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Capitol Hill Group v. Pillsbury Winthrop Shaw Pittman

July 2, 2008

CAPITOL HILL GROUP, PLAINTIFF,
v.
PILLSBURY WINTHROP SHAW PITTMAN, LLP, ET AL., DEFENDANTS.



MEMORANDUM OPINION

Now before the Court comes plaintiff Capitol Hill Group's Motion for Remand Pursuant to 28 U.S.C. § 1447(c) and § 1452(b), or in the Alternative, Abstention Pursuant to 28 U.S.C. § 1334(c) [12]. Upon consideration of the motion, defendant Shaw Pittman's opposition [14], plaintiff's reply [19], plaintiff's supplement [22], defendant's response [23], plaintiff's second supplement [29], defendant's second response [30], the entire record herein, and the applicable law, the Court will DENY plaintiff's motion.

I. BACKGROUND

A. Factual Background

Plaintiff Capitol Hill Group ("CHG") filed suit against defendants Pillsbury Winthrop Shaw Pittman, LLP and Shaw Pittman, LLP (collectively "Shaw Pittman") in addition to their employees Paul A. Tummonds, Jr. and Patrick J. Potter, alleging a number of claims stemming from defendants' representation of plaintiff in a zoning proceeding.

Plaintiff became embroiled in proceedings before the U.S. Bankruptcy Court for the District of Columbia and on February 1, 2002 retained Shaw Pittman as counsel. (See Compl. ¶ 12.) The Bankruptcy Court approved plaintiff's retention of Shaw Pittman, and the Court accordingly monitored the efficacy of Shaw Pittman's representation. (Opp. 6.)

At all times during the bankruptcy proceedings, plaintiff owned commercial real property, which included a hospital and nursing center, for which it had to provide parking in accordance with D.C. law. (See Compl. ¶ 11.) Plaintiff had been engaged in a longstanding dispute with the D.C. Board of Zoning Adjustment ("BZA") regarding the amount of parking spaces required with respect to its property holdings. (See id. ¶¶ 14-31.) Shaw Pittman represented plaintiff before the BZA during the pendency of the bankruptcy proceedings. (Id. ¶ 12.) After issuing a ruling in favor of plaintiff, BZA unilaterally decided to reconsider that decision, and it ultimately issued an order requiring plaintiff to provide additional parking spaces for use at the hospital and nursing center. (See id. ¶ 15.) According to plaintiff, fulfilling this parking requirement is virtually impossible, rendering its property essentially useless. (Pl. Mot. Remand 6-7.)

Plaintiff's allegations stem from Shaw Pittman's dealings with the BZA. Plaintiff first alleges that defendants neglected to notify it of the BZA's issuance of the modified order, which precluded plaintiff from appealing the adverse ruling, since the deadline for such an appeal had long passed by the time plaintiff learned of the order. (See Compl. ¶ 17.) Furthermore, plaintiff claims that defendant failed to advance an argument before the BZA that would have resulted in a more favorable ruling. (See id. ¶ 21.) Substantively, the allegations involve claims for legal malpractice, breach of contract, and breach of fiduciary duty. (See id. ¶¶ 19-31.) Plaintiff seeks substantial damages as redress for these alleged wrongs. (Id.)

Plaintiff filed suit on September 7, 2007 in the Superior Court for the District of Columbia. (Notice of Removal ¶ 1.) Defendants subsequently removed the case to this Court on October 26, 2007, pursuant to 28 U.S.C. § 1334. (Id. ¶ 4.) Plaintiff now seeks to remand the case to state court, contending that this Court lacks jurisdiction to hear its claims.

B. Bankruptcy Jurisdiction and Removal

Congress has given federal courts "original but not exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or related to cases under title 11." Bankruptcy Cases and Proceedings, 28 U.S.C. § 1334(b) (2008). In the event an action under the compass of this statute is filed in state court, defendants have the right to remove the case to the federal district court "for the district and division embracing the place where such action is pending." Actions Removable Generally, 28 U.S.C. § 1441(a) (2008).

The plaintiff in a removed action has the opportunity to contest the federal court's jurisdiction by filing a motion to remand the case to state court. See Procedure After Removal Generally, 28 U.S.C. § 1447(c) (2008). Congress has further placed the onus on federal courts to remand to the appropriate state court any action in which it appears before final judgment that the court lacks subject-matter jurisdiction. Id. Federal courts are further vested with the authority to remand bankruptcy cases to state courts based on a variety of equitable grounds. See Removal of Claims Related to Bankruptcy Cases, 28 U.S.C. § 1452(b); 28 U.S.C. § 1334(c)(1).

II. ANALYSIS

A. General Principles of Remand

It is axiomatic that "[f]ederal courts are courts of limited jurisdiction and therefore the law presumes that a cause lies outside of the court's limited jurisdiction." Julien v. CCA of Tenn., Inc., 268 F. Supp. 2d 19, 21 (D.D.C. 2003) (internal quotation marks omitted). Consequently, "[c]courts must strictly construe removal statutes." Id. If the plaintiff moves to remand the case to a state court, "the defendant bears the burden of proving federal jurisdiction." Id. Moreover, the court to which a case is removed has the duty to remand the case to the state court in which it originated if at any time prior to final judgment it determines it lacks subject-matter jurisdiction. See id. In such a case, "remand is mandatory." Id.

A court must view motions to remand through the prism of limited federal jurisdiction: "[a]ny doubts as to whether federal jurisdiction exists must be resolved in favor of remand." RWN Dev. Group, LLC v. Travelers Indem. Co. of Conn., 540 F. Supp. 2d 83, 86-87 (D.D.C. 2008). In other words, "[t]he court must resolve any ambiguities concerning the propriety of removal in favor of remand." Id. (internal quotation marks omitted).

In bankruptcy proceedings, however, federal courts enjoy a more robust authority to hear cases. See In re Premium Escrow Servs., Inc., 342 B.R. 390, 397 (D.D.C. 2006) ("Federal jurisdiction over the bankruptcy case or proceeding must exist pursuant to 28 U.S.C. ยง 1334, which ...


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