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City of Webster Groves v. CCATT LLC

United States District Court, E.D. Missouri, Eastern Division

September 3, 2019

CITY OF WEBSTER GROVES, MO, Plaintiff,
v.
CCATT LLC, et al., Defendant.

          MEMORANDUM AND ORDER

          RONNIE L. WHITE UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on the Motion to Remand filed by Plaintiff, the City of Webster Groves, Missouri ("the City"). (ECF No. 20) The motion has been fully briefed. After careful consideration, the Court denies the motion.

         BACKGROUND

         In August 1997, the City entered into a lease agreement with Eastern Missouri Cellular Limited Partnership, a predecessor in interest to Defendant New Cingular Wireless PCS, LLC ("New Cingular"). The lease agreement provided for the City to lease to New Cingular certain real property located in and owned by the City for the construction and operation of a communications tower. In 2013, New Cingular notified the City that it would grant sublease rights to manage and operate the communications tower on the leased premises to Crown Castle International Corp. ("Crown Castle") while New Cingular would remain the tenant.

         In May 2018, the City discovered a provision of the lease agreement, which related to escalation of the base rent, had not been implemented. The City then requested a rent reconciliation report from Crown Castle for the underpayment of rent beginning in 1997. Crown Castle sent a document admitting there was an underpayment between 2007 and 2017. The City disputed the total amount due and sent a notice of default to Crown Castle and New Cingular (collectively referred to as "Defendants"). After Defendants failed to cure the alleged defaults, the City sent a notice terminating the lease agreement and demanding possession of the leased premises. According to the City, Defendants have refused to cure their defaults, pay owed amounts, remove improvements and other personal property from the leased premises (including the communications tower itself), or vacate the leased premises.

         The City sued in state court and asserted claims for breach of contract (Count I), declaratory judgment (Count II), and unlawful detainer (Count III). Crown Castle then removed the case to federal court on the basis of diversity jurisdiction pursuant to 28 U.S.C. §§ 1332, 1441, and 1446. Defendants filed their Answers (ECF Nos. 15 & 17), and Defendant CCATT LLC ("CCATT") filed a counterclaim of breach of contract/breach of the implied covenant of good faith and fair dealing (ECF No. 18). The City has moved for the case to be remanded to state court, arguing Defendants have failed to sufficiently plead facts to invoke diversity jurisdiction. The City also contends principles of federalism and comity support this case proceeding in state court. On December 20, 2018, the Court granted the parties' Joint Motion to Stay (ECF No. 24) pending the resolution of the City's Motion to Remand and vacating the Order Setting Rule 16 Conference. (ECF No. 26)

         LEGAL STANDARD

         A party may remove an action to federal court only if it could have been brought in federal court originally. Junk v. Terminix Int'l Co, 628 F.3d 439, 444 (8th Cir. 2010) (citing 28 U.S.C. § 1441(a)-(b)). In removal cases, the Court reviews the state court petition and the notice of removal in order to determine whether it has jurisdiction. Branch v. Wheaton Van Lines, Inc., No. 4:44CV01735 AGF, 2014 WL 6461372, at *l (E.D. Mo. Nov. 17, 2014). "Where the defendant seeks to invoke federal jurisdiction through removal, ... it bears the burden of proving that the jurisdictional threshold is satisfied." Bell v. Hershey Co., 557 F.3d 953, 956 (8th Cir. 2009). "[A] case is ordinarily not removable on federal question grounds unless the federal question is presented on the face of the plaintiffs complaint." Kaufman v. Boone Ctr., Inc., No. 4:11CV286 CDP, 2011 WL 1564052, at *l (E.D. Mo. Apr. 25, 2011). A plaintiff may move to remand the case if the district court lacks subject matter jurisdiction. Junk, 628 F.3d at 444 (citing 28 U.S.C. § 1447(c)). District courts are to resolve all doubts regarding federal jurisdiction in favor of remand. Hubbard v. Federated Mut. Ins. Co., 799 F.3d 1224, 1227 (8th Cir. 2015).

         DISCUSSION

         The City first argues remand is proper because Crown Castle failed to properly invoke federal diversity jurisdiction.

         Under 28 U.S.C. § 1332(a), a district court has original jurisdiction over a civil action where the amount in controversy exceeds the sum of $75, 000 and there is complete diversity of citizenship between the litigants. "Complete diversity of citizenship exists where no defendant holds citizenship in the same state where any plaintiff holds citizenship." OnePoint Solutions, LLC v. Borchert, 486 F.3d 342, 346 (8th Cir. 2007). "For a party to remove a case to federal court based on diversity jurisdiction, the parties must be diverse both when the plaintiff initiates the action in state court and when the defendant files the notice of removal in federal court." Chavez-Lavagnino v. Motivation Educ. Training, Inc., 714 F.3d 1055, 1056 (8th Cir. 2013); Reece v. Bank of New York Mellon, 760 F.3d 771, 777 (8th Cir. 2014). Pursuant to 28 U.S.C. § 1332(c)(1), a corporation is considered a citizen of the state in which it is incorporated and the state where it has its principal place of business. "For purposes of establishing diversity, a limited liability company's citizenship is the citizenship of each of its members." Little Otters of Love, LLC v. Rosenberg, 724 Fed.Appx. 498, 501 (8th Cir. 2018).

         In its Notice of Removal, Crown Castle asserted it is a Delaware corporation with its principal place of business in Texas. (ECF No. 1, at ¶ 9) It further explained that CCATT is a limited liability company ("LLC") whose sole member is another LLC, CCATT Holdings LLC, whose sole member is Crown Castle USA Inc., a Pennsylvania corporation with its principal place of business in Pennsylvania. (Id. at ¶ 8) For New Cingular's citizenship, however, Crown Castle asserted the following:

Upon information and belief New Cingular Wireless PCS, LLC f/k/a/ AT&T Wireless PCS, LLC ("New Cingular") is not a citizen of Missouri because it is a limited liability company without any owner or member that [is] a citizen of Missouri. Upon information and belief neither New Cingular nor its members are citizens of Missouri.

(Id. at ¶ 10) (emphasis added) Because the party seeking removal bears the burden of proving the jurisdictional requirements, Bell, 557 F.3d at 956, the City argues Crown Castle was required to identify the members of each defendant LLC and sufficiently plead that none of their members are citizens of Missouri of which the City is considered a citizen. The City contends Crown Castle's allegation based "[u]pon information and belief, rather than specifically pleading the ...


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