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Hinrichs v. Dow Chemical Co.

United States District Court, E.D. Wisconsin

June 26, 2017

CHRIS HINRICHS and, AUTOVATION LTD Plaintiffs,
v.
DOW CHEMICAL CO. D/B/A DOW AUTOMOTIVE, Defendant.

          ORDER GRANTING PLAINTIFFS' MOTION FOR REMAND (DKT. NO. 11) AND DECLINING TO RULE ON THE DEFENDANT'S MOTION TO DISMISS DUE TO LACK OF JURISDICTION (DKT. NO. 19)

          PAMELA PEPPER United States District Judge

         Plaintiffs Chris Hinrichs and Autovation Limited filed suit in Waukesha County Circuit Court against defendant Dow Chemical Company, seeking damages on claims of negligent misrepresentation, intentional misrepresentation, strict responsibility misrepresentation, and violation of Wis.Stat. §100.81(1). Dkt. No. 1-1 at 4. The defendant removed the case to this court. Dkt. No. 1. The plaintiffs filed a motion for remand. Dkt. No. 11. Less than a month after the plaintiffs filed their remand motion, the defendant filed a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). Dkt. No. 19. The court will grant the motion for remand, and declines to rule on the motion to dismiss given its lack of jurisdiction.

         I. FACTUAL BACKGROUND

         Plaintiff Hinrichs developed and owns the patent for JeeTops-“custom, premium skylight panels built for Jeep Wranglers equipped with Freedom Top hardtops.” Dkt. No. 1-1 at 5-6. He is also the sole owner of Autovation Limited, which “for a period of time had a license to manufacture, distribute, and install JeeTops panels.” Id. at 6. In 2013, the defendant informed plaintiff Heinrichs that there was a “potential new Dow primer for use with the Dow adhesive employed in installing JeeTops panels;” the Dow representative who told the plaintiff about the new primer indicated that the defendant was going to test the primer “with the acrylic used in the JeeTops product.” Id. at 7. Shortly afterward, plaintiff Heinrichs informed the representative “that some customers were experiencing cracks in their JeeTops panels that had been installed using Dow adhesives.” Id. The representative responded that the acrylic had been sent to the defendant's labs for testing. Id.

         In the fall of 2013, the defendant produced a report of the lab testing, which indicated that the adhesive was “properly functioning on the acrylic used by” plaintiff Heinrichs, and that “‘[n]o evidence of any crazing or surface cracking was observed.'” Id. at 8. The plaintiffs allege that, in contrast to this report, “even more JeeTops purchasers started experiencing cracks in the product.” Id. The defendant continued to look for “the root cause of the issue, ” but by October 2014, the plaintiffs allege, “one-third of all JeeTops panel installations using Dow's BetaPrime 5504G and BetaTech Plus adhesive system had failed.” Id. By the time the plaintiffs determined the source of the problem and replaced the adhesive, “the negative publicity attendant on the failure of the JeeTops panels after being attacked by the Dow adhesive destroyed [plaintiff Hinrichs'] ability to sell new product.” Id. at 9. Consequently, the plaintiffs allege that the defendant's misrepresentation prevents them from selling the JeeTops with the replaced adhesives. Id. at 10.

         II. DIVERSITY JURISDICTION FACTS

         Plaintiff Hinrichs resides in Delafield, Wisconsin. Id. at 5. The plaintiffs allege in the complaint that plaintiff Autovation is a Delaware corporation, with its principal office located in Wisconsin. Id. The complaint asserts that the defendant is a foreign corporation with its principal office located in Michigan. Id.

         The defendant's notice of removal states that the “[d]efendant is a Delaware corporation, with its principal place of business in Michigan.” Dkt. No. 1 at 2. Paragraph 5 of that notice of removal says, “According to Plaintiffs' Complaint, . . . Plaintiff Autovation Limited is a Delaware corporation with its principal office located in Wisconsin.” Id. at 2, ¶5. The defendants did not challenge Autovation's Delaware citizenship in the notice of removal.

         In paragraph 7 of that same notice of removal, however, the defendants stated:

This court has original jurisdiction of this action pursuant to 28 U.S.C. §1332, because the matter in controversy exceeds the sum of $75, 000, exclusive of interest and costs, and is therefore greater than the jurisdictional threshold for diversity jurisdiction. In addition, Plaintiffs are a Wisconsin resident and a Wisconsin corporation, respectively, and Defendant is a Delaware corporation, with its principal place of business in Michigan, meaning there is complete diversity of citizenship between the parties.

Dkt. No. 1 at 2 (emphasis added).

         The plaintiffs base their motion for remand on the fact that both plaintiff Autovation and defendant Dow are corporate citizens of Delaware; thus, they argue, the parties are not diverse, and this court does not have jurisdiction. Dkt. No. 13 at 1. In its opposition to remand, the defendant-who knew as of the time of removal that Autovation claimed Delaware citizenship, and did not contest it at that time--argued that the plaintiff “improperly joined” Autovation, and that Autovation “has no colorable claim for relief, meaning that the Court should ignore Autovation's purported citizenship and retain jurisdiction.” Dkt. No. 15 at 1.

         III. LAW GOVERNING REMOVAL

         Under 28 U.S.C. §1441, a defendant may remove a case from state court to federal court where the district court has original jurisdiction. District courts have original jurisdiction over all civil actions where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interests or costs, and is between ...


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