Beckman v. Wal-Mart Stores, Inc. et al
Filing
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ORDER denying Plaintiff's 10 Motion to Remand to State Court. Court denies Plaintiff's 10 Motion for an Award of Costs and Attorneys' Fees. Signed by Judge Cynthia Bashant on 2/26/2018. (jah)
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UNITED STATES DISTRICT COURT
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SOUTHERN DISTRICT OF CALIFORNIA
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GINA BECKMAN, individually and
on behalf of all others similarly
situated,
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ORDER DENYING MOTION TO
REMAND
Plaintiff,
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Case No. 17-cv-02249-BAS-BLM
[ECF No. 10]
v.
WAL-MART STORES, INC., et al.,
Defendants.
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Presently before the Court is Plaintiff Gina Beckman’s Motion to Remand.
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(ECF No. 10.) On November 3, 2017, Defendants Wal-Mart Stores, Inc., Espresso
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Supply, Inc., and Eko Brands, LLC (collectively, “Defendants”) removed this matter
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to federal court based on diversity jurisdiction under 28 U.S.C. §§ 1331, 1332,
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1141(b), and 1441(c). Plaintiff argues that removal was untimely under 28 U.S.C. §
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1446(b). (Id.)
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The Court finds these motions suitable for determination on the papers
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submitted and without oral argument. See Civ. L. R. 7.1(d)(1). For the following
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reasons, the Court finds removal was timely and DENIES Plaintiff’s motion to
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remand this action to the San Diego Superior Court.
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I.
BACKGROUND
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On June 16, 2017, Plaintiff commenced this action in the San Diego Superior
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Court asserting claims for: (1) breach of implied warranty of merchantability; (2)
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breach of express warranty; (3) breach of implied warranty of fitness for a particular
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purpose; and (4) violation of the Business and Professions Code §§ 17200 et seq. and
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17500 et seq. (ECF No. 10-1 ¶ 3.) Plaintiff named the following defendants: “Wal-
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Mart Stores, Inc.” and “Brew & Save.” (Id.) On June 20, 2017, Plaintiff personally
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served Defendant Wal-Mart Stores, Inc. (“Wal-Mart”) with the initial complaint. (Id.
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¶ 4.) Plaintiff also contends that “Defendant Brew & Save was personally served
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with the initial complaint . . . on or about July 5, 2017.” (Id. ¶ 5.)
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On August 1, 2017, David A. Lowe, counsel for Espresso Supply, Inc., notified
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Plaintiff’s counsel that “Brew & Save had been erroneously sued because it [sic]
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Brew & Save is a brand, not a corporate entity.” (ECF No. 10-1 ¶ 6.) Further, Mr.
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Lowe provided that “Eko Brands, LLC manufactures the Brew & Save Carafe
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Filters,” and “Espresso Supply, Inc. is the parent company of Eko Brands, LLC.”
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(Id.)
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In an email to Plaintiff’s counsel on that same day, Mr. Lowe summarized this
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telephone conversation, stating once more that “Eko Brands, LLC (wrongly named
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in the complaint as Brew & Save)” was the proper entity defendant to this suit. (ECF
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No. 10-1 at Ex. 1.) Additionally, Mr. Lowe informed Plaintiff’s counsel that he
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would be contacting Wal-Mart to discuss his representation thereof. (Id.) About two
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weeks later, Mr. Lowe emailed Plaintiff’s counsel and confirmed that he was now
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representing Wal-Mart. (Id. at Ex. 2.) Mr. Lowe also reiterated the agreement he
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had made with Plaintiff’s counsel “to accept service on behalf of the proper named
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party, once the amendment was made, in exchange for an agreed upon period of
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answer for all Defendants.” (Id.)
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On September 7, 2017, Plaintiff mailed the First Amended Complaint (“FAC”)
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to Mr. Lowe. The FAC named the following defendants: “Wal-Mart Stores, Inc.,”
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“Espresso Supply, Inc.,” “Eko Brands, LLC,” and “Ekobrew.” (Id. ¶ 11.) On
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September 27, 2017, Mr. Lowe notified Plaintiff’s counsel indicating that he would
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not accept service. Specifically, Mr. Lowe stated: “We never indicated that Ekobrew
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was an entity or ever acquired,” and suggested that Plaintiff “amend to correct the
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complaint, after which [he and his clients were] happy to discuss service on behalf
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of properly named entity defendants.” (ECF No. 10-1 at Ex. 6.)
Instead of amending and re-serving a second amended complaint as Mr. Lowe
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suggested, Plaintiff’s counsel served Defendants personally.
