Lack v. Caesars Enterainment Corporation
- Vincent Briccetti
- 7:20-cv-05394
- U.S. District Court · Southern District of New York
- 2
In Lack v. Caesars Entertainment, Judge Briccetti ordered defendants to explain why the removed case should not be sent back for lack of jurisdiction.
Myrna Lack and the five named defendants. The order required defendants’ counsel to explain why the federal court should retain the removed case rather than send it back to state court.
What happened
In Lack v. Caesars Entertainment Corporation, defendants removed Myrna Lack’s state-court case to federal court, claiming the parties were citizens of different states. The court had questioned whether that claim was valid because Harrah’s Atlantic City, LLC, was a New York citizen.
After the court raised the issue, defendants’ counsel submitted a stipulation voluntarily dismissing Lack’s claims against that company and argued that the dismissal resolved the diversity issue. The court said that was incorrect because federal jurisdiction is generally determined when the case is removed, and the exception for creating diversity through a voluntary dismissal applies only when the dismissal occurs before removal.
The court ordered defendants’ counsel to submit a detailed letter explaining why the case should not be sent back to state court for lack of jurisdiction by July 30, 2020. The order also stated that the rule barring removal by an in-state defendant prevented removal when the case was removed. Judge Vincent L. Briccetti did not state in this order that he had already remanded the case.
The detailed version
- Lack v. Caesars Enterainment Corporation · No. 7:20-cv-05394
- Vincent Briccetti
- July 23, 2020
Background
Myrna Lack sued Caesars Entertainment Corporation, Harrah’s Atlantic City, LLC, Harrah’s Atlantic City Operating Company, LLC, Harrah’s Atlantic City Propco, LLC, and Harrah’s Bossier City Investment Company, LLC, in Supreme Court, Westchester County. The defendants removed the case to the U.S. District Court for the Southern District of New York based on diversity jurisdiction under 28 U.S.C. § 1332(a)(1). Diversity jurisdiction allows a federal court to hear certain cases involving citizens of different states.
On July 15, 2020, the court ordered defendants’ counsel to explain why the case should not be sent back to state court, called a remand, because the court might lack subject-matter jurisdiction. Subject-matter jurisdiction is the court’s legal power to hear the case. The court specifically asked about the defendants’ position that diversity existed even though Harrah’s Atlantic City, LLC, was a New York citizen.
Analysis
On July 22, 2020, defendants’ counsel sent the court a stipulation of voluntary dismissal concerning Lack’s claims against Harrah’s Atlantic City, LLC. Counsel argued, without citing authority, that the dismissal made the diversity issue moot. The court rejected that argument.
The court explained that whether a case may be removed is generally determined when the notice of removal is filed. For diversity removal, the parties must have been diverse both when the state-court complaint was filed and when removal was sought. The court recognized an exception when a plaintiff voluntarily dismisses a nondiverse defendant after filing the state complaint but before removal. According to the court, that exception did not apply because defendants removed the case before the voluntary dismissal.
The court also stated that the forum-defendant rule barred removal at the time of removal. That rule generally prevents removal of a case based only on diversity jurisdiction when a properly joined and served defendant is a citizen of the state where the case was filed.
Order and effect
The court did not state that it had already remanded the case. Instead, it ordered defendants’ counsel to submit, by July 30, 2020, a detailed letter explaining why the court should not remand the case for lack of subject-matter jurisdiction. The order was signed by Judge Vincent L. Briccetti.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.