Asia Economic Institute et al v. Xcentric Ventures LLC et al

Filing 14

OPPOSITION to First MOTION to Remand Case to Los Angeles Superior Court 12 filed by Defendant Xcentric Ventures LLC. (Gingras, David) Modified on 4/14/2010 (esa).

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1 2 3 4 5 6 7 8 9 10 11 12 13 GINGRAS LAW OFFICE, PLLC 4072 E. MOUNTAIN VISTA DRIVE PHOENIX, ARIZONA 85048 David S. Gingras, CSB #218793 Gingras Law Office, PLLC 4072 E Mountain Vista Dr. Phoenix, AZ 85048 Tel.: (480) 639-4996 Fax: (480) 668-3623 Attorneys for Defendants Xcentric Ventures, LLC and Edward Magedson UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA ASIA ECONOMIC INSTITUTE, LLC, et al., Plaintiffs, vs. XCENTRIC VENTURES, LLC, et al., Defendants. Case No: 2:10-cv-01360-SVW-PJW DEFENDANTS' OPPOSITION TO PLAINTIFFS' MOTION TO REMAND Hearing Date: April 26, 2010 Time: 1:30 PM Courtroom: 6 (Hon. Steven Wilson) Complaint Filed: Jan. 27, 2010 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I. INTRODUCTION At first blush, Plaintiffs' motion seems to imply that removal jurisdiction is a rare privilege to be exercised cautiously, and that removal is a matter of the court's grace. This is incorrect. Although the Ninth Circuit has not yet expressly adopted such strong language, other courts have noted, "A defendant is entitled to have the suit removed to a proper federal court as a matter of right, on complying with the conditions prescribed by statute. If the requirements of the removal statute are met, the right to removal is absolute." Regis Associates v. Rank Hotels Mgmt. Ltd., 894 F.2d 193 (6th Cir. 1990) (citing White v. Wellington, 627 F.2d 582, 586 (2nd Cir. 1980)). DEFENDANTS' OPPOSITION TO PLAINTIFFS' MOTION TO REMAND 1 2 3 4 5 6 7 8 9 10 11 12 13 GINGRAS LAW OFFICE, PLLC 4072 EAST MOUNTAIN VISTA DRIVE PHOENIX, ARIZONA 85048 For the purposes of this matter, if federal subject matter jurisdiction exists, then Plaintiffs' motion must be denied. As explained infra, it is entirely undisputed that federal jurisdiction exists here. For that reason, the motion should be denied. II. ARGUMENT Leaving no stone unturned, Plaintiffs' motion presents three separate arguments in favor of remand: 1.) 2.) 3.) Diversity jurisdiction is lacking because Ed Magedson lives in California; Diversity jurisdiction is lacking because the Complaint seeks less than $75,000; and Federal question jurisdiction is present, but this case contains numerically more state-law claims than federal claims, so state-law predominates making discretionary remand available under 28 U.S.C. 1441(c) While Defendants agree they bear the burden of establishing that removal was proper, denial of the motion is not contingent upon Defendants disproving all three of these points. On the contrary, as long as this court has jurisdiction for any reason then removal was appropriate and remand is improper: Even if one ground of federal jurisdiction is defective, it should be noted that remand may not be necessary if an adequate alternate ground of jurisdiction is present. For example, a cause removed on grounds of diversity of citizenship and federal question jurisdiction need not be remanded if the former does not exist, so long as the latter does. 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29A Fed. Proc., L. Ed. 69:125 (2010 Supp.) (citing American Brahmental Ass'n v. American Simmental Ass'n, 443 F. Supp. 163 (W.D. Tex. 1977)). This example is particularly apropos because the Notice of Removal (Doc. #1) in this case explained that removal was based on both federal question jurisdiction and diversity jurisdiction. As such, even assuming arguendo Plaintiffs are correct and diversity jurisdiction is absent (which Defendants dispute), remand would still be improper because Plaintiffs concede their federal RICO claims create original federal question jurisdiction pursuant to 18 U.S.C. 1964(a) and 28 U.S.C. 1331. 2 DEFENDANTS' OPPOSITION TO PLAINTIFFS' MOTION TO REMAND 1 2 3 4 5 6 7 8 9 10 11 12 13 GINGRAS LAW OFFICE, PLLC 4072 EAST MOUNTAIN VISTA DRIVE PHOENIX, ARIZONA 85048 Because removal only requires one statutory basis, and since it is undisputed that at least one valid jurisdictional basis existed for removal of this matter, the inquiry should end and the case should not be remanded. a. The Court Has Diversity Jurisdiction The court is familiar with the legal parameters of its own jurisdiction and therefore Defendants will only briefly comment on each point. As explained below, Defendants assert that diversity jurisdiction exists pursuant to 28 U.S.C. 1332(a)(1) making removal appropriate under 28 U.S.C. 1441(a). This is so because on its face the Complaint alleges that the plaintiff