Opinion
MASTER FILE 02 Civ. 3288 (DLC), 03 Civ. 6220 (DLC), 03 Civ. 6221 (DLC), 03 Civ. 6223 (DLC), 03 Civ. 6224 (DLC)
October 20, 2003
MEMORANDUM OPINION AND ORDER
The four above-captioned securities actions were filed in Mississippi state court ("Mississippi Actions") against defendants connected with the telecommunications company formerly known as WorldCom, Inc. ("WorldCom"). Certain defendants removed these four lawsuits on the ground that they were related to WorldCom's pending bankruptcy proceedings. Through papers filed on August 25, 2003, the plaintiffs in the Mississippi Actions have attempted to show cause why the prior Opinions in this consolidated action denying motions to remand brought by plaintiffs in other actions do not also require the denial of their pending motions to remand.
The Mississippi plaintiffs were following a procedure established in this consolidated, multi-district litigation through the Order of June 11, 2003. That Order provided an opportunity for actions that appeared on this Court's docket between March 3 and June 11, 2003 to show cause by July 3, 2003 why prior opinions in this consolidated securities action denying remand motions do not also require denial of their pending motions to remand; actions appearing on this Court's docket after June 11, 2003 are required to show cause within three weeks of their arrival on the docket.
Earlier in this litigation, the New York City Employee's Retirement System ("NYCERS") moved to remand its action to state court. NYCERS and its co-plaintiffs had filed suit alleging violations of the Securities Act of 1933 and common law fraud arising out of their purchase of WorldCom stocks and bonds. Milberg Weiss Bershad Hynes Lerach LLP also contested removal and federal jurisdiction on behalf of forty-one plaintiffs in the numerous Individual Actions it had filed across the country. The Milberg Weiss Actions were permitted to intervene in NYCERS' motion so that their removal arguments could be heard on an expedited basis. An opinion dated March 3 ("March 3 Opinion"), addressed and rejected the arguments made by both NYCERS and Milberg Weiss, and denied NYCERS' motion to remand. In re WorldCom, Inc., Sec. Litig., 293 B.R. 308 (S.D.N.Y. 2003)(DLC). The March 3 Opinion held that there was federal subject matter jurisdiction over the action,id. at 324, and that it was properly removed pursuant to the bankruptcy removal provision, 28 U.S.C. § 1452(a), as "related to" WorldCom's bankruptcy. Id. at 330. The March 3 opinion also addressed and rejected plaintiffs' arguments that the motion for remand should be granted on various equitable grounds. Id. at 331-34. By opinion dated May 5, 2003 ("May 5 Opinion"), see In re WorldCom, Inc., Sec. Litig. Nos. 02 Civ. 3288, 03 Civ. 167, 03 Civ. 338, 03 Civ. 998(DLC), WL 21031974 (S.D.N.Y. May 5, 2003), the Court addressed and rejected the argument by an Ohio Individual Action that the Eleventh Amendment to the United States Constitution barred the removal to federal court of their actions since it alleged only State law claims. The May 5 opinion denied the motions and explained that the basis for federal jurisdiction was the existence of bankruptcy jurisdiction, not the existence of claims arising under the federal securities laws.Id. at *2.
This Opinion addresses one of the arguments for remand raised by the plaintiffs in the Mississippi Actions. They argue that the bankruptcy removal provision, 28 U.S.C. § 1452 ("Section 1452"), requires the unanimous consent of all the defendants who have been served at the time of removal. Their motion to remand is denied for the following reasons.
Because removal was proper under 28 U.S.C. § 1452, it is unnecessary to address whether removal was also appropriate, as defendants argue, under the federal securities laws as amended by the Securities Litigation Uniform Standards Act of 1998, Pub.L. 105-353, 112 Stat. 3227 (codified in scattered sections of Title 15 of the United States Code).
The notices of removal indicate that the four Mississippi Actions were filed in December of 2002. They pleaded claims under the Mississippi Securities Act, Miss. Code Ann. § 75-71-717(a)(2), and Mississippi common law. The actions were removed in February and March of 2003, by the defendants. The plaintiffs contend that defendants Betty L. Vinson and Troy M. Normand had been served in each action. Defendants Vinson and Normand did not join in the removal of the Mississippi Actions.
