Kris Kenny v. Wal-Mart Stores, Inc.
881 F.3d 786
9th Cir.2018Background
- Kenny filed a putative class action in California state court challenging Wal‑Mart’s policy requiring drug/urine testing after workplace injuries; Kenny served a First Amended Complaint (FAC) on Wal‑Mart.
- Wal‑Mart obtained a short extension and, on the last day to respond, filed a demurrer and motion to strike; the demurrer hearing was set for June 15, 2017.
- Before Kenny opposed the demurrer and before any state‑court rulings or discovery, Wal‑Mart removed the case to federal court under CAFA.
- The district court, sua sponte and in a four‑sentence order, remanded the case to state court, concluding Wal‑Mart waived removal by filing the demurrer.
- Wal‑Mart sought permission to appeal the remand order; the Ninth Circuit granted review and vacated the remand, remanding for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a district court may remand sua sponte for a non‑jurisdictional defect | Kenny argued waiver (filing demurrer) justified remand | Wal‑Mart argued §1447(c) limits sua sponte remand to lack of subject‑matter jurisdiction | Court: Sua sponte remand for non‑jurisdictional defects is unauthorized; remand was improper |
| Whether Wal‑Mart waived the right to remove by filing a demurrer in state court | Kenny: Filing a demurrer manifested intent to litigate in state court and thereby waived removal | Wal‑Mart: FAC was indeterminate as to CAFA removability; defensive demurrer to avoid default did not waive removal | Court: No waiver—waiver must be clear and the FAC did not make removability apparent |
| When a defendant is chargeable with knowledge of removability for CAFA purposes | Kenny: Defendant should have known and acted earlier | Wal‑Mart: A defendant is not required to investigate beyond the pleadings when the complaint is indeterminate | Court: Defendant not charged until a paper gives enough information; no duty to inquire when pleadings are indeterminate |
| Effect of filing a responsive pleading on last day to avoid default | Kenny: Responsive merits filing indicates intent to litigate in state court | Wal‑Mart: Filing was necessary to avoid default and was not an indication of abandoning federal forum | Court: Filing on last day and removing before opposition/hearing showed no manifest intent to litigate in state court; no waiver |
Key Cases Cited
- Resolution Tr. Corp. v. Bayside Developers, 43 F.3d 1230 (9th Cir. 1994) (waiver of removal requires clear manifestation of intent to litigate in state court)
- Corona‑Contreras v. Gruel, 857 F.3d 1025 (9th Cir. 2017) (§1447(c) limits sua sponte remand to lack of subject‑matter jurisdiction)
- Kuxhausen v. BMW Fin. Servs. NA LLC, 707 F.3d 1136 (9th Cir. 2013) (defendant not charged with removability until a paper gives enough information)
- Roth v. CHA Hollywood Medical Ctr., L.P., 720 F.3d 1121 (9th Cir. 2013) (no duty to inquire when initial pleading is indeterminate as to removability)
- Rea v. Michaels Stores Inc., 742 F.3d 1234 (9th Cir. 2014) (defendant may remove when an amended pleading or other paper reveals removability)
- Beighley v. FDIC, 868 F.2d 776 (5th Cir. 1989) (waiver must be clear and unequivocal)