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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
REX CARR,                                                                     )
)
Plaintiff,                                                                    )
                                                                              )
vs.                                                                           )                                                    No.  4:09CV643-DJS
                                                                              )
CARR KOREIN TILLERY, L.L.C. and                                               )
KOREIN TILLERY L.L.C.,                                                        )
)
Defendants.                                                                   )
ORDER
On March 24, 2009, plaintiff Rex Carr, an attorney, filed
in  the  Circuit  Court  for  the  City  of  St.  Louis  a                    “Petition  in
Equity  for  Accounting.”     Named  as  defendants  are  Carr  Korein
Tillery,  L.L.C.                                                              (“CKT”),  Carr’s  former  law  firm,  and  Korein
Tillery  L.L.C.                                                               (“KT”),  the  new  firm  organized  following  his
separation.   The petition alleges that following the settlement of
earlier  litigation  in  the  Circuit  Court  of  St.  Clair  County,
Illinois, relating to Carr’s entitlement to legal fees, defendants
have  paid  substantial  sums  into  escrow  accounts  as  fees  due  to
plaintiff,  but  that  defendants  refuse  to  distribute  the  funds  to
plaintiff.    Plaintiff  further  alleges  that  additional  sums  have
been  received  by  CKT  to  which  plaintiff  is  entitled,  and  that  an
accounting is required.
The  petition  seeks,  inter  alia,  the  payment  of  the
escrowed  funds,  the  appointment  of  a  master  to  perform   an




accounting of disputed fees and their proper allocation, judgment
for  fees  owed  to  plaintiff,  and  the  appointment  of  a  receiver  to
act  for  CKT  against  KT  to  the  extent  necessary  to  recover  sums
improperly transferred from CKT to KT.   The parties have a long and
tortured  history  of  disagreement  and  associated  litigation.    By
defendants’  count,  this  action  is  the  ninth  between  the  parties
concerning  the  allocation  of  fees  as  between  Carr  and  his  former
law partners.
On April 24, 2009, defendants removed the action to this
Court,  asserting  that  removal  is  supported  by  federal  question
jurisdiction.   Defendants contend that the instant petition “arises
from  the  same  facts,  seeks  the  same  fees  and  is  barred  by  the
judgment  entered  in”  a  previous  action  by  Carr  in  the  Southern
District of Illinois, rendering the pleading initiating this case
“identical to  [that] RICO action.”1    Notice  of Removal  [Doc.  #1],
p.2.    Now  before  the  Court  are  plaintiff  Carr’s  motion  to  remand
the case to the state court, and defendants’ motion to dismiss and
motion to transfer or stay the action.
Because  the  motion  to  remand  addresses  the  threshold
issue  of  the  Court’s  jurisdiction,  the  Court  addresses  it  first.
Defendants  bear  the  burden  of  demonstrating  that  this  Court’s
removal jurisdiction is properly invoked, and doubts about federal
jurisdiction are to be resolved in favor of remanding the action to
1                                                                             “RICO” is the Racketeer Influenced and Corrupt Organizations
Act,  18 U.S.C.  §§  1961, et seq.
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the state court.   Bell v. Hershey Co.,  557 F.3d  953,  956  (8th Cir.
2009);  In  re  Business  Men’s  Assur.  Co.  of  Am.,  992  F.2d  181,  183
(8th Cir.  1993).    Removal based on  “federal-question jurisdiction
is  governed  by  the  ‘well-pleaded-complaint  rule,’  which  provides
that  federal  jurisdiction  exists  only  when  a  federal  question  is
presented   on   the   face   of   the   plaintiff's   properly   pleaded
complaint.” Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987).
Because  the  well-pleaded  complaint  rule  “makes  the  plaintiff  the
master of the claim[,] he or she may avoid federal jurisdiction by
exclusive reliance on state law.” Id.
