Toth v. Envivio, Inc. et al

Filing 35

ORDER by Judge Claudia Wilken.DENYING 32 MOTION FOR LEAVE TO FILE MOTION FOR RECONSIDERATION. (ndr, COURT STAFF) (Filed on 10/17/2013)

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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 TOTH, et al.,

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Plaintiffs,

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No. C 12-5636 CW
ORDER DENYING
MOTION FOR LEAVE
TO FILE MOTION FOR
RECONSIDERATION
(Docket No. 32)

v.

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ENVIVO, INC., et al.,

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Defendants.
________________________________/

United States District Court
For the Northern District of California

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Defendants, Envivo, Inc. and several of its officers and

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directors, move for leave to file a motion for reconsideration of

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the Court’s October 11, 2013 order remanding this case to San

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Mateo County Superior Court.

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Wiley Oppose the motion.

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submissions, the Court denies the motion.

Plaintiffs Michael Toth and Joe

After considering the parties

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DISCUSSION

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A party may only file a motion for reconsideration after

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obtaining leave of the Court.

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Local Rule 7–9(b), the party seeking leave to file such a motion

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must show (1) that “a material difference in fact or law exists

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from that which was presented to the Court before entry of the

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interlocutory order for which reconsideration is sought”; (2) the

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“emergence of new material facts or a change of law occurring

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after the time of such order”; or (3) a “manifest failure by the

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Court to consider material facts or dispositive legal arguments

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which were presented to the Court before such interlocutory

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order.”

Civil L.R. 7-9(a).

Under Civil

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Here, Defendants argue that “the Court manifestly failed to

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consider a dispositive legal argument, namely, that where, as

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here, an action is facially removable as a federal question, the

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burden is on the plaintiffs who are seeking remand to prove that

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an express exception to removal exists.”

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Leave File Mot. Recons., at 1 (citing Breuer v. Jim’s Concrete of

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Brevard, Inc., 538 U.S. 691, 698 (2003)).

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the faulty premise that this action is “facially removable as a

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federal question.”

United States District Court
For the Northern District of California

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Docket No. 32, Mot.

This argument rests on

As explained in the Court’s remand order, the 1933 Securities

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Act contains an anti-removal provision that expressly states,

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“Except as provided in section 77p(c) of this title, no case

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arising under this subchapter and brought in any State court of

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competent jurisdiction shall be removed to any court of the United

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States.”

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over whether or not section 77p(c) permits the removal of actions

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like this one -- which raise only federal securities fraud

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claims -- and the question remains unsettled.

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Alpha Natural Res., Inc., 902 F. Supp. 2d 797, 807 (S.D.W. Va.

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2012) (“No matter what Congress intended § 77p(c) to accomplish,

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there is no perfect way to read that section in conjunction with

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the plain meaning of the amendments in § 77v(a).”).1

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this continuing ambiguity over the scope of section 77p(c),

15 U.S.C. § 77v(a).

Federal district courts are divided

See Niitsoo v.

In light of

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Over the last decade, more than a dozen district courts around
the country -- including two in this district -- have construed section
77p(c) to preclude removal in cases like this one. See, e.g., Reyes v.
Zynga Inc., 2013 WL 5529754 (N.D. Cal.) (granting motion to remand);
Young v. Pac. Biosciences of Cal., 2012 WL 851509 (N.D. Cal.) (same);
but see Lapin v. Facebook, Inc., 2012 WL 3647409 (N.D. Cal.) (denying
motion to remand).

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Defendants have not demonstrated that the present action is

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“facially removable as a federal question.”

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Thus, contrary to Defendants’ position, Plaintiffs were not

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required to prove that an exception to removal exists in order to

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prevail on their motion to remand.

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has explained, the burden to establish that federal jurisdiction

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exists rested at all times with Defendants themselves.

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Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (“The ‘strong

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presumption’ against removal jurisdiction means that the defendant

Rather, as the Ninth Circuit

Gaus v.

United States District Court
For the Northern District of California

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always has the burden of establishing that removal is proper.”).

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They failed to satisfy that burden.

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CONCLUSION
For the reasons set forth above, Defendants’ motion for leave
to file a motion for reconsideration (Docket No. 32) is DENIED.
IT IS SO ORDERED.

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Dated: 10/17/2013

CLAUDIA WILKEN
United States District Judge

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