Timothy Cox v. R.J. Reynolds Tobacco Company, Inc et al

Filing 42

MINUTES (IN CHAMBERS) by Judge S. James Otero: ORDER DENYING PLAINTIFF'S MOTION FOR AN ORDER TO REMAND THIS CASE TO STATE COURT 31 . (lc)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

DATE: April 5, 2017

CASE NO.: CV 17-01229 SJO (JCx)
TITLE:

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Cox v. R.J. Reynolds Tobacco Co., Inc. et al.

========================================================================
PRESENT: THE HONORABLE S. JAMES OTERO, UNITED STATES DISTRICT JUDGE
Victor Paul Cruz
Courtroom Clerk

Not Present
Court Reporter

COUNSEL PRESENT FOR PLAINTIFF:

COUNSEL PRESENT FOR DEFENDANTS:

Not Present

Not Present

========================================================================
PROCEEDINGS (in chambers): ORDER DENYING PLAINTIFF'S MOTION FOR AN ORDER
TO REMAND THIS CASE TO STATE COURT [Docket No. 31]
This matter is before the Court on Plaintiff Timothy Cox's ("Plaintiff") Motion for an Order to
Remand this Case to State Court ("Motion"), filed March 13, 2017. Defendants R.J. Reynolds
Tobacco Company ("RJRT"), Reynolds American, Inc. ("RAI"), Staci Meyer ("Meyer"), and Tasha
Kolbe ("Kolbe") (collectively, "Defendants") opposed the Motion ("Opposition") on March 27, 2017,
and Plaintiff replied ("Reply") on April 3, 2017. The Court found this matter suitable for disposition
without oral argument and vacated the hearing set for April 17, 2017. See Fed. R. Civ. P. 78(b).
For the following reasons, the Court DENIES Plaintiff's Motion.
I.

FACTUAL AND PROCEDURAL BACKGROUND

On December 22, 2016, Plaintiff filed a Complaint for Damages, Injunctive Relief, and Restitution
("Complaint") in the Superior Court of the State of California for the County of Los Angeles,
asserting twenty (20) causes of action against Defendants. (See Notice of Removal, Ex. A-1 at
2, ECF No. 1.) On December 27, 2016, Plaintiff filed a First Amended Complaint for Damages,
Injunctive Relief, and Restitution ("FAC") in state court, asserting twenty-one (21) causes of action
against Defendants. (See Notice of Removal, Ex. A-1 at 60.) Although the majority of these
causes of action arise under state law, the sixth, seventh, and eighth arise under Title VII of the
Civil Rights Act of 1964, 42 U.S.C. §§ 2000e, et seq. (See FAC ¶¶ 128-150.)
RAI removed to this Court on February 15, 2017, and RJRT, Meyer, and Kolbe joined in the
removal. (See Notice of Removal ¶¶ 2-3.) In their Notice of Removal, Defendants make the
following averments regarding when they were served with copies of the pleadings: (1) RAI was
served with both the Complaint and FAC on January 17, 2017; (2) RJRT was served with the
Complaint and FAC on December 28, 2016; (3) Meyer was served with the Complaint and FAC
on December 30, 2016; and (4) Kolbe was served with the Complaint and FAC on January 24,
2017. (Notice of Removal ¶ 2.) Defendants also submit that they filed a Joint Answer to the FAC
on January 27, 2017. (Notice of Removal ¶ 4, Ex. A-2.)

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

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DATE: April 5, 2017

CASE NO.: CV 17-01229 SJO (JCx)

