Everyday Discount, Inc. v. State Farm General Insurance Company

Filing 15

MINUTES (IN CHAMBERS) - ORDER DENYING MOTION TO REMAND AND VACATING HEARING by Judge George H. Wu. The Court has reviewed the papers filed in support of the motion to remand filed by plaintiff Everyday Discount, Inc. ("Plaintiff"), the p apers filed in support of the opposition of defendant State Farm General Insurance Company ("Defendant"), and the papers filed in support of Plaintiff's reply. The Court vacates the April 9, 2018, hearing set for this motion, see C.D. Cal. L.R. 7-15, and denies the motion for the reasons set forth below. (See document for details) (mrgo)

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

CV 18-902-GW(PLAx)

Title

Everyday Discount, Inc. v. State Farm Gen. Ins. Co.

Present: The Honorable

Date

April 2, 2018

GEORGE H. WU, UNITED STATES DISTRICT JUDGE

Javier Gonzalez

None Present

Deputy Clerk

Court Reporter / Recorder

Tape No.

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

None Present

None Present

PROCEEDINGS (IN CHAMBERS):

ORDER DENYING MOTION TO REMAND AND
VACATING HEARING

The Court has reviewed the papers filed in support of the motion to remand filed by plaintiff
Everyday Discount, Inc. (“Plaintiff”), the papers filed in support of the opposition of defendant State
Farm General Insurance Company (“Defendant”), and the papers filed in support of Plaintiff’s reply.
The Court vacates the April 9, 2018, hearing set for this motion, see C.D. Cal. L.R. 7-15, and denies the
motion for the reasons set forth below.
This lawsuit was filed on October 2, 2017, in the Los Angeles Superior Court. See Docket No.
1-2. Defendant removed the case to federal court on February 5, 2018, asserting diversity jurisdiction.
See Docket No. 1. In its Motion to Remand, Plaintiff contends the removal was procedurally defective
because Defendant was aware of the alleged basis for federal jurisdiction well before the case being
filed in state court. See Docket Nos. 9, 11. Defendant opposes the Motion to Remand in part by
observing that:
Federal law provides for two 30-day windows during which a case may be removed: (1)
during the first 30 days after the defendant receives the initial pleading, which discloses the
basis for removal jurisdiction; and (2) within 30 days after the defendant receives a paper
“from which it may first be ascertained that the case is one which is or has become
removable” if the case stated by the initial pleading is not removable. 28 U.S.C. §1446(b) .
...
Plaintiff does not argue here that the face of its Complaint revealed a basis for federal
jurisdiction. Nor could it, as that document said nothing about Plaintiff’s state of incorporation or
principal place of business, and revealed nothing about the amount-in-controversy. See Docket No. 1-2.
Instead, Plaintiff’s argument for remand is that Defendant was aware of the prerequisites for this Court’s
:
Initials of Preparer
CV-90 (06/04)

CIVIL MINUTES - GENERAL

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

CV 18-902-GW(PLAx)

Date

Title

April 2, 2018

Everyday Discount, Inc. v. State Farm Gen. Ins. Co.

jurisdiction pursuant to 28 U.S.C. § 1332 because of information Defendant learned, pre-litigation, in
the course of investigating Plaintiff’s insurance claim. With that knowledge in its possession and
Defendant not having removed the case within 30 days of the Complaint being served upon it, Plaintiff
believes the matter must be remanded.
Removing defendants are under no obligation to investigate the facts necessary for establishing
federal jurisdiction. See Harris v. Bankers Life & Cas. Co., 425 F.3d 689, 694, 696-97 (9th Cir. 2005);
see also Kuxhausen v. BMW Fin’l Servs. NA LLC, 707 F.3d 1136, 1139, 1141 (9th Cir. 2013);
O’Connell & Stevenson, Federal Civil Procedure Before Trial (2017), §§ 2:3231, 3235, at 2D-151 –
152. Rather, that information must either appear on the face of the plaintiff’s state-court complaint or
must be contained in documents transmitted to defendants during the course of the litigation. See 28
U.S.C. § 1446(b)(1), (3) (providing for removal within 30 days of receipt of copy of the initial pleading
or within 30 days of receipt “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”); see also Kuxhausen,
707 F.3d at 1142 (“[W]e have held that ‘other paper’ does not embrace ‘any document received prior to
receipt of the initial pleading.’ Because Kuxhausen’s demand letter was provided to BMW before she
initiated her suit, it cannot trigger [the second] thirty-day period [under § 1446(b)].”) (quoting Carvalho
v. Equifax Info. Servs., LLC, 629 F.3d 876, 885-86 (9th Cir. 2010)); Carvalho, 629 F.3d at 885 (“It is
axiomatic that a case cannot be removed before its inception. If the second paragraph of section 1446(b)
were meant to include as ‘other paper’ a document received by the defendant months before receipt of
the initial pleading, the requirement that the notice of removal ‘be filed within thirty days after receipt
by the defendant’ of the ‘other paper’ would be nonsensical.”); O’Connell & Stevenson, Federal Civil
Procedure Before Trial (2017), §§ 2:3315-3324, at 2D-162 – 165.
Holding Defendant to knowledge it learned pre-litigation runs afoul of both of these principles –
it would look to Defendant’s subjective knowledge and/or require it to conduct its own independent
investigation, and it would look to material that was exchanged before the lawsuit had even been filed.
See O’Connell & Stevenson, Federal Civil Procedure Before Trial (2017), § 2:3323.5, at 2D-165.
Harris, Carvalho and Kuxhausen – all binding Ninth Circuit decisions – reject that approach. While, as
Plaintiff argues, a deposition transcript may indeed serve as an “other paper,” Plaintiff has not directed
the Court to any case holding that a pre-litigation deposition transcript may so serve (and any such
decision would conflict with Ninth Circuit authority, as described above).
As this “untimely removal” position is Plaintiff’s only argument on this motion to remand, the
Court denies the motion.

:
Initials of Preparer
CV-90 (06/04)

CIVIL MINUTES - GENERAL

JG
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