United States District Court, D. Colorado
ORDER
KRISTEN L. MIX, MAGISTRATE JUDGE
This
matter is before the Court on Defendant Rota Fortunae's
("Rota") Motion to Reconsider
[#46][1] (the "Motion"). The Motion [#46]
was filed on January 4, 2019, and Plaintiff filed a Response
[#47] in opposition to the Motion on January 9,
2019.[2] In the Motion [#46], Defendant Rota asks
the Court to reconsider the portion of the Court's
December 20, 2018 Order [#45], directing Rota to answer four
interrogatories propounded by Plaintiff to determine the
existence of the John/Jane Doe Defendants in this case.
See Minute Entry [#45]. For the reasons set forth
below, the Motion [#46] is GRANTED in part
and DENIED in part.
A
motion for reconsideration "is an extreme remedy to be
granted in rare circumstances." Brumark Corp. v.
Samson Res. Corp., 57 F.3d 941, 944 (10th Cir. 1995). It
is well established in the Tenth Circuit that grounds for a
motion to reconsider include: "(1) an intervening change
in the controlling law, (2) new evidence previously
unavailable, and (3) the need to correct clear error or
prevent manifest injustice." Servants of Paraclete
v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000) (citing
Brumark, 57 F.3d at 948). Therefore, a motion to
reconsider is "appropriate [only] where the court has
misapprehended the facts, a party's position, or the
controlling law. It is not appropriate to revisit issues
already addressed or advance arguments that could have been
raised in prior briefing." Id.
The
Court's Order [#45], issued from the bench during the
December 20, 2018 Scheduling Conference, [3] directed
Defendant Rota to answer four interrogatories propounded by
Plaintiff in support of the Motion to Remand
[#15].[4] The Court found that Interrogatory Nos. 1
through 4 sought appropriate information from Defendant Rota
regarding the issue of whether any of the John/Jane Doe
Defendants referenced in the Complaint [#3] exists, a
disputed fact central to the Motion to Remand [#15]. The
Court reached this determination based primarily on two
issues raised by the Motion to Remand [#15] concerning the
existence or non-existence of the John/Jane Doe Defendants.
The first issue is jurisdictional, i.e. whetherthe
citizenship of the John/Jane Doe Defendants can be
ascertained at this early stage in the proceedings to satisfy
the Court of its subject matter jurisdiction over this case
pursuant to 28 U.S.C. § 1332(a)(1). The second issue is
procedural, i.e. whether the John/Jane Doe
Defendants, who were served with process in state court prior
to removal, were required to consent to Defendant Rota's
removal of this case pursuant to 28 U.S.C. §
1446(b)(2)(A). Further, the Court relied on a decision from
the United States District Court for the District of New
Jersey, Santiago v. Fed. Express Freight, Inc., No.
CV14-5081 (KM) (JBC), 2015 WL 6687617 (D.N.J. Oct. 30, 2015),
which allowed limited discovery into the identities of John
Doe defendants where the plaintiffs motion to remand was
pending. Santiago, 2015 WL 6687617, at *3. With the
above in mind, the Court addresses the arguments for
reconsideration raised by Defendant Rota in the instant
Motion [#46].
At the
outset, the Court addresses Plaintiffs assertion that the
Motion [#46] should be summarily denied for raising arguments
that could have been asserted earlier. Response
[#47] at 2. While Plaintiff correctly states the standard for
a motion to reconsider, the Court is not inclined to construe
Defendant Rota's Motion [#46] as "rehashing"
arguments the Court explicitly did not invite during the
December 20, 2018 hearing. See . Ex. A, Transcript of
December 20, 2018 Hearing [#47-1] at 7 ("[The
Court] will not accept argument with respect to these
conclusions.").
With
respect to the Motion [#46], Defendant Rota first argues that
the Order [#45] is contrary to the controlling law because
Santiago, on which this Court relied, conflicts with
28 U.S.C. § 1441 and Tenth Circuit precedent construing
that statute. See Motion [#46] at 2-3. In short,
Defendant Rota argues that Santiago conflicts to the
extent that it holds a party may inquire into the potential
citizenship of a John Doe defendant for the purposes of
determining the propriety of removal. Id. at 3.
After careful review, the Court does not agree. The Tenth
Circuit precedents cited by Defendant Rota deal generally
with 28 U.S.C. § 1441, which explicitly mandates that
federal courts disregard "the citizenship of defendants
sued under fictitious names" when considering whether a
civil action is removable.[5] Santiago, however, takes the
analysis one step further where, as here, there is a
legitimate concern as to the existence of subject matter
jurisdiction and the party opposing remand asserts "that
factual uncertainties or ambiguities must be resolved in
favor of federal court jurisdiction." Santiago,
2015 WL 6687617, at*2. This is precisely the argument
Defendant Rota raises here: that any uncertainties as to
whether the John/Jane Doe Defendants exist should be ignored
and that the Court should presume that it has diversity
jurisdiction in this case by disregarding those Defendants.
