Sun City Pet Market LLC v. Honest Kitchen Incorporated

Filing 20

ORDER denying 8 Motion to Remand to State Court. Signed by Judge David G Campbell on 3/2/2017.(DGC, nvo)

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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Sun City Pet Market, LLC, an Arizona limited liability company, 10 Plaintiff, 11 12 No. CV17-00121-PHX DGC ORDER v. 13 The Honest Kitchen, Inc., a Delaware corporation, 14 Defendant. 15 16 17 Defendant removed this case from state court. Doc. 1. Plaintiff filed a motion to 18 remand under 28 U.S.C. §1441(b). Doc. 8. The motion is fully briefed, and neither party 19 has requested oral argument. For the reasons set forth below, the Court will deny the 20 motion to remand. 21 I. Background. 22 Plaintiff Sun City Pet Market, LLC is an Arizona limited liability company with 23 its principal place of business in Arizona. Doc. 1-2 ¶ 1. Defendant The Honest Kitchen, 24 Inc. is a Delaware corporation registered to do business in Arizona. Id., ¶ 2. On 25 November 22, 2016, Plaintiff filed its complaint in Arizona state court (Doc. 8 at 1) and 26 mailed Defendant a verified copy with a demand letter (Doc. 18 at 4; Doc. 9). Plaintiff 27 asserts that Defendant waived formal service, but does not cite to the record. Doc. 18 at 28 4. Defendant denies that it waived formal service. Doc. 8 at 2; Doc. 19 at 2-3. Plaintiff 1 served Defendant with the summons and complaint on December 13, 2016. Doc. 1-2 at 2 20. Defendant filed a notice of removal on January 13, 2017. Doc. 1. 3 II. 4 5 Analysis. Plaintiff argues that remand is proper because Defendant’s notice of removal was untimely and procedurally defective. The Court disagrees. 6 A. 7 Generally, a defendant must file a notice of removal within 30 days of being 8 served with a summons and complaint. 28 U.S.C. § 1446(b); Murphy Bros., Inc. v. 9 Michetti Pipe Stringing, Inc., 526 U.S. 344, 355 (1999). The 30-day requirement “is 10 triggered by defendant’s receipt of an ‘initial pleading’ that reveals a basis for removal. 11 If no ground for removal is evident in that pleading, the case is ‘not removable’ at that 12 stage. In such case, the notice of removal may be filed within thirty days after the 13 defendant receives ‘an amended pleading, motion, order or other paper’ from which it 14 can be ascertained from the face of the document that removal is proper.” Harris v. 15 Bankers Life & Cas. Co., 425 F.3d 689, 694 (9th Cir. 2005). “[N]otice of removability 16 under § 1446(b) is determined through examination of the four corners of the applicable 17 pleadings, not through subjective knowledge or a duty to make further inquiry.” Id. Defendant’s notice of removal was not untimely. 18 Plaintiff served Defendant with the summons and complaint on December 13, 19 2016. Doc. 1-2 at 20. If a basis for removal was evident in Plaintiff’s complaint, then the 20 30-day removal period would have ended on January 12, 2017, the day before Defendant 21 filed its notice of removal. Doc. 1. But Defendant argues that the time for removal did 22 not begin to run when it was served because Plaintiff’s citizenship was not apparent from 23 the complaint. Doc. 18 at 2. Defendant argues that the time for removal still has not run 24 because Defendant discovered the basis for removal through its own investigation and not 25 from any additional information from Plaintiff. Id. The Court agrees. 26 1. 27 Plaintiff’s complaint states that it is an Arizona limited liability company with its 28 principal place of business in Arizona. Doc. 1-2 at 4. An LLC is a citizen where its Plaintiff’s citizenship was not evident from its complaint. -2- 1 owners and members are citizens. Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 2 894, 902 (9th Cir. 2006). Plaintiff’s complaint does not state how many owners or 3 members it has, or their states of citizenship. Doc. 1-2. Without those facts, Plaintiff’s 4 citizenship was not evident from the complaint and the 30-day removal period was not 5 triggered. 6 Plaintiff argues that it had a conversation with Defendant on December 7, 2016, 7 and that Defendant was or could have been aware of a basis for removal on that date. 8 Doc. 8 at 4; Doc. 19 at 2. But this alleged conversation occurred before Plaintiff served 9 Defendant with the summons and complaint, so the removal period could not have begun 10 on that date. See Murphy, 526 U.S. at 355. Nor did it begin on the date of service 11 because the complaint did not disclose a basis for removal. 