Attached to the Notice of Removal are a number of exhibits that detail when service of process
was effectuated upon Defendants. Exhibit A-2 contains a "Notice of Service of Process" created
by Corporation Service Company ("CSC"), which provides that summons and the pleadings were
personally served on CSC, on behalf of RJRT, on December 28, 2016, and further states that
service on RJRT was "processed" on December 30, 2016. (See Notice of Removal, Ex. A-2 at
13.) Exhibit A-3 contains copies of the summons and pleadings, and provides that Meyer was
served with these documents on December 30, 2016. (See Notice of Removal, Ex. A-3 at 2.)
Exhibit A-4 likewise contains a "Notice of Service of Process" created by CSC, which provides that
summons and the pleadings were personally served on CSC, on behalf of RAI, on January 17,
2017, and further states that service on RAI was "processed" on January 18, 2017. (See Notice
of Removal, Ex. A-4 at 2.) This Notice provides that the "Primary Contact" is Martin L. Holton of
RJRT, and that electronic copies were provided to, among others, RAI. (Notice of Removal, Ex.
A-4 at 2.) Finally, Exhibit A-5 details that an individual defendant received copies of the summons
and pleadings on January 24, 2017—presumably this person is Kolbe. (See Notice of Removal,
Ex. A-5 at 2.) Also on February 15, 2017, counsel for Defendants filed (1) a Notice of Interested
Parties; (2) a Corporate Disclosure Statement for RJRT; and (3) a Corporate Disclosure Statement
for RAI, submitting that RAI is a publicly traded corporation and that RJRT is "an indirect, wholly
owned subsidiary of" RAI. (Notice of Interested Parties, ECF No. 3; see also Corporate Disclosure
Statements, ECF Nos. 4-5.) On March 1, 2017, RAI and Kolbe filed an Amended Notice of
Removal, which does not appear to be materially different from Defendants' initial Notice of
Removal. (See Am. Notice of Removal, ECF No. 12.)
II.

DISCUSSION

Perhaps because Plaintiff asserts three causes of action under Title VII in his FAC, he does not
challenge whether this Court can properly exercise subject-matter jurisdiction over this action.
(See generally Mot., ECF No. 31.) Instead, he argues that Defendants' removal was untimely for
a bevy of reasons. Plaintiff primarily contends that because certain facts suggest that RAI and
RJRT "are subject to such a degree of common ownership, control and management, in that each
corporation was the agent of each other and each corporation authorized the same agent for
service of process," the Court should treat the December 28, 2016 service of process upon CAC
as agent for RJRT as tantamount to effectuating proper service upon RAI on this date. (See Mot.
7.) Plaintiff raises other challenges regarding the Amended Notice of Removal.
A.

Legal Standards

28 U.S.C. § 1441(a) provides that, subject to certain exceptions not applicable here, "any civil
action brought in a State court of which the district courts of the United States have original
jurisdiction, may be removed by the defendant or the defendants, to the district court of the United
States for the district and division embracing the place where such action is pending." 28 U.S.C.
§ 1441(a). Section 1446, which governs the procedure for removal of civil actions, provides that
"[t]he notice of removal of a civil action or proceeding shall be filed within 30 days after the
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

DATE: April 5, 2017

CASE NO.: CV 17-01229 SJO (JCx)

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) (emphasis added). Section 1446 further provides that "[e]ach defendant shall have
30 days after receipt by or service on that defendant of the initial pleading or summons described
in paragraph (1) to file the notice of removal."
28 U.S.C. § 1446(b)(2)(B). Moreover, "[i]f
defendants are served at different times, and a later-served defendant files a notice of
removal, any earlier-served defendant may consent to the removal even though that
earlier-served defendant did not previously initiate or consent to removal." 28 U.S.C.
§ 1446(b)(2)(C) (emphasis added).
"A motion to remand challenges the propriety of an action's removal to federal court."
Viriyapanthu v. Am. Airlines, No. CV 16-05761-AB (GJSx), 2016 WL 5842181, at *2 (C.D. Cal.
Oct. 3, 2016) (citing 28 U.S.C. § 1447). "The Court may remand an action for lack of subject
matter jurisdiction or for any defect in the removal procedure." Id. (citing 28 U.S.C. § 1447(c)).
"Because federal courts are courts of limited jurisdiction, removal statutes are strictly construed,
with any doubts resolved in favor of remand." Id. (citing Shamrock Oil & Gas Corp. v. Sheets, 313
U.S. 100, 108-09 (1941)). The removing party bears the burden of proving that removal was
proper. United Comput. Sys. v. AT&T Corp., 298 F.3d 756, 763 (9th Cir. 2002). Where a plaintiff
asserts there are defects in the removal procedure, the defendant must establish that it followed
the proper procedure for removal under Section 1446. See 28 U.S.C. §§ 1446(b)(1), (3).
B.

