Craig v. MTD Products Company

Filing 9

ORDER signed by District Judge Troy L. Nunley on 10/17/2016 DENYING 5 Motion to Remand and Award of Attorney Fees. (Michel, G.)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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NORMAN J. CRAIG
Plaintiff,

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No. 2:16-cv-00480-TLN-EFB
ORDER

v.
MTD PRODUCTS COMPANY, an Ohio
Corporation; dba TROY-BILT, LLC,

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Defendant.
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This matter is before the Court pursuant to Plaintiff’s Motion to Remand and Award of

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Attorney Fees. (ECF No. 5.) Defendant has filed an opposition to Plaintiff’s motion. (ECF No.

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6.) The Court has carefully considered the arguments raised in Plaintiff’s motion as well as

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Defendant’s opposition. For the reasons set forth below, Plaintiff’s Motion to Remand and

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Award of Attorney Fees (ECF No. 5) is hereby DENIED.

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I.

FACTUAL AND PROCEDURAL BACKGROUND

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On September 18, 2015, this case was filed in the California Superior Court, El Dorado

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County. (ECF No. 6 at 4.) The Complaint indicated the parties were diverse from each other, but

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did not specify the amount of damages Plaintiff was claiming. (ECF No. 6 at 5.) Defendant

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made several attempts to discover the amount of damages Plaintiff was claiming during the

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course of the discovery process in order to determine whether the case could be removed to
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federal court. (ECF No. 6 at 5.) Defendant sent two Requests for Admissions inquiring about

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damages on November 12, 2015. (ECF No. 6 at 5.) In December, 2015, Plaintiff responded

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stating Plaintiff did not have sufficient knowledge of the damages. (ECF No. 6 at 5.) Plaintiff

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responded to Defendant’s interrogatories with the same statement. (ECF No. 6 at 5.) Defendant

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also attempted to coordinate meet and confer correspondence regarding the damages, but was

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unsuccessful. (ECF No. 6 at 5.) On January 4, 2016, Defendant received Plaintiff’s Case

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Management Statement. (ECF No. 5 at 2.) This document indicated the amount in controversy to

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be $80,000, and was the first time Plaintiff had mentioned any estimation of damages. (ECF No.

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6 at 2.) The amount was listed in reference to a California Rules of Court provision in which

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Plaintiff claimed it was exempt from participating in judicial arbitration.1 (ECF No. 6 at 6.) The

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dollar figure was typed in on the second page of a six page form document. (ECF No. 6 at 6.)

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Defendant asserts that it did not see the amount listed on the form and continued to inquire about

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the amount of damages. (ECF No. 6 at 6.) On February 16, 2016, Defendant received Plaintiff’s

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Amended Responses to Defendant’s Request for Admissions, in which Plaintiff stated the amount

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in controversy exceeded $75,000. (ECF No. 6 at 6.) At this point, it had been just over 30 days

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since Defendant received Plaintiff’s Case Management Statement. (ECF No. 6 at 7.) On March

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8, 2016, Defendant removed this action to federal court. (ECF No. 5 at 1.) Plaintiff now moves

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to remand this case, alleging Defendant missed its opportunity for removal. (ECF No. 5 at 1.)

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II.

LEGAL STANDARD

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Procedures for removal are set forth in 28 U.S.C. § 1446. A defendant seeking to remove

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a civil action shall file a notice of removal in the district court. 28 U.S.C. § 1446(a); Roth v. CHA

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Hollywood Med. Ctr., L.P., 720 F.3d 1121, 1124 (9th Cir. 2013). The removing defendant bears

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the burden of establishing that removal is proper. Gaus v. Miles, 980 F. 2d. 564, 566 (9th Cir.

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1992). Removal statutes should be construed narrowly in favor of remand to protect the

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jurisdiction of state courts. Harris v. Bankers Life & Cas. Co., 425 F.3d 689 (9th Cir. 2005).
28 U.S.C.S. § 1446(b)(1) permits defendants to remove state court actions to federal court

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Under Rule 3.811 of the California Rules of Court, cases are exempt from judicial arbitration if the amount
of damages exceeds $50,000.

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within thirty days of receiving an initial pleading or other document that reveals a basis for

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removal. 28 U.S.C.S. § 1446(b)(1). However, if the initial pleading does not provide a basis for

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removal, a defendant may remove an action within thirty days of receiving an amended pleading,

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motion, order, or other paper from which it may first be ascertained that the case is removable.

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28 U.S.C.S. § 1446(b)(3); Jordan v. Nationstar Mortg. LLC, 781 F.3d 1178, 1179 (9th Cir. 2015).

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Defendant has no affirmative duty to investigate beyond the face of the complaint to

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determine if the case is removable. Rose v. Beverly Health & Rehab. Servs., No. 1:06cv0067

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AWI DLB, 2006 U.S. Dist. LEXIS 54530 (E.D. Cal. July 22, 2006). Defendant can avoid the

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running of the thirty-day time period even if it suspects that the complaint is removable. Id.
Under 28 U.S.C.S. § 1446(c)(1), Defendant cannot remove to federal court more than a

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year after the case was initiated in state court, "unless the district court finds that the plaintiff has

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acted in bad faith in order to prevent a defendant from removing the action." 28 U.S.C.S. §

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1446(c)(1).

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III.

ANALYSIS
A. Removal

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Plaintiff’s initial pleading did not establish a jurisdictional amount of more than $75,000.

