United States District Court, D. New Mexico
C. Cox, III Heidel Samberson Cox & McMahon Lovington, New
Mexico Attorneys for the Plaintiff.
Stanley N. Harris Maria O'Brien Modrall Sperling Roehl
Harris & Sisk P.A. Albuquerque, New Mexico Attorneys for
MEMORANDUM OPINION AND ORDER
MATTER comes before the Court on the Plaintiff's Motion
to Remand to State Court, filed September 5, 2017 (Doc.
12)(“Motion to Remand”). The Court held a hearing
on October 12, 2017. The primary issue is whether Defendant
Mosaic Potash Carlsbad, Inc. (“Mosaic Potash”)
has established that Plaintiff Edison Ranch, Inc.'s
request for a declaratory judgment places more than $75,
000.00 in controversy. The Court concludes that Mosaic Potash
has met diversity jurisdiction's amount in controversy
requirement, because granting Edison Ranch's declaratory
judgment request could divest Mosaic Potash of water
development rights that are worth more than $75, 000.00.
Accordingly, the Court denies the Motion to Remand.
case concerns a well drilled in the southwest quarter of the
southwest quarter of Section 31, Township 16 South, Range 35
East, N.M.P.M., County of Lea, State of New Mexico
(“Lea County Well”). See Complaint for
Damages in Trespass, Injunctive Relief and Declarative Relief
¶ 9, at 2, filed in the Fifth Judicial District Court,
County of Lea, State of New Mexico on June 6, 2017, filed on
August 2, 2017 (Doc. 1-2)(“Complaint”). In 2006,
Mosaic Potash acquired water-development rights associated
with the well (“Water Permit”). See
Complaint ¶ 11, at 2. The Office of the State Engineer
gave Mosaic Potash until May 31, 2013 to “provide proof
of beneficial use or request another extension”;
otherwise, Mosaic Potash's Water Permit would expire.
Complaint ¶ 13, at 2. Mosaic Potash requested an
extension before the May 31, 2013 deadline. See
Complaint ¶ 13, at 2. Two years later, the State
Engineer gave Mosaic Potash another extension, stating that
Mosaic Potash's Water Permit would terminate on May 31,
2016, unless Mosaic Potash proved its beneficial use of the
water by that date. See Complaint ¶¶
14-15, at 2. Mosaic Potash did not, however, provide proof of
beneficial use by May 31, 2016. See Complaint ¶
16, at 2.
Complaint, Edison Ranch first alleges that Mosaic Potash
trespassed by laying a water line over Edison Ranch's
land to pump water from the Lea County Well. See
Complaint ¶¶ 17-20, at 2. Second, Edison Ranch
requests a declaration that Mosaic Potash's Water Permit
“has terminated and Mosaic Potash has no further right
to develop water rights pursuant to said [p]ermit” and
that “Mosaic is prevented from further
operations” of the Lea County Well. Complaint
¶¶ B-C, at 3.
Potash removed this case from the Fifth Judicial District
Court, County of Lea, State of New Mexico. See
Notice of Removal, filed August 2, 2017 (Doc. 1). Mosaic
Potash asserts that the Court has diversity jurisdiction
because Mosaic Potash is a citizen of Minnesota and Delaware,
see Notice of Removal ¶ 4, at 1; Declaration of
Mark J. Isaacson ¶ 3, at 1, taken on July 31, 2017,
filed August 2, 2017 (Doc. 1-3)(“Isaacson
Decl.”), and Edison Ranch is a citizen of New Mexico,
see Notice of Removal ¶ 5, at 2. Mosaic Potash
insists that Edison Ranch's declaratory relief request --
asking the Court to declare that Mosaic Potash's Water
Permit is terminated -- would, if granted, cost Mosaic Potash
more than $75, 000.00. See Notice of Removal ¶
8, at 2. Mosaic filed the Declaration of Scott Goodale, filed
August 2, 2017 (Doc. 1-4)(“Goodale Decl.”).
Goodale states that he is Mosaic Potash's
“Engineering Leads Advisor.” Goodale Decl. ¶
2, at 1. Goodale avers that Mosaic Potash “has expended
more than $75, 000” on the Lea County Well. Goodale
Decl. ¶ 7, at 1. Goodale asserts that granting Edison
Ranch's requested declaratory relief would cost Mosaic
Potash more than $75, 000.00, because it would “render
. . . without value” Mosaic Potash's interest in
the Lea County Well and the Water Permit. Goodale Decl.
¶¶ 7-9, at 1-2.
The Motion to Remand.
