Commercial Litigation and Arbitration

Notice of Removal May Not Be Amended to Add Jurisdictional Facts Not in Existence at Time Notice Was Filed

Am. Int’l Grp. v. Bank of Am., 2012 U.S. Dist. LEXIS 106072 (S.D.N.Y. July 29, 2012):

Plaintiffs initiated this action in New York State Court in August 2011. Defendants removed the action to federal court, and Plaintiffs then filed a motion in this Court to remand the case to state court. On October 20, 2011, the Court denied Plaintiffs' remand motion, finding that there was federal jurisdiction over the case. (Dkt. No. 43.) Specifically, the Court found federal jurisdiction under the Edge Act, 12 U.S.C. § 632. The Court denied Plaintiffs' motion for reconsideration. (Dtk. No. 76.) The Court confirmed its conclusion regarding Edge Act jurisdiction and additionally addressed Defendants' alternative basis for federal jurisdiction, as a civil proceeding "related to" cases under the United States Bankruptcy Code. 28 U.S.C. § 1334(b). The Court found that three of the bankruptcy proceedings asserted by Defendants provided a sufficient basis for "related to" jurisdiction. ***

Defendants argue that supplemental notices of removal are appropriate where, as here, the new basis for removal arises more than thirty days after the initial removal petition.

Defendants' analysis is incorrect in the context of this case. Here, Defendants attempt to add additional jurisdictional facts (i.e., the existence of additional, potentially related, bankruptcy filings) in the Corrected Supplemental Notice of Removal, presumably, to bolster the Court's previous finding of "related to" jurisdiction. That attempt is improper.

Defendants' proposed filing cannot be characterized as a mere clarification or correction of their initial petition —which would be permitted — as the newly proffered bankruptcies did not exist at the time of the initial petition. See Wyant v. Nat'l R.R. Passenger Corp., 881 F. Supp. 919, 924 (S.D.N.Y. 1995) (noting that courts generally allow amended notices of removal only when "the proposed amendments are technical in nature or merely serve to clarify what was contained in the original notice for removal") (citation omitted). In that light, Defendants' effort to shore up the basis of the "related to" jurisdiction is no different from an effort to remedy a substantive defect in the initial petition, which would not be permissible at this advanced stage in the litigation. See id. ("[A] defendant may not amend its notice of removal after th[e] thirty-day period [after the initial pleading] to remedy a substantive defect in the petition.").

In short, the Court is limited in its jurisdictional analysis to the facts in existence at the time of removal, see, e.g., Blockbuster, Inc. v. Galeno, 472 F.3d 53, 56-57 (2d Cir. 2006), and, accordingly, rejects Defendants' request to file the Corrected Supplemental Notice of Removal.

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