12 The Ninth Circuit has rejected Plaintiff’s argument that Defendant was required to 13 conduct an inquiry into removability. Harris, 425 F.3d at 698. Defendant had no duty to 14 investigate Plaintiff’s citizenship, and did not receive “an amended pleading, motion, 15 order or other paper” that revealed a basis for removal. See id. at 694. Thus, the 30-day 16 removal period was not triggered by the December 7 conversation or by service of the 17 summons and complaint. 18 investigation into Plaintiff’s citizenship and removed on that basis, this fact does not alter 19 the running of the 30-day deadline. A defendant may file a notice of removal based on its 20 own conclusions from investigation. Roth v. CHA Hollywood Med. Ctr., L.P., 720 F.3d 21 1121, 1125 (9th Cir. 2013). Although it is true that Defendant did conduct its own 22 Plaintiff does not dispute that Defendant is a citizen of Delaware and California. 23 Doc. 1 at 2; Docs. 8, 19. Nor does Plaintiff dispute that it has two members who are 24 Arizona citizens and that it is a citizen of Arizona. Doc. 18 at 2. Instead, Plaintiff argues 25 that Defendant “offers no evidence to supports its presumption” regarding Plaintiff’s 26 citizenship, and that this “remains an issue for the Court to determine[.]” Doc. 19 at 4. 27 But Defendant has timely alleged a basis for removal that Plaintiff does not dispute, and 28 Plaintiff cannot “prevent or delay removal by failing to reveal information showing -3- 1 removability and then objecting to removal when the defendant has discovered that 2 information on its own.” Roth, 720 F.3d at 1125. 3 2. 4 Plaintiff does not expressly dispute that the amount-in-controversy requirement is 5 met, but seems to argue that Defendant is improperly calculating Plaintiff’s damages. 6 Doc. 19 at 4-5. Plaintiff seeks both specific performance of an order for goods worth 7 $90,653.09 (Doc. 1-2 at 6 ¶ 16) and recovery of “the market price at the time of 8 repudiation, less the contract price and any expenses saved, plus any incidental or 9 consequential damages” (id., ¶¶ 26-28). Plaintiff also seeks punitive damages, interest on 10 that sum “at the highest rate allowable by law,” and its costs and attorneys’ fees. Id. at 8. 11 The amount-in-controversy – the cost of performing the contract, the market price at the 12 time of the breach, interest, damages, and attorneys’ fees – exceeds $75,000. 13 B. The amount in controversy is satisfied. Defendant’s notice of removal was not procedurally defective. 14 Plaintiff argues that Defendant’s notice of removal was procedurally defective 15 because Defendant did not provide the Arizona state court “with notice of its 16 representation in this matter.” Doc. 8 at 4. But Plaintiff provides no evidence that 17 Defendant failed to comply with § 1446(d), and cites no authority for the proposition that 18 failure to comply with state notice-of-appearance rules can defeat removal under federal 19 law. Doc. 8 at 3-5. 20 Plaintiff argues that it should not be deprived of its choice of forum. Although it 21 is true that there is a “strong presumption” against removal and “[f]ederal jurisdiction 22 must be rejected if there is any doubt as to the right of removal in the first instance,” 23 Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992), a defendant may invoke federal 24 jurisdiction when removal is proper under § 1441 and the defendant complies with the 25 procedures of § 1446, as Defendant has here. 26 Finally, Plaintiff argues that removal is improper because the outcome of this case 27 “would be substantially the same” in state court, litigating in state court will not be 28 “oppressive or vexatious” for Defendant, and Defendant’s “end goal” is to transfer the -4- 1 case to California. Doc. 8 at 6. Plaintiff cites no authority to suggest that any of these 2 considerations makes removal improper. 3 4 5 IT IS ORDERED that Plaintiff’s motion for remand (Doc. 8) is denied. The parties’ requests for attorneys’ fees are denied. Dated this 2nd day of March, 2017. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -5-

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