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Little v. Wyndham Worldwide Operations, Inc.

United States District Court, M.D. Tennessee, Nashville Division

May 5, 2017

ROBERT E. LITTLE, and KATHLEEN D. LITTLE, Plaintiffs,
v.
WYNDHAM WORLDWIDE OPERATIONS, INC., WYNDHAM VACATION RESORTS, INC., WYNDHAM VACATION OWNERSHIP, INC., and CHRISTOPHER CLABOUGH, Defendants.

          MEMORANDUM OPINION

          WAVERLY D. CRENSHAW CHIEF UNITED STATES DISTRICT JUDGE.

         Pending before the Court is Plaintiffs' Motion to Remand (Doc. No. 16), to which Defendants have responded in opposition (Doc. No. 21), and Plaintiffs have replied (Doc. No. 33). For the reasons that follow, Plaintiffs' Motion will be granted and this case will be remanded to state court.

         I. Background

         This litigation asserting common law and statutory claims under Tennessee law was filed in the Chancery Court for Davidson County on October 14, 2016. Plaintiffs, Robert E. and Kathleen D. Little, are citizens of the state of Illinois. (Doc. No. 1-1, Chancery Complaint). Named as Defendants are Wyndham Worldwide Operations, Inc., which is alleged to be a Delaware corporation with its principal place of business in New Jersey, and Wyndham Vacation Resorts, Inc. and Wyndham Vacation Ownership, Inc., both of which are alleged to be Delaware corporations with their principle places of business in Florida. (Id. ¶¶ 2-4). Also named as a Defendant is Christopher Clabough, who is alleged to be a licensed sales agent for the Wyndham Defendants and a Tennessee resident. (Id. ¶¶5, 8(h)). Four business days after suit was filed, the Wyndham Defendants removed the action to this Court on diversity jurisdiction grounds, [1] even though Defendant Clabough had yet to be served with process.

         Plaintiffs now move to remand, arguing that those Defendants are attempting “to game the system” by “watching the [state] court dockets and quickly removing cases before anyone can even be served” in order to bypass the forum defendant rule. (Doc. No. 33 at 2). Plaintiffs ask this Court to prohibit “big corporate giants like Wyndham” from engaging in “jack rabbit removal to defeat the purpose of Congressional intent, ”[2] and to remand the case to the Chancery Court from whence it originated for lack of diversity jurisdiction. (Id.). Plaintiffs also contend that the Court should “ignore” the Wyndham Defendants' “lame argument” that federal question jurisdiction exists under the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601, et seq., characterizing the argument as being “embarrassingly specious, even for a sneaky corporate defendant.” (Id. at 5). Although the Court finds such hyperbole unnecessary, it agrees that remand is appropriate.

         II. Analysis

         Diversity jurisdiction is conferred by 28 U.S.C. § 1332 that provides shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interests and costs and is - (1) against citizens of different states.” 28 U.S.C. § 1332(a)(1). Under this statute, “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), as is alleged to be the case here.

         A defendant sued in state may remove to federal court “any civil action brought in a State court of which the district courts of the United States have original jurisdiction.” 28 U.S.C. § 1441(a). Specifically with regard to diversity jurisdiction, however, Section 1441(b) of the removal statute - also known as the “forum defendant rule” - provides:

         (b) Removal based on diversity of citizenship.--

(1) In determining whether a civil action is removable on the basis of the jurisdiction under section 1332(a) of this title, the citizenship of defendants sued under fictitious names shall be disregarded.
(2) A civil action otherwise removable solely on the basis of the jurisdiction under section 1332(a) of this title may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.

28 U.S.C.A. 1441(b).

         The Wyndham Defendants argue that removal was proper based upon both the plain language of § 1441(b)(2) and the Sixth Circuit's decision in McCall v. Scott, 239 F.3d 808 (6th Cir. 2001). While both sources provide a colorable basis for their decision to remove when they did, the Court finds that McCall is not controlling and that permitting the Wyndham Defendants' removal would thwart the underlying purpose for the forum defendant rule.

         In McCall, the Sixth Circuit stated that “[w]here there is complete diversity of citizenship, as [plaintiff] concedes there was, the inclusion of an unserved resident defendant in the action does not defeat removal under 28 U.S.C. § 1441(b).” 239 F.3d at 809 n.2. However, that statement-made without any further elaboration and relegated to a footnote-has repeatedly been characterized as dicta, both within and outside the Sixth Circuit, and is therefore not necessarily followed. See e.g. Breitweiser v. Chesapeake Energy Corp., 2015 WL 6322625, at *3 (N.D. Tex. Oct. 20, 2015); Arrington v. Medtronic, Inc., 130 F.Supp.3d 1150, 1155 (W.D. Tenn. 2014); In re Darvocet, Darvon & Propoxyphene Prod. Liab. Litig., 2012 WL ...


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