Pennel v. American Addiction Centers, Inc.
2:20-cv-00284
E.D. Cal.Jun 8, 2020Background
- Plaintiff Melissa Pennel sued her former employer for wage-and-hour violations and pregnancy discrimination; complaint filed in Sacramento County Superior Court (Sept. 20, 2019) and later amended to add AAC Holdings.
- Both American Addiction Centers and AAC Holdings are Nevada corporations that share officers, the same office in Tennessee, and a website; Plaintiff argues they operate as a single entity.
- Plaintiff served American Addiction Centers via the listed registered agent on January 6, 2020, and served AAC Holdings via the same registered agent (at its Nevada office) on January 7, 2020.
- AAC Holdings removed the case to federal court on February 6, 2020; Plaintiff moved to remand, arguing removal was untimely because service on the related defendant on January 6 should have started the 30-day removal clock for AAC Holdings.
- The Court took judicial notice of public records submitted by the parties and considered whether the removal complied with 28 U.S.C. § 1446(b)’s timing requirements and related service-of-process arguments.
- The Court denied the motion to remand, finding AAC Holdings’ removal was timely under the "later-served" rule and that service on American Addiction Centers did not start the removal clock for AAC Holdings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness of removal under 28 U.S.C. § 1446(b) | Removal was untimely because AAC Holdings was effectively served on Jan 6 (same agent), so removal on Feb 6 was 31 days late | Each defendant gets its own 30-day period after service; AAC Holdings was served Jan 7, so removal on Feb 6 was timely | Court held AAC Holdings was served Jan 7 and removal on Feb 6 was timely under the later-served rule |
| Whether service on one co-owned defendant starts the clock for the other (shared registered agent / single-entity theory) | Service on American Addiction Centers should count for AAC Holdings because the entities share agents/officers and operate as a single entity (alter-ego / unity of interests) | Service is governed by state law; separate service on each corporate defendant matters; no authority shows service on one automatically starts the other’s removal clock | Court rejected Plaintiff’s argument — no basis to treat service on one defendant as service on the other for removal timing; later-served rule controls |
| Governing law for pre-removal sufficiency of service (state law vs. Federal Rule 4) | Federal Rule 4 standards could control (Plaintiff relied on federal sufficiency arguments) | Pre-removal sufficiency is governed by state law; Federal Rules apply only after removal | Court applied California law for service effectiveness and did not reