Castro v. Quezada

Background

The case was removed to the U.S. District Court for the Southern District of New York on April 19, 2021. The complaint asserted state-law claims for breach of contract and unjust enrichment. The parties were Jose Eladio Castro, as plaintiff, and Santiago Quezada and Euros El Tina Restaurant and Billiards Corp. doing business as El Tina Lounge, as defendants.

Jurisdiction

Federal courts may hear a state-law case based on diversity jurisdiction only when the opposing parties have complete diversity of citizenship and the amount-in-controversy requirement is satisfied. The court stated that the complaint showed that Castro and at least one defendant were citizens of New York. Because both sides therefore included New York citizens, complete diversity was absent.

The defendants did not establish any other basis for original jurisdiction, meaning a jurisdictional basis that would allow the federal court to hear the case initially. The defendants referred to RICO claims in a different case, but the court explained that supplemental jurisdiction—the authority to hear related claims after a court already has original jurisdiction—cannot itself supply the original jurisdiction needed to remove a state-court complaint. The court also noted that consolidation of the cases had not provided a basis for removal.

Disposition

The court held that the action was improperly removed and stated that it must be remanded to state court. Judge Edgardo Ramos directed the Clerk of Court to terminate the federal case and remand it to state court. The opinion did not decide the merits of the breach-of-contract or unjust-enrichment claims.