Williamson v. Cestaro

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

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ANTHONY WILLIAMSON, et al.

Plaintiffs, MEMORANDUM & ORDER

21-CV-2465(EK)(PK)

-against-

JOSEPH CESTARO,

Defendant.

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ERIC KOMITEE, United States District Judge:

This case concerns the upcoming election being held by

a union, the Construction & General Building Laborers Local 79

(“Local 79”). The parties dispute who may use the phrase “Clean

Slate” in the election. The lawsuit was initially filed in

state court, but third-party counterclaim defendants Michael

Prohaska and Local 79 removed it here on May 3, 2021. For the

reasons set forth below, I conclude that the removal was

improper and remand the case.

Background

On March 31, 2021, Anthony Williamson and Chaz

Rynkiewicz (members of Local 79’s Executive Board) brought a

state-law action in the Supreme Court of the State of New York,

Kings County, against Joseph Cestaro, a fellow citizen of New

York. Cestaro is a candidate for business manager in Local 79’s

upcoming election. See State Complaint, ECF No. 9, Ex. 6. They

allege that Cestaro’s New York State service-mark registration

for the phrase “Clean Slate” was procured by fraud because

Cestaro misrepresented to the New York Department of State that

he “owned” the term personally, even though the phrase has been

used by candidates for union office for decades. Id. They

asked the state court to revoke the mark.

In response, Cestaro brought counterclaims against

Williamson and Rynkiewicz seeking, among other things, a

declaratory judgment that he is the rightful owner of the mark.

See Answer with Counterclaims and Cross-Claims, ECF No. 9, Ex.

7. Cestaro also filed counterclaims against others — namely,

third-party counterclaim defendants Michael Prohaska and Local

79, alleging, inter alia, trademark infringement, wrongful

termination, and defamation, and challenging the draft ballot

prepared by the Local 79 Judges of Election. Id. Prohaska is

campaigning for the same position at Local 79 — business manager

— as Cestaro. Both candidates are using the “Clean Slate”

moniker.

On May 3, 2021, Prohaska and Local 79 (the “Third-

Party Counterclaim Defendants”) removed the case pursuant to

28 U.S.C. § 1441. See Notice of Removal, ECF No. 1. In the

Notice, they assert that federal jurisdiction exists under

Section 301(a) of the Labor Management Relations Act, 29 U.S.C

§ 185(a), because Cestaro’s counterclaims against them are

“substantially dependent” on the application of Local 79’s

constitution. See Notice of Removal ¶ 8 (citing Whitehurst v

1199 SEIU United Healthcare Workers E., 928 F.3d 201, 208 (2d

Cir. 2019)).

On May 11, 2021, Cestaro filed a motion in this Court

for a temporary restraining order and a preliminary injunction.

He seeks to enjoin anyone on the ballot from using the phrase

“Clean Slate.” ECF No. 9.

Legal Standard

Federal courts are possessed of limited jurisdiction.

Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377

(1994) (federal courts “possess only that power authorized by

Constitution and statute, which is not to be expanded by

judicial decree” (internal citations omitted)). “Only state-

court actions that originally could have been filed in federal

court may be removed to federal court.” Caterpillar, Inc. v.

Williams, 482 U.S. 386, 392 (1987). Where an action has been

removed from state court, “[i]f at any time before final

judgment it appears that the district court lacks subject matter

jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c).

The removing party “has the burden of establishing

that removal is proper.” United Food & Com. Workers Union, Loc.

919, AFL-CIO v. CenterMark Props. Meriden Square, Inc., 30 F.3d

298, 301 (2d Cir. 1994). The right to remove is statutory,

established by 28 U.S.C. §§ 1441-1445. As a result, the Supreme

Court in Shamrock Oil & Gas Corp. v. Sheets directed federal

courts addressing removal to “scrupulously confine their own

jurisdiction to the precise limits which the statute has

defined.” 313 U.S. 100, 109 (1941). For this reason, “federal

courts construe the removal statute narrowly, resolving any

doubts against removability.” Somlyo v. J. Lu–Rob Enters.,

Inc., 932 F.2d 1043, 1045–46 (2d Cir. 1991). If there is

ambiguity as to whether removal is appropriate, a court must

adopt a construction consistent with this restrictive approach,

rather than expand the scope of removability. See Am. Fire &

Cas. Co. v. Finn, 341 U.S. 6, 9-10 (1951).

Discussion

A. 28 U.S.C. § 1441(a)

In their Notice of Removal, the Third-Party

Counterclaim Defendants originally invoked Section 1441(a) of

the removal statute. They now concede, however, that they have

no right to remove under that Section. See Letter by

Construction and General Building Laborers Local 79, Michael

Prohaska, ECF No. 7.

Clear authority compels this concession. Section

1441(a) does not contemplate removal by third-party defendants

(i.e., defendants who were not named in the original complaint).