The parties' submissions in connection with this motion indicate that the Original Complaint in 03 Civ. 6220 and in 03 Civ. 6221 was filed on December 19, 2002, in 03 Civ. 6223 was filed on December 31, 2002, and in 03 Civ. 6224 was filed on December 30, 2002. The parties submissions also indicate that the complaint in each action was amended on January 17, 2003.
03 Civ. 6221 and 03 Civ. 6224 were removed on February 21, 2003. 03 Civ. 6220 was removed on February 20, 2003, and 03 Civ. 6223 was removed on March 13, 2003.
03 Civ. 6220 was removed by defendants James C. Allen, Judith Areen, Max E. Bobbitt, Francesco Galesi, and Stiles A. Kellett, Jr.; consent to removal was given by Scott D. Sullivan, David F. Myers, Buford Yates, Jr., John W. Sidgmore, Arthur Andersen, L.L.P., Andersen UK, Andersen Worldwide SC, Mark Schoppet, Melvin Dick, Salomon Smith Barney, Inc., Citigroup, Inc., Jack Grubman, Sanford Weil, J.P. Morgan Chase Co., J.P. Morgan Securities Inc., Bank of America Corp., Bank of America Securities, LLC, ABN AMRO Inc., Deutsche Bank AG, and Deutsche Bank Alex. Brown Inc. The other three actions were removed by Bernard J. Ebbers; consent was given to the removal of 03 Civ. 6221 by Scott D. Sullivan, David F. Myers, Buford Yates, Jr., John W. Sidgmore, James C. Allen, Arthur Andersen, L.L.P., Andersen UK, Andersen Worldwide SC, Mark Schoppet, Melvin Dick, Salomon Smith Barney, Inc., Citigroup, Inc., Jack Grubman, Sanford Weil, J.P. Morgan Chase Co., J.P. Morgan Securities Inc., Bank of America Corp., Bank of America Securities, LLC, ABN AMRO Inc., Deutsche Bank AG, and Deutsche Bank Alex. Brown Inc.; consent was given to the removal of 03 Civ. 6223 by Scott D. Sullivan, David F. Myers, Buford Yates, Jr., John W. Sidgmore, James C. Allen, Judith Areen, Max E. Bobbitt, Francesco Galesi, Stiles A. Kellett, Jr., Arthur Andersen, L.L.P., Andersen UK, Andersen Worldwide SC, Mark Schoppet, Melvin Dick, Salomon Smith Barney, Inc., Citigroup, Inc., Jack Grubman, Sanford Weil, J.P. Morgan Chase Co., J.P. Morgan Securities Inc., Bank of America Corp., Bank of America Securities, LLC, ABN AMRO Inc., Deutsche Bank AG, Deutsche Bank Alex. Brown Inc., Chase Securities, Inc., Lehman Brothers, Inc., Blaylock Partners, LP, Credit Suisse First Boston Corporation, Goldman, Sachs Co., UBS Warburg LLC, and Utendahl Capital; consent was given to the removal of 03 Civ. 6224 by Scott D. Sullivan, David F. Myers, Buford Yates, Jr., John W. Sidgmore, James C. Allen, Judith Areen, Max E. Bobbitt, Francesco Galesi, Stiles A. Kellett, Jr., Arthur Andersen, L.L.P., Andersen UK, Andersen Worldwide SC, Mark Schoppet, Melvin Dick, Salomon Smith Barney, Inc., Citigroup, Inc., Jack Grubman, Sanford Weil, J.P. Morgan Chase Co., J.P. Morgan Securities Inc., Bank of America Corp., Bank of America Securities, LLC, ABN AMRO Inc., Deutsche Bank AG, and Deutsche Bank Alex. Brown Inc.
The Proof of Service documents indicate that Troy M. Normand and Betty L. Vinson were served on December 20, 2002 in both 03 Civ. 6220 and 03 Civ. 6221. They were served on January 6, 2003 in 03 Civ. 6223, and on December 31, 2002 in 03 Civ. 6224.
