United States District Court, D. Minnesota
Christopher W. Madel, Todd L. Hennan, and Ellen M. Ahrens,
Madel PA, for Plaintiff.
Eric
E. Walker and Keith G. Klein, Perkins Coie LLP, and Arthur G.
Boylan and Peter McElligott, Anthony Ostlund Baer &
Louwagie PA, for Defendants.
MEMORANDUM OPINION AND ORDER
SUSAN
RICHARD NELSON UNITED STATES DISTRICT JUDGE
In
August of 2018, Defendants removed this case to federal court
asserting diversity jurisdiction, and promptly filed a motion
to dismiss Plaintiff's complaint on res judicata grounds.
However, because both Plaintiff CSM Corporation and
Defendants Urban Minneapolis Plymouth Building, LLC and Urban
Minneapolis Plymouth Tenant, LLC, are Minnesota citizens, and
because there was no indication that Plaintiff
“fraudulently joined” those two Defendants, as
that term is defined under Eighth Circuit case law, see
Filla v. Norfolk So. Ry. Co., 336 F.3d 806 (8th Cir.
2003), Plaintiff moved to remand this case to state court for
lack of complete diversity of citizenship. In the
alternative, Plaintiff also contended that Defendants'
res judicata-based motion to dismiss was meritless.
Because
the Court agrees with Plaintiff that it lacks subject matter
jurisdiction over this dispute, the Court declines to
consider Defendants' motion to dismiss, and accordingly
remands this case back to state court.
I.
BACKGROUND
This is
a dispute between two hotel developers over allegedly
nefarious business practices. Put simply, Plaintiff alleges
that Defendants clandestinely worked with one of
Plaintiff's former senior executives, a man named Michael
Coolidge, to steal lucrative business opportunities from
Plaintiff, and then hire Coolidge away from Plaintiff to help
Defendants consummate these business opportunities, namely,
the purchase and development of the “Plymouth Building
Embassy Suites” in downtown Minneapolis.
For
purposes of subject matter jurisdiction, however, only the
following allegations from Plaintiff's Amended Complaint
(Doc. No. 30) and Defendants' Fed.R.Civ.P. 7.1 corporate
disclosure statements (Doc Nos. 6-11), are relevant:
First,
Plaintiff CSM “is a corporation organized under the
laws of Minnesota, with its principal place of business in
Minneapolis, Minnesota.” (Am. Compl. ¶ 6.)
Second,
Defendant Urban Minneapolis Plymouth Tenant, LLC “is a
limited liability company organized under the laws of
Delaware with a principal place of business in Minneapolis,
Minnesota” (id. ¶ 12), and a membership
that includes Minnesota corporation U.S. Bancorp Community
Development Corporation. (See Plymouth Tenant Rule
7.1 Statement [Doc. No. 10]; Hennan Affidavit [Doc. No. 31-2]
¶ 2.)
Third,
Defendant Urban Minneapolis Plymouth Building, LLC “is
a limited liability company organized under the laws of
Delaware with a principal place of business in Minneapolis,
Minnesota” (Am. Compl. ¶ 11), and a membership
that includes Defendant Urban Minneapolis Plymouth Tenant,
LLC. (See Plymouth Building Rule 7.1 Statement [Doc.
No. 9].)
Fourth,
Plaintiff alleges that, in May 2015, these two
“Plymouth Building Defendants” acquired, and then
began operating, “the Plymouth Building and Embassy
Suites Flag for Downtown Minneapolis for the benefit of HRI
and themselves, ” all while “knowing” that
this purchase and development resulted from Mr.
Coolidge's breach of his contractual and fiduciary
duties. (See Am. Compl. ¶¶ 35, 150, 153.)
Fifth,
more specifically, Plaintiff alleges that the Plymouth
Building Defendants either tortiously interfered with
Plaintiff and Mr. Coolidge's contract, or aided and
abetted the other Defendants in tortious interference,
because “the Plymouth Building Defendants knowingly
induced and encouraged Coolidge to breach the provision of
the Employment Agreements barring him from pursuing CSM
opportunities within a year after the termination of his CSM
employment [in October 2014], and assisted Coolidge in
breaching the same, by, inter alia, acquiring the
Plymouth Building and the Embassy Suites Flag in Downtown
Minneapolis for their benefit and the benefit of HRI
Defendants and others at CSM's expense and operating the
same.” (Id. ¶ 161; see also id.
¶¶ 197-99 (aiding and abetting).)
Sixth,
Plaintiff alleges that, through the aforementioned conduct,
the Plymouth Building Defendants “substantially
assisted Coolidge in breaching his ...