Section 1441(a) states that “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 . . . .” (emphasis added).

And the Supreme Court recently confirmed that third-party

defendants against whom counterclaims are asserted may not

remove under Section 1441(a). Home Depot U.S.A., Inc. v.

Jackson, 139 S. Ct. 1743, 1750 (2019). Courts in this Circuit

have applied this principle to other third-party claims as well.

See, e.g., Broad Coverage Serv. v. Oriska Ins. Co., No. 20-CV-

11108, 2021 WL 930458, at *2 (S.D.N.Y. Mar. 11, 2021) (third-

party defendants who claimed to be “real party-in-interest” were

not “defendants to the original action, and thus they are not

‘defendants’ who can seek removal under § 1441(a)”); Casul v.

Modell’s NY II, Inc., No. 04-CV-7204, 2004 WL 2202581, at *2

(S.D.N.Y. Sept. 30, 2004) (“[C]ourts have routinely held that a

third-party [impleaded] defendant may not remove under section

1441(a).” (collecting cases)).

B. 28 U.S.C. § 1441(c)

The Third-Party Counterclaim Defendants now argue that

removal in this case is proper under a different provision of

the removal statute: 28 U.S.C. § 1441(c). As relevant here,

that provision provides that:

(1) If a civil action includes —

(A) a claim arising under the Constitution, laws, or

treaties of the United States (within the meaning of

section 1331 of this title), and

(B) a claim not within the original or supplemental

jurisdiction of the district court or a claim that has

been made nonremovable by statute,

the entire action may be removed if the action would be

removable without the inclusion of the claim described

in subparagraph (B).

This provision perhaps poses a closer question than

removal under Section 1441(a). Unlike Section 1441(a), Section

1441(c) does not explicitly limit removal to “the defendant or

the defendants” to the action. In light of this distinction,

some courts have read Section 1441(c) to be ambiguous with

regard to whom it allows to remove. E.g., St. John’s Univ. v.

Certain Underwriters at Lloyd’s, 760 F. Supp. 2d 381, 383

(S.D.N.Y. 2011). In resolving this ambiguity, the “majority” of

courts have construed this Section “against allowing removal [by

third-party defendants], as the Supreme Court has directed lower

courts” to do. Id.; see also Casul, 2004 WL 2202581, at *2

(noting that “most courts . . . simply do not read section

1441(c) as permitting removal by a third party defendant”). By

contrast, the “minority view posits that . . . a third-party

defendant can remove the entire lawsuit” under Section 1441(c),

at least in “certain circumstances.” St. John’s Univ., 760 F.

Supp. 2d at 383. Prohaska and Local 79 urge me to adopt the

minority position here. For the reasons set out below, I

conclude that the majority view is correct — both as a textual

matter, and in light of the Supreme Court’s directive to

construe the removal statute against removability when ambiguity

exists.

1. The text of the statute supports the view that third-

party counterclaim defendants may not remove under

Section 1441(c)

As noted above, Section 1441(a) sets out an express

limitation on which parties may remove, by stating that removal

must be by “the defendant or the defendants.” The Third-Party

Counterclaim Defendants do not argue that Section 1441(c)

explicitly expands this authorization to third-party

counterclaim defendants. Instead, they claim that Section

1441(c) does so implicitly, by omitting the “defendant or the

defendants” language found in Section 1441(a). Under this

reading, Section 1441(c) allows an entirely new category of

parties to remove actions, without any express statement from

Congress to that effect.

This argument is unpersuasive. The fact that Congress

did not repeat the term “defendant” in another provision of the

same statute does not imply that it meant to expand the class of

parties who may remove. Instead, the better reading is a

common-sense one. Section 1441(c) is intended to bring

additional clarity to the question of which categories of claims

can be removed – not to expand or contract the universe of

parties who can remove them. Read in this manner, Section

1441(c) serves only “to clarify that in cases removed on the

basis of federal question jurisdiction, the district court

retains discretion to either adjudicate or remand any other

nonremovable claims.” Arrow Fin. Servs., LLC v. Massil, No. 08-

CV-437, 2009 WL 348553, at *6 (E.D.N.Y. Feb. 11, 2009); see also

Gold Town Corp. v. United Parcel Serv., Inc., No. 20-CV-6287,

2021 WL 355057, at *6 (S.D.N.Y. Feb. 2, 2021) (reading Section

1441(c) “as limited to the subset of removed cases involving

both federal and state claims in which the Court would not have

supplemental jurisdiction over the state claims”).

There is substantial support for this reading. For

example, in Bowling v. U.S. Bank Nat’l Ass’n, 963 F.3d 1030,

1036-38 (11th Cir. 2020), the Eleventh Circuit held that “the

most natural reading of the statute is that removal is generally

authorized under (a), with (c) providing additional criteria for

a certain subset of civil actions.” Id. at 1038. Other courts

have adopted this approach as well. See, e.g., Greater N.Y.

