Gold Town Corp. v. United Parcel Service, Inc.

Background

Gold Town sold Kenneth Ransom a 14-karat gold necklace through Amazon for $2,350. Gold Town shipped it through United Parcel Service, Inc. (UPS) using next-day service. After UPS reported delays and then said the package was lost, Gold Town refunded Ransom the full purchase price. Gold Town alleges that UPS later placed a new label on the package and delivered the necklace to Ransom, who signed for it and kept it without returning the necklace or paying its value.

Gold Town sued Ransom in New York state court for conversion, replevin, fraud, and unjust enrichment. It sued UPS for negligence and conversion. UPS removed the case to federal court, asserting federal-question jurisdiction based on federal common law governing air-carrier liability for lost, damaged, or delayed shipments. UPS also stated that Ransom had verbally consented to removal.

Arguments about removal

Gold Town moved to remand, meaning it asked the federal court to return the case to state court. It argued that UPS’s notice of removal was filed too late, that federal-question jurisdiction was absent, and that Ransom had not properly consented to removal.

The court rejected the timing argument. Although UPS filed 32 days after service, the thirtieth day fell on a Saturday, so the filing deadline continued to the following Monday. The court also stated that federal common law appeared to dominate the field governing UPS’s potential liability for the air shipment and therefore appeared to provide federal-question jurisdiction, although the court said it did not need to conclusively resolve that issue.

Written consent requirement

The court held that the removal was ineffective because Ransom had not provided written consent. Under the removal statute and Second Circuit precedent, all properly joined and served defendants must join in or consent to removal when a case is removed under the general removal provision. The court assumed, for purposes of its analysis, that Ransom had verbally consented, but held that a written memorialization of his consent was necessary.

The court relied on Second Circuit precedent and decisions from the Southern District of New York requiring unambiguous written consent from a non-removing co-defendant. It explained that requiring a writing helps avoid factual disputes about whether consent was actually given.

UPS alternatively argued that Ransom’s consent was unnecessary under a different removal provision for cases combining federal and state claims. The court rejected that argument. UPS had removed the case under the general removal provision, not that alternative provision. The court further held that, because the claims against Ransom arose from the same delivery as the claims against UPS, the federal court would have supplemental jurisdiction over the claims against Ransom. Therefore, the general removal provision governed and Ransom’s consent was required.

Disposition

The court granted Gold Town’s motion to remand and directed that the case be returned to state court. The court also denied Gold Town’s request for attorney’s fees and costs, finding that UPS’s removal arguments were not objectively unreasonable. The court directed the clerk to terminate the pending motions, including UPS’s motion to dismiss, and to close the federal case.