Roger L. Culberson II, et al v. Walt Disney Parks and Resorts, et al

Filing 27

MINUTES OF IN CHAMBERS ORDER GRANTING PLAINTIFFS MOTION TO REMAND by Judge Stephen V. Wilson: Plaintiff Roger Culberson's Motion to Remand 19 is GRANTED. Case remanded to Los Angeles Superior Court, Case No. BC526351. ( MD JS-6. Case Terminated. ) Court Reporter: N/A. (gk)

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

2:15-cv-05177-SVW-PLA

Title

Roger L. Culberson II, et al v. Walt Disney Parks and Resorts, et al

Present: The Honorable

Date

September 30, 2015

STEPHEN V. WILSON, U.S. DISTRICT JUDGE

Paul M. Cruz

N/A

Deputy Clerk

Court Reporter / Recorder

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

N/A

N/A

Proceedings:

IN CHAMBERS ORDER GRANTING PLAINTIFFS MOTION TO
REMAND [19]

On November 1, 2013, plaintiff Roger Culberson brought a putative class action (“Complaint”)
against The Walt Disney Company in state court. (Dkt. 1-2.) The initial complaint alleged violations
of the Fair Credit Reporting Act (“FCRA”) and California Labor Code § 432.7(a), based on the use of
arrest records in a background check to rescind an offer of employment. (Compl. ¶¶ 55-64.)
Approximately one year after filing the original complaint, Culberson filed a First Amended Complaint
(“FAC”), adding plaintiff Edward Joseph III (collectively, “Plaintiffs”), and changing the named
defendant to Walt Disney Parks & Resorts, Inc. (“Defendant”). (See Dkt. 25-2.) The FAC also
alleged violations of the FCRA and § 432.7(a). (Dkt. 2-2.) Finally, in June 2015, Plaintiffs filed a
Second Amended Complaint (“SAC”) alleging only violations of the FCRA. (Dkt. 25-1.)
Defendant removed the case to this Court on July 9, 2015, pursuant to the Class Action Fairness
Act (“CAFA”). (Dkt. 1.) On August 10, 2015, Plaintiffs moved to remand the case to state court,
arguing that Defendant’s removal was untimely under the theory that Defendant could have ascertained
that the action was removable from: (1) the face of the Complaint or FAC, (2) special interrogatories, or
(3) the date the state court signed the Proposed Order that deemed the SAC filed. (Dkt. 19.)
For the reasons stated below, the motion to remand is GRANTED.
Factual Background

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

2:15-cv-05177-SVW-PLA

Date

Title

September 30, 2015

Roger L. Culberson II, et al v. Walt Disney Parks and Resorts, et al

Original Complaint
As discussed above, Culberson filed his original Complaint on November 1, 2013. (See Dkt.
1-2.) The Complaint alleged that Disney “knowingly violated 15 U.S.C. § 168lb(b)(3) and 15 U.S.C.
§ 168lm(a) by failing to provide its job applicants and employees with pre-adverse action and adverse
action notices as well as failing to provide with its job applicants with a copy of their consumer reports.”
(Compl. ¶ 12.) Culberson specifically alleged that he did not receive a copy of a report generated as a
part of his background check and did not receive a pre-adverse action or adverse action report. (Id.
¶¶ 26-28.) The proposed class consisted of “thousands of employees and prospective employees.”
(Id. ¶ 49.) Culberson sought a statutory penalty of up to $1,000 per FCRA violation, punitive damages
for willful FCRA violations, and costs and attorney’s fees. (Id. at 12.)
First Amended Complaint
The FAC was filed around November 26, 2014. (See Dkt. 25-2.) The content of the FAC was
substantially similar to the Complaint except that it added a new plaintiff, Joseph. Unlike Culberson,
Joseph alleged that he had received a pre-adverse action notice but that it came after the decision to
rescind his offer of employment had already been made. (FAC ¶¶ 50-51.)
Second Amended Complaint
Substance
The SAC attacked Defendant’s disclosure practices for the first time. (See SAC ¶¶ 24-30,
54-58.) Culberson and Joseph each alleged that around two weeks after they were given a conditional
offer of employment, they were given background check consent forms that did not meet the FCRA’s
“standalone disclosure” requirement. (Id. ¶¶ 22-26, 53-56.) Based on these new allegations, the
Plaintiffs also changed the class definition. Plaintiffs redefined the class as:
All natural persons residing in the United States who, within two years from the filing of
this action, were the subject of a consumer report prepared at the request of DISNEY for
employment purposes and who were not provided a clear and conspicuous disclosure
consisting solely of the disclosure that a consumer report for employment services may
be obtained.

