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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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Sun City Pet Market, LLC, an Arizona
limited liability company,

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Plaintiff,

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No. CV17-00121-PHX DGC
ORDER

v.

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The Honest Kitchen, Inc., a Delaware
corporation,

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Defendant.

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Defendant removed this case from state court. Doc. 1. Plaintiff filed a motion to

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remand under 28 U.S.C. §1441(b). Doc. 8. The motion is fully briefed, and neither party

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has requested oral argument. For the reasons set forth below, the Court will deny the

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motion to remand.

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I.

Background.

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Plaintiff Sun City Pet Market, LLC is an Arizona limited liability company with

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its principal place of business in Arizona. Doc. 1-2 ¶ 1. Defendant The Honest Kitchen,

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Inc. is a Delaware corporation registered to do business in Arizona. Id., ¶ 2. On

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November 22, 2016, Plaintiff filed its complaint in Arizona state court (Doc. 8 at 1) and

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mailed Defendant a verified copy with a demand letter (Doc. 18 at 4; Doc. 9). Plaintiff

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asserts that Defendant waived formal service, but does not cite to the record. Doc. 18 at

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4. Defendant denies that it waived formal service. Doc. 8 at 2; Doc. 19 at 2-3. Plaintiff

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served Defendant with the summons and complaint on December 13, 2016. Doc. 1-2 at

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20. Defendant filed a notice of removal on January 13, 2017. Doc. 1.

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II.

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Analysis.
Plaintiff argues that remand is proper because Defendant’s notice of removal was

untimely and procedurally defective. The Court disagrees.

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A.

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Generally, a defendant must file a notice of removal within 30 days of being

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served with a summons and complaint. 28 U.S.C. § 1446(b); Murphy Bros., Inc. v.

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Michetti Pipe Stringing, Inc., 526 U.S. 344, 355 (1999). The 30-day requirement “is

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triggered by defendant’s receipt of an ‘initial pleading’ that reveals a basis for removal.

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If no ground for removal is evident in that pleading, the case is ‘not removable’ at that

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stage. In such case, the notice of removal may be filed within thirty days after the

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defendant receives ‘an amended pleading, motion, order or other paper’ from which it

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can be ascertained from the face of the document that removal is proper.” Harris v.

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Bankers Life & Cas. Co., 425 F.3d 689, 694 (9th Cir. 2005). “[N]otice of removability

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under § 1446(b) is determined through examination of the four corners of the applicable

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pleadings, not through subjective knowledge or a duty to make further inquiry.” Id.

Defendant’s notice of removal was not untimely.

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Plaintiff served Defendant with the summons and complaint on December 13,

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2016. Doc. 1-2 at 20. If a basis for removal was evident in Plaintiff’s complaint, then the

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30-day removal period would have ended on January 12, 2017, the day before Defendant

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filed its notice of removal. Doc. 1. But Defendant argues that the time for removal did

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not begin to run when it was served because Plaintiff’s citizenship was not apparent from

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the complaint. Doc. 18 at 2. Defendant argues that the time for removal still has not run

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because Defendant discovered the basis for removal through its own investigation and not

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from any additional information from Plaintiff. Id. The Court agrees.

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Plaintiff’s complaint states that it is an Arizona limited liability company with its

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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.

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owners and members are citizens. Johnson v. Columbia Props. Anchorage, LP, 437 F.3d

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894, 902 (9th Cir. 2006). Plaintiff’s complaint does not state how many owners or

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members it has, or their states of citizenship. Doc. 1-2. Without those facts, Plaintiff’s

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citizenship was not evident from the complaint and the 30-day removal period was not

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triggered.

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Plaintiff argues that it had a conversation with Defendant on December 7, 2016,

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and that Defendant was or could have been aware of a basis for removal on that date.

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Doc. 8 at 4; Doc. 19 at 2. But this alleged conversation occurred before Plaintiff served

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Defendant with the summons and complaint, so the removal period could not have begun

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on that date. See Murphy, 526 U.S. at 355. Nor did it begin on the date of service

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because the complaint did not disclose a basis for removal.

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The Ninth Circuit has rejected Plaintiff’s argument that Defendant was required to

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conduct an inquiry into removability. Harris, 425 F.3d at 698. Defendant had no duty to

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investigate Plaintiff’s citizenship, and did not receive “an amended pleading, motion,

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order or other paper” that revealed a basis for removal. See id. at 694. Thus, the 30-day

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removal period was not triggered by the December 7 conversation or by service of the

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summons and complaint.

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investigation into Plaintiff’s citizenship and removed on that basis, this fact does not alter

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the running of the 30-day deadline. A defendant may file a notice of removal based on its

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own conclusions from investigation. Roth v. CHA Hollywood Med. Ctr., L.P., 720 F.3d

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1121, 1125 (9th Cir. 2013).

Although it is true that Defendant did conduct its own

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Plaintiff does not dispute that Defendant is a citizen of Delaware and California.

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Doc. 1 at 2; Docs. 8, 19. Nor does Plaintiff dispute that it has two members who are

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Arizona citizens and that it is a citizen of Arizona. Doc. 18 at 2. Instead, Plaintiff argues

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that Defendant “offers no evidence to supports its presumption” regarding Plaintiff’s

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citizenship, and that this “remains an issue for the Court to determine[.]” Doc. 19 at 4.

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But Defendant has timely alleged a basis for removal that Plaintiff does not dispute, and

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Plaintiff cannot “prevent or delay removal by failing to reveal information showing

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removability and then objecting to removal when the defendant has discovered that

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information on its own.” Roth, 720 F.3d at 1125.

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2.

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Plaintiff does not expressly dispute that the amount-in-controversy requirement is

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met, but seems to argue that Defendant is improperly calculating Plaintiff’s damages.

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Doc. 19 at 4-5. Plaintiff seeks both specific performance of an order for goods worth

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$90,653.09 (Doc. 1-2 at 6 ¶ 16) and recovery of “the market price at the time of

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repudiation, less the contract price and any expenses saved, plus any incidental or

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consequential damages” (id., ¶¶ 26-28). Plaintiff also seeks punitive damages, interest on

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that sum “at the highest rate allowable by law,” and its costs and attorneys’ fees. Id. at 8.

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The amount-in-controversy – the cost of performing the contract, the market price at the

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time of the breach, interest, damages, and attorneys’ fees – exceeds $75,000.

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B.

The amount in controversy is satisfied.

Defendant’s notice of removal was not procedurally defective.

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Plaintiff argues that Defendant’s notice of removal was procedurally defective

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because Defendant did not provide the Arizona state court “with notice of its

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representation in this matter.” Doc. 8 at 4. But Plaintiff provides no evidence that

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Defendant failed to comply with § 1446(d), and cites no authority for the proposition that

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failure to comply with state notice-of-appearance rules can defeat removal under federal

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law. Doc. 8 at 3-5.

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Plaintiff argues that it should not be deprived of its choice of forum. Although it

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is true that there is a “strong presumption” against removal and “[f]ederal jurisdiction

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must be rejected if there is any doubt as to the right of removal in the first instance,”

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Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992), a defendant may invoke federal

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jurisdiction when removal is proper under § 1441 and the defendant complies with the

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procedures of § 1446, as Defendant has here.

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Finally, Plaintiff argues that removal is improper because the outcome of this case

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“would be substantially the same” in state court, litigating in state court will not be

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“oppressive or vexatious” for Defendant, and Defendant’s “end goal” is to transfer the

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case to California. Doc. 8 at 6. Plaintiff cites no authority to suggest that any of these

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considerations makes removal improper.

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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.

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