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Park Equine Hospital, Pllc v. Braugh

United States District Court, Sixth Circuit

May 30, 2013

PARK EQUINE HOSPITAL, PLLC, Plaintiff,
v.
JANE BRAUGH, Defendant.

MEMORANDUM OPINION AND ORDER

DANNY C. REEVES, District Judge.

This matter is pending for consideration of Plaintiff Park Equine Hospital, PLLC's Motion to Remand to State Court and Motion for Attorney's Fees. [Record No. 3] For the reasons stated below, both motions will be granted.

I.

On April 14, 2011, Park Equine filed suit against Defendant Jane Braugh, a horse owner and attorney who lives in California, seeking to collect $33, 559.72 in veterinary fees allegedly owed by Braugh. The Complaint alleges breach of contract and unjust enrichment. [Record No. 1-2] In December 2011, Braugh filed an Answer and a Counterclaim, alleging claims under Kentucky law. [Record No. 1-6, p. 3] On August 10, 2012, after cross-motions for summary judgment were filed, the state court granted summary judgment on liability for Park Equine. [Record No. 1-12] On August 22, 2012, the state court directed the parties to mediate the case and required that the parties be present at the mediation in Lexington, Kentucky. [Record No. 1-14]

After scheduling difficulties arose, Park Equine filed a motion to compel and requested that the court set a date for the mediation. In her response, Braugh argued that the selected mediator was no longer neutral because of alleged ex parte contacts. [Record No. 1-15, p. 5] Based on this response, Park Equine asserted that any further mediation efforts would be a waste of time and resources, and requested that the matter be set for a trial. [Record No. 1-16] After arguments, the court scheduled a trial for April 16, 2013.

On April 10, 2013 - almost two years after the suit was instituted - Braugh filed a "Motion for Leave to Amend Counterclaim, " alleging violations of the federal Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692. [Record No. 1-19] The next day, on April 11, 2013, Braugh removed the case to this Court based of federal question jurisdiction pertaining to the allegations contained in her proposed Amended Counterclaim. Because of the removal, the Fayette Circuit Court cancelled the April 16, 2013 trial. However, it took no action regarding Braugh's motion to file an amend Counterclaim. [Record No. 3-1, p. 4]

In support of its motion to remand, Park Equine argues that a defendant may not create subject matter jurisdiction by filing a counterclaim alleging violations of federal law. It argues that Braugh's purpose in removing the case to federal court was to delay the trial in the Fayette Circuit Court, and that it is entitled to attorney's fees because there was no objectively reasonable basis for removal. In response, Braugh argues that the proposed Amended Counterclaim established federal question jurisdiction and that the Court has supplemental jurisdiction over the non-federal claims.

II.

A federal district court's removal jurisdiction is set out in 28 U.S.C. § 1441. Under this statutory section, "[a]ny 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." 28 U.S.C. § 1441(a). Where, as here, diversity jurisdiction is lacking, removal jurisdiction "turns on whether the case falls within the original federal question' jurisdiction of the United States district courts." Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 8 (1983). Thus, the Court looks to 28 U.S.C. § 1331, which dictates the parameters of the Court's federal question jurisdiction. Section 1331 states that "[t]he district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. In other words, a case is properly removed when it "arises under" federal law - or, when original federal question jurisdiction would be proper. Id.

The Supreme Court has explained that a district court's federal question jurisdiction is limited to cases "in which a well-pleaded complaint establishes either that federal law creates the cause of action or that the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal law." Franchise Tax, 463 U.S. at 27-28. A case depends on the resolution of a substantial question of federal law when "the federal law is a necessary element of one of the well-pleaded... claims." Id. at 13. Additionally, under the "well-pleaded complaint" rule, courts will generally only look to the plaintiff's complaint. Palkow v. CSX Transp., Inc., 431 F.3d 543, 552 (6th Cir. 2005). Therefore, absent diversity, in deciding whether a district court has subject matter jurisdiction over the claims of a party, the Court applies the well-pleaded complaint rule. See Franchise Tax, 463 U.S. at 13.

There are very few exceptions to this rule. As the Sixth Circuit explained in Mikulski v. Centerior Energy Corp.:

One exception is the artful-pleading doctrine: plaintiffs may not "avoid removal jurisdiction by artfully casting their essentially federal law claims as state-law claims." A related exception is the complete-preemption doctrine: removal is proper "when a federal statute wholly displaces the state-law cause of action through complete pre-emption." A third exception is the substantial-federalquestion doctrine, which applies "where the vindication of a right under state law necessarily turn[s] on some construction of federal law."

501 F.3d 555, 565 (6th Cir. 2007) (internal citations omitted). Under these limited circumstances, a defendant may properly remove an action to federal court despite a plaintiff's desire to proceed in state court. "Further, because they implicate federalism concerns, removal statutes are to be narrowly construed." Long v. Bando Mfg. of Am., Inc., 201 F.3d 754, 757 (6th Cir. 2000).

"[I]n certain cases federal-question jurisdiction will lie over state-law claims that implicate significant federal issues." Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308, 312 (2005). However, "[t]he well-pleaded complaint rule generally provides that the plaintiff is the master of his complaint, and the fact that the wrong asserted could be addressed under either state law or federal law does not ordinarily diminish the plaintiff's right to choose a state law cause of action." Alexander v. Elec. Data Sys. Corp., 13 F.3d 940, 943 (6th Cir. 1994). Further, the party seeking removal bears the burden of demonstrating that the district court has original jurisdiction. Eastman v. Marine Mech. Corp., 438 F.3d 544, 549 (6th ...


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