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included “Ekobrew” as a defendant. (Id. ¶ 15.) On September 28, 2017, Plaintiff
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served Wal-Mart by mail with the FAC. (ECF 10-1 ¶ 14.) On October 4, 2017,
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Plaintiff served Eko Brands, LLC (“Eko Brands”) and Espresso Supply, Inc.
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(“Espresso Supply”) personally with the FAC. (ECF No. 10-1 ¶ 15.)
The caption still
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On November 3, 2017 Defendants filed their Notice of Removal pursuant to
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28 U.S.C. §§ 1331, 1332, 1141(b) and 1441(c). (ECF No. 1.) On December 4, 2017,
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Plaintiff filed a Motion to Remand and Request for an Award of Costs and Attorneys’
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Fees. (ECF No. 10.)
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II.
LEGAL STANDARD
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“[A]ny civil action brought in a State court of which the district courts of the
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United States have original jurisdiction, may be removed by the defendant or the
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defendants, to the district court of the United States.” 28 U.S.C. § 1441(a). A party
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must remove an action within thirty days and section 1446(b) provides when that
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thirty-day limitation begins to run. 28 U.S.C. § 1446(b).
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Additionally, when a party removes a case under the Class Action Fairness Act
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(“CAFA”), there is an alternative thirty-day window for which the time limit begins
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to run once a defendant first ascertains that a case is removable. See Roth v. CHA
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Hollywood Med. Ctr., L.P., 720 F.3d 1121, 1126 (9th Cir. 2006).
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A.
Removal of Civil Actions Under 28 U.S.C. § 1446(b)
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In order for removal to be timely under section 1446(b)(1), “the notice of
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removal of a civil action or proceeding shall be filed within thirty days after the
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receipt by the defendant, through service or otherwise, of a copy of the initial
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pleading setting forth the claim for relief upon which such action or proceeding is
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based.” § 1446(b)(1). The “thirty-day removal period is triggered ‘if the case stated
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by the initial pleading is removable on its face.’” Carvalho v. Equifax Info. Servs,
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LLC, 629 F.3d 876, 885 (9th Cir. 2010) (quoting Harris v. Banker Life & Cas. Co.,
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425 F.3d 689, 694 (9th Cir. 2005)).
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In a multi-defendant suit where parties are served at different times, the last
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served defendant timely removes a case if the notice of removal is filed thirty days
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after service, regardless of when the other parties were effectively served.
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§ 1446(b)(2)(B).
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B.
Removal of Class Actions Under the CAFA
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CAFA states that any district court has original jurisdiction of an action if “the
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amount in controversy exceeds the sum or value of $5,000,000 . . . and in which the
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aggregate number of proposed plaintiffs is 100 or greater, and any member of the
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plaintiff class is a citizen of a state different from any defendant.” Lowdermilk v.
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U.S. Bank Nat’l Ass’n, 479 F.3d 994, 997 (9th Cir. 2007); see 28 U.S.C. § 1332(d).
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Removal of these class actions is governed by section 1446. 28 U.S.C. §
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1453(b). However, removal under CAFA allows for a reading of sections 1441 and
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1446 together, and “permit[s] a defendant to remove outside the two thirty-day
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periods on the basis of its own information . . . provided that neither of the two thirty-
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day periods under § 1446(b)(1) and (b)(3) has been triggered.” Roth, 720 F.3d at
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1126. Therefore, a defendant may remove a class action at any point during the
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pendency of litigation in state court, so long as removal is initiated within thirty days
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of when the defendant is put on notice that a case has become removable. See Roth,
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720 F.3d at 1123; Abrego v. Dow Chem. Co., 443 F.3d 676, 691 (9th Cir. 2006).
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III.
ANALYSIS
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A.
Defendants’ Timely Removal Under Section 1446(b)(1)
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Plaintiff moves to remand this action to state court and alleges that Defendants
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failed to satisfy the timing requirements under section 1446(b). (ECF No. 10 at 6:15-
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16.) Plaintiff contends that the initial complaint sent exclusively to Wal-Mart on
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June 20, 2017 triggered the thirty-day time limit under section 1446(b)(1). (ECF No.
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10 at 7:14-22.) Alternatively, Plaintiff argues that the time limit was triggered when
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its counsel mailed the FAC to Mr. Lowe on September 7, 2017. (ECF No. 10 at 6:23-
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27.) Defendant argues that service was not effective on either of the dates contended
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by Plaintiff, and rather, that proper service occurred on October 4, 2017 when the last
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defendants, Eko Brands and Espresso Supply, were served. (ECF No. 12 at 6:1-3.)
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The Court agrees with Defendants.
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A defendant is limited to removing a case within thirty days of receiving an
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initial pleading if it is removable on its face. § 1446(b)(1). Each defendant in a
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multi-party proceeding has the opportunity to remove an action once it has been
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properly served. § 1446(b)(2)(B),(C); see also Delfino v. Reiswig, et al., 630 F.3d
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952, 956 (9th Cir. 2011) (upholding recent trends in case law favoring the later-
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served defendant rule).
