United States District Court, D. South Carolina, Orangeburg Division
Larry L. Hudson, Plaintiff,
New Idea Corporation, AVCO Corporation, and Godley Auction Company, Inc. of SC, Defendants.
ORDER AND OPINION
This matter is before the court under Plaintiff Larry Hudson's ("Plaintiff) Motion to Remand the case to the Court of Common Pleas for Orangeburg County, South Carolina. (ECF No. 11.) Defendant AVCO Corporation ("Defendanf) opposes Plaintiffs Motion to Remand and asks the court to retain jurisdiction. (ECF No. 18.) For the reasons set forth herein, the court GRANTS Plaintiffs Motion to Remand (ECF No. 11).
I. RELEVANT FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff, a South Carolina resident, filed this products liability action in the Orangeburg County Court of Common Pleas on March 27, 2015. (See generally ECF No. 1-1 at 5-7.) Plaintiff named as Defendants New Idea Corporation ("New Idea"), AVCO Corporation ("AVCO"), and Godley Auction Company, Inc. of S.C. ("Godley Auction"). Id. Plaintiffs chief complaint is that a design defect in a two-row com picker-allegedly designed and manufactured by Defendants AVCO and New Idea and sold by Defendant Godley Auction-resulted in Plaintiffs left hand being severed from his arm, causing him severe and permanent injuries. (Id. at 5-6.)
After filing its Answer in the Orangeburg County Court of Common Pleas on October 19, 2015, (ECF No. 4), Defendant AVCO filed its Notice of Removal to this Court on October 22, 2015, (ECF No. 1), alleging that the case is removable to this federal court under 28 U.S.C. § 1441 (2012), as this case is a controversy between citizens of different states. In its Notice of Removal, Defendant AVCO states that it is a Delaware corporation with its principal place of business in Wilmington, Massachusetts; that Defendant New Idea “is not an existing separate legal entity;” and that Defendant Godley Auction “is not a legal person or entity.” (ECF No. 1 at 2.)
In his Complaint, Plaintiff alleges not only that Defendants AVCO and New Idea do business in the State of South Carolina, (ECF No. 1-1 at 5), but also that Defendant Godley Auction was incorporated and has its principal place of business in the State of South Carolina. (Id.; see also ECF No. 11-3.) In its Notice of Removal, Defendant AVCO argues that Defendant Godley Auction’s citizenship should be disregarded because Defendant Godley Auction dissolved as a corporation in 2013. (ECF No. 1 at 2.)
Now before the court is Plaintiff’s Motion to Remand this case to the Court of Common Pleas for Orangeburg County, South Carolina, (ECF No. 11), which this court considers below.
II. LEGAL STANDARD
A party seeking to remove a case from state to federal court bears the burden of demonstrating that jurisdiction is proper at the time it files its petition for removal. Caterpillar Inc. v. Lewis, 519 U.S. 61, 73 (1996). If federal jurisdiction is doubtful, remand is necessary. Mulchaey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994); see Marshall v. Manville Sales Corp., 6 F.3d 229, 232 (4th Cir. 1993) (noting Congress’s “clear intention to restrict removal and to resolve all doubts about the propriety of removal in favor of retained state court jurisdiction”); see also Auto Ins. Agency, Inc. v. Interstate Agency, Inc., 525 F.Supp. 1104, 1106 (D.S.C. 1981) (citations omitted).
The right to remove a case from state to federal court derives solely from 28 U.S.C. § 1441, which provides that “any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.” Absent jurisdiction based on the presentation of a federal question, see 28 U.S.C. § 1331 (2012), a federal district court only has “original jurisdiction of all civil actions where the matter 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) (2012). “[28 U.S.C. § 1332(a)] and its predecessors have consistently been held to require complete diversity of citizenship. That is, diversity jurisdiction does not exist unless each defendant is a citizen of a different State from each plaintiff.” Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 373 (1978) (emphasis in original) (footnote omitted); Crawford v. C. Richard Dobson Builders, Inc., 597 F.Supp.2d 605, 608 (D.S.C. 2009) (“The complete diversity rule of § 1332 requires that the citizenship of each plaintiff be different from the citizenship of each defendant.”). Moreover, a corporation is a “citizen” of the state in which it is incorporated. 28 U.S.C. § 1332(c)(1).
The dispute before this court centers on whether Defendant Godley Auction provides the basis for remand under 28 U.S.C. § 1332(a) since it, according to Plaintiff, is being sued as a South Carolina citizen, thereby destroying complete diversity of citizenship. (ECF No. 11 at 3- 5.) Plaintiff secondly argues that Defendant AVCO’s Notice of Removal (ECF No. 1) is defective since Defendant AVCO never obtained Defendant Godley Auction’s consent to remove the case. (ECF No. 11 at 5.)
In its Notice of Removal, Defendant AVCO asserts that Defendant Godley Auction, as a dissolved corporation, “should be disregarded for purposes of diversity jurisdiction.” (ECF No. 1 at 2.) Plaintiff counters in his Motion to Remand:
Defendant Godley Auctions dissolved on April 13, 2013, and Plaintiff filed this action on March 27, 2015. Therefore, Godley Auction’s status as a dissolved corporation does not affect its South Carolina citizenship.
Under Defendant AVCO’s argument, Godley Auction has no citizenship. This directly contradicts South Carolina law . . . that a dissolved corporation may be sued-meaning it retains citizenship even after dissolution. Godley Auction is a South Carolina citizen with the capacity to be sued. Godley Auction’s dissolution does not provide a basis for removal because it ...