United States District Court, E.D. Missouri, Eastern Division
MEMORANDUM AND ORDER OF REMAND
A. ROSS UNITED STATES DISTRICT JUDGE
matter is before the Court on the following motions:
Plaintiffs' Motion to Remand (Doc. No. 6); Defendants
SanD Development, LLC, LaBarge Coating, LLC and David
Kersting's 12(b)(5) Motion to Dismiss and Defendants
Suzanne Pawlow, David Kersting and LaBarge Coating, LLC's
12(b)(3) Motion to Dismiss and Defendants' Motion to
Transfer Venue Pursuant to the First-Filed Rule (Doc. No.
11); and subject to Defendants' pending Rule 12(b)
motions, Defendants' Motion to Dismiss and Alternatively
Defendants' Motion to Transfer and Consolidate Pursuant
to the First-Filed Rule and Further Alternatively to
Consolidate under Local Rule 4.03 (Doc. No. 19). The motions
are fully briefed and ready for disposition.
lawsuit arises out of a decades-long business relationship
between the parties. Plaintiff LaBarge C&R, LLC
("C&R") is a holding company owned by Pierre
LaBarge that in turn owns 100% of Plaintiff LaBarge Realty,
LLC ("Realty"), whose only asset is real property
located in Houston, Texas. C&R and Realty are Missouri
limited liability companies. Defendants Suzanne Pawlow
("Pawlow") and David Kersting
("Kersting") are officers of both C&R and
Realty and members and managers of Defendant SanD
Development, LLC ("SanD"), a Texas limited
liability company. Defendant LaBarge Coating, LLC
("Coating") is a Missouri limited liability company
whose sole member is SanD. Coating is a pipe coating,
processing and storage business that operates on Realty's
property in Texas (the "Sheldon Property") pursuant
to a lease agreement (the "Sheldon Lease"). Pawlow
is a citizen of Illinois; Kersting is a citizen of Missouri.
September 14, 2018, SanD and Coating (the "Texas
plaintiffs") filed suit against C&R, Realty, and
their owner Mr. LaBarge (the "Texas defendants") in
Texas state court alleging twelve causes of actions arising
out of the Sheldon Lease as well as other agreements (the
"Texas lawsuit"). C&R and Realty were served
with process on September 28, 2018.
October 9, 2018, Realty and C&R filed this action in the
Circuit Court of St. Louis County, Missouri against SanD,
Pawlow, Kersting, and Coating asserting claims for breach of
fiduciary duty, fraud, tortious interference with business
expectancy, unjust enrichment, breach of the implied covenant
of good faith and fair dealing, rescission and declaratory
relief (the "Missouri lawsuit").
October 22, 2018, the Texas defendants (Plaintiffs herein)
removed the Texas lawsuit to the Southern District of Texas
and then moved to dismiss and/or transfer the case to the
Eastern District of Missouri pursuant to a forum selection
November 8, 2018, Pawlow removed the Missouri lawsuit to this
Court based on diversity of citizenship of the parties.
Plaintiffs move to remand pursuant to the "forum
defendant rule," 28 U.S.C. §
1441(b)(2), arguing this Court lacks jurisdiction
because they named SanD, Kersting, and Coating, all Missouri
defendants. Defendants maintain the forum defendant rule does
not apply because they were not served at the time of
removal, citing Horton v. Conklin. 431 F.3d 602, 604
(8th Cir. 2005).
December 4, 2018, Defendants filed their motion to dismiss
for improper service pursuant to Rule 12(b)(5) and improper
venue pursuant to Rule 12(b)(3) and motion to transfer this
case to the Southern District of Texas pursuant to the
December 17, 2018, the Southern District of Texas transferred
the Texas lawsuit to the Eastern District of Missouri, where
it was assigned to District Judge Hamilton, No. 18-CV-2090
JCH. Defendants have now moved to dismiss, stay or transfer
the instant action based on the "first-filed" rule.
Alternatively, Defendants seek consolidation of the two cases
pursuant to Rule 42 and Local Rule 4.03. Plaintiffs do not
urge the Court to delay ruling on Plaintiffs' Motion to
Remand and Defendants' Motion to Dismiss and Motion to
Transfer until after it rules on Defendants' Motion to
Dismiss, and Alternatively, Defendants' Motion to
Transfer and Consolidate Pursuant to the First-Filed Rule,
and Further Alternatively to Consolidate Under Local Rule
4.03. (Doc. No. 29 at 2). Because the Court must be satisfied
that it has jurisdiction before it turns to the merits of the
parties' other legal arguments, Carlson v. Arrowhead
Concrete Works, Inc., 445 F.3d 1046, 1050 (8th Cir.
2006), the Court will address Plaintiffs' motion to
statutes are strictly construed, and any doubts about the
propriety of removal are resolved in favor of state court
jurisdiction and remand." Madderra v. Merck Sharpe
& Dohme Corp., No. 4:11CV1673, 2012 WL 601012, at *1
(E.D. Mo. Feb. 23, 2012) (quoting Manning v. Wal-Mart
Stores East, Inc., 304 F.Supp.2d 1146, 1148 (E.D. Mo.
2004)). The party seeking removal and opposing remand has the
burden of establishing jurisdiction by a preponderance of the
evidence. Id. (citing Central Iowa Power Co-op.
v. Midwest Indep. Transmission Sys. Operator, Inc., 561
F.3d 904, 912 (8th Cir. 2009T). See also Nicely v.
Wyeth, Inc., No. 4:11CV338 CDP, 2011 WL 2462060 at *2
(E.D. Mo. Jun. 17, 2011).
forum defendant rule, 28 U.S.C. § 1441(b), makes
diversity jurisdiction in a removal case narrower than if the
case was originally filed in federal court by the plaintiff.
Brake v. Reser's Fine Foods, Inc., No.
4:08CV1879 JCH, 2009 WL 213013, at *1 (E.D. Mo. Jan. 28,
2009) (citing Hurt v. Dow Chem. Co., 963 F.2d 1142,
1145 (8th Cir. 1992) (referencing the 28 U.S.C. §
1441(b) limitation on defendants in the forum State)). Under
§ 1441(b), a defendant can remove a case based on
diversity jurisdiction "only if none of the parties in
interest properly joined and served as defendants is a
citizen of the State in which such action is brought."
See Lincoln Prop. Co. v. Roche,546 U.S. 81, 90
(2005); Horton, 431 F.3d at 604 (quoting 28 U.S.C.
§ 1441(b)); Pecherski v. General Motors Corp.,
636 F.2d 1156, 1160 (8th Cir. 1981) (28 U.S.C. § 1441(b)
"further limits jurisdiction based on diversity of
citizenship by requiring that no joined and served defendants
be a citizen of the state in which the action was initially
brought"). Federal courts lack diversity jurisdiction
over a removed case in which one of the defendants is a
citizen of the forum state. Hinkle v. Norfolk ...