Defendants  are                                                                “not  permitted  to  inject  a   federal
question  into  an  otherwise  state-law  claim  and  thereby  transform
the action into one arising under federal law.” Gore v. Trans World
Airlines,                                                                      210  F.3d                                  944,   948   (8th  Cir.   2000).   It  is  firmly
established  that  a  federal  defense  does  not  provide  a  basis  for
removal,  “even  if  the  defense  is  anticipated  in  the  plaintiff's
complaint,  and  even  if  both  parties  concede  that  the  federal
defense  is  the  only  question  truly  at  issue  in  the  case.”
Caterpillar,  482 U.S. at  393.
There   is,   however,   another   longstanding,  if  less
frequently  encountered,  variety  of  federal                                 “arising
under”   jurisdiction,                                                         [the   Supreme   Court]   having
recognized  for  nearly  100  years  that  in  certain  cases
federal-question  jurisdiction  will  lie  over  state-law
claims that implicate significant federal issues.
Grable  &  Sons  Metal  Prods.,  Inc.  v.  Darue  Eng'g  & Mfg.,  545  U.S.
308,  312  (2005).
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There  is  no                                                                 “single,  precise,  all-embracing  test  for
jurisdiction  over  federal  issues  embedded  in  state-law  claims
between nondiverse parties.” Id. at  314  (internal marks omitted).
The class of such cases is a “special and small category.”   Empire
Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677, 699 (2006).
“[T]he  question  is,  does  a  state-law  claim  necessarily  raise  a
stated  federal  issue,  actually  disputed  and  substantial,  which  a
federal forum may entertain without disturbing any congressionally
approved balance of federal and state judicial responsibilities.”
Grable,  545  U.S.  at  314.    See  also  Central  Iowa  Power  Co-op.  v.
Midwest  Independent  Transmission  System,  561  F.3d  904,  912  (8th
Cir.  2009).
Carr challenges defendants’ assertion of federal question
jurisdiction:
The Accounting Petition raises and pleads no question of
law or fact under Federal RICO or under any other federal
statute that has been completely preempted by federal law
or  act  of  Congress,  and  may  not  be  removed  since  the
accounting petition relies exclusively on state law.
Motion  to  Remand  [Doc.  #10],  p.2.    Carr  further  points  out  that
neither  of  the  defendants  here  was  a  party  to  the  RICO  action.
Contrary  to  defendants’  contentions,  Carr’s  petition  for  an
accounting does not assert any cause of action created by federal
law, does not turn on any question or construction of federal law,
and does not implicate significant federal issues.
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In   support   of   removal,   defendants   suggest   that
plaintiff’s artful pleading is “simply an artifice to avoid federal
jurisdiction.”                                                                Id.                                        The  pleading  is  artful  indeed,  if  it
compresses  into  its  6-page  equity  petition  for  an  accounting  the
sum  and  substance  of  the                                                  96-page  complaint  filed  in  the  RICO
action.    See Exhibit  1 to the Notice of Removal  [Doc.  #1-2].    The
Court readily concludes that the state court pleading here removed
cannot  be  said  to  be  “identical”  to  the  RICO  complaint,  with  its
detailed allegations of fact including 100 or more predicate acts,
and  theories  under  federal  law  as  to  patterns  of  racketeering
activity  involving   mail  fraud,  wire  fraud,  theft  of  funds,
extortion  and  other  illegal  conduct  in  violation  of                    18  U.S.C.
§1962(a),  §1962(c) and  §1962(d).
Defendants also over-reach when they suggest that Carr’s
claim for an equitable accounting under Missouri law is dependent
upon his ability to show that he lacks an adequate remedy at law,
which  is  in  turn  dependent  upon  his  showing  that  the  judgment  of
the Southern District of Illinois in the prior RICO litigation bars
all future litigation on the parties’ contracts, which then gives
rise  to  federal  jurisdiction  over  this  case.    Defendants  fail  to
persuade  the  Court  that  negating  the  preclusive  effect  of  the
federal  judgment  is  a  subsidiary  element  of  plaintiff’s  claim,
rather than an issue raised by a potential defense.