Although 28 U.S.C. § 1441(b)(1) explicitly mandates such
disregard when considering whether a civil action is
removable, 28 U.S.C. § 1446(b)(2)(A) does not
explicitly allow disregard of served John Doe defendants when
invoking the removal mechanism. In accordance with the
plain language of that statute, the Court declines to ignore
the served John Doe defendants in considering the issue of
their lack of consent to removal. This procedural issue has
been fairly raised in Plaintiffs Motion to Remand [#15].
Santiago is instructive in providing a method, i.e.
limited discovery, to address the issue early in this case.
As the
parties' briefing on the Motion to Remand [#15]
demonstrates, the procedural issue raised by 28 U.S.C. §
1446(b)(2)(A) necessarily turns on whether the John/Jane Does
exist and thus, whether their consent to removal was required
and obtained. See generally Motion to Remand [#15];
Response [#29]; Reply [#39]. Although
Defendant Rota moved for reconsideration of the substituted
service order in the state court prior to removal, Rota has
not done so in this Court.[6] Hence, the current posture of the case
is that certain unnamed and unidentified defendants were
served with process prior to removal of the case from state
court, but they did not consent to removal. Although the
existence vel non of the John/Jane Doe Defendants is
ultimately important to the jurisdictional issue here, at
this stage of the litigation it is critical to the procedural
issue raised by the Motion to Remand [#15]. Defendant Rota
cites no Tenth Circuit authority, and the Court finds none,
indicating otherwise or suggesting that addressing the
procedural issue through limited discovery is erroneous.
Second,
Defendant Rota argues that Santiago is inapposite to
this case because it is factually distinguishable. See
Motion [#46] at 3-4. Although the Court acknowledges
that the facts in Santiago are somewhat different
from the facts here, those differences are not relevant to
the jurisdictional and procedural issues discussed above.
Santiago reflects the well-established rule that a
federal court has a duty to satisfy itself that its subject
matter jurisdiction has been properly invoked.
Santiago, 2015 WL 6687617, at *2; see Shaw v.
AAA Eng'g & Drafting Inc., 138 Fed.Appx. 62, 67
(10th Cir. 2005) ("[l]t has long been recognized that a
federal court must, sua sponte, satisfy itself of its power
to adjudicate in every case and at every stage of the
proceeding."). Fairly construed, Santiago
simply applies that rule in a case involving uncertainties
about the existence of John Doe defendants. See
Santiago, 2015 WL 6687617, at *2-3. The court in
Santiago concluded that limited discovery into the
John Does' identities was an appropriate method for
determining disputed facts early in the proceedings before
ruling on a motion to remand. Id. at *3. This Court
agrees with that conclusion and is not convinced that the
immaterial factual differences between Santiago and
this case render it inapplicable here.
Third,
Defendant Rota argues that the Court's control of future
joinder of non-diverse defendants obviates the present
jurisdictional concern. See Motion [#46] at 4-5.
Although this may be true, Defendant Rota again ignores the
procedural issue raised by the fact that the John/Jane Doe
Defendants were served prior to removal. The Court has an
obligation to follow the law which, in this case, includes 28
U.S.C. § 1446(b)(2)(A). The Court may not simply
disregard the statutory requirement that all properly served
defendants must consent to removal. The fact that Defendant
Rota does so, by failing to even cite 28 U.S.C. §
1446(b)(2)(A) in the Motion [#46], does not give the Court
authorization to do the same. Further, the Court might
suggest that Defendant Rota's control over remand
obviates the present jurisdictional concerns. Given that
Defendant Rota removed the case to federal court, Rota could
concede Plaintiff's Motion to Remand [#15] and send the
case back to state court, at which point both the
jurisdictional issue and the procedural issue regarding
consent of the John/Jane Doe Defendants to removal would be
moot.
Fourth,
Defendant Rota argues that the Court's Order [#45]
allowing limited discovery is not justified because Plaintiff
"merely speculates that [some John/Jane Does] might
exist and this might destroy diversity." Motion
[#46] at 6. The Complaint [#3] alleges that Defendant Rota
and the John/Jane Doe Defendants engaged in a conspiracy to
pursue a "short and distort scheme" against
Plaintiff by disseminating false and misleading statements in
order to profit from short positions taken against Plaintiffs
stock price. See Compl. [#3] at 1-2. Despite
Defendant Rota's arguments to the contrary, the Court
finds that this allegation, as more fully described in the
Complaint [#3], sufficiently implicates the John/Jane Doe
Defendants' involvement in this alleged scheme and is not
so conclusory or speculative as to foreclose the Court's
discretion in permitting limited discovery at this time.