Motion to Remand, Edison Ranch argues that the Court lacks
diversity jurisdiction, because the amount in controversy is
not greater than $75, 000.00. See Motion to Remand
¶ 3, at 1. Edison Ranch asserts that Mosaic Potash's
amount-in-controversy theory relies on cases that calculate
“the value of future occurrences, ” but,
according to Edison Ranch, its declaratory relief “does
not relate to future events, but rather asks confirmation of
a decision already made by the New Mexico State
Engineer.” Motion to Remand ¶¶ 6-7, at 1-2.
Edison Ranch asserts that “[t]he final extension
granted by the State Engineer to Mosaic . . . state[s] that
Mosaic's ‘rights under this permit will expire
unless the proofs are filed on or before' May 31,
2016.” Motion to Remand ¶ 8, at 2. Edison Ranch
contends that Mosaic Potash has not shown that the permit did
not expire, nor that it tried to prevent the permit's
termination. See Motion to Remand ¶¶
10-11, at 2. Consequently, Edison Ranch argues, Mosaic Potash
has not established “any amount in controversy other
than the trespass damages.” Motion to Remand ¶ 12,
The Response to the Motion to Remand.
Potash responds to the Motion to Remand. See
Response to Motion to Remand to State Court, filed September
19, 2017 (Doc. 14)(“Response”). Mosaic Potash
states that Edison Ranch bases its arguments on two incorrect
premises: (i) that Edison Ranch's declaratory relief does
not relate to future events; and (ii) that remand is
warranted, because the declaratory relief seeks confirmation
of a decision already made. See Response ¶ 13,
at 3-4. Mosaic Potash asserts that Edison Ranch's
declaration relates to future events, because it asks for a
court to declare that Mosaic Potash has “no
further” water rights and is “prevented from
further” operations. Response ¶ 14, at 4 (quoting
Complaint ¶ C, at 4). Mosaic Potash also argues that
establishing jurisdiction does not require showing that the
Water Permit did not expire or that Mosaic Potash attempted
to prevent the Water Permit from expiring, because those
“are the very points that are at issue” in Edison
Ranch's declaratory relief request. Response ¶¶
15-16, at 4.
Court held a hearing on October 12, 2017. See Draft
Transcript of Hearing (taken October 12,
2017)(“Tr.”). The Court began by stating that
“it seems to me that if you put this water well out of
operation, that [will cause] damages in excess of $75,
000.00.” Tr. at 2:25-3:2 (Court). Edison Ranch stated
that granting its declaratory relief would only confirm a
preexisting State Engineer decision, which means that
“the damages question is no longer relevant.” Tr.
at 3:19-25 (Cox). Mosaic Potash countered that whether State
Engineer determined that the permit expired “is what
this case is going to determine.” Tr. 4:19-5:5
(Harris). Mosaic Potash asserted that its employee's
affidavit sufficiently established that more than $75, 000.00
is at issue. See Tr. at 5:7-12 (Harris). The Court
stated that it is inclined to agree with Mosaic Potash that
the Court has diversity jurisdiction. See Tr. at
REGARDING DIVERSITY JURISDICTION
jurisdiction under 28 U.S.C. § 1332(a)(1) requires: (i)
complete diversity among the parties; and (ii) that
‘the matter in controversy exceeds the sum or value of
$75, 000, exclusive of interest and costs.'”
Thompson v. Intel Corp., No. CIV 12-0620 JB/LFG,
2012 WL 3860748, at *12 (D.N.M. Aug. 27, 2012)(Browning,
J.)(citing 28 U.S.C. § 1332(a)). As the Court has
previously explained, “[t]he Supreme Court of the
United States has described this statutory diversity
requirement as ‘complete diversity, ' and it is
present only when no party on one side of a dispute shares
citizenship with any party on the other side of a
dispute.” McEntire v. Kmart Corp., No. CIV
09-0567, 2010 WL 553443, at *3 (D.N.M. Feb. 9,
2010)(Browning, J.)(citing Strawbridge v. Curtiss, 7
U.S. (3 Cranch) 267, 267-68 (1806), overruled in part by
Louisville & N.R. Co. v. Mottley, 211 U.S. 149
(1908); McPhail v. Deere & Co., 529 F.3d 947,
951 (10th Cir. 2008)). The amount-in-controversy requirement
is an “estimate of the amount that will be put at issue
in the course of the litigation.” Valdez v. Metro.
Prop. & Cas. Ins. Co., 867 F.Supp.2d 1143, 1163
(D.N.M. 2012)(Browning, J.)(citing McPhail v. Deere &
Co., 529 F.3d at 956). The Court will discuss the two
requirements in turn.
