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Estate of Hanna v. Agape Senior, LLC

United States District Court, D. South Carolina, Columbia Division

January 20, 2015

The Estate of Dora Elizabeth B. Hanna, by and through her Personal Representative, King C. Hanna, Jr. and on behalf of a Class of Individuals Similarly Situated, Plaintiffs,
v.
Agape Senior, LLC; Agape Harbison, Inc.; Agape Lexington, Inc.; Agape Assisted Living, Inc.; Agape at Kathwood, Inc.; Carolina Community Hospice, Inc.; Agape Senior Primary Care, Inc.; Agape Management Services, Inc.; Agape West Columbia; Agape Senior Conway; Scott Middleton and his agents, assigns and representatives; Jackson and Coker Locum Tenens, LLC d/b/a Jackson Coker, Defendants/Third-Party Plaintiffs,
v.
Ernest Addo, Third-Party Defendant.

ORDER

JOHN F. ANDERSON, Magistrate Judge.

I. INTRODUCTION

This matter comes before the Court on Plaintiffs' Motion to Remand (ECF No. 113), Defendants' Motion to Realign Ernest Addo (ECF No. 123), and Plaintiffs' Motion for Leave to File Plaintiffs' Second Amended Complaint. (ECF No. 126).

II. BACKGROUND FACTS

This case arises out of purported medical treatment rendered to patients of Agape[1] by Ernest Addo ("Addo"), an unlicensed physician who assumed the identity of Arthur Kennedy, a duly licensed South Carolina physician. Specifically, this action was initiated to pursue the claims of all patients who received care from Addo during the time he was associated with Agape. The original complaint was filed in state court in Richland County, South Carolina and alleged causes of action for negligent referral against Jackson & Coker and negligent hiring, negligence per se, unjust enrichment, negligent retention, negligent supervision, negligent entrustment, vicarious liability, and strict tort liability (declaratory judgment) against Agape. On October 4, 2012, this case was removed by the Agape defendants from state court pursuant to the Class Action Fairness Act ("CAFA"), codified in relevant part at 28 U.S.C. § 1332(d).[2] Shortly after removal and as a result of the parties' request, the Court stayed this case for an extended period of time while the underlying declaratory judgment action was litigated to determine contested insurance coverage issues. The stay was eventually lifted on November 5, 2014. Thereafter, the Plaintiffs dismissed defendant Jackson & Coker and filed a Motion to Remand. That motion is the issue presently before the Court.

III. LEGAL STANDARD

A district court's review of federal jurisdiction assessing whether an action was properly removed must be evaluated based upon the time of removal. Consequently, post-removal events cannot serve to strip the federal court of otherwise proper jurisdiction. Groupo Dataflux v. Atlas Global Grp., L.P., 541 U.S. 567, 569-70 (2004); Freeport-McMoRan, Inc. v. KN Energy, Inc., 498 U.S. 426, 428 (1991). This same premise also holds true for actions removed pursuant to CAFA. Cedar Lodge Plantation, LLC v. CSHV Fairway View I, LLC, 768 F.3d 425, 427 (5th Cir. 2014) ("It is well-established that the time-of-removal rule prevents post-removal actions from destroying jurisdiction that attached in federal court under CAFA."); State of Louisiana v. American National Property & Casualty Co., 746 F.3d 633, 639-40 (5th Cir. 2014) (describing "overwhelming and unanimous authority" among the circuit courts of the position that post-removal events do not oust CAFA jurisdiction); Chavis v. Fid. Warranty Servs., Inc., 415 F.Supp.2d 620, 627 (D.S.C. 2006) (post-removal events... do not deprive a federal court of diversity jurisdiction) (citing Thompson v. Victoria Fire & Casualty Co., 32 F.Supp.2d 847, 849 (D.S.C. 1999)).

"While a defendant filing a notice of removal under 28 U.S.C. § 1446(a) need only allege federal jurisdiction with a short plain statement - just as federal jurisdiction is pleaded in a complaint - when removal is challenged, the removing party bears the burden of demonstrating that removal jurisdiction is proper." Ellenburg v. Spartan Morots Chassis, Inc., 519 F.3d 192, 200 (4th Cir. 2008). However, once the jurisdictional requirements of CAFA are met, the burden shifts to the party seeking remand to establish that an exception exists. Eakins v. Pella Corp., 455 F.Supp.2d 450, 452 (E.D. N.C. 2006) (holding that "the plaintiff bears the burden of proving that the local controversy exception warrants remand to state court").

IV. DISCUSSION

A. Class Action Fairness Act

CAFA was enacted in 2005 to address abuses of the class action device by amending 28 U.S.C. § 1332, the federal diversity statute. In doing so, the diversity statute was modified to allow for federal jurisdiction over class actions where only minimal diversity exists. Congress implemented CAFA to "restore the intent of the framers of the United States Constitution by providing for Federal court consideration of interstate cases of national importance under diversity jurisdiction." CAFA § 2(b)(2). In general, removal pursuant to CAFA is permissible if the removing party can establish: (1) the matter in controversy exceeds the sum or value of $5, 000, 000, exclusive of interest and costs, 28 U.S.C. § 1332(d)(2); (2) any member of a class of plaintiffs is a citizen of a state different from any defendant, § 1332(d)(2)(A); and (3) there are 100 or more plaintiff class members, § 1332(d)(5)(B).

In noting CAFA's impact, the Senate Judiciary Committee stated, "[o]verall, new section 1332(d) is intended to expand substantially federal court jurisdiction over class actions..." S.Rep. No. 109-14 at 42 (2005). The Fourth Circuit has also recognized that CAFA not only "amended, among other things, the concept of diversity jurisdiction for class actions to require only minimal diversity, " but it also "liberalized the requirements for removing class actions to federal courts." Johnson v. Advance America, 549 F.3d 932, 935 (4th Cir. 2008). However, despite the broad allowance of federal jurisdiction afforded by CAFA, the statue also has exceptions that, when applicable, make the exercise of jurisdiction by a federal court improper.

In the case currently before the Court, there does not appear to be any dispute between the parties regarding CAFA's basic jurisdictional requirements. Instead, the basis of Plaintiffs' Motion to Remand rests on what is known as the ...


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