Divincent v. Divincent et al

Filing 54

ORDER by Judge Thelton E. Henderson granting 49 Motion to Remand (tehlc1, COURT STAFF) (Filed on 12/2/2013)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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MICHAEL DIVINCENT,

No. C13-3360 TEH

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Plaintiff,

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v.

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ORDER GRANTING PLAINTIFF’S
MOTION TO REMAND

ROBERT DIVINCENT, et al.,

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Defendants.

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This matter comes before the Court on Plaintiff’s motion to remand. Pursuant to

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For the Northern District of California

United States District Court

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Civil Local Rule 7-1(b), the Court finds oral argument unnecessary and now VACATES

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the December 9, 2013 hearing. After carefully considering the parties’ written arguments,

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Plaintiff’s motion to remand is GRANTED for the reasons discussed below.

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BACKGROUND
On July 18, 2013, Defendants E-Trade Brokerage Services Inc., E-Trade Financial

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Corporation, Inc., and E-Trade Financial Corporate Services, Inc., (collectively, “E-

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Trade”) removed this case from the Superior Court of California for the County of Contra

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Costa. Defendants then moved to dismiss the case. On August 15, 2013, Plaintiff Michael

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DiVincent moved for leave to amend his complaint and to remand the case back to state

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court.

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The Court granted Plaintiff leave to amend because his motion was within the 21-

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day period for amendment as of right under Federal Rule of Civil Procedure 15(a)(1)(B).

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Sep. 24, 2013 Order at 2. The Court also required the parties to confer on the remand

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issue, and noted that it was “not inclined to maintain jurisdiction over a case that includes

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no federal questions even if removal were initially proper based on the original complaint.”

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Id.

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Plaintiff timely filed his First Amended Complaint (“FAC”), which references no

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federal statutes or regulations, and states no federal causes of action. After the parties

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failed to reach an agreement on whether remand was appropriate, Plaintiff moved to

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remand. Defendants Dean DiVincent, Robert DiVincent, and David Gardner submitted

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statements of non-opposition. E-Trade, however, opposes the motion and requests that the

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Court instead stay all proceedings with respect to E-Trade, and compel arbitration.

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DISCUSSION
Upon removal of a case to federal court, a district court has discretion to remand a

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For the Northern District of California

United States District Court

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case once federal claims are eliminated. Acri v. Varian Assocs., Inc., 114 F.3d 999, 1000

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(9th Cir. 1997). In determining whether to remand, “the balance of factors to be

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considered” are “judicial economy, convenience, fairness and comity.” Carnegie-Mellon

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Univ. v. Cohill, 484 U.S. 343, 357 (1988). A court may also consider “whether the

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plaintiff has engaged in any manipulative tactics” in order to inappropriately secure a

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particular forum. Id. The Supreme Court has noted that when all federal claims are

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eliminated early on, a district court has “a powerful reason to choose not to continue to

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exercise jurisdiction.” Id. at 350-51.

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Here, the first four factors are either neutral or tip slightly in favor of remand. The

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Court has yet to delve into the merits of Plaintiff’s complaint; thus, there would be no

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duplication of efforts or resulting waste of judicial resources in remanding this action back

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to state court. As neither the Contra Costa Superior Court nor this Court appear more

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convenient to the parties, the Court finds the convenience factor neutral, along with

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fairness – which no party has argued weighs in their favor. With respect to comity, the

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FAC includes only state law causes of action and makes no mention of federal law.

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Comity thus supports remand.

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E-Trade’s primary argument is that Plaintiff’s elimination of all references to

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federal law in the FAC was manipulative, and done “precisely to avoid arbitration,” as

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demanded by the parties’ agreement. E-Trade Opp. at 1-2. The Court disagrees, finding

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that a plaintiff’s decision of where to file suit is a legitimate strategic decision. Faced with

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removal, a plaintiff has the choice whether to retain federal claims or pursue his state

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forum of choice. Baddie v. Berkeley Farms Inc., 64 F.3d 487, 491 (9th Cir. 1995). Here,

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Plaintiff chose to pursue his action in state court, and eliminated all references to federal

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law. “There [is] nothing manipulative about that straight-forward tactical decision.” Id.

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As Plaintiff is the “master of the complaint,” he may “avoid federal jurisdiction by
exclusive reliance on state law.” Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987).

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The Court does not consider Plaintiff’s actions an effort at manipulative forum shopping.

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For the Northern District of California

United States District Court

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Finally, although E-Trade argues that remand would contravene a Ninth Circuit

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mandate to ensure that private arbitrations are enforced, an order remanding this case in no

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way prevents E-Trade from pursuing arbitration in state court. This Court has yet to rule

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on the arbitration issue, therefore parties would not have to “re-litigate the exact same

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issues” again, as E-Trade argues – rather they would be litigating them for the first time,

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but in state court rather than before this Court.

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CONCLUSION
With good cause appearing, the Court exercises its discretion and GRANTS

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Plaintiff’s motion to remand. This matter is hereby remanded to the Superior Court of

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California for the County of Contra Costa. The Clerk shall close the file.

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IT IS SO ORDERED.

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Dated: 12/02/13

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THELTON E. HENDERSON, JUDGE
UNITED STATES DISTRICT COURT

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