Diversity of Citizenship.
diversity jurisdiction purposes, a person's domicile
determines citizenship. See Crowley v. Glaze, 710
F.2d 676, 678 (10th Cir. 2013). “A person's
domicile is defined as the place in which the party has a
residence in fact and an intent to remain indefinitely, as of
the time of the filing of the lawsuit.” McEntire v.
Kmart Corp., 2012 WL 3860748, at *12 (citing Crowley
v. Glaze, 710 F.2d at 678). See Freeport-McMoRan,
Inc. v. KN Energy, Inc., 498 U.S. 426, 428
(1991)(“We have consistently held that if jurisdiction
exists at the time an action is commenced such jurisdiction
may not be divested by subsequent events.”). If neither
a person's residence nor the location where the person
has an intent to remain can be established, the person's
domicile is that of his or her parents at the time of the
person's birth. See Gates v. Comm'r of Internal
Revenue, 199 F.2d 291, 294 (10th Cir. 1952)(“[T]he
law assigns to every child at its birth a domicile of origin.
The domicile of origin which the law attributes to an
individual is the domicile of his parents. It continues until
another domicile is lawfully acquired.”). Additionally,
“while residence and citizenship are not the same, a
person's place of residence is prima facie evidence of
his or her citizenship.” McEntire v. Kmart
Corp., 2010 U.S. Dist. LEXIS 13373, at *3 (citing
State Farm Mut. Auto. Ins. Co. v. Dyer, 19 F.3d 514,
520 (10th Cir. 1994)). A corporation on the other hand, is
“‘deemed to be a citizen of any State by which it
has been incorporated and of the State where it has its
principal place of business.'” Gadlin v. Sybron
Int'l Corp., 222 F.3d 797, 799 (10th Cir.
2000)(quoting 28 U.S.C. § 1332(c)(1)).
Amount in Controversy.
statutory amount-in-controversy requirement, which presently
stands at $75, 000.00, must be satisfied as between a single
plaintiff and a single defendant for a federal district court
to have original jurisdiction over the dispute; “a
plaintiff cannot aggregate independent claims against
multiple defendants to satisfy the amount-in-controversy
requirement, ” nor can multiple plaintiffs aggregate
their claims against a single defendant to exceed the
threshold. Martinez v. Martinez, 2010 U.S. Dist.
LEXIS 38109, at *18 (D.N.M. 2010)(Browning, J.). If multiple
defendants are jointly liable, or jointly and severally
liable, on some of the claims, however, the amounts of those
claims may be aggregated to satisfy the amount-in-controversy
requirement as to all defendants jointly liable for the
claims. See Alberty v. W. Sur. Co., 249 F.2d 537,
538 (10th Cir. 1957); Martinez v. Martinez, 2010
U.S. Dist. LEXIS 38109, at *18. Similarly, multiple
plaintiffs may aggregate the amounts of their claims against
a single defendant if the claims are not “separate and
distinct.” Martin v. Franklin Capital Corp.,
251 F.3d 1284, 1292 (10th Cir. 2001)(Seymour, C.J.),
abrogated on other grounds by Dart Cherokee Basin
Operating Co. v Owens, 135 S.Ct. 547 (2014). Multiple
claims by the same plaintiff against the same defendant may
be aggregated, even if the claims are entirely unrelated.
See 14AA C. Wright & A. Miller, Federal
Practice and Procedure, Jurisdiction § 3704, at
566-95 (4th ed. 2011). While the rules on aggregation sound
complicated, they are not in practice: if a single plaintiff
--regardless whether he or she is the only plaintiff who will
share in the recovery -- can recover over $75, 000.00 from a
single defendant -- regardless whether the defendant has
jointly liable co-defendants -- then the court has original
jurisdiction over the dispute between that plaintiff and that
defendant. The court can then exercise supplemental
jurisdiction over other claims and parties that “form
part of the same case or controversy under Article III,
” 28 U.S.C. § 1367(a), meaning that they
“derive from a common nucleus or operative fact.”
United Mine Workers of Am. v. Gibbs, 383 U.S. 715,
actions seeking declaratory or injunctive relief, it is well
established that the amount in controversy is measured by the
value of the object of the litigation.” Hunt v.
Wash. State Apple Adver. Comm'n, 432 U.S. 333, 347
(1977). The Tenth Circuit follows the “either viewpoint
rule, ” which considers either the value to the
plaintiff, or the cost to the defendant of injunctive and
declaratory relief, as the measure of the amount in
controversy. Lovell v. State Farm Mut. Auto. Ins.
