Broad Coverage Service, Inc. v. Oriska Insurance Company
- Philip Halpern
- 7:20-cv-11108
- U.S. District Court · Southern District of New York
- 2
In Broad Coverage Service v. Oriska Insurance, Judge Halpern remanded the case because third-party defendants cannot remove under federal law.
The plaintiffs, defendants, and third-party defendants in the action were affected because the federal court returned the case to the New York state court where it began, closed the federal action, and terminated all pending matters.
What happened
Broad Coverage Service, Inc. and Dynamic Claim Services, Inc. sued Oriska Insurance Company and Rashbi Management, Inc. in New York state court. Rashbi later brought claims against Donna Hodge, Annette Hall, Karen Grant Williams, and Alexi Arias as class representatives, and those third-party defendants removed the case to federal court.
The court explained that federal law allows a defendant to remove a qualifying state-court case, but the Supreme Court has held that a third-party defendant is not a defendant who may remove a case under that law. Because the third-party defendants were added only through Rashbi’s third-party complaint, their removal was not allowed.
In Broad Coverage Service, Inc. v. Oriska Insurance Company, Judge Philip M. Halpern remanded the case to the Supreme Court of the State of New York, County of Rockland. The court directed the Clerk to send the state court a copy of the order, close the federal case, and terminate all pending matters.
The detailed version
- Broad Coverage Service, Inc. v. Oriska Insurance Company · No. 7:20-cv-11108
- Philip Halpern
- Jan. 11, 2021
Background
Broad Coverage Service, Inc. and Dynamic Claim Services, Inc. started the action against Oriska Insurance Company and Rashbi Management, Inc. in the Supreme Court of the State of New York, County of Rockland. Rashbi filed a third-party complaint against Donna Hodge, Annette Hall, Karen Grant Williams, and Alexi Arias as class representatives of a class of employees of employer defendants. Those third-party defendants then removed the action to the U.S. District Court for the Southern District of New York.
Analysis
The third-party defendants claimed that federal jurisdiction existed under 28 U.S.C. § 1441, the federal removal statute. The court applied the Supreme Court’s decision in Home Depot U.S.A., Inc. v. Jackson, which held that § 1441(a) does not permit a third-party defendant to remove a case to federal court. The court noted that the third-party defendants were not named in the original action and entered the case only when Rashbi filed its third-party complaint. Binding Supreme Court precedent therefore barred their removal.
Disposition
Judge Philip M. Halpern remanded the action to the Supreme Court of the State of New York, County of Rockland. The Clerk was directed to send that court a copy of the order and close the federal action. All pending matters were terminated. The opinion did not decide the underlying claims between the parties.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.