It is well established that the unanimous consent by defendants to a removal is necessary to remove an action under the general removal statute. See Bradford v. Harding, 284 F.2d 307, 309 (2d Cir. 1960). Section 1441(a) of Title 28, United States Code, provides:
Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending. For purposes of removal under this chapter the citizenship of defendants sued under fictitious names shall be disregarded.28 U.S.C. § 1441(a) ("Section 1441") (emphasis supplied).
Every removal statute must be interpreted according to its own terms, however, and the Bradford court itself found that the removal provision that applies to actions brought against officers of the United States does not require unanimity. That statute, 28 U.S.C. § 1442 ("Section 1442"), provides:
(a) A civil action or criminal prosecution commenced in a State court against any of the following may be removed by them to the district court of the United States for the district and division embracing the place wherein it is pending:
(1) The United States or any agency thereof or any officer (or any person acting under that officer) of the United States or of any agency thereof, sued in an official or individual capacity for any act under color of such office or on account of any right, title or authority claimed under any Act of Congress for the apprehension or punishment of criminals or the collection of the revenue.
(2) A property holder whose title is derived from any such officer, where such action or prosecution affects the validity of any law of the United States.
(3) Any officer of the courts of the United States, for any Act under color of office or in the performance of his duties;
(4) Any officer of either House of Congress, for any act in the discharge of his official duty under an order of such House.28 U.S.C. § 1442 (emphasis supplied).
The Bradford court emphasized the use of the term "by them" in Section 1442, in contrast to the use of the phrase "the defendant or the defendants" in Section 1441, in reaching its conclusion that unanimity was unnecessary to a removal under Section 1442.Bradford, 284 F.2d at 309. See also In re Franklin National Bank Sec. Litig., 532 F.2d 842, 846 (2d Cir. 1976) (refusing to apply unanimity requirement to removal pursuant to 12 U.S.C. § 1819(4)).
Similarly, the two circuit courts that have considered this issue in the context of Section 1452, which is the bankruptcy removal provision, have concluded that Section 1452 does not require all defendants to consent to removal. In re Lazar, 237 F.3d 967, 973 n. 2 (9th Cir. 2001); Creasy v. Coleman Furniture Corp., 763 F.2d 656, 660-61 (4th Cir. 1985); see also Mt. McKinley Ins. Co. v. Corning Inc., No. 02 Civ. 5835 (DLC), 2003 WL 1482786, at *6 (S.D.N.Y. Mar. 20, 2003); In re WorldCom, Inc., Sec. Litig., 293 B.R. 308, 330 (S.D.N.Y. 20003)(DLC). Section 1452(a) provides:
A party may remove any claim or cause of action in a civil action other than a proceeding before the United States Tax Court or a civil action by a governmental unit to enforce such governmental unit's police or regulatory power, to the district court for the district where such civil action is pending, if such district court has jurisdiction of such claim or cause of action under section 1334 of this title.28 U.S.C. § 1452(a) (emphasis supplied).
As noted above, Section 1441 provides that an action "may be removed by the defendant or defendants," while Section 1452 provides that "a party" may remove any claim or cause of action. By its very terms, any party, whether a plaintiff or defendant, may remove an action under Section 1452 as related to a bankruptcy proceeding. Its use is not restricted to a defendant. Similarly, a single party may remove an action; it does not require the consent of others.
Plaintiffs rely almost exclusively on Retirement Sys. of Alabama v. Merrill Lynch Co., 209 F. Supp.2d 1257, 1264 (M.D. Ala. 2002) ("RSA"). The RSA court recognized that its conclusion that Section 1452 required unanimity was in conflict with the "many courts" that have considered the issue and declined to base its decision to remand on its own interpretation of Section 1452. In light of the above analysis and authority, RSA's analysis is not persuasive.
Conclusion
The motions by the plaintiffs in 03 Civ. 6220, 03 Civ. 6221, 03 Civ. 6223, and 03 Civ. 6224 to remand their actions are denied.SO ORDERED.