Co., 466 F.3d 893, 897 (10th Cir. 2006).
of the amount-in-controversy requirement must be established
by a preponderance of the evidence. See McPhail v. Deere
& Co., 529 F.3d at 953. In the context of
establishing an amount-in-controversy, the defendant seeking
removal could appear to be bound by the plaintiff's
chosen amount of damages in the complaint, which would seem
to allow a plaintiff to avoid federal jurisdiction
“merely by declining to allege the jurisdictional
amount [in controversy].” McPhail v. Deere &
Co., 529 F.3d at 955. The Tenth Circuit's decision in
McPhail v. Deere & Co. has foreclosed such an
option from a plaintiff who wishes to remain in state court.
McPhail v. Deere & Co. holds that a
defendant's burden in establishing jurisdictional facts
is met if the defendant proves “jurisdictional facts
that make it possible that $75, 000 is in play.” 529
F.3d at 955.
Supreme Court recently clarified that a defendant seeking
removal to federal court need only include in the notice of
removal a plausible allegation that the amount in controversy
exceeds the jurisdictional threshold. See Dart Cherokee
Basin Operating Co., LLC v. Owens, 135 S.Ct. at 554. The
district court should consider outside evidence and find by a
preponderance of the evidence whether the amount in
controversy is satisfied “only when the plaintiff
contests, or the court questions, the defendant's
allegation.” Dart Cherokee Basin Operating Co., LLP
v. Owens, 135 S.Ct. at 554.
REGARDING REMOVAL AND REMAND
civil action filed in state court satisfies the requirements
for original federal jurisdiction -- meaning, most commonly,
federal-question or diversity jurisdiction -- the defendant
may invoke 28 U.S.C. § 1441(a) to remove the action to
the federal district court “embracing the place where
such action is pending.” 28 U.S.C. § 1441(a).
See Huffman v. Saul Holdings LP, 194 F.3d 1072, 1076
(10th Cir. 1999)(“When a plaintiff files in state court
a civil action over which the federal district courts would
have original jurisdiction based on diversity of citizenship,
the defendant or defendants may remove the action to federal
court . . . .”)(quoting Caterpillar Inc. v.
Lewis, 519 U.S. at 68). In a case with multiple
defendants, there must be unanimous consent to removal; any
one defendant may spoil removal and keep the case in state
court. See 28 U.S.C. § 1446(b)(2)(A). Only true
defendants have removal rights: plaintiffs defending
counterclaims and third-party defendants may not remove an
action,  and their consent is not required for
removal if all the true defendants consent. See Hamilton
v. Aetna Life & Cas. Co., 5 F.3d 642, 643-44 (2d
Cir. 1993); Wiatt v. State Farm Ins. Co., 560
F.Supp.2d 1068 (D.N.M. 2007)(Browning, J.). “A
plaintiff objecting to the removal may file a motion asking
the district court to remand the case to state court.”
Huffman v. Saul Holdings LP, 194 F.3d at 1076
(citing Caterpillar Inc. v. Lewis, 519 U.S. at 69).
remove a case based on diversity, the diverse defendant must
demonstrate that all of the usual prerequisites of diversity
jurisdiction are satisfied. Under 28 U.S.C. § 1332(a), a
federal district court possesses original subject-matter
jurisdiction over a case when the parties are diverse in
citizenship and the amount in controversy exceeds $75,
000.00. See 28 U.S.C. § 1332(a); Johnson v.
Rodrigues, 226 F.3d 1103, 1107 (10th Cir. 2000).
Diversity between the parties must be complete. See
Caterpillar Inc. v. Lewis, 519 U.S. at 68; Radil v.
Sanborn W. Camps, Inc., 384 F.3d 1220, 1225 (10th Cir.
2004). In addition to the requirements of original
jurisdiction, § 1441(b)(2) lays out the
“forum-defendant rule, ” which provides that a
case may not be removed on the basis of diversity
jurisdiction if any defendant is a citizen of the state in
which the state-court action was brought. Brazell v.
Waite, 525 F. App'x 878, 884 (10th Cir.
2013)(unpublished). The Tenth Circuit wrote:
[W]e note that § 1441(b)(2) -- the so-called
forum-defendant rule -- provides as a separate requirement
that “[a] civil action otherwise removable solely on
the basis of [diversity] jurisdiction . . . may not be
removed if any of the parties in interest properly joined and
served as defendants is a citizen of the State in which such
action is brought.”