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

2:15-cv-05177-SVW-PLA

Date

Title

September 30, 2015

Roger L. Culberson II, et al v. Walt Disney Parks and Resorts, et al

(Id. ¶ 66.) Plaintiffs sought a statutory penalty of up to $1,000 per FCRA violation, punitive
damages for willful FCRA violations, and costs and attorney’s fees. (Id. at 16.)
Timing
The parties substantially agree on the timing surrounding the filing of the SAC.
timing can be summarized as follows:






The

June 5, 2015:
o The parties finalized and signed a stipulation and Proposed Order for leave to file
a SAC. (Dkt. 6-3.)
 The stipulation read: “IT IS HEREBY STIPULATED by and between the
appearing parties, Plaintiffs ROGER L. CULBERSON and EDWARD
JOSEPH III (hereafter as “PLAINTIFFS”) and Defendant WALT
DISNEY PARKS AND RESORTS U.S., by and through their attorneys of
record, that PLAINTIFFS shall be granted leave to file a Second Amended
Complaint in the form attached hereto as Exhibit A.
 The Proposed Order stated: “Having considered the stipulation regarding
the agreement to allow PLAINTIFFS to file their Second Amended
Complaint, the Court hereby Orders that PLAINTIFFS have leave to file
their Second Amended Complaint without the need of a formal motion.
The attached Second Amended Complaint is hereby deemed flied.
 The state court stamped the Stipulation and Proposed SAC as
“RECEIVED Central Civil West June 05 2015.”
o The stipulation and Proposed Order was served on both parties at 12:28 PM
through the Case Anywhere service. (Dkt. 19-7.)
June 8, 2015: The Honorable Jane Johnson signed the Proposed Order. (See Dkt. 6-3.)
June 12, 2015: The signed Order was stamped as “FILED.” (Dkt. 21-2.)
June 22, 2015: Counsel for Defendant contacted the state court to inquire about the
Order. The clerk informed counsel that the Order had been filed, but informed counsel
for Defendant that Plaintiffs must file a stand-alone version of the Second Amended
Complaint. (Dkt. 21, 19.)

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

2:15-cv-05177-SVW-PLA

Title

Roger L. Culberson II, et al v. Walt Disney Parks and Resorts, et al





Date

September 30, 2015

June 23, 2015: Counsel for Defendant asked counsel for Plaintiffs for a file-stamped copy
of the SAC, showing that it was filed. (Id.)
July 8, 2015, another copy of the SAC was filed, deleting the word “Proposed” from the
caption page of the previously-filed version. (Dkt. 19, 7.) Counsel for Plaintiffs
emailed a file-stamped copy of the SAC to counsel for Defendant. (Dkt. 21, 20.)
July 9, 2015, Defendant filed its notice of removal. (Dkt. 19, 12; Dkt. 21, 20.)

Legal Standard
Timeliness of Removal
Under § 1146(b) there are up to two thirty-day windows when a case can be removed. Reyes v.
Dollar Tree Stores, Inc., 781 F.3d 1185, 1189 (9th Cir. 2015). First, a defendant has 30 days to remove
after receiving an original complaint when that pleading was removable.1 If the initial complaint was
not removable, one separate thirty-day removal window begins after receipt of the first document from
which it can be ascertained that the case is removable:
[I]f the case stated by the initial pleading is not removable, a notice of removal may be filed
within 30 days after receipt by the defendant, through service or otherwise, of a copy of an
amended pleading, motion, order or other paper from which it may first be ascertained that
the case is one which is or has become removable.
28 U.S.C. § 1446(b)(3).
The second removal window is triggered by the occurrence of an event that first discloses that
the case is or was removable. See Reyes, 781 F.3d at 1189. The Ninth Circuit employs an objective
test to determine whether a document makes a case removable. Harris v. Bankers Life & Cas. Co., 425
F.3d 689, 694 (9th Cir. 2005) (“notice of removability under § 1446(b) is determined through examination
of the four corners of the applicable pleadings, not through subjective knowledge or a duty to make further
1

“The notice of removal of a civil action or proceeding shall be filed within 30 days after the receipt by the defendant, through
service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is
based, or within 30 days after the service of summons upon the defendant if such initial pleading has then been filed in court and
is not required to be served on the defendant, whichever period is shorter.” 28 U.S.C. § 1446(b)(1).

