The New Yorker Hotel Management Company, Inc. v. Barreto

Background

The New Yorker Hotel Management Company, Inc. filed a holdover petition in the Civil Court of the City of New York, County of New York, Housing Part, against Mickey Barreto and two unidentified defendants. The petition alleged that Barreto rented Room 2565 at the New Yorker Hotel, that his lease expired on July 7, 2021, and that he remained in possession without the hotel’s permission. The hotel sought possession, a money judgment of $169,860, and the fair market value of the room’s use and occupancy.

The hotel later filed a notice of motion for summary judgment in the state-court case. Barreto then filed a notice attempting to remove the case to the federal district court. He argued that removal was timely because he filed it within 30 days after receiving the hotel’s summary-judgment motion, which he called an amendment. He also asserted federal-question and diversity jurisdiction.

Barreto was appearing without a lawyer. He argued that the hotel was connected to the North Korean government and violated sanctions administered by the U.S. Office of Foreign Assets Control. He also asserted that the case implicated his claimed status as an elected leader of The Beautiful Nation of the Moon and of the Sun, which he described as an Indian Tribe, and as a representative of a foreign sovereign. For diversity jurisdiction, he alleged that the hotel was a foreign state and that he was a New York citizen.

Court’s Analysis

A defendant may remove a state-court action only when the federal district court would have original jurisdiction over it. The court explained that a removal notice generally must be filed within 30 days after the defendant receives a pleading, motion, or other paper showing that the case is removable. The court found that Barreto alleged no facts showing that the hotel’s summary-judgment motion was the first document from which removability could be determined. The notice therefore appeared untimely.

The court also held that it lacked federal-question jurisdiction. Under the well-pleaded-complaint rule, federal-question jurisdiction ordinarily must appear on the face of the plaintiff’s properly pleaded claim. A federal defense or argument raised by the defendant does not create federal-question jurisdiction. The petition was a landlord-tenant holdover case based on state law, and Barreto’s allegations about sanctions, foreign-sovereign status, and tribal-leader status did not change that conclusion.

The court rejected diversity jurisdiction as well. Diversity jurisdiction requires, among other things, that the case be between citizens of different states and that the amount in controversy exceed $75,000. The court stated that a defendant cannot remove a case on diversity grounds when a properly joined defendant is a citizen of the state where the case was filed. Because Barreto was a New York citizen and was the defendant in the state-court action, he could not remove the case to a federal court in New York on that basis.

Disposition

The court concluded that removal was improper and remanded the action under 28 U.S.C. § 1447(c) to the Civil Court of the City of New York, County of New York, Housing Part. The Clerk was directed to send that court a copy of the order and close the federal action. All pending matters were terminated. The court did not decide the merits of the hotel’s holdover claims or its state-court motion for summary judgment.