Brazell v. Waite, 525 F. App'x at 884
(alteration in original)(quoting 28 U.S.C. §
1441(b)(2))). The forum-defendant rule applies only to cases
removed under diversity jurisdiction; a defendant may remove
a case brought against it in its home state on the basis of
federal-question jurisdiction. See 28 U.S.C. §
1441(b). Last, a case cannot be removed if it began with a
nondiverse party or forum-citizen defendant, and only later
came to satisfy the requirements of removal jurisdiction,
unless: (i) the plaintiff voluntarily dismissed the
removal-spoiling party, see DeBry v. Transamerica
Corp., 601 F.2d 480, 488 (10th Cir. 1979);
Flores-Duenas v. Briones, No. CIV 0660, 2013 WL
6503537, at *12 n.6, *26 (D.N.M. Dec. 1, 2013)(Browning, J.)
(describing the operation of the
“voluntary-involuntary” rule); or (ii) the
removal-spoiling party was fraudulently joined or
The Presumption Against Removal.
courts are courts of limited jurisdiction; thus, there is a
presumption against removal jurisdiction, which the defendant
seeking removal must overcome. See Laughlin v. Kmart
Corp., 50 F.3d 871, 873 (10th Cir. 1995); Fajen v.
Found. Reserve Ins. Co., 683 F.2d at 333; Martin v.
Franklin Capital Corp., 251 F.3d at 1290; Bonadeo v.
Lujan, No. CIV 08-0812, 2009 WL 1324119, at *4 (D.N.M.
Apr. 30, 2009)(Browning, J.)(“Removal statutes are
strictly construed, and ambiguities should be resolved in
favor of remand.”). The defendant seeking removal must
establish that federal court jurisdiction is proper “by
a preponderance of the evidence.” McPhail v. Deere
& Co., 529 F.3d at 953 (10th Cir. 2008). See
Bonadeo v. Lujan, 2009 WL 1324119, at *4 (“As the
removing party, the defendant bears the burden of proving all
jurisdictional facts and of establishing a right to
removal.”). Because federal courts are courts of
limited jurisdiction, the Tenth Circuit has ruled that
“courts must deny such jurisdiction if not
affirmatively apparent on the record.” Okla. Farm
Bureau Mut. Ins. Co. v. JSSJ Corp., 149 F. App'x
775, 778 (10th Cir. 2005)(unpublished). On the other hand,
this strict construction and presumption against removal
should not be interpreted as a hostility toward removal cases
in the federal courts. See McEntire v. Kmart Corp.,
2010 WL 553443, at *2 (citing Bonadeo v. Lujan, 2009
WL 1324119, at *12 (“Strict construction does not mean
judicial hostility toward removal. Congress provided for
removal, and courts should not create rules that are at
tension with the statute's language in the name of strict
is well-established that statutes conferring jurisdiction
upon the federal courts, and particularly removal statutes,
are to be narrowly construed in light of our constitutional
role as limited tribunals.” Pritchett v. Office
Depot, Inc., 420 F.3d 1090, 1095 (10th Cir. 2005)(citing
Shamrock Oil & Gas Corp. v. Sheets, 313 U.S.
100, 108-09 (1941); United States ex rel. King v.
Hillcrest Health Ctr., 264 F.3d 1271, 1280 (10th Cir.
2001)). “All doubts are to be resolved against
removal.” Fajen v. Found. Reserve Ins. Co.,
683 F.2d 331, 333 (10th Cir. 1982). “The burden of
establishing subject-matter jurisdiction is on the party
asserting jurisdiction.” Montoya v. Chao, 296
F.3d 952, 955 (10th Cir. 2002).
Removal's Procedural Requirements.
1446 of Title 28 of the United States Code governs the
procedure for removal. “Because removal is entirely a
statutory right, the relevant procedures to effect removal
must be followed.” Thompson v. Intel Corp.,
2012 WL 3860748, at *5. A removal that does not comply with
the express statutory requirements is defective, and the
Court must, upon request, remand the case to state court.
See Huffman v. Saul Holdings LP, 194 F.3d at 1077.
See also Chavez v. Kincaid, 15 F.Supp.2d 1118, 1119
(D.N.M. 1998)(Campos, J.)(“The [r]ight to remove a case
that was originally in state court to federal court is purely
statutory, not constitutional.”).
1446(a) provides that a party seeking removal of a matter to
federal court shall file a notice of removal in the district
and division where the state action is pending,
“containing a short and plain statement of the grounds
for removal, together with a copy of all process, pleadings,
and orders served upon such defendant or defendants in such
action.” Such notice of removal is proper if filed
within thirty-days from the date when the case qualifies for
federal jurisdiction. See Caterpillar Inc. v. Lewis,
519 U.S. at 68-69; 28 U.S.C. § 1446(b). The Tenth
Circuit has further elaborated that, for the thirty-day
period to begin to run, “this court requires clear and
unequivocal notice from the [initial] pleading itself”
that federal jurisdiction is available. Akin v. Ashland
Chem. Co., 156 F.3d 1030, 1036 (10th Cir. 1998). The
Tenth Circuit specifically disagrees with “cases from
other jurisdictions which impose a duty to investigate and
determine removability where the initial pleading indicates
that the right to remove may exist.” Akin v.