and defendants are citizens of different states and as explained in more detail below, the amount in question certainly exceeds $75,000. Assuming these two facts are true, then discretionary remand as requested on pages 89 of Plaintiffs' motion is simply not an available option; "[T]he exercise of diversity jurisdiction is not discretionary." Brockman v. Merabank, 40 F.3d 1013, 1017 (9th Cir. 1994) (citing Carnegie-Mellon University v. Cohill, 484 U.S. 343, 356, 108 S.Ct. 614, 622, 98 L.Ed. 720 (1988)). On the contrary, "With rare exceptions not applicable here [e.g., abstention] where the district court is presented with a case within its original jurisdiction, it has a virtually unflagging obligation to exercise the jurisdiction conferred upon it by the coordinate branches of government and duly invoked by litigants." Williams v. Costco Wholesale Corp., 471 F.3d 975, 977 (9th Cir. 2006) (holding district court had no discretion to remand removed case where diversity jurisdiction was present) (internal quotation marks omitted) (quoting United States v. Rubenstein, 971 F.2d 288, 293 (9th Cir. 1992)). The reasons for this are manifest; "Removal based on diversity jurisdiction is intended to protect out-of-state defendants from possible prejudices in state court." Lively v. Wild Oats Markets, Inc., 456 F.3d 933 (9th Cir. 2006) (citing Tosco Corp. v. Cmtys. for a Better Env't., 236 F.3d 495, 502 (9th Cir. 2001) ("The purpose of diversity jurisdiction is to provide a federal forum for out-of-state litigants where they are free from prejudice in favor of a local litigant.") (internal quotations marks omitted)). PLAINTIFFS' MOTION TO REMAND 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 DEFENDANTS' OPPOSITION TO 1 2 3 4 5 6 7 8 9 10 11 12 13 GINGRAS LAW OFFICE, PLLC 4072 EAST MOUNTAIN VISTA DRIVE PHOENIX, ARIZONA 85048 Here, Defendants Xcentric and Magedson are both Arizona citizens for diversity purposes (Magedson lives in Arizona and Xcentric is an Arizona-LLC with its principal place of business in Arizona). Further, as explained below the case involves more than $75,000 and thus both required elements for diversity jurisdiction are present. Nothing more is required for the court to deny the instant motion. i. Defendants Xcentric And Magedson Are Citizens of Arizona As a general rule, "the propriety of removal is determined solely on the basis of the pleadings filed in state court." Williams, 471 F.3d at 976 (citing Sparta Surgical Corp. v. Nat'l Ass'n of Sec. Dealers, Inc., 159 F.3d 1209, 1213 (9th Cir. 1998); O'Halloran v. Univ. of Wash., 856 F.2d 1375, 1379 (9th Cir. 1988). Here, Plaintiffs' Complaint alleges that Defendant Xcentric "is a limited liability company organized and existing in Arizona with its purported domestic address as P.O. Box 470, Phoenix, Arizona 85280." Compl. 6. The Complaint further alleges that "Defendant Ed Magedson ... is a resident of the State of Arizona." Compl. 8.1 Both of those allegations were admitted in the Answer (Doc. #4) filed in this action. Because complete diversity is apparent on the face of the Complaint, the Answer and the Notice of Removal, that part of the inquiry should end. However, Plaintiffs argue that their allegations to the contrary notwithstanding, diversity is lacking here because before this action was filed, Mr. Magedson made a passing remark in an email stating, "I am in California. I live here now." This issue is, in fact, not an issue at all. Beyond the fact that both the Complaint and Answer agree that Mr. Magedson is not a resident or citizen of California, Mr. Magedson also addressed this issue in his affidavit (Doc. #10) filed in support of Defendants' Anti-SLAPP motion. 1 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 According to 1 of his affidavit, Mr. Magedson For the court's information, the Complaint includes claims against another Defendant--Badbusinessbureau.com, LLC which is alleged to be a d/b/a of RipoffReport.com. Although the Complaint alleges that this defendant is also a citizen and resident of the State of Arizona, this issue is irrelevant here because Badbusinessbureau.com, LLC has not been served and is therefore not required to consent to the removal. See Emrich v. Touche Ross & Co., 846 F.2d 1190, 1193 n. 1 (9th Cir. 1988) (explaining general rule that "all defendants in a state action must join in the petition for removal ... [applies] only to defendants properly joined and served in the action.") PLAINTIFFS' MOTION TO REMAND 4 DEFENDANTS' OPPOSITION TO 1 2 3 4 5 6 7 8 9 10 11 12 13 GINGRAS LAW OFFICE, PLLC 4072 EAST MOUNTAIN VISTA DRIVE PHOENIX, ARIZONA 85048 testified that he is a resident of the State of Arizona. As explained in 31 of his