1) (providing for permissive abstention). Courts consider the following factors in determining whether permissive abstention is appropriate:
(1) the effect or lack thereof on the efficient administration of the estate if a court recommends abstention; (2) the extent to which state law issues predominate over bankruptcy issues: (3) the difficulty or unsettled nature of the applicable law; (4) the presence of a related proceeding commenced in state court or other nonbankruptcy court; (5) the jurisdictional basis, if any, other than 28 U.S.C. § 1334; (6) the degree of relatedness or remoteness of the proceeding to the main bankruptcy case; (7) the substance rather than the form of an asserted core proceeding; (8) the feasibility of severing state law claims from core bankruptcy matters to allow judgments to be entered in state court with enforcement left to the bankruptcy court;(9) the burden of the bankruptcy court’s docket; (10) the likelihood that the commencement of the proceeding in bankruptcy court involves forum shopping by one of the parties; (11) the existence of a right to a jury trial; and (12) the presence in the proceeding of non-debt- or parties.
Beneficial Nat’l Bank USA v. Best Receptions Sys., Inc.,
In considering the above-mentioned factors, this Court believes that a discretionary remand of this case is appropriate. The state law claims asserted in Plaintiffs Complaint predominate over any bankruptcy issue that may arise due to Plaintiffs chapter 11 proceeding. While the state law claims do not appear to be based on any unsettled issues of state law, this Court is convinced that Plaintiffs state law claims are only indirectly related to its bankruptcy case. Moreover, as the Court held above, there is no other independent basis for jurisdiction other than 28 U.S.C. § 1334. Finally, the parties’ right to a jury trial will be preserved on remand, and the fact that Defendant is a non-debtor party also weighs in favor of discretionary remand. Therefore, in the alternative, discretionary remand is appropriate in this case pursuant to 28 U.S.C. § 1334(c)(1).
Accordingly,
IT IS ORDERED that Plaintiffs Motion to Remand is GRANTED and that this case is REMANDED to the Oakland County Circuit Court.
Notes
. Plaintiffs Complaint alleges the following six counts: (I) Breach of Contract; (II) Breach of Implied Contract; (III) Unjust Enrichment; (IV) Promissory Estoppel; (V) Quantum Meruit; and (VI) Innocent Misrepresentation. Plaintiff has pleaded Counts II— VI in the alternative.
. Plaintiff's Complaint erroneously states that “Delphi is a Delaware corporation with its principal executive offices in Troy, Michigan.” (Comply 2.) In their briefs, the parties acknowledge that Delphi is actually a limited liability composed of one member Delphi Corporation. (Dft.'s Memo. In Opp. at 3; Pl.'s Rep. Br. at 1 n. 1.)
. Defendant acknowledges that Delphi Corporation's principal place of business is in Troy, Michigan. (Dft.'s Memo. In Opp. at 3.) In its reply brief, Plaintiff states that “Delphi’s sole member is Delphi Corporation, which is incorporated in Delaware.” (Pl.'s Reply at 1 n. 1.)
. A treatise on federal practice and procedure describes the forum doctrine in a different manner. See 13B Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 3626, at p. 644 (2d ed.1984) (stating that "if suit was brought by or against a corporation in one of its states of incorporation, for diversity purposes the company would be treated as if it were only a citizen of the forum state”). This suit was not brought in either party’s state of incorporation.
.Defendant argues that the lack of case law on this issue is "due to the unavailability of appellate review for removal and remand decisions ...." (Dft.’s Sur-Rep. at 2.) Defendant is probably correct. See 28 U.S.C. § 1447(d).
.
See also Smith v. Arundel Coop., Inc.,
. Even if the forum doctrine was not effectively abolished by the 1958 amendment of 28 U.S.C. § 1332(c)(1), it is questionable whether it would apply to Plaintiff, an LLC composed solely of a corporation incorporated in one state.
See Fritz v. Am. Home Shield Corp.,
. "The abstention provisions of 28 U.S.C. § 1334(c)(2) apply even though a case has been removed pursuant to 28 U.S.C. § 1452."
Robinson v. Mich. Consol. Gas Co.,
. Moreover, this Court is not persuaded by Defendant’s argument that because it has filed a “comprehensive motion to dismiss and/or summary judgment,” (Dft.’s Resp. Br. at 14 n. 10), this case could be resolved more quickly in this Court. Defendant’s argument, based primarily on its own self-serving actions, misses the point. The inquiry is whether the Oakland County Circuit Court can timely adjudicate the case. Besides, this Court does not believe that it should reward Defendant, particularly where, as here, Defendant’s decision to remove resulted in further delays.
. According to 28 U.S.C. § 157(b)(2):
Core proceedings include, but are not limited to—
(A) matters concerning the administration of the estate;
(E) orders to turn over property of the estate;
(O) other proceedings affecting the liquidation of the assets of the estate or the adjustment of the debtor-creditor or the equity security holder relationship, except personal injury tort or wrongful death claims ....
. As further evidence that this lawsuit will not effect the administration of its estate, Plaintiff proffers its Chapter 11 Plan Framework, in which Plaintiff agreed to pay unsecured creditors in full with interest and pay dividends to its equity holders. (See Pl.’s Rep. Br. Ex. A.) Consequently, because Plaintiff has agreed to pay its creditors in full, any damages that may flow from the successful prosecution of this lawsuit will not substantially affect Plaintiffs ability to pay its creditors.