Massoud Pouratian et al v. Travelers Commercial Insurance Company, et al

Filing 8

ORDER TO SHOW CAUSE RE LACK OF SUBJECT MATTER JURISDICTION by Magistrate Judge Frederick F. Mumm. Response to Order to Show Cause due by 3/20/2015. (see attached) Based on the foregoing, Travelers is hereby ORDERED TO SHOW CAUSE in writing on or before March 20, 2015, why this action should not be remanded to the Los Angeles County Superior Court. (jm)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 15-1507 FFM

Title

MASSOUD POURATIAN and MAHNAZ POURATIAN v. TRAVELERS
COMMERCIAL INSURANCE, TEAM 5 SERVICES, INC., dba PUROCLEAN and
DOES 1 through 20, inclusive

Present: The
Honorable

Date

March 6, 2015

Frederick F. Mumm, United States Magistrate Judge

James Munoz

None Present

N/A

Deputy Clerk

Court Reporter / Recorder

Tape No.

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

None Present

None Present

Proceedings:

(IN CHAMBERS) ORDER TO SHOW CAUSE RE LACK OF SUBJECT
MATTER JURISDICTION

I. INTRODUCTION AND BACKGROUND
Plaintiffs Massoud Pouratian and Mahnaz Pouratian filed this action on March 19,
2014 in Los Angeles County Superior Court against defendants Travelers Commercial
Insurance (“Travelers”) and Team 5 Services, Inc. dba Puroclean (the “Non-Diverse
Defendant”). The First Amended Complaint asserts the following claims: (1) breach of
contract, (2) breach of implied duty of good faith and fair dealing, and (3) unfair business
practices. The First Amended Complaint also requests specific performance and
declaratory relief.
Travelers filed a notice of removal in this Court on March 2, 2015, contending that
this Court has original jurisdiction over this action based on diversity of citizenship.
Travelers avers that the Superior Court’s February 25, 2015 order granting the NonDiverse Defendant’s motion for summary judgment created complete diversity between
the parties.1

1

According to Travelers, plaintiff is a citizen of California and Travelers is a
Connecticut corporation with its principal places of business in the state of Connecticut.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 15-1507 FFM

Date

March 6, 2015

Title

MASSOUD POURATIAN and MAHNAZ POURATIAN v. TRAVELERS
COMMERCIAL INSURANCE, TEAM 5 SERVICES, INC., dba PUROCLEAN and
DOES 1 through 20, inclusive

II. LEGAL STANDARD
Removal is proper where the federal courts have original jurisdiction over an
action brought in state court. 28 U.S.C. § 1441(a). Courts recognize a “strong
presumption” against removal jurisdiction; the burden is on the removing defendant to
demonstrate that removal is proper. See, e.g., Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th
Cir. 1992).
Pursuant to 28 U.S.C. § 1332(a), the federal courts have original jurisdiction over
state law actions only where the amount in controversy exceeds $75,000 and the action is
between parties of diverse citizenship. It is well established that diversity of citizenship,
as grounds for removal jurisdiction, must exist both when an action is filed in state court
and when the defendant petitions for removal of the action to federal court. Strasser v.
KLM Royal Dutch Airlines, 631 F. Supp. 1254, 1256 (C.D. Cal. 1986).
An exception to this rule exists where an action, not initially removable, may
become removable when a plaintiff voluntarily dismisses all diversity-defeating
defendants from a state court action. Self v. General Motors Corp., 588 F.2d 655, 659
(9th Cir. 1978). However, where the dismissal of a diversity-defeating defendant is done
involuntarily, such as a dismissal on the merits over the plaintiff’s opposition, that action
does not become removable. Id. at 659; see also Avila v. Allegro Mfg., 2011 WL
6010044, at *6 (C.D. Cal. Nov. 28, 2011). Thus, “where a state court dismisses a nondiverse defendant without the plaintiff’s assent, the complaint is not removable on
diversity grounds.” Beck v. Starbuck Corp., 2008 WL 4298575, at *3 (N.D. Cal. Sept.
19, 2008) (citing Self, 588 F.2d at 658) (internal citations omitted); see also Wright &
Miller, 14B Fed. Prac. & Proc. Juris. § 3723 (4th ed.) (distinguishing between situations
in which a state judge terminated the action as to the non-diverse party and situations in
which the plaintiff voluntarily terminated the action as to a non-diverse party).
III. DISCUSSION
An stated above, Travelers argues that the requirement of complete diversity is met
as a result of the Superior Court’s February 25, 2015 order (the “Order”), which granted
the summary judgment motion of the Non-Diverse Defendant.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 15-1507 FFM

Date

March 6, 2015

Title

MASSOUD POURATIAN and MAHNAZ POURATIAN v. TRAVELERS
COMMERCIAL INSURANCE, TEAM 5 SERVICES, INC., dba PUROCLEAN and
DOES 1 through 20, inclusive

This argument is foreclosed by the principle that an action is not removable to
federal court on diversity grounds where complete diversity is only achieved after the
“involuntary” dismissal in state court of diversity-defeating defendants. See Self, 588
F.2d at 6587 (finding that an action not initially removable must “remain in state court
unless a ‘voluntary’ act of the plaintiff brings about a change that renders the case
removable”); Beck, 2008 WL 4298575, at *3 (concluding that an action should be
remanded where diversity was not achieved by a voluntary act on the part of the
plaintiff). Here, the Superior Court Order dismissing the Non-Diverse Defendant in
response to such defendant’s summary judgment motion constitutes an involuntary
dismissal. As a result, the action is not removable on diversity grounds. See, e.g., Self,
588 F.2d at 657.
IV. CONCLUSION
Based on the foregoing, Travelers is hereby ORDERED TO SHOW CAUSE in
writing on or before March 20, 2015, why this action should not be remanded to the Los
Angeles County Superior Court.
IT IS SO ORDERED.

:
Initials of Preparer

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JM

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