Analysis

Plaintiff's Motion is predicated on a mistaken belief that because RJRT and RAI are related entities
that use the same agent for service of process, the Court should treat RAI as being "served" on
December 28, 2016, the day RJRT was served with copies of summons and the complaints. This
theory finds no support in either law or logic, and as such, it must be rejected.
Before turning to the merits of the parties contentions, however, the Court cautions Plaintiff not
to file pleadings in the future that either run afoul of the page limitations specified in this Court's
Initial Standing Order ("ISO") or only comply with such limitations as a result of modification of
either the font size or the margins. See L.R. 11-3.1.1 (detailing rules regarding font size).
Plaintiff's Motion spans twenty-four pages, in direct violation of paragraph 24 of the ISO. (See
ISO ¶ 24 ["All pleadings must comply with L.R. 11, except that no memorandum or points and
authorities or opposition may exceed twenty pages, excluding indices and exhibits, unless
permitted by the Court."], ECF No. 10.) Moreover, Plaintiff's Motion is difficult to read in light of
the minuscule text used, in particular the text found in the myriad footnotes. Future failures to
comply with this Court's procedural requirements may result in sanctions.

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

DATE: April 5, 2017

CASE NO.: CV 17-01229 SJO (JCx)

Turning to the merits, the Court concludes that Defendants have met their burden of
demonstrating that service was effectuated upon RAI on January 17, 2017, and therefore RAI's
removal is timely. "Service of process, under longstanding tradition in our system of justice, is
fundamental to any procedural imposition on a named defendant." Murphy Bros., Inc. v. Michetti
Pipe Stringing, Inc., 526 U.S. 344, 350 (1999). Indeed, it is a "bedrock principal" that "[a]n
individual or entity named as a defendant is not obliged to engage in litigation unless notified of
the action, and brought under a court's authority, by formal process." Id. at 347. Accordingly, "a
named defendant's time to remove is triggered by simultaneous service of the summons and
complaint, or receipt of the complaint, 'through service or otherwise,' after and apart from service
of the summons, but not by mere receipt of the complaint unattended by any formal service." Id.
at 347-48 (emphasis added).
California law, which applies in this case, provides that "[a] summons may be served by personal
delivery of a copy of the summons and of the complaint to the person to be served. Service of a
summons in this manner is deemed complete at the time of such delivery." Cal. Code Civ.
Proc. § 415.10 (emphasis added). This section goes on to provide that "[t]he date upon which
personal delivery is made shall be entered on or affixed to the face of the copy of the
summons at the time of its delivery. However, service of a summons without such date shall be
valid and effective." Id. (emphasis added). California law also provides that "[i]n an action against
a corporation . . ., the copy of the summons that is served shall contain a notice stating," among
other things, "the name of the corporation" that is a party to the action. Cal. Code Civ. Proc.
§ 412.30. Finally, section 416.10 of the California Code of Civil Procedure details a list of methods
for service on a corporation. See Cal. Code Civ. Proc. § 416.10 (providing that, among other
things, service on a corporation can be accomplished by "delivering a copy of the summons and
the complaint" to the "person designated as agent for service of process").
Here, Defendants have submitted uncontroverted evidence that on January 17, 2017, Plaintiff's
attorney, Natalie Mirzayan, effectuated personal service upon "Reynolds American, Inc." pursuant
to California Code of Civil Procedure section 416.10 by way of its agent for service of process,
CSC. (See Notice of Removal, Ex. A-4 at 2-3.) Indeed, Plaintiff admits as much in his Motion.
(See Mot. 3-4 ["[S]ervice was effectuated once gain on January 17, 2017 on CSC because it is
the authorized designated agent for service of process for RAI . . ."].)1 Although it is true that
CSC's Notice of Service of Process indicates both that the "entity" is "R. J. Reynolds Tobacco

1

Plaintiff's references to RAI Trade Marketing Services Company are not only confusing,
but irrelevant. RAI Trade Marketing Services Company is not and has never been a
defendant in this action, and Plaintiff admits that this entity "is not the parent corporation"
of RJRT. (Mot. 6.) Moreover, even if it were true that RAI is not registered to business in
California, Plaintiff has failed to explain why such a fact would be of any consequence to
the resolution of his Motion.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

DATE: April 5, 2017

CASE NO.: CV 17-01229 SJO (JCx)

