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Pel-State Bulk Plant, LLC v. Unifirst Holdings, Inc.

United States District Court, M.D. Louisiana

January 14, 2015

PEL-STATE BULK PLANT, LLC d/b/a PEL-STATE SERVICES
v.
UNIFIRST HOLDINGS, INC., ET AL

NOTICE

RICHARD L. BOURGEOIS, Jr., Magistrate Judge.

Please take notice that the attached Magistrate Judge's Report has been filed with the Clerk of the United States District Court.

In accordance with 28 U.S.C. § 636(b)(1), you have fourteen (14) days after being served with the attached Report to file written objections to the proposed findings of fact, conclusions of law and recommendations therein. Failure to file written objections to the proposed findings, conclusions, and recommendations within 14 days after being served will bar you, except upon grounds of plain error, from attacking on appeal the unobjected-to proposed factual findings and legal conclusions of the Magistrate Judge which have been accepted by the District Court.

ABSOLUTELY NO EXTENSION OF TIME SHALL BE GRANTED TO FILE WRITTEN OBJECTIONS TO THE MAGISTRATE JUDGE'S REPORT.

MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION

Before the Court is Plaintiff's Motion to Remand. (R. Doc. 11). The motion is opposed. (R. Doc. 17). Plaintiff has filed a supplemental memorandum. (R. Doc. 23).

I. BACKGROUND

On March 17, 2014, Pel-State Bulk Plant, LLC d/b/a Pel-State Services ("Plaintiff") filed this suit in the 19th Judicial District Court for the Parish of East Baton Rouge, Louisiana ("State Court"), naming as defendants Unifirst Holdings, Inc. and Unifirst Corporation (collectively, "Defendants"). (R. Doc. 1-2 at 3-7). Plaintiff alleges that a "Customer Service Agreement" ("Agreement") purportedly entered into between the parties on October 22, 2012 is void and unenforceable because the employee who executed the Agreement on behalf of Plaintiff did not have actual or apparent authority to do so. (R. Doc. 1-2 at 3-4). In December of 2013, Plaintiff informed Defendants that it was terminating their relationship based on poor quality of services and other disputes. (R. Doc. 1-2 at 4). On February 10, 2014, Defendants commenced an arbitration proceeding with the American Arbitration Association pursuant to the arbitration provision of the Agreement. (R. Doc. 1-2 at 4). Plaintiff is seeking a declaration that the Agreement is void and unenforceable, an enjoinment of the arbitration proceeding, and all other general and equitable relief to which it may be entitled. (R. Doc. 1-2 at 4-5).

On May 1, 2014, Defendants removed this proceeding. (R. Doc. 1). Defendants allege that this Court has subject matter jurisdiction pursuant to the diversity jurisdiction statute, 28 U.S.C. § 1332. In the alternative, Defendants allege that the Court has jurisdiction pursuant to the Federal Arbitration Act, 9 U.S.C. § 1, et seq.

On June 6, 2014, Defendants moved to compel arbitration. (R. Doc. 5). This motion is pending before the district judge.

On July 22, 2014, Plaintiff moved to remand his suit to state court. (R. Doc. 11).

II. ARGUMENTS OF THE PARTIES

In support of remand, Plaintiff first argues that Defendants have not established complete diversity between the parties. Plaintiff claims that its only member is PSO, LLC, which is a Louisiana limited liability company. Plaintiff further claims that the only member of PSO, LLC is an individual named Nancy Tucker Rudd, who is a citizen of Texas. Accordingly, Plaintiff claims that it is a citizen of Texas and is non-diverse with regard to defendant Unifirst Holdings, Inc., which is also a citizen of Texas. In addition, Plaintiff argues that there is no federal question jurisdiction based on the Federal Arbitration Act because that statute does not create an independent basis for federal jurisdiction.

In opposition, Defendants do not address the issue of federal question jurisdiction. Instead, they focus their arguments on attempting to establish that Plaintiff is solely a citizen of Louisiana. Defendants submitted documents from the Louisiana Secretary of State in support of this position. Defendants also rely on Louisiana's annual reporting requirement, La. R.S. 12:1308.1, to demonstrate that Plaintiff is estopped from arguing that non-listed members (such as PSO, LLC) are its members. Defendants argue that ...


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