Sur-Tec, Inc. v. CovertTrack Grp., Inc., No.
13-2218-CM, 2014 WL 1304909, at *2 (D. Kan. Apr. 1, 2014)
(stating that courts enjoy "wide discretion in
determining whether jurisdictional discovery is
warranted" but may deny a request for jurisdictional
discovery if not adequately supported) (citations omitted).
Moreover, as Plaintiff notes in the Response [#47] to the
instant Motion [#46], although Defendant Rota has denied the
existence of the John/Jane Doe Defendants, see Response
to Motion to Remand [#29] at 3-4, Plaintiff has made
reasonable arguments as to why the Court should not accept
Defendant Rota's denial as conclusive, see Reply to
Motion to Remand [#39] at 2-5. It is precisely for this
reason that the Court finds that limited discovery into the
existence and/or identities of the John/Jane Doe Defendants
is appropriate.
Defendant
Rota's remaining arguments concern the particular
interrogatories to which Rota must respond pursuant to the
Court's Order [#45]. See Motion [#46] at 7-10.
Specifically, Defendant Rota asserts that the interrogatories
undermine Rota's right to anonymity, seek information
Rota is not obligated to provide, and were submitted pursuant
to an improperly served discovery request. See Id.
As was
stated during the December 20, 2018 hearing, the Court is
sensitive to Defendant Rota's concern that providing
certain information requested will violate Rota's
asserted First Amendment right to anonymity without a fair
hearing on the issue. Therefore, on further consideration of
the interrogatories provided, the Order [#45] is amended to
require Defendant Rota to respond to Interrogatory Nos. 2 and
4 only. The Order [#45] is further amended to permit
Defendant Rota to exclude Rota's true identity from the
response provided to Interrogatory No. 2.[7] Given that
Defendant Rota's initial deadline to respond to the
interrogatories was January 4, 2019, and a Status Conference
regarding those responses is set for January 11, 2019 at 9:00
a.m., see Order [#45], Defendant Rota's
responses to Interrogatory Nos. 2 and 4 shall be submitted to
Plaintiff no later than January 10, 2019, at 5:00 p.m.
However,
despite Defendant Rota's contention, the Court is not
persuaded that Rota is "protected" from discovery
of the information otherwise sought in Interrogatory Nos. 2
and 4. Nor is the Court convinced that Defendant Rota has no
obligation to respond to any interrogatory given that Rota,
as the party invoking federal jurisdiction, has the burden to
establish that subject matter jurisdiction is proper. See
Salzer v. SSM Health Care of Okla. Inc., 762 F.3d 1130,
1134 (10th Cir. 2014). The cases Defendant Rota cites in
support of this argument do not dictate otherwise, given that
those cases do not involve unidentified defendants that were
nevertheless served with process prior to removal. See
Lincoln Prop. Co. v. Roche, 546 U.S. 81, 84-88 (2005);
Brooks v. Purcell, 57 Fed.Appx. 47, 48 (3d Cir.
2002). Finally, although Plaintiff did not file a proper
discovery motion seeking leave of Court to propound the
interrogatories at issue, Plaintiff did raise such a request
as alternative relief in the Motion to Remand [#15] and the
Court has discretion to order jurisdictional discovery sua
sponte. See Motion to Remand [#15] at 11 -13; 25
CP, LLC v. Firstenberg Mach. Co., No. 09-CV-80-PB, 2009
WL4884483, at*10 (D.N.H. Dec. 8, 2009) (noting that courts
"have the authority to order jurisdictional discovery
sua sponte") (citing Hatfill v. Foster, 415
F.Supp.2d 353, 356 (S.D.N.Y. 2006); Am. Color Graphics v.
Brooks Pharm., inc., No. 8:05-CV-1512-T-27TBM, 2007 WL
3202748, *4 (M.D. Fla. Oct. 29, 2007)).
Accordingly,
for the foregoing reasons, IT IS HEREBY
ORDERED that Defendant Rota's Motion to
Reconsider [#46] is GRANTED in part and
DENIED in part. The Motion is
granted to the extent that Defendant Rota
seeks to protect Rota's right to anonymity by not
responding to Plaintiff's Interrogatory Nos. 1 and 3 and
by excluding Rota's true identity from the response to
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