United States District Court, W.D. Louisiana, Lafayette Division
MIDSOUTH BANK, N.A.
QUALITY COMPANIES USA, LLC, ET AL.
REPORT AND RECOMMENDATION
PATRICK J. HANNA UNITED STATES MAGISTRATE JUDGE
before the court is the motion to remand, which was filed by
the plaintiff, Energy Services Note Acquisition, LLC, the
assignee of MidSouth Bank, N.A. (Rec. Doc. 5). The motion is
not opposed. (Rec. Doc. 8). The motion was referred to the
undersigned magistrate judge for review, report, and
recommendation in accordance with the provisions of 28 U.S.C.
§ 636 and the standing orders of the court. Considering
the evidence, the law, and the arguments of the parties, and
for the reasons fully explained below, it is recommended that
the motion be granted.
sued the defendants in Louisiana state court, seeking to
recover more than $10 million allegedly owed under various
loans evidenced by promissory notes, credit card debt, and
guaranties. The defendants, Quality Companies USA,
L.L.C., Troy D. Collins, Nathan C. Granger, and Kayro
Investments, LLC were all served in May 2018,  and they
allegedly answered the suit in December 2018. On January 16,
2019, Energy Services Note Acquisition, LLC
(“ESNA”) was substituted for MidSouth as the
plaintiff in the state-court lawsuit pursuant to an
assignment of rights.
defendants removed the suit on January 24, 2019, alleging
that removal was appropriate under 28 U.S.C. § 1332,
which requires complete diversity of citizenship and an
amount in controversy exceeding $75, 000. The defendants
argued that the suit became removable when ENSA (a Texas
citizen) replaced MidSouth (a Louisiana citizen) as the
plaintiff. The defendants specifically alleged that the
parties are diverse because the defendants are all Louisiana
citizens while ESNA is a Texas
citizen. ESNA responded by filing the motion to
remand, arguing that the removal of this case is prohibited
by the forum defendant rule.
28 U.S.C. § 1332(a), federal courts have subject-matter
jurisdiction over cases in which the parties are diverse in
citizenship and the amount in controversy exceeds $75, 000.
But an action solely removable under Section 1332(a)
“may not be removed if any of the parties in interest
properly joined and served as defendants is a citizen of the
State in which such action is brought.” This limitation
is often referred to as the “forum defendant
forum defendant rule states that a case cannot be removed on
the basis of diversity jurisdiction if a defendant, who was
properly joined and properly served, is a citizen of the
forum state. In accordance with the plain language of
the statute, this rule applies even if the other criteria for
removal are present. The forum defendant rule is procedural
rather than jurisdictional; therefore, a failure to comply
with the rule is a defect in removal procedure that is
waived unless an objection is timely filed.
procedural challenge to removal must be asserted not more
than thirty days after removal,  and an untimely motion
“is outside of the district court's power to
grant.” In this case, the challenge to removal
was filed just four days after the case was removed;
therefore, it was timely filed. Courts in this district have
applied the forum defendant rule in numerous
case, there is no contention that the court's
subject-matter jurisdiction has a basis other than diversity,
it is undisputed that the defendants were all served before
the suit was removed, and it is undisputed that the
procedural defect was raised in a timely remand motion.
Further, the defendants conceded that remand is appropriate
in this case. Accordingly, this Court recommends that
the motion to remand be granted due to the operation of the
forum defendant rule.
the forum defendant rule precludes removal of this action, it
is recommended that the plaintiff's motion for remand
(Rec. Doc. 5) be GRANTED.
the provisions of 28 U.S.C. § 636(b)(1)(C) and
Fed.R.Civ.P. 72(b), parties aggrieved by this recommendation
have fourteen days from service of this report and
recommendation to file specific, written objections with the
Clerk of Court. A party may respond to another party's
objections within fourteen days after being ...