Ashland Chem. Co., 156 F.3d at 1036.
the notice of removal is filed, all state-court proceedings
are automatically stayed, and the other defendants in the
case -- if not all defendants joined in the removal -- have
thirty days to consent to the removal of the action.
See 28 U.S.C. § 1446(b)(2). “When a civil
action is removed solely under section 1441(a) [the standard
removal statute, which excludes multiparty, multiforum
jurisdiction], all defendants who have been properly joined
and served must join in or consent to the removal of the
action.” 28 U.S.C. § 1446(b)(2)(A). The failure of
all defendants to consent to removal will result in remand.
See Tate v. Mercedes-Benz USA, Inc., 151
F.Supp.2d 222, 223-24 (N.D.N.Y. 2001)(“Absent such
consent, the removal petition is defective and the usual
course of conduct is for the federal court to remand the
action back to state court.”). The rule of unanimity
applies to all defendants, whether they are required parties
under rule 19 or merely proper parties under rule 20.
See 14C C. Wright & A. Miller, Federal Practice
& Procedure § 3730, at 459 (4th ed. 2009).
Defendants who have not been served, however, need not join
in removal. See Kiro v. Moore, 229 F.R.D. 228,
230-32 (D.N.M. 2005)(Browning, J.).
1447(c) permits the district court to “require payment
of just costs and any actual expenses, including attorney
fees, incurred as a result of the removal.” 28 U.S.C.
§ 1447(c). The Supreme Court has stated:
The appropriate test for awarding fees under § 1447(c)
should recognize the desire to deter removals sought for the
purpose of prolonging litigation and imposing costs on the
opposing party, while not undermining Congress' basic
decision to afford defendants a right to remove as a general
matter, when the statutory criteria are satisfied.
Martin v. Franklin Capital Corp., 546 U.S. 132, 140
(2005). The Tenth Circuit has limited district courts'
discretion to impose costs and fees to those cases in which
the removal was objectively unreasonable. See Garret v.
Cook, 652 F.3d 1249, 1254 (10th Cir.
2011)(“[C]ourts may award attorney's fees under
§ 1447(c) only where the removing party lacked an
objectively reasonable basis for seeking removal.”).
Court awarded costs and attorneys' fees to a plaintiff in
New Mexico ex rel. Balderas v. Valley Meat Co.,
LLC, because the Court determined that the removal
motion was objectively unreasonable. See No. CIV
14-1100, 2015 WL 3544288, at *26 (D.N.M. May 20, 2015)
on reconsideration in part sub nom. New Mexico
v. Valley Meat Co., LLC, No. CIV 14-1100, 2015 WL
9703255 (D.N.M. Dec. 14, 2015)(Browning, J.). The Court
determined that: (i) the party seeking removal --
D'Allende Meats -- was not statutorily authorized to file
removal, because D'Allende Meats was not a defendant;
(ii) D'Allende Meats did not obtain any defendants'
affirmative consent to removal, which is necessary even if
joint counsel represents each defendant; (iii) D'Allende
Meats' assertion that the Court had civil-rights
jurisdiction over the case lacked a sound basis in the
case's facts; and (iv) neither the case's facts or
case law supported D'Allende Meats' assertion that
the Court had federal-question jurisdiction. See
2015 WL 3544288, at *26. The Court concluded that
“[f]ailure on any one of these bases would, on its own,
justify remand[, but] [w]hiffing on all four warrants the
imposition of costs and fees.” 2015 WL 9703255, at *27.
Amendment of the Notice of Removal.
Caterpillar, Inc. v. Lewis, the Supreme Court held
that a defect in subject-matter jurisdiction cured before
entry of judgment did not warrant reversal or remand to state
court. See 519 U.S. at 70-78. Citing
Caterpillar, Inc. v. Lewis, the Tenth Circuit has
held that “a defect in removal procedure, standing
alone, is not sufficient to warrant vacating judgment and
remand to state court if subject matter jurisdiction existed
in the federal court.” Browning v. Am. Family Mut.
Ins. Co., 396 F. App'x 496, 505-06 (10th Cir.