Company" and that the "primary contact" is Martin L. Holton of "R. J. Reynolds Tobacco
Company," these similarities are of no moment. First, the fact that two related entities might share
the same "primary contact" for the purpose of responding to litigation has no legal consequence,
and Plaintiff cites to no authority indicating otherwise. Second, the "R. J. Reynolds Tobacco
Company" listed as the "entity" in this Notice of Service of Process has a different Entity ID
Number than the one listed in the December 30, 2016 Notice of Service of Process indicating that
RJRT was served with process on December 28, 2016. (Compare Notice of Removal, Ex. A-4
at 2 [ID number 2270705]; with See Decl. Liat L. Yamini in Supp. Opp'n ("Yamini Decl."), Ex. A [ID
number 0218032].) Given these unique Entity ID Numbers, the Court finds Plaintiff's argument
that RAI and RJRT "cannot be properly considered different 'defendant[s]' within the meaning of
Section 1446(b)(2)(B)" to be a weak one. (Cf. Mot. 10-11.)
The lone case Plaintiff cites on this point, RCM International, LLC v. Alpental Energy Partners,
LLC, is inapposite. In that case, Alpental, after the thirty-day window to remove had closed,
"transferred its ownership" of the relevant project "to its then-wholly-owned subsidiary, Blue
Mountain Biogas LLC." No. 14-CV-04788 SC, 2014 WL 6844944, at *1 (N.D. Cal. Dec. 4, 2014).
"[D]iscovery issues were significant" in the state court action, "and at first, RCM was unaware of
the transfer of ownership or the existence of Blue Mountain Biogas LLC." Id. (emphasis in
original). "Nonetheless, after learning of the transfer, RCM amended its complaint on October 7,
2014 to substitute Blue Mountain Biogas for one of the Doe entities named in the initial complaint."
Id. Twenty-one days after the filing of this amended pleading, "Blue Mountain Biogas filed notice
of removal on the grounds of diversity of citizenship." Id.
The district court determined that Blue Mountain Biogas lacked an independent right of removal
"[b]ecause of Alpental's litigation conduct and Blue Mountain Biogas' close affiliation with
Alpental[.]" Id. at *2. Indeed, the court found remand to be appropriate for three reasons, only one
of which is partially at play here:
First, because of Alpental's litigation behavior and its close relationship with Blue
Mountain Biogas, construing Section 1446(b)(2)(B) to grant Blue Mountain Biogas
an independent right of removal would be incompatible with any of the statute's
underlying purposes and the Ninth Circuit's directive to construe the removal
statutes strictly against removal. . . . Second, construing removal as timely despite
these connections would also undermine the purpose of Section 1446(b)(1), by
granting "the defendant of the undeserved tactical advantage . . . [of] wait[ing] [to]
see how he was faring in state court before deciding whether to remove the case to
another court. . . ." Third, denying remand would ignore the advanced state of the
Underlying Action, and circumvent, if not fully undermine a pending sanctions
motion in state court.

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

DATE: April 5, 2017

CASE NO.: CV 17-01229 SJO (JCx)

Id. at *4 (emphasis added) (citations omitted). Tellingly, Plaintiff fails to cite either the half of the
first of these reasons concerning litigation conduct or the second or third reasons. (Cf. Mot. 11.)
Here, Plaintiff has failed to adduce any evidence that RAI attempted to evade service. Rather,
Plaintiff's own pleadings make clear that he knew one or more Reynolds entities was organized
under the laws of the State of North Carolina at the time he filed his initial Complaint, but did not
discover that RAI was a North Carolina company until shortly before filing his FAC. (Compare
Compl. ¶ 8; with FAC ¶ 8.) Perhaps this explains why Plaintiff's earlier attempts to serve RAI and
Kolbe failed. (Cf. Mot. 3.) Furthermore, Plaintiff has not suggested, much less shown, that the
underlying state court action had proceeded in any meaningful manner or that RAI's removal
efforts were designed to "wait and see" how it was faring in state court before deciding whether
to remove to another forum. As such, the Court finds the reasoning of RCM to be inapplicable in
this case and concludes that RAI has an independent right to remove that triggered the date it was
formally served with process.
In conclusion, RAI removed the instant action within thirty (30) days of being served with summons
and the pleadings, and therefore its removal was timely under Section 1446(b).2 The Court
DENIES Plaintiff's Motion.
III.

RULING

For the foregoing reasons, the Court DENIES Plaintiff Timothy Cox's Motion for an Order to
Remand this Case to State Court.
IT IS SO ORDERED.

2

Because the Court concludes that RAI's removal was timely, it need not address the
remainder of Plaintiff's arguments concerning Kolbe and the Amended Notice of Removal.
Furthermore, because the Court denies Plaintiff's Motion, it need not consider his request
for attorneys' fees.

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