Mut. Ins. Co. v. Anchor Const. Co., 326 F. Supp. 245, 248 (E.D.

Pa. 1971) (holding that “removal by a defendant rather than by a

third-party defendant is a logical limitation on Section

1441(c),” because “Section 1441(c) . . . receive[s] its vitality

from the general removal section, 1441(a)[,] which grants the

right to removal to a ‘defendant or defendants’”).

The Supreme Court’s reasoning in Home Depot further

supports this conclusion. There, the Court held that third-

party counterclaim defendants cannot remove under Section

1441(a), in part because the phrase “civil action” in that

Section refers to the action “as defined by the plaintiff’s

complaint,” which (by definition) excludes third-party

counterclaim defendants. Home Depot, 139 S. Ct. at 1748

(cleaned up) (noting that “the civil action . . . of which the

district court must have original jurisdiction is the action as

defined by the plaintiff’s complaint . . . .”). Section 1441(c)

also refers to the removal of a “civil action.” And a settled

canon of statutory interpretation dictates that the contours of

the “civil action” referred to in 1441(c) should be coterminous

with the one referred to in 1441(a), as defined by the Supreme

Court in Home Depot. See Sorenson v. Sec’y of Treasury of U.S.,

475 U.S. 851, 860 (1986) (general rule of statutory construction

assumes that “identical words used in different parts of the

same act are intended to have the same meaning”). This maxim

supports reading the phrase “civil action” in subsection (c) to

require a federal question to appear on the face of the

plaintiff’s complaint. Thus, the Supreme Court’s reasoning in

Home Depot supports the conclusion that third-party counterclaim

defendants cannot remove actions under Section 1441(c). See

Bureaus Inv. Grp. Portfolio No. 15, LLC v. Athey, No. 20-CV-517,

2020 WL 7333377, at *2 (W.D. Wis. Dec. 14, 2020) (adopting this

analysis).

2. Ambiguity must be resolved in favor of remand

This could be the end of the analysis. But, even

assuming — arguendo — that Section 1441(c) is susceptible to

multiple interpretations, binding and settled guidance requires

that I adopt the narrower one — that is, the interpretation that

favors remand. See Shamrock Oil, 313 U.S. 100 at 109 (the

removal statute must be strictly construed against the extension

of federal jurisdiction). For this reason, too, I conclude that

Section 1441(c) does not permit removal here. To conclude

otherwise would “expand federal jurisdiction beyond the

parameters established by Congress,” in contravention of the

Supreme Court’s admonition in Shamrock Oil. Crawford by

Crawford v. Hosp. of Albert Einstein Coll. of Med., 647 F. Supp.

843, 846 (S.D.N.Y. 1986). “This brand of statutory

interpretation is misplaced, especially in the context of the

removal statute.” Id.

Employing this reasoning, courts in the Second Circuit

have — with near unanimity — declined to permit third-party

defendants to remove under Section 1441(c). See, e.g., Certain

Underwriters at Lloyd’s v. Art Crating, Inc., No. 12-CV-5078,

2014 WL 123488, at *17 (“Given the Supreme Court’s guidance that

removal legislation be strictly construed . . . the majority

view that third-party defendants lack standing to remove cases

[under Section 1441(c)] to federal court is more persuasive . .

. .”); St. John’s Univ., 760 F. Supp. 2d at 383 (holding that

third-party defendants may not remove a case from state court

under 1441(c) in light of the Supreme Court’s directive to

resolve ambiguities against removal); Arrow Fin. Servs., LLC,

2009 WL 348553, at *3-7 (remanding and noting that as a rule of

interpretation, “[i]n light of the congressional intent to

restrict federal court jurisdiction, as well as the importance

of preserving the independence of state governments, federal

courts construe the removal statute narrowly”); Fed. Ins. Co. v.

Tyco Int’l Ltd., 422 F. Supp. 2d 357, 373 (S.D.N.Y. 2006) (the

majority “view is more faithful to the Supreme Court’s

instruction . . . to strictly construe the removal statute”);

see also 16 James W. Moore, MOORE’S FEDERAL PRACTICE § 107.41[6] (3d

ed. 2021) (“The better view, consistent with the principle that

removal jurisdiction is to be strictly construed, is that third-

party claims [under Section 1441(c)] are not removable.”). The

Third-Party Counterclaim Defendants present no compelling reason

to depart from the weight of this authority.

Conclusion

For the foregoing reasons, this case is remanded to

the Supreme Court of the State of New York, Kings County. The

Clerk of Court is respectfully directed to remand the action,

send a certified copy of this Order to the Clerk of that court,

and close this case.

SO ORDERED.

_/s/ Eric Komitee________________

ERIC KOMITEE

United States District Judge

Dated: May 24, 2021

Brooklyn, New York