County Of Orange v. The Crossroads Hotel

Background

The County of Orange filed the underlying action in the Supreme Court of Orange County on May 12, 2023, against The Crossroads Hotel, Newburgh EOM, LLC, Ramada by Windham, and Ratan Newburgh, LLC. The action followed a publicly announced plan to place some recently arrived asylum seekers in hotels outside New York City. The County’s state-court complaint alleged that buses brought homeless men to The Crossroads Hotel without notice to the County and described the resulting shelter as illegal under local law.

On May 17, 2023, the state court issued a preliminary injunction temporarily barring the defendants from transporting additional migrants or asylum seekers to Orange County. The injunction allowed the 186 people already occupying the properties to remain until further order. The defendants removed the case to federal court on May 21, 2023. The County then moved to remand, meaning to return the case to state court.

Legal Standards

Under 28 U.S.C. § 1447(c), a federal court must remand a case if it lacks subject-matter jurisdiction before final judgment. The party that removed the case bears the burden of showing that removal was proper. Removal statutes are strictly interpreted, and doubts are resolved against removal.

A defendant may remove a state-court case under 28 U.S.C. § 1443(1) in limited civil-rights circumstances. The court applied the two-part test from Georgia v. Rachel: the defendant must identify a right stated in terms of racial equality, and the defendant must show that the right is denied or cannot be enforced in the state courts. Removal under this provision is limited to situations in which it can be clearly predicted that the defendant’s rights will inevitably be denied by being required to proceed in state court.

A defendant may also remove under 28 U.S.C. § 1441 if the federal courts would have had original jurisdiction over the action. Because the parties were not diverse, federal-question jurisdiction was the only possible basis under that statute. Ordinarily, federal-question jurisdiction depends on the plaintiff’s complaint, not on a federal defense.

The court also considered the narrow Grable exception. Under that exception, a state-law claim may arise under federal law only when the federal issue is necessarily raised, actually disputed, substantial, and capable of resolution in federal court without disturbing the federal-state balance.

Analysis

Section 1443(1). The court held that the defendants did not satisfy the second part of the Rachel test. Even assuming the County’s state-court challenges were racially motivated, the defendants did not show that they had been denied, or could not enforce, their federal rights in New York state court.

The court explained that no federal law prohibited the County from bringing a civil action to enforce zoning and occupancy laws, and the defendants had no federal right to avoid those laws. The defendants’ allegations that the County was selectively or pretextually enforcing facially neutral laws did not establish that their federal rights would inevitably be denied in state court. The defendants also could raise their federal civil-rights arguments there.

Section 1441 and federal-question jurisdiction. The court held that the defendants could not establish jurisdiction under the Grable exception. The County’s claims concerned enforcement of local zoning laws and could succeed or fail without resolving a federal issue. The alleged selective enforcement based on race, color, or national origin, and the defendants’ arguments involving Title II, 42 U.S.C. § 1981, equal protection, the Contract Clause, the Takings Clause, and federal immigration law and policy, were potential federal defenses rather than necessary elements of the County’s claims.

Because the defendants could not show that a federal issue was necessarily raised, the court did not address the other three Grable requirements.

Disposition

The court granted the County’s motion to remand. It directed the Clerk of Court to terminate the motion and remand the case to the Supreme Court of the State of New York, Orange County. The opinion did not decide the underlying zoning, occupancy, or civil-rights disputes.