2010)(unpublished). In McMahon v. Bunn-O-Matic
Corp., 150 F.3d 651 (7th Cir. 1998)(Easterbrook, J.),
the United States Court of Appeals for the Seventh Circuit
noticed, on appeal, defects in the notice of removal,
including that the notice failed to properly allege diversity
of citizenship. See 150 F.3d at 653 (“As it
happens, no one paid attention to subject-matter jurisdiction
. . . .”). The Seventh Circuit nevertheless permitted
the defective notice of removal to be amended on appeal to
properly establish subject-matter jurisdiction. See
150 F.3d at 653-54.
Tenth Circuit has allowed defendants to remedy defects in
their petition or notice of removal. See Jenkins v. MTGLQ
Investors, 218 F. App'x. 719, 723 (10th Cir. 2007)
(unpublished)(granting unopposed motion to amend notice of
removal to properly allege jurisdictional facts); Watkins
v. Terminix Int'l Co., Nos. CIV 96-3053, 96-3078,
1997 WL 34676226, at *2 (10th Cir. May 22, 1997)(per
curiam)(unpublished)(reminding the defendant that, on remand,
it should move to amend the notice of removal to properly
allege jurisdictional facts); Lopez v. Denver & Rio
Grande W. R.R. Co., 277 F.2d 830, 832 (10th Cir. 1960)
(“Appellee's motion to amend its petition for
removal to supply sufficient allegations of citizenship and
principal place of business existing at the time of
commencement of this action is hereby granted, and diversity
jurisdiction is therefore present.”). The Tenth Circuit
has further reasoned that disallowing amendments to the
notice of removal, even after the thirty-day removal window
had expired, when the defendant made simple errors in its
jurisdictional allegations, “would be too grudging with
reference to the controlling statute, too prone to equate
imperfect allegations of jurisdiction with the total absence
of jurisdictional foundations, and would tend unduly to exalt
form over substance and legal flaw-picking over the orderly
disposition of cases properly committed to federal
courts.” Hendrix v. New Amsterdam Cas. Co.,
390 F.2d 299, 301 (10th Cir. 1968). The Tenth Circuit has
noted that a simple error in a jurisdictional allegation
includes failing to identify a corporation's principal
place of business or referring to an individual's state
of residence rather than citizenship. See Hendrix v. New
Amsterdam Cas. Co., 390 F.2d at 301. In McEntire v.
Kmart Corp., when faced with insufficient allegations in
the notice of removal -- allegations of
“residence” not “citizenship” -- the
Court granted the defendants leave to amend their notice of
removal to cure the errors in some of the “formalistic
technical requirements.” 2010 WL 553443, at *8 (citing
Hendrix v. New Amsterdam Cas. Co., 390 F.2d at
300-02). Further, in Thompson v. Intel Corp., the
Court permitted the defendant, Intel Corp., to amend its
notice of removal to include missing jurisdictional elements,
including evidence that its principal place of business and
corporate headquarters -- the center of Intel Corp.'s
direction, control, and coordination of activities -- is out
of state, so that the diversity requirements were met.
See 2012 WL 3860748, at *1.
are limits to the defects that an amended notice of removal
may cure, however, as Professors Charles Alan Wright and
Arthur R. Miller explain:
[A]n amendment of the removal notice may seek to accomplish
any of several objectives: It may correct an imperfect
statement of citizenship, state the previously articulated
grounds more fully, or clarify the jurisdictional amount. In
most circumstances, however, defendants may not add
completely new grounds for removal or furnish missing
allegations, even if the court rejects the first-proffered
basis of removal, and the court will not, on its own motion,
retain jurisdiction on the basis of a ground that is present
but that defendants have not relied upon.
14 C. Wright & A. Miller, Federal Practice and
Procedure § 3733, at 651-59 (4th ed.
2009)(footnotes omitted). Professor Moore has similarly
recognized: “[A]mendment may be permitted after the
30-day period if the amendment corrects defective allegations
of jurisdiction, but not to add a new basis for removal
jurisdiction.” 16 J. Moore, D. Coquillette, G. Joseph,
S. Schreiber, G. Vairo, & C. Varner, Moore's
Federal Practice § 107.30[a][iv], at 107-317 to
-18 (3d ed. 2013). Thus, where diversity jurisdiction is
asserted as a basis for removal of an action to federal
court, the district court may permit the removing defendant
to amend its removal notice, if necessary, to fully allege
facts which satisfy the requirements of diversity
jurisdiction by a preponderance of the evidence. See
Carrillo v. MCS Indus., Inc., No. CIV 12-0573, 2012 WL
5378300, at *14 (D.N.M. Oct. 15, 2012)(Browning,
J.)(permitting party to amend its notice of removal when the
removing party did “not assert a new basis for
jurisdiction, or a new allegation not present in its Notice
of Removal; rather, the . . . Amended Notice of Removal
provide[d] greater detail regarding the same basis for
jurisdiction asserted in the . . . Notice of Removal”).
