Bald Head Association v. Curnin, No. 7:2009cv00173 - Document 50 (E.D.N.C. 2010)
Court Description: ORDER granting 9 Motion to Remand. It is ORDERED that this case be REMANDED to the General Court of Justice, Superior Court Division, Brunswick County, North Carolina. Because this court has determined that the removal of this action was not proper , it does not reach either Plaintiffs Motion to Dismiss, Motion for Judgment on the Pleadings, and Reply to 11 Counterclaim 21 or Defendant's Motion for Leave to Amend Answer and Counterclaim & Notice of Removal 42 . Signed by Judge James C. Fox on 5/10/2010. Copies served on counsel and to Superior Court Division of Brunswick County. (Edwards, S.)
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Bald Head Association v. Curnin Doc. 50 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NORTH CAROLINA SOUTHERN DIVISION No.7:09-CVI73-F BALD HEAD ASSOCIATION., Plaintiff, v. PETER C. CURNIN, Defendant. ) ) ) ) ) ) ) ORDER This matter is before the court on Plaintiffs Motion to Remand [DE-9], Plaintiffs Motion to Dismiss, Motion for Judgment on the Pleadings, and Reply to Counterclaim [DE-21] and Defendant's Motion for Leave to Amend Answer and Counterclaim & Notice of Removal [DE-42]. All motions have been fully briefed and are ripe for disposition. I. PROCEDURAL AND FACTUAL HISTORY Defendant Peter C. Cumin is the owner of Lot 333, Stage I, Bald Head Island, as shown in Book 1002, Page 509 and Book 1409, Page 741 ofthe Brunswick County Registry ("the Property"). Plaintiff Bald Head Association contends it is a non-profit corporation whose members consists of the owners of properties located within Stage I of Bald Head Island, Brunswick County, North Carolina. As an owner of property in Stage I, Bald Head Island, Cumin is a member of Bald Head Association. According to Bald Head Association, Cumin is subject to the Amended and Restated Declaration of Covenants, Conditions and Restrictions for Bald Head Association filed at Book 1359, Page 1 of the Brunswick County Registry ("the Covenants"). The parties to this action have a history of disputes concerning both the Property and the Covenants. In 2001, Bald Head Association filed a lawsuit (the "2001 lawsuit") against Cumin Dockets.Justia.com regarding his failure to comply with the Covenants, which Cumin removed to this court. The 2001 lawsuit was remanded to state court, and summary judgment was granted in favor of Bald Head Association, ultimately resulting in a judgment against Cumin in the amount of $60,000. In 2003, Cumin filed a separate, sealed qui tam action in this court against Bald Head Island Limited ("the qui tam action"). Bald Head Island Limited ("BHI Limited") is the successor to the developers of Stage I of Bald Head Island, and according to Bald Head Association, has had no rights under the Covenants since 2004. In the qui tam action, Cumin alleged Bald Head Island is owned by the United States as a "war prize." According to Cumin, Bald Head Association therefore has no interest in the property. The United States declined to intervene, and the case ultimately was dismissed for failure to prosecute. Cumin has appealed this ruling to the Fourth Circuit Court of Appeals. Bald Head Association filed the instant action on September 18,2009, in Brunswick County Superior Court seeking injunctive relief to address Cumin's alleged non-compliance with the Covenants, as well as the recovery of dues, fines and assessments. On October 28,2009, Cumin removed this action to this court, and on November 4,2009, filed an Amended Notice of Removal. In the Amended Notice of Removal, Cumin alleges that removal is proper under 28 U.S.C. §§ 1441(b), 1442(a), 1443(1), and 1443(2). Specifically, he alleges that as a relator in the qui tam action, he is an officer ofthe court. He also contends he cannot have a fair trial in Brunswick County Superior Court, and that he is a whistle-blower and Federal Bureau of Investigation informant and is entitled to protection as such. 2 Cumin filed his Answer and Counterclaim on December 8, 2009. His Counterclaim alleges that Bald Head Association, its agents, and attorneys, the Village of Bald Head Island and BHI Limited have engaged in a conspiracy to retaliate against him. He seeks a temporary restraining order, preliminary and permanent injunction, and alleges claims for a declaratory judgment, violation of 42 U.S.C. §§ 1981, 1985, trespass under state law, "breach of duties," fraud, libel and slander to title, wrongful execution, unjust enrichment, intentional infliction of emotional distress, and unfair and deceptive trade practices. Bald Head Association filed its Motion to Dismiss all claims on January 27, 2010. Pursuant to Cumin's motion, this action was stayed from January 25, 2010 through March 5, 2010, to allow the parties to mediate. The parties' efforts at mediation were unsuccessful, and on March 22, 2010, Cumin filed his opposition to the Motion to Remand and Motion to Dismiss, and also filed a Motion for Leave to Amend Answer and Counterclaim & Notice of Removal. Cumin did not attach his proposed Amended Answer and Counterclaim or proposed Amended Notice of Removal, but instead appears to want to incorporate by reference his own contemporaneously filed Declarations into the documents. II. ANALYSIS Because the Motion to Remand goes to the heart of whether this court has subject matter jurisdiction over this action, the court will address the Motion to Remand first. A. Motion to Remand Cumin contends that removal of this action to this court is proper under three separate statutes: 28 U.S.C. § 1441,28 U.S.C. § 1442, and 28 U.S.C. § 1443. The court will address each 3 statute in tum, keeping in mind "[t]he burden of establishing federal jurisdiction is placed upon the party seeking removal." Mulcaheyv. Columbia Organic Chern. Co., Inc., 29 F.3d 148, 151 (4th Cir. 1994). 