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

2:15-cv-05177-SVW-PLA

Date

Title

September 30, 2015

Roger L. Culberson II, et al v. Walt Disney Parks and Resorts, et al

inquiry”). Thus, the thirty-day window does not open based on the subjective knowledge of a defendant
with respect to the elements that make a case removable.
CAFA gives federal district courts original jurisdiction over class actions involving at least 100
class members, with minimal diversity, and an amount in controversy which exceeds $5,000,000. 28
U.S.C. § 1332(d). There is no antiremoval presumption in CAFA cases. Dart Cherokee Basin
Operating Co., LLC v. Owens, 135 S. Ct. 547, 554 (2014). But “[t]he party seeking the federal forum
bears the burden of establishing that the statutory requirements of federal jurisdiction have been met.”
Rodriguez v. AT & T Mobility Servs. LLC, 728 F.3d 975, 978 (9th Cir. 2013). Thus, “if the evidence
submitted by both sides is balanced, in equipoise, the scales tip against federal-court jurisdiction.” Ibarra
v. Manheim Investments, Inc., 775 F.3d 1193, 1199 (9th Cir. 2015).
Discussion
Second Amended Complaint
For the purposes of this motion, the parties do not contest whether the SAC establishes CAFA’s
three jurisdictional requirements. (See Dkt. 21, 1.) Instead, the parties dispute when the thirty-day
removal window opened under § 1446(b)(3). Defendant argues that the removal window opened on
one of three days: (1) June 12, 2015, the day the court filed the Order granting leave to file the SAC; (2)
June 22, 2015, the day Defendant was informed of the existence of that signed Order on; or (3) July 8,
2015, the day Defendant received a file-stamped copy of the SAC. (Dkt. 21, 18.) Plaintiffs argue that
removal of the SAC was untimely because the thirty-day period was triggered by the court’s Order
granting leave to file an amended complaint, signed on July 8, 2015. (Dkt. 19, 11-13.) Thus, the
question is which of these events would have first triggered the Defendant’s right to remove under
§ 1446(b)(3).
There is no binding Ninth Circuit precedent that establishes which of these dates triggers the
thirty-day removal period but courts have generally followed three approaches to this issue. Lucente
S.P.A. v. Apik Jewelry, Inc., No. CV-07-04005 MMM RZX, 2007 WL 7209938, at *2-4 (C.D. Cal. Oct.
3, 2007) (surveying cases). Under the “minority” view, the removal window commences upon service
of a motion to amend. Id. at *2-3. Under the “majority” approach, the removal window opens when
the state court grants a plaintiff’s motion to amend. Id. at *3-4. A third approach requires that the
amended complaint was actually filed before the window opens. Id. at *4.