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Here, Mr. Lowe’s acceptance of service was contingent upon Plaintiff naming
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the correct parties as defendants. (ECF No. 10 ¶ 9.) A defendant may make
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acceptance of service of a complaint conditional on plaintiff satisfying a prerequisite
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condition. See Patriot Rail Corp. v. Sierra R. Co., No. 2:09-cv-0009 TLN AC, 2013
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WL 3745231, at *6 (E.D. Cal. July 15, 2013) (conditioning counsel’s acceptance of
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service of counterclaims upon defendant’s agreement to allow an amended
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complaint). If that condition is not satisfied, service of process is ineffective, and the
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thirty-day time limit does not begin to run. (Id.)
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Plaintiff’s counsel did not name the correct defendants because she included
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the nonexistent legal entity “Ekobrew.” (ECF No. 12 at 6:22-23.) Although Plaintiff
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listed three of the correct defendants, Mr. Lowe was not authorized by Defendants to
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accept service because an incorrect defendant was named. Moreover, Mr. Lowe was
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not obligated to accept service on behalf of a legally nonexistent entity. Thus, service
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was ineffective on September 7, 2017. See Fed. R. Civ. P. 12(b)(5).
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Plaintiff’s counsel proceeded to serve Defendant Wal-Mart personally on
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September 28, 2017 and Defendants Eko Brands and Espresso Supply on October 4,
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2017. Because each defendant has the opportunity to remove an action once it has
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been properly served, the final defendants served on October 4, 2013 had until
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November 3, 2017 to remove. See § 1446(b). Espresso Supply, Eko Brands, and
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Wal-Mart filed their notice of removal on November 3, 2017. (ECF No. 10 at 6:3-
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8.) Thus, removal was timely under section 1446(b)(1). See § 1446(b).
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B.
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Even if the thirty-day time limit began to run before October 4, 2017,
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Defendants’ Timely Removal Under the CAFA
Defendants timely removed the case under CAFA.
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Removal under CAFA is similarly governed by section 1446(b), though the
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procedure for timely removal is not absolute. Effectively, CAFA provides that the
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thirty-day removal period may start at a later point: when removability is first
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ascertained. A plaintiff should not be able to delay or prevent removal by failing to
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include information necessary to ascertain removability under CAFA. Roth, 720
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F.3d at 691. Thus, under the CAFA, a defendant who has not lost the right to remove
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may still do so if the removal is filed within thirty days after the defendant ascertains
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that the case is removable by means of its own research or outside sources. See id.
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at 1123; Abrego, 443 F.3d at 691; see also § 1453.
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Here, neither party disputes that the first two elements of CAFA are met
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because the allegations in the initial complaint established minimal diversity and that
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the class of plaintiffs would exceed one hundred. (ECF No. 10 at 13:2-4.) Rather,
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Defendants contend that the third element, the amount in controversy, was not
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determinable on the face of the FAC, and Plaintiff disagrees. (ECF No. 12 at 4:10-
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5:25.)
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The Court agrees with Defendants that the FAC did not clearly state the
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amount in controversy. Upon first receiving the FAC, Eko Brands, Espresso Supply,
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and Wal-Mart had to conduct their own inquiry into whether the amount in
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controversy exceeded $5,000,000 before seeking removal. (ECF No. 12 at 4:17-19.)
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Defendants assessed the sales volume of the disputed product and internally assessed
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the possible amount in controversy by using their own records. (Id. at 4:9-13.)
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Although these inquiries take time, Defendants state that they sped up the process
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and took a cautionary approach, filing their Notice of Removal within the statutorily
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allocated thirty days from service on Eko Brands and Espresso Supply. (Id. at 1:20-
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23.) Accordingly, the Court finds Defendants’ removal was timely under both
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section 1446(b) and CAFA.
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Plaintiff’s Request for an Award of Costs and Attorneys’ Fees
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C.
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Plaintiff’s request for attorneys’ fees is denied because Defendants timely
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removed the case. Even if the Court granted the remand, Defendants had an
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objectively reasonable basis for removing this matter.
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Albertson’s Inc., No. 08-55955, 2009 WL 3326427, at *1 (9th Cir. Oct. 16, 2009)
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(quoting Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005)).
See § 1447(c); Dall v.
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III.
CONCLUSION
The Court DENIES Plaintiff’s Motion to Remand. Accordingly, the Court
denies Plaintiff’s Request for an Award of Costs and Attorneys’ Fees.
IT IS SO ORDERED.
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DATED: February 26, 2018
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