United States District Court, N.D. Illinois Eastern Division
August 31, 2005.
SEAN PEIRICK, MICHAEL WATTS, and JAMES JOHNSON, Plaintiffs,
HOOTERS OF AMERICA, INC., et al., Defendants.
The opinion of the court was delivered by: SUZANNE CONLON, District Judge
MEMORANDUM OPINION AND ORDER
Scan Peirick, Michael Watts, and James Johnson (collectively
"plaintiffs") initially filed this action against Hooters of
America, Inc., Hooters Air, LLC, and Hooters Management
Corporation (collectively "defendants") in the Circuit Court of
Cook County, Illinois for breach of contract implied in law,
breach of contract implied in fact, unjust enrichment, an
accounting and a declaratory judgment. Specifically, plaintiffs
allege defendants adopted plaintiffs' plans for a Hooters airline
without compensation in breach of implied contracts. Defendants
Hooters of America, Inc. and Hooters Air LLC removed the action
to this court based on diversity jurisdiction. Plaintiffs move
for remand, claiming the notice of removal is defective.
Defendants move for leave to file an amended notice of removal
Federal district courts have original jurisdiction of all civil
actions between citizens of different states where the amount in
controversy exceeds $75,000. 28 U.S.C. § 1332. A defendant may
remove an action from state court to federal court, based on
diversity jurisdiction, pursuant to the provisions of 28 U.S.C. § 1446. Under § 1446, a defendant may
file a notice of removal within thirty days of receiving a copy
of the complaint, or if the case is not removable based on the
complaint, within thirty days of receiving a pleading, motion,
order or other document that establishes that the case is
removable. Id. The defendant bears the burden of establishing
removability, and all doubts about federal jurisdiction are
resolved in favor of remand to state court. McCoy v. McClain,
226 F. Supp. 2d 939, 943 (N.D. Ill. 2002).
Plaintiffs allege the notice of removal is defective because
defendants failed to: (1) comply with Local Rule 81.2; (2) obtain
consent of Hooters Management; and (3) satisfy the requirements
for diversity jurisdiction.
I. Local Rule 81.2
Plaintiffs argue defendants' notice of removal is fatally
defective because it violates Local Rule 81.2. Local Rule 81.2
has been withdrawn because "[i]t imposes burdens on the manner in
which lawyers practice in state courts without significant
benefit and without clear authority to do so." Committee
Comment to LR 81.2. Accordingly, the motion to remand for Local
Rule 81.2 violations must be denied.
II. Failure to Obtain Consent of Defendants
Generally, all defendants must join in, or consent to, removal
within the thirty day period set forth in § 1446. Shaw v. Dow
Brands, Inc., 994 F.2d 364, 368 (7th Cir. 1993). A removal
petition is defective if it fails to explain why the other
defendants have not consented to removal. Id.; Marquette v.
Matra Transport, S.A., No. 96 C 6768, 1997 WL 222933, at *4
(N.D. Ill. May 1, 1997). Amendment of a notice of removal to
correct a technical defect is generally permissible, even if the
amendment occurs more than thirty days after removal. Shaw, at
369 (failure to obtain consent was "a technicality that doesn't go to the heart of jurisdiction");
Marquette, 1997 WL 222933, at *4 (lack of explanation in
removal notice was not a fatal defect); Estate of Pilsnik v.
Hudler, 118 F. Supp. 2d 905, 909 (E.D. Wis. 2000) (allowing
defendants' motion to amend their notice of removal to include
Hooters Management did not consent to the original notice of
removal. Hooters of America, Inc. and Hooters Air, LLC, however,
explained the lack of consent, stating that Hooters Management
had not yet filed an appearance in the case. In their amended
notice, defendants further explain that, despite an
investigation, they were originally unable to decipher whether
Hooters Management had been served. See Great American Ins. Co.
v. K & R Transportation, Inc., No. 04 C 1451, 2004 WL 1094540,
at *2 (N.D. Ill. May 17, 2004) (explanation sufficient where the
notice of removal stated steps were taken to investigate
co-defendant's legal status and reasons stated for not including
co-defendant's consent in the notice.). The amended notice
includes the consent of Hooters Management. Accordingly, any
defect due to lack of consent is cured by the amended notice. The
motion for leave to file an amended notice of removal instanter
III. Diversity Jurisdiction
The party seeking to invoke federal diversity jurisdiction
bears the burden of demonstrating that the complete diversity and
amount in controversy requirements were met at the time of
removal. Chase v. Shop `N Save Warehouse Foods, Inc.,
110 F.3d 424, 427 (7th Cir. 1997). A defendant must establish that
diversity is proper by supporting its allegations of jurisdiction
with "competent proof." Id.; Hayes v. Bass Pro Outdoor World,
LLC, No. 02 C 9106, 2003 WL 187411, at *1 (N.D. Ill. Jan. 21,
2003). This standard requires a defendant to offer evidence that
proves, to a reasonable probability, that jurisdiction exists.
Chase, 110 F.3d at 427. In determining whether there is diversity jurisdiction supporting removal, a court must weigh
only the evidence available at the time the petition for removal
was filed; thus, a court should not base its decision on
predictions about what a plaintiff may do in the future. Hahn v.
Pepisco, Inc., 350 F. Supp. 2d 758, 763 (N.D.Ill. 2004).
Defendants do not meet their burden of establishing the
citizenship and amount in controversy requirements. Defendants
must show that the evidence available at the time of removal
establishes a reasonable probability that the amount in
controversy exceeds $75,000. See Stein v. Sprint Communications
Co., 968 F. Supp. 371, 377 (N.D. Ill. 1997). In this case, the
amount in controversy is not obvious from the face of the
complaint. See Schacht v. Ethicon, 881 F. Supp. 348, 349
(N.D.Ill. 1995) (remanding case where amount in controversy was
unclear on the face of the complaint and holding appropriate
forum for necessary factfinding is state court). Defendants do
not offer any proof to support their conclusory statement in the
removal notice that "the amount in controversy ? exceeds
$75,000.00." Def. Am. Notice of Removal at p. 2. Similarly,
defendants offer no proof as to their claim that the plaintiffs
are citizens of Illinois. Defendants fail to establish by a
reasonable probability that the requirements of diversity
jurisdiction are satisfied.
Defendants' motion for leave to file amended notice of removal
instanter and plaintiffs' motion to remand are granted. The
deficiencies in the notice of removal make it impossible for the
court to determine if the parties are diverse and whether the
jurisdictional amount has been satisfied. Accordingly, this case is remanded to the Circuit Court of Cook
County pursuant to 28 U.S.C. § 1447(c), based on lack of subject
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