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Accordingly, Defendant did not file for removal within 30 days of the pleading, as allowed under

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28 U.S.C.S. § 1446(b)(1), and therefore this section is not at issue. Thus, the Court turns to 28

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U.S.C.S. § 1446(b)(3) to determine whether Defendant properly removed this case to federal

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court.

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Plaintiff admits that the parties in this action are diverse and the controversy meets the

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$75,000 minimum requirement for diversity under 28 U.S.C. § 1332(a), but argues Defendant

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missed its window for removal under 28 U.S.C.S. § 1446(b)(3). (ECF No. 5 at 2.) Defendant

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received Plaintiff’s Case Management Statement on January 4, 2016. (ECF No. 5 at 2.) As

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referenced above, a section of the Case Management Statement regarding mandated arbitration

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indicated the amount in controversy to be $80,000. (ECF No. 6 at 2.) Plaintiff claims the Case

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Management Statement is considered an “other paper” under 28 U.S.C.S. § 1446(b)(3), and

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therefore this document put Defendant on notice that the case was removable. (ECF No. 5 at 2.)
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Plaintiff contends Defendant’s removal was improper because it filed for removal on March 8,

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2016, more than 30 days after receiving the Case Management Statement. (ECF No. 5 at 2.)
Defendant argues Plaintiff acted in bad faith by refusing to give any information as to the

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damages prior to its submission of the Case Management Statement. (ECF No. 6 at 3.)

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Defendant claims the 30-day clock should have instead begun February 16, 2016, when it

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received Plaintiff’s Amended Responses to Defendant’s Request for Admissions clearly stating

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the damages exceeded $75,000. (ECF No. 6 at 7.) Accordingly, Defendant argues that filing for

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removal within 30 days of receiving Plaintiff’s Amended Responses to Defendant’s Request for

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Admissions was proper. (ECF No. 6 at 7.)
Under 28 U.S.C.S. § 1446(c)(3), “information relating to the amount in controversy in the

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record of the State proceeding, or in responses to discovery, shall be treated as an “other paper”

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under subsection (b)(3).” The Ninth Circuit has not further specified a definition of “other

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paper.” Fitzwater v. Bank of Am., N.A., No. 2:15-cv-0825-GMN-NJK, 2015 U.S. Dist. LEXIS

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164355 (D. Nev. Dec. 8, 2015). However, “other paper” has been interpreted to mean

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“documents generated within the state court litigation.” Rose v. Beverly Health & Rehab. Servs.,

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No. 1:06cv0067 AWI DLB, 2006 U.S. Dist. LEXIS 54530 (E.D. Cal. July 22, 2006) (finding that

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an email sent from Defendants to Plaintiff during the course of trial was not considered an “other

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paper”); see also Riggs v. Cont’l Baking Co., 678 F. Supp. 236 (N.D. Cal. 1988) (holding “[t]he

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elements of removability must be specifically indicated in official papers before the statutory

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period begins to run”).

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In this case, Plaintiff filed a Case Management Statement2 as part of the state court

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litigation. However, because this Court finds that Plaintiff acted in bad faith to conceal the

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amount of damages in an effort to prevent removal, it does not decide whether the Case

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Management Statement is considered an “other paper” under 28 U.S.C.S. § 1446(b)(3).
Plaintiff’s bad faith attempts to conceal the jurisdictional amount of the case in an effort

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to prevent removal are governed by 28 U.S.C.S. § 1446(c)(3)(B). The rule explains that Plaintiff

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This form was filed as part of an Alternative Dispute Resolution program offered through the El Dorado
Superior Court system.

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has “deliberately failed to disclose the actual amount in controversy to prevent removal.” 28

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U.S.C.S. § 1446(c)(3)(B). Here, the complaint did not state the amount of damages and

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Defendant made several attempts to determine if the case met the $75,000 amount required for

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removal. (ECF No. 6 at 6.) Plaintiff refused to provide Defendant with any information as to the

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amount of damages for another five months. (ECF No. 6 at 6.) When Plaintiff finally provided

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the $80,000 figure, it was included as part of an arbitration provision in the middle of a Case

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Management Statement form letter. (ECF No. 6 at 3.) Only when that 30-day time limit had

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elapsed did Plaintiff provide Defendant with Plaintiff’s Amended Responses to Defendant’s

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Request for Admissions, in which Plaintiff stated the amount in controversy exceeded $75,000.

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(ECF No. 6 at 7.)
This late amendment seems to be a tactical decision made in an effort to prevent removal,

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especially in light of Plaintiff’s duty to supplement or amend disclosures and responses under

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Fed. R. Civ. P. 26(e)(1) (“A party…who has responded to an interrogatory, request for

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production, or request for admission—must supplement or correct its disclosure or response in a

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timely manner if the party learns that in some material respect the disclosure or response is

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incomplete or incorrect, and if the additional or corrective information has not otherwise been

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made known to the other parties during the discovery process or in writing”).
This case meets the jurisdictional requirements under 28 U.S.C.S. § 1332(a) because the

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parties are diverse and the amount of damages exceeds $75,000. Therefore, the federal court has

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subject matter jurisdiction to hear the case. Because the Plaintiff acted in bad faith to prevent the

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case from being removed to federal court, its Motion to Remand is denied.
B. Attorney Fees

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Because this case is not being remanded, the Court declines Plaintiff’s request for attorney

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fees.

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IV.

CONCLUSION

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For the foregoing reasons, Plaintiff’s Motion to Remand and Award of Attorney Fees

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(ECF No. 5) is hereby DENIED.

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Dated: October 17, 2016

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Troy L. Nunley
United States District Judge

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