affidavit, Mr. Magedson's comment about living in California was made in response to Mr. Mobrez threaten to "find" Mr. Magedson in Arizona. Whether or not Mr. Magedson should have made this statement, the fact remains that he resides in Arizona and there is no evidence to the contrary. ii. The Amount At Issue Exceeds $75,000 Although the Complaint does not contain a demand for a specific dollar amount, the nature of the claims (which seek general damages, special damages, punitive damages, treble damages, and attorney's fees) clearly shows that the amount at issue exceeds $75,000. If there was an doubt about the amount in dispute at the time removal, it has been resolved by the Plaintiffs' clarification that they are seeking damages in excess of $75,000. See Exhibit A to Declaration of David Gingras submitted herewith. Because all plaintiffs and all defendants are citizens of different states and because the amount in dispute exceeds $75,000, this court has original subject matter jurisdiction under 28 U.S.C. 1332(a)(1) making removal appropriate under 28 U.S.C. 1441(a). Nothing further is required for remand to be denied. b. The Court Has Federal Question Jurisdiction Removal based on federal question jurisdiction is per se proper; "A defendant may remove an action to federal court based on federal question jurisdiction ... ." Hunter v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009) (citing 28 U.S.C. 1441). Here, the Complaint contains two federal RICO claims arising under 18 U.S.C. 1962(c) and 1962(d). Plaintiffs concede these are federal claims which vest this court with original 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 subject matter jurisdiction. Again, nothing further is needed to deny the motion to remand. c. State Law Does Not Predominate All Non-Federal Claims Defendants agree that even where removal is proper, the court always has discretion to remand any matters in which state law "predominates": PLAINTIFFS' MOTION TO REMAND 5 DEFENDANTS' OPPOSITION TO 1 2 3 4 5 6 7 8 9 10 11 12 13 GINGRAS LAW OFFICE, PLLC 4072 EAST MOUNTAIN VISTA DRIVE PHOENIX, ARIZONA 85048 Whenever a separate and independent claim or cause of action within the jurisdiction conferred by section 1331 of this title is joined with one or more otherwise non-removable claims or causes of action, the entire case may be removed and the district court may determine all issues therein, or, in its discretion, may remand all matters in which State law predominates. 28 U.S.C. 1441(c) (emphasis added). This rule was the basis for the court's ruling in the only case cited by Plaintiffs on this issue--Felder v. Puthuff, 1993 U.S. Dist. LEXIS 4557 (N.D. Cal. 1993) (finding remand appropriate because the case was predominately a state-law breach of contract matter with numerous state-law claims and a single unrelated federal RICO claim). Relying solely upon Puthuff, Plaintiffs argue that even if this court keeps the federal RICO claims, it should remand some or all remaining claims because they contain predominately state-law issues. The problem with this argument is that discretionary remand is simply unavailable as to claims which arise in a case where diversity is the basis for federal jurisdiction. See Williams v. Costco Wholesale Corp., 471 F.3d 975, 977 (9th Cir. 2006) (holding district court had no discretion to remand removed case where diversity jurisdiction was present) (internal quotation marks omitted). As explained above, complete diversity is present here making discretionary remand unavailable under 28 U.S.C. 1441. III. CONCLUSION 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 This court had jurisdiction over this case on the day it was removed, and such jurisdiction exists today. Because the case was properly removed, the Motion to Remand should be denied. DATED this 5th day of April, 2010. GINGRAS LAW OFFICE, PLLC /S/ David S. Gingras David S. Gingras Attorneys for Edward Magedson and Xcentric Ventures, LLC PLAINTIFFS' MOTION TO REMAND 6 DEFENDANTS' OPPOSITION TO 1 2 3 4 5 6 7 8 9 10 11 12 13 GINGRAS LAW OFFICE, PLLC 4072 EAST MOUNTAIN VISTA DRIVE PHOENIX, ARIZONA 85048 CERTIFICATE OF SERVICE I hereby certify that on April 5, 2010 I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing, and for transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: Mr. Daniel F. Blackert, Esq. Asia Economic Institute 11766 Wilshire Blvd., Suite 260 Los Angeles, CA 90025 Attorneys for Plaintiffs And a courtesy copy of the foregoing delivered to: Honorable Steven V. Wilson U.S. District Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 /s/David S. Gingras PLAINTIFFS' MOTION TO REMAND DEFENDANTS' OPPOSITION TO

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