1. Removal under 28 U.S.C. § 1441 Pursuant to 28 U.S.C. § 1441(a), "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." In this case, Cumin contends federal question jurisdiction is present. Under 28 U.S.C. § 1331, federal questionjurisdictionexists when a plaintiffs cause ofaction "arises under" federal law. "Under what has become known as the well-pleaded complaint rule, § 1331 federal question jurisdiction is limited to actions in which the plaintiff's well-pleaded complaint raises an issue of federal law; actions in which defendants merely claim a substantive federal defense to a state-law claim do not raise a federal question." In re Blackwater Security Consulting, LLC, 460 F.3d 576,584 (4th Cir. 2006). Accordingly, to detennine "whether an action presents a federal question under § 1331, a court must first discern whether federal or state law creates the cause of action." Mulcahey, 29 F.3d at 152. If federal law creates the cause of action, a district court "unquestionably" has federal subject matter jurisdiction. Id If state law creates the cause ofaction, "federal questionjurisdiction depends on whether the plaintiffs demand 'necessarily depends on resolution of a substantial question of federal law. ' " Id (quoting Franchise Tax Bd v. 4 Constr. Laborers Vacation Trust, 463 U.S. 1,28 (1983)(emphasis added) and citing Merrell Dow Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804, 809 (1986)). Here, Cumin does not (and indeed cannot) contend that federal law creates the cause of action. Instead, he argues that by attaching an opinion from the Fourth Circuit Court of Appeals from the qui tam action, Bald Head Association "shouted out its recognition of the federal issues in this case." Resp. in Opp. to Mot. for Remand [DE-46] at p. 2. Bald Head Association, for its part, contends that its attachment ofthe opinion from the qui tam action was inadvertent. I Whether Bald Head Association's attachment ofthe opinion from the qui tam action was inadvertent or purposeful, however, makes no difference. Bald Head Association's claims plainly do not "necessarily depend on resolution of a substantial question offederallaw." The attachment ofthe qui tam action opinion does nothing to change this. Cumin has failed to establish that this court has federal question jurisdiction over this action. 2. Removal under 28 U.S.C. § 1442 Cumin also contends that 28 U.S.C. § I442(a)(1) and (a)(3) provide a basis for removal of this action. The statute 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 where it is pending: (I) 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 1 It appears that Bald Head Association intended to attach Bald Head Association v. Cumin, 176 N.C. App. 766, 627 S.E.2d 350,cert. denied, 360 N.C. 531, 633 S.E.2d 672 (2006), which is specifically referenced in the Complaint. See Compl. [DE-I-3] ~ 5 ("A copy of the North Carolina Court of Appeals' decision in Cumin I is attached hereto as Exhibit A."). 5 for the apprehension or punishment of criminals or the collection of the revenue (3) Any officer of the courts ofthe United States, for any act under color of office or in the performance of his duties. 28 U.S.C. § 1442 (a)(I) and (a)(3). Suits against federal officers are an exception to the "well pleaded complaint" rule. Jefferson County v. Acker, 527 U.S. 423, 431 (1999). "Under the federal officer removal statute, suits against federal officers may be removed despite the nonfederal cast of the complaint; the federal-question element is met if the defense depends on federal law." Id. To qualify under section I442(a)(1), a defendant must (1) be an officer of the United States or a person acting under an officer of the United States; (2) show a nexus or "causal connection" between the alleged conduct and the official authority; and (3) have a colorable federal defense. See In re MTBE Prods. Liability Litigation, 488 F.3d 112, 124 (2d Cir. 2007); Virden v. Altria Group, Inc., 304 F.Supp.2d 832, 843 (N.D.W.Va. 2004). Here, the record indicates that Cumin is neither an officer of the United States nor a person acting under an officer of the United States. Relators under the False Claims Act are not "officers" of the United Staets. The Fifth Circuit, in Riley v. St. Luke's Episcopal Hospital, 252 F.3d 749 (5th Cir. 2001), concluded that the False Claims Act's qui tam provisions do not violate the Appointments Clause in the Constitution because "qui tam relators are not officers of the United States." Id. at 757. In so concluding, the Riley court explained: Supreme Court precedent has established that the constitutional definition of an "officer" encompasses, at