Cf. New Mexico ex rel. Balderas v. Valley Meat Co.,
No. CIV 14-1100, 2015 WL 3544288, at *25 (D.N.M. May 20,
2015)(Browning, J.)(denying amendment when it sought to
assert a new jurisdictional basis that was not raised in the
notice of removal).
Consideration of Post-Removal Evidence.
Tenth Circuit looks to both evidence in the complaint and
submitted after the complaint in determining whether the
criteria necessary for removal are met. See Thompson v.
Intel Corp., 2012 WL 3860748, at *8 (citing McPhail
v. Deere & Co., 529 F.3d at 956). The Tenth Circuit
explained in McPhail v. Deere & Co. that a
district court may have evidence presented to it after a
notice of removal has been filed, even if produced at a
hearing on subject-matter jurisdiction, to determine if the
jurisdictional requirements are met. See 529 F.3d at
953. “[B]eyond the complaint itself, other
documentation can provide the basis for determining the
amount in controversy -- either interrogatories obtained in
state court before removal was filed, or affidavits or other
evidence submitted in federal court afterward.”
McPhail v. Deere & Co., 529 F.3d at 956 (citing
Meridican Secs. Ins. Co. v. Sadowski, 441 F.3d 536,
541-42 (7th Cir. 2006), and Manguna v. Prudential Prop.
& Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002)).
As this Court has explained, “the Seventh Circuit, on
which the Tenth Circuit has heavily relied when addressing
the amount in controversy, has recognized that ‘events
subsequent to removal may clarify what the plaintiff was
actually seeking when the case was removed.'”
Aranda v. Foamex Int'l, 884 F.Supp.2d 1186, 1208
(D.N.M. 2012)(Browning, J.)(quoting Carroll v. Stryker
Corp., 658 F.3d 675, 681 (7th Cir. 2011)). Thus, when
determining if the requirements for federal jurisdiction are
met in a matter removed from state court, a district court
may consider evidence submitted after removal. See
Thompson v. Intel Corp., 2012 WL 3860748, at *14
(“[I]t is appropriate to consider post-removal evidence
to determine whether subject-matter jurisdiction
exists.”); Carrillo v. MCS Indus., Inc., 2012
WL 5378300, at *6-9.
defendant may remove a case to federal court based upon
diversity jurisdiction in the absence of complete diversity
if a plaintiff joins a nondiverse party fraudulently to
defeat federal jurisdiction. See Am. Nat'l Bank &
Trust Co. v. Bic Corp., 931 F.2d 1411, 1412 (10th Cir.
1991); Hernandez v. Menlo Logistics, Inc., No. CIV
12-0907, 2013 WL 5934411, at *14-17 (D.N.M. Sept. 30,
2013)(Browning, J.). A defendant may remove on the basis of
fraudulent joinder either while the nondiverse party is still
joined or after it is dismissed from the case -- the doctrine
can thus function as an exception to either complete
diversity or the voluntary-involuntary rule.
“‘[A] fraudulent joinder analysis [is] a
jurisdictional inquiry, '” Bio-Tec Envtl., LLC
v. Adams, 792 F.Supp.2d at 1214 (quoting Albert v.
Smith's Food & Drug Ctrs., Inc., 356 F.3d 1242,
1247 (10th Cir. 2004)), and, thus, the Tenth Circuit
instructs that the district court should “pierce the
pleadings, consider the entire record, and determine the
basis of joinder by any means available, ” Dodd v.
Fawcett Publ'ns, Inc., 329 F.2d 82, 85 (10th Cir.
1964)(citations omitted). “A district court may
disregard a nondiverse party named in the state court
complaint and retain jurisdiction if joinder of the
nondiverse party is a sham or fraudulent.” Baeza v.
Tibbetts, No. CIV 06-0407, 2006 WL 2863486, at *3
(D.N.M. July 7, 2006)(Vazquez, J.). The Supreme Court has
stated: “Merely to traverse the allegations upon which
the liability of the resident defendant is rested or to apply
the epithet ‘fraudulent' to the joinder will not
suffice: the showing must be such as compels the conclusion
that the joinder is without right and made in bad
faith.” Chesapeake & Ohio Ry. Co. v.
Cockrell, 232 U.S. 146, 152 (1914). The Tenth ...