United States District Court, D. Utah, Central Division
MEMORANDUM DECISION AND ORDER GRANTING  DEFENDANT
SOUTHERN UTAH UNIVERSITY'S MOTION FOR REMAND
NUFFER DISTRICT JUDGE
case is rooted in a helicopter crash in September 2016.
Plaintiff QBE Insurance Company (“QBE”)
interpleads proceeds of its insurance policy for a helicopter
which crashed in September 2016. SUU leased the helicopter in
question from Defendant November Alpha, LLC
(“NA”) which removed the case from Utah state
court to this court.
Southern Utah University (“SUU”), filed a Notice
of Non-Consent to Removal,  and a Motion for Remand
(“Motion”) to return the case to the Utah Fifth
Judicial District Court. QBE does not oppose the
Motion. Defendant November Alpha, LLC
(“NA”), the party which removed the case,
opposes the Motion. SUU replies in support.
SUU is immune from suit in federal court under the Eleventh
Amendment to the United States Constitution, and because
SUU's presence in the lawsuit destroys diversity
jurisdiction, this court lacks jurisdiction over the case.
The Motion for Remand is GRANTED.
filed the Complaint in the Utah Fifth Judicial District Court
on March 23, 2017.The Complaint sought to determine which
defendant or defendants were entitled to receive the proceeds
from the QBE insurance policy. The helicopter was subject to
a lien under a security agreement in favor of defendant Scope
forth in the Complaint, QBE is a corporation incorporated in
the State of Pennsylvania with its principal place of
business in New York City, New York. NA is a New Jersey
limited liability company with its principal place of
business in Newark, Delaware.Scope Leasing, Inc. is a
corporation organized in the State of Ohio. The Complaint
characterized SUU as a “political subdivision of the
State of Utah, located in Cedar City,
April 26, 2017, NA filed a Notice of Removal. NA based the
removal on diversity jurisdiction, alleging that
“[c]omplete diversity exists between the parties
pursuant to 28 U.S.C. § 1332(a)(2).” SUU accepted
service of the Complaint that same day. In
conjunction with the notice of appearance of counsel on its
behalf,  SUU then filed a document entitled
“Notice of Non-Consent to Removal,
” in which it “provide[d] notice to
. . . all parties that it [did] not consent to the removal of
this action to the United States District Court for the
District of Utah.” Twelve days later, SUU filed its
Motion to Remand.
28 U.S.C. § 1447, “[a] motion to remand [a] case
on the basis of any defect other than lack of subject matter
jurisdiction must be made within 30 days after the filing of
the notice of removal . . . .” “If at any time
before final judgment it appears that the district court
lacks subject matter jurisdiction, the case shall be
remanded.” In its timely filed motion, SUU argues
here that as “an agency and ‘arm of the state of
Utah[, ]'” it is “entitled to immunity from
suit in the federal courts under the Eleventh Amendment to
the U.S. Constitution.” SUU also argues that the
“complete diversity for removal required by 28 U.S.C.
§ 1332” is not present in this case.
opposition ignores these jurisdictional issues, focusing
instead on the matters raised in SUU's concurrently filed
Motion for Extension of Time to Respond to Plaintiff's
Complaint.NA argues that because SUU failed to
timely answer the complaint, SUU is in default and
“should not be entitled to ask for any relief . . .
including any request that the matter be remanded back to
Utah state court.” NA fails to recognize that when
default “against a party who has failed to plead or
otherwise defend” is considered, “the district
court has an affirmative duty to look into its jurisdiction .
. . over the subject matter . . . .” Fulfilling
that duty reveals that this court cannot exercise
jurisdiction over the case for the reasons SUU provides.
is immune under from suit in federal court under the Eleventh
argues that it “is immune from suit in this court under
the Eleventh Amendment of the U.S.
Constitution.” This is correct. “The ultimate
guarantee of the Eleventh Amendment is that nonconsenting
States may not be sued by private individuals in federal
court.” This guarantee means that the Eleventh
Amendment operates as a “jurisdictional bar that
precludes unconsented suits in federal court against a state
and arms of the state.”
Utah State University- can readily be considered as an arm of
the state because the 10th Circuit has
“consistently found [that] state universities are arms
of the state.”State statute confirms this as well.
Although QBE and NA describe SUU as a political subdivision
of the State of Utah in the Complaint and the
Notice of Removal,  the Utah code explicitly recognizes SUU
as a state institution of higher education that
enjoys “all rights, immunities, and franchises
necessary to function as such.” As an arm of
the state, SUU may choose whether to consent to a suit in
federal court. It clearly withholds its consent here so the
Eleventh Amendment bars this court from taking up the case.
The case must be remanded back to state court.
presence in the case destroys diversity jurisdiction
also argues that its status as an arm of the state destroys
the diversity jurisdiction utilized as a basis for
removal. SUU is correct on this argument as well.
Even if Eleventh Amendment immunity did not apply to SUU, its
recognized status as an arm of the state is fatal to
jurisdiction attaches only when all parties on one side of
the litigation are of a different citizenship from all
parties on the other side of the
litigation.” The citizenship of each individual
defendant must be considered. The United States
Supreme Court has directed that “[w]hen a plaintiff
sues more than one defendant in a diversity action, the
plaintiff must meet the requirements of the diversity statute
for each defendant or face
dismissal.” Because “a state, or the arm or
alter ego of a state . . . does not constitute a
‘citizen' for diversity purposes,
” the presence of SUU in this case as a
named defendant effectively renders the diversity of the
parties incomplete. “Incomplete diversity destroys
original jurisdiction with respect to all
claims.” The case must be remanded because this
court cannot exercise jurisdiction over the case.
HEREBY ORDERED that SUU's Motion for Remand is GRANTED.
Because this court does not have jurisdiction over the case,
IT IS FURTHER ORDERED that all remaining pending
motions are MOOT. Plaintiffs Complaint is