a minimum, a continuing and formalized relationship of employment with the United States Government. There is no such relationship with regard to qui tam relators, and they therefore are not subject to either the benefits or the requirements associated with the offices of the United States. For 6 instance, qui tam plaintiffs do not draw a government salary and are not required to establish their fitness for public employment. Id. at 757-58 (internal citations omitted). Cumin offers no reason, much less a compelling one, why the definition of the word "officer" in § 1441(a)(l) should be broader than the constitutional definition of "officer." Similarly, Cumin's role as an informant is not "continuing and formalized relationship of employment with the United States Government." Riley, 252 F.3d at 758. Cumin is not an officer of the United States Government. Nor does the record suggest that Cumin was acting under an officer of the United States in his capacity as a relator. The Supreme Court has explained that "under" in the context of § 1442(a)(l) must refer to what has been described as a relationship that involves "acting in a certain capacity, considered in relation to one holding a superior position or office." 18 OXFORD ENGLISH DICTIONARY 948 (2d ed. 1989). That relationship typically involves "subjection, guidance or control." WEBSTER'S NEW INTERNATIONAL DICTIONARY 2765 (2d ed. 1953). See also FUNK & WAGNALLS NEW STANDARD DICTIONARY OF THE ENGLISH LANGUAGE 2604 (1942)(defining "under" as meaning "[s]ubordinate or subservient to," "[s]ubject to guidance, tutorship, or direction of'); 18 OXFORD ENGLISH DICTIONARY, supra at 949 ("[s]ubject to the instruction, direction, or guidance of'). In addition, precedent and statutory purpose make clear that the private person's "acting under" must involve an to assist, or to help carry out, the duties or tasks ofthe federal superior. Watson v. Phillip Morris Cos., Inc., 551 U.S. 142, 151 (2007)(the last emphasis added). Cumin, in his role as a relator, was not acting subject to the guidance, tutorship, or direction of any federal officer. The Seventh Circuit Court of Appeals has concluded that under certain circumstances, an informant acting at the behest of the Federal Bureau of Investigations is a person "acting under an officer ofthe United States." Venezia v. Robinson, 16 F.3d 209,211-12 (7th Cir. 1994). In Venezia, 7 the FBI conducted a sting operation against an operator of illegal video poker machines, Venezia. Id. at 210-211. An agent ofthe Illinois Liquor Control Commission solicited a bribe from Venezia, in exchange for no further raids on Venezia's establishment, where upon Venezia sued the agent in state court, asking for an injunction against extortion. Id. at 210. The agent removed the case to federal court, contending that in soliciting the bribe, he was acting under the direction of the FBI, and in fact was wearing a wire. Id. After Venezia appealed the district court's denial ofhis motion to remand, the Seventh Circuit concluded that removal was proper: "A federal agent or informant who asserts that he was (or is) acting in the course of a criminal investigation is entitled to removed under § 1442(a)(1), presenting to the federal tribunal all questions ofjustification and immunity." Id. at 212. Venezia, however, does not carry the day for Cumin in this case. In Venezia, as in other cases where removal pursuant to § 1442(a)(I) has been held to proper, the defendant is sued for his actions that occurred at the direction of a federal officer or agency. Here, Cumin is not being sued for his actions in providing assistance to the FBI; he is being sued for allegedly failing to comply with the Covenants and for the recovery of allegedly-due fines and assessments. The record makes clear that the alleged actions that led to this suit-non-compliant paint colors, unapproved work to the property, etc.-were not performed or omitted by Cumin pursuant to the direction of the FBI or any other federal officer or agency. Unlike in Venezia, there is no nexus between the alleged conduct-Cumin' s alleged painting of his dwelling or refusal to pay fines and assessments-and his alleged "official authority" as an informant. Consequently, Cumin has failed to satisfy all the elements under § 1442(a)(1). 8 Similarly, Cumin cannot satisfy § 1442(a)(3), which provides for removal by "[a]ny officer of the courts of the United States, for any act under color of office or in the performance of his or her duties." Cumin does not explain how he can be considered an "officer of the courts of the United States." Nevertheless, even if Cumin could somehow make this showing, he has not shown that the actions underlying the claims in this suit were taken "under color of office or in the performance of his or her duties." Because Cumin cannot satisfy the elements of either § 1442(a)(1) or (a)(3), removal of this action on that basis is improper. 