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

2:15-cv-05177-SVW-PLA

Date

Title

September 30, 2015

Roger L. Culberson II, et al v. Walt Disney Parks and Resorts, et al

Defendant’s removal was untimely under all three of these approaches. Removal would be
untimely if the Court followed the “minority” rule. The operative date under the “minority” rule was
the day Plaintiffs filed the stipulation seeking leave to amend. Therefore, the stipulation served on
Defendant by Case Anywhere would have opened the removal window on June 5, 2015.
Under the “majority” rule, the removal window would have opened on July 8, 2015. In most
cases, the parties will be notified of a state court’s decision to grant a motion on the same day that the
decision is made. But the logic of the “majority” rule does not rely on the parties’ notice.
The
concern addressed by the “majority” rule is that a motion to amend is still contingent on a judge’s
discretion to deny leave to amend, not that the parties might not be aware of the grounds making the
case removable. See Sullivan v. Conway, 157 F.3d 1092, 1094 (7th Cir. 1998) (noting that until the
judge grants the motion to amend “the state judge might deny the motion”). Thus, the “majority” rule
would hold that the thirty-day removal window would have opened on July 8, 2015, the date Judge
Johnson signed the Order.
Finally, under the third approach identified in Lucente, the removal window would have also
opened on July 8, 2015. The third approach is a slightly more formal approach than the “majority”
view because it includes any delay between when a motion for leave to amend is granted and the actual
filing of the amended complaint. But here there was no such delay. Judge Johnson’s Order deemed
the SAC filed when she granted the stipulation. As a result, Defendant’s removal would have been
untimely under this approach as well.2
Though many courts have mentioned the defendant’s notice of the operative document, few
courts have required actual notice before the thirty-day window commences. Defendant argues that in
Lucente, “Judge Morrow remanded the case because the defendant waited more than 30 days after
written notice that the court signed the order to remove.” (Dkt. 21, 23.) But the court’s conclusion
2

The cases cited by Defendant for the proposition that “[c]ourts have emphasized service, not filing, of an amended complaint
is required to start the removal clock,” (Dkt. 21, 20-21.) actually provide support for this date because these cases stand for the
proposition that date that starts the removal period can be changed by operation of law. Johannson v. Wachovia Mortgage
FSB, No. C 11-02822 WHA, 2011 WL 3443952, *2-3 (N.D. Cal. Aug. 5, 2011) (California Code of Civil Procedure § 1013
extends date of response by operation of law); Student A. By & Through Mother of Student A. v. Metcho, 710 F. Supp. 267,
268-69 (N.D. Cal. 1989) (same).

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

2:15-cv-05177-SVW-PLA

Date

Title

September 30, 2015

Roger L. Culberson II, et al v. Walt Disney Parks and Resorts, et al

was based on an application of the “majority” rule. Lucente, 2007 WL 7209938, at *5. The court
only mentioned the later date, when the defendant received notice that the court had signed the Order on
the stipulation and filed the amended complaint, to explain why the conclusion that the thirty-day
window had closed was “particularly appropriate” given the defendant’s notice that the plaintiff sought
to add a federal claim, filed a stipulation and amended complaint, and received notice that the Order had
been signed. Id. at *5.
This Court is faced with the decision that was unnecessary in Lucente. The defendant in
Lucente would have prevailed only if the court required “formal service” of the amended complaint
before opening the removal window. See id. at *2. Unlike in Lucente, Defendant was not informed
by the state court that the Order had been signed until many days after it had been signed and filed.
(See Dkt. 21, 19.) While it is true that at least one case has required actual service on a defendant
before the removal window opened, Miller v. Stauffer Chem. Co., 527 F. Supp. 775, 777 (D. Kan. 1981),
the Court sees no reason to depart from the view that is “generally followed” by the courts in the Ninth
Circuit. Lion Raisins, Inc. v. Fanucchi, 788 F. Supp. 2d 1167, 1173 (E.D. Cal. 2011). Following the
“majority” rule, the outcome of this motion is clear, and it is also fair. This is not a case where the
defendant was unaware that the plaintiff intended to add claims that would make the case removable or
was unaware that the stipulation and amended complaint had been filed with the state court. Counsel
for Defendant signed a Proposed Order containing the SAC on June 8, 2015, that would become
effective on the date of signature but did not inquire about the status of the Order until June 22, 2015.
These are not circumstances that call for application of a different rule.3
Order
For the aforementioned reasons, the Plaintiffs’ motion for remand is GRANTED.4

3

Though not cited for this proposition by either party, the Court is aware that under Jordan v. Nationstar Mortgage LLC, 781
F.3d 1178 (9th Cir. 2015), it must give CAFA provisions a “liberal construction” when it interprets removal jurisdiction. 781
F.3d at 1184. However, given that there is no binding authority supporting Defendant’s interpretation of § 1446(b)(3), and the
weight of authority is against their interpretation, the Court need not apply a presumption for or against jurisdiction to reach the
conclusion that removal was untimely.
4
Because the Court decides that removal of the SAC was untimely, it does not consider whether any prior papers triggered the
thirty-day removal window.

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