Even  following  defendants’  syllogism  as  it  is  posited,
the Court rejects defendants’ contention that the preclusive effect
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of  the  federal  court  judgment  in  the  RICO  case  is  a  sufficiently
significant issue of federal law in the present case as to support
federal  question  removal.    None  of  the  cases  defendants  cite  in
support  presents  a  substantially  similar  scenario,  and  none  is
persuasive  to  support  the  extension  of  the  principle  to  the
circumstances defendants describe here.    As the Supreme Court has
observed,                                                                     “it  takes  more  than  a  federal  element          ‘to  open  the
                                                                              “arising  under”  door.’”    Empire  Healthchoice,   547  U.S.  at    701,
quoting Grable,  545 U.S. at  313.
To  the  extent  that  defendants  rely  on  some  courts’
interpretation of the Supreme Court’s second footnote in Federated
Department  Stores,  Inc.  v.  Moitie,  452  U.S.  394,  397  n.2  (1981),
the Supreme Court has since, in Rivet v. Regions Bank of Louisiana,
522 U.S. 470, 472 (1998), clarified the footnote and confined it to
Moitie’s  particular  context.    In  Rivet,  the  Supreme  Court  holds
that removal may not be predicated on “a defendant’s assertion that
a prior federal judgment has disposed of the entire matter and thus
bars  plaintiffs  from  later  pursing  a  state-law-based  case,”  and
that “[t]he defense of claim preclusion, we emphasize, is properly
made in the state proceeding.” Id.
The  entire  history  of  the  parties’  litigation  and  its
potential legal impact on this action are not matters of relevance
at  the  jurisdictional  threshold  on  which  today’s  ruling  stands.
Instead, the Court has analyzed the proffered basis for defendants’
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removal  of  the  state  court  petition,  and  has  found  it  to  be
lacking.   The                                                                “Petition in Equity for Accounting” asserts no claim
created by federal law, invokes no area of state law to which the
doctrine of complete federal preemption applies, and does not turn
on  any  substantial  question  of  federal  law  sufficient  to  support
removal.    For  all  the  foregoing  reasons,  and  particularly  by  the
principles of the well-pleaded complaint doctrine, the removal was
improper and the action must be remanded to state court.   The Court
does  not  find  that  defendants  lacked  an  objectively  reasonable
basis  for  removal,  and  plaintiff’s  request  for  an  award  of
attorney’s  fees  is  therefore  denied.    Martin  v.  Franklin  Capital
Corporation,  546 U.S.  132,  141  (2005).
This  Court  need  not  reach,  and  does  not  consider,  any
matters   of   claim   preclusion,   issue   preclusion,   sanctionable
vexatious  multiplication  of  litigation,  or  other  such  arguments
alluded  to  in  the  briefing  of  the  motion  to  remand,  and  made  in
support or opposition to the motions to dismiss, to transfer or to
stay.   As the Court finds that it lacks jurisdiction, the case must
be  remanded  without  this  Court’s  consideration  of  other  matters,
which may be raised before the state court.
Accordingly,
                                                                              IT  IS  HEREBY  ORDERED  that  plaintiff’s  motion  to  remand
[Doc.                                                                         #10]  is  granted.     No  attorney’s  fees  or  costs  will  be
imposed.
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IT IS FURTHER ORDERED that defendants’ motion to dismiss
[Doc.  #15]  and  motion  to  transfer  or  stay  [Doc.  #17]  are  denied
without prejudice as moot.
IT IS FURTHER ORDERED that this action is remanded to the
Circuit Court for the City of St. Louis.
Dated this                                                                   2nd   day of November,  2009.
/s/ Donald J. Stohr
UNITED STATES DISTRICT JUDGE
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