United States District Court, D. Delaware
CAMARILLO HOLDINGS LLC, LEEWARD HOLDINGS, LLC, MEDALIST HOLDINGS, INC., CEREUS PROPERTIES, LLC, MICHAEL LACEY, JAMES LARKIN, SCOTT SPEAR, JOHN BRUNST, VERMILLION HOLDINGS, LLC and SHEARWATER INVESTMENTS, LLC, Plaintiffs,
AMSTEL RIVER HOLDINGS, LLC, KICKAPOO RIVER INVESTMENTS LLC, LUPINE HOLDINGS LLC, ATLANTISCHE BEDRIJVEN, C.V., CF HOLDINGS GP LLC, CF ACQUISITIONS LLC, UGC TECH GROUP, C.V., AD TECH HOLDINGS GP BV, AD TECH COOPERATIEF U.A., AD TECH BV, CARL FERRER, DARTMOOR HOLDINGS, LLC, IC HOLDINGS, LLC, BACKPAGE.COM, LLC, WEBSITE TECHNOLOGIES, LLC, POSTING SOLUTIONS, LLC, POSTFASTER, LLC, CLASSIFIED STRATEGIES COOPERATIEF U.A., PAYMENT SOLUTIONS, B.V., CLASSIFIED SOLUTIONS LTD., and LES BACKPAGE ENTERPRISES INC., Defendants.
Kathleen M. Miller and Robert K. Beste, III, SMITH,
KATZENSTEIN, & JENKINS LLP, Wilmington, DE. Attorneys for
D. Brown and Joseph B. Cicero, CHIPMAN BROWN CICERO &
COLE, LLP, Wilmington, DE. Mark A. Castillo, CURTIS CASTILLO
PC, Dallas, TX. Attorneys for Defendants
U.S. DISTRICT JUDGE
August 16, 2018, Plaintiffs Camarillo Holdings, LLC, et al.
("Plaintiffs") filed a verified complaint in the
Court of Chancery of the State of Delaware against Defendants
Amstel River Holdings, LLC et al. for the advancement of
legal fee deposits made with several law firms (the
"Retainers"). (D.I. 1 Ex. A) On September 19, 2018,
Defendants Carl Ferrer, Backpage.com, LLC, Amstel River
Holdings, LLC, and Website Technologies LLC (together,
"Defendants") filed a notice of removal, which
brought the Chancery action to this Court. (D.I. 1)
Subsequently, on September 21, 2018, Plaintiffs filed a
motion to remand this matter to the Court of Chancery (D.I.
4) and to expedite consideration of the motion to remand
(D.I. 6). On September 26, 2018, Defendants filed a motion
for extension of time to answer Plaintiffs' verified
complaint (D.I. 11) and, on October 17, 2018, they filed a
motion to dismiss (D.I. 17).
reasons stated below, the Court will grant Plaintiffs'
motion to remand and deny as moot the remaining motions.
to 28 U.S.C. § 1441(a), any defendant may remove a civil
action from state court to a federal court in which the
action could have been filed originally; that is, where the
federal court has subject matter jurisdiction over the
action. See Caterpillar Inc. v. Williams, 482 U.S.
386, 392 (1987). "[T]he party asserting federal
jurisdiction in a removal case bears the burden of showing,
at all stages of the litigation, that the case is properly
before the federal court." Frederico v. Home
Depot, 507 F.3d 188, 193 (3d Cir. 2007); see also
Brown v. Jevic, 575 F.3d 322, 326 (3d Cir. 2009).
Removal provisions "are to be strictly construed against
removal and all doubts should be resolved in favor of
remand." Boyer v. Snap-On Tools Corp., 913 F.2d
108, 111 (3d Cir. 1990) (internal citations omitted).
have failed to meet their burden to show that this case is
properly in federal court.
first argue that removal is proper under 28 U.S.C. §
1442(a)(1) because, in Defendants' view, the present suit
is "an action against the United States." (D.I. 14
at 6-11) Defendants' position is based on their
contentions that (1) the United States has identified one of
the requested Retainers - the Davis Wright Tremaine Retainer
- as being subject to forfeiture under 21 U.S.C. § 853;
(2) there is no logical difference between the Davis Wright
Tremaine Retainer and the other Retainers at issue in this
case; and (3) therefore, the Retainers sought in this action
by Plaintiffs have all vested with the United States.