3. Removal pursuant to 28 U.S.C. § 1443 Cumin's final justification for removal of this action rests upon 28 U.S.C. § 1443, which provides: Any of the following civil actions or criminal prosecutions, commenced in a State court may be removed by the defendant to the district court of the United States for the district and division embracing the place wherein it is pending: (1) Against any person who is denied or cannot enforce in the courts of such State a right under any law providing for the equal civil rights of citizens of the United States, or of all persons within the jurisdiction thereof; (2) For any act under color of authority derived from any law providing for equal rights, or for refusing to do any act on the ground that it would be inconsistent with such law. 28 U.S.C. § 1443. The Supreme Court has explained that a two-part test is applicable in determining whether a case may be properly removed pursuantto § 1443(1). Conradv. Robinson, 871 F.2d612, 614 (6th Cir. 1989)(citing Johnson v.Mississippi, 412 U.S. 213 (1975); City o/Greenwood v. Peacock, 384 U.S. 808(1966); Georgia v. Rachel, 384 U.S. 780 (1966». First, "the right denied defendant must 9 be one that arises under a federal law that provides for specific civil rights stated in tenns of racial equality; second, the defendant must be unable to or be denied the opportunity to enforce these specified federal rights in the courts ofthe state in question." Id. (citing Johnson, 421 U.S. at 219.). Here, the only potentially applicable law cited by Cumin which would satisfy the first part of the test is 42 U.S.C. § 1985(1), which prohibits conspiracies to prevent a federal officer from perfonning his duties or from accepting such office. 2 The Supreme Court's decision in Kush v. Rutledge, 460 U.S. 719 (1983), however, observed that § 1985(1) "contain[s] no language requiring that the conspirators act with the intent to deprive their victims ofthe equal protection ofthe laws." Id at 724-25 (examining § 1985(1), the first portion of § 1985(2), and the second part of § 1985(3)). Indeed, the plain text of § 1985(1) provide no reference to equal rights, much less racial equality. Moreover, as this court already has discussed at length, Cumin is not an officer ofthe United States. Consequently, Cumin cannot satisfy the first part of the test articulated by the Supreme Court for removal under § 1443(1), and removal under that provision is not proper. Nor is removal appropriate under § 1443(2), which allows for removal of actions "[t]or any act under color ofauthority derived from any law providing for equal rights, or for refusing to do any act on the ground that it would be inconsistent with such law." Even if Cumin could somehow said 2 42 U.S.C. § 1985(1) provides: If two or more persons in any State or Territory conspire to prevent, by force, intimidation, or threat, any person from accepting or holding any office, trust, or place of confidence under the United States, or from discharging any duties thereof; or to induce by like means any officer of the United States to leave any State, district, or place, where his duties as an officer are required to be perfonned, or to injure him in his person or property on account of his lawful discharge of the duties of his office, or while engaged in the law discharge thereof, or to injury his property so as to molest, interrupt, hinder, or impede him in the discharge of his official duties. 10 to be acting under color of authority derivedfrom any law providingfor equal rights, as this court has explained, he is not being sued for his actions as an informant or relator. He is being sued for his actions concerning his home and his alleged financial obligations to a homeowner's association. Cf Harpagon Co., LLCv. FXM, P.e., 653 F.Supp.2d 1336, 1348 (N.D. Ga. 2009)(explaining that removal of collection actions against an attorney and his law firm were not proper under § 1443(2) where attorney claimed to be a de facto federal agent by reporting evidence of alleged felonies; the collection action sought the satisfaction of a state court judgment, and was not based on attorney's reporting of alleged crimes). Removal under § 1443(2) is not appropriate. Because the removal of this action is not proper under 28 U.S.C. §§ 1441, 1442, or 1443, Bald Head Association's Motion to Remand [DE-9] is ALLOWED. B. Remaining Motions Because this court has determined that the removal ofthis action was not proper, it does not reach either Plaintiffs Motion to Dismiss, Motion for Judgment on the Pleadings, and Reply to Counterclaim [DE- 21] or Defendant's Motion for Leave to Amend Answer and Counterclaim & Notice of Removal [DE-42]. III. CONCLUSION Plaintiffs Motion to Remand [DE-9] is ALLOWED, and it is ORDERED that this case be REMANDED to the General Court of Justice, Superior Court Division, Brunswick County, North Carolina. Because this court has determined that the removal of this action was not proper, it does not reach either Plaintiffs Motion to Dismiss, Motion for Judgment on the Pleadings, and Reply to 11 Counterclaim [DE- 21] or Defendant's Motion for Leave to Amend Answer and Counterclaim & Notice of Removal [DE-42V SO ORDERED. This the 10th day of May, 2010. es C. Fox Senior United States District Judge Although the court did not reach Defendant's Motion for Leave to Amend Answer and Counterclaim and Notice or Removal [DE-42], the court did consider the infonnation contained in Defendant's Declarations [DE-43; DE-44] when ruling on the Motion to Remand. 3 12
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