(Id. at 6-10) On October 20, 2018, Defendants
notified this Court that a forfeiture order entered by the
U.S. District Court for the District of Arizona has been
amended and now appears to cover all Retainers at issue here.
(Compare D.I 19 Ex. A with D.I. 1 Ex. A at
57-68) To Defendants, while Plaintiffs have pled this case
nominally as an advancement action against Defendants,
because the Retainers have been forfeited to the United
States, it is actually a suit against the United States.
(D.I. 14 at 6-11) Plaintiffs counter that the Retainers have
not, in fact, been forfeited. (D.I. 5 at 13-14; D.I. 16 at
assuming, without deciding, that Defendants have forfeited
the Retainers to the United States, this action would still
not be removable under Section 1442(a)(1). Plainly, this
action does not name the United States as a defendant; nor
has the United States sought to intervene in it.
Defendants' reliance on United States v.
Phillips, 185 F.3d 183, 188 (4th Cir. 1999), is
unavailing. There, unlike here, the plaintiff had sued the
United States under federal law. See Id. at 185.
Moreover, Phillips decided whether a foreclosure
sale on a property forfeited to the United States was void
because, although the foreclosure was "technically"
against a mortgagor, it nonetheless constituted "an
action at law or equity against the United States," and
was barred by the criminal asset forfeiture statute, 21
U.S.C. § 853(k). Id. at 188. The
Phillips Court's holding has little, if any,
application to the pending motion to remand, which is
governed instead by the removal statute, 28 U.S.C. §
next argue that removal is proper under 28 U.S.C. §
1441(c) because this Court purportedly has federal question
jurisdiction in this action. (D.I. 14 at 11-13) According to
Defendants, Plaintiffs' demand for the Retainers may only
be litigated pursuant to 21 U.S.C. § 853(n), which
specifies procedures for a third-party to assert an interest
in property forfeited to the United States. (Id.)
Plaintiffs dispute that the Retainers have been forfeited
(D.I. 5 at 13-14; D.I. 16 at n.4) and further contend that
Defendants have no standing to assert the bar of § 853
(D.I. 5 at 13 ("If Defendants have no interests in the
Retainers . . ., they have no basis on which to object to
Plaintiffs' requested relief."); D.I. 16 at 6).
again without deciding, that Defendants have standing to
assert § 853, and that Plaintiffs may only proceed
through a § 853(n) proceeding, removal would still be
improper. The availability of an unasserted federal claim
does not provide this Court with federal-question
jurisdiction. Instead, under the well-pleaded complaint rule,
"federal jurisdiction exists only when a federal
question is presented on the face of the plaintiffs properly
pleaded complaint." Caterpillar, Inc., 482 U.S.
at 392 (internal citation omitted). Here, the face of the
complaint does not present any federal claims. Nor does the
complaint "artfully plead" around necessary federal
questions, contrary to Defendants' allegation. (D.I. 14
at 4-5) Defendants' contention that 21 U.S.C. §
853(k) bars Plaintiffs' advancement action is a federal
defense; under the well-pleaded complaint rule, it does
create federal jurisdiction. See Caterpillar, 482
U.S. At 392-93 ("The [well-pleaded complaint] rule makes
the plaintiff the master of the claim; he or she may avoid
federal jurisdiction by exclusive reliance on state law....
[A] case may not be removed to federal court on the
basis of a federal defense .. . even if the defense is
anticipated in the plaintiffs complaint, and even if both
parties concede that the federal defense is the only question
truly at issue."). Defendants may contest the validity
of the advancement claim in the Court of Chancery.
final purported basis for removal is the All Writs Act, 28
U.S.C. §1651(a), which they view as providing an
independent basis for federal jurisdiction. (D.I. 14 at
13-14) However, "the All Writs Act cannot be employed to
remove an otherwise unremovable case." In re
Prudential Ins. Co. of America Sales Practices
Litigation,314 F.3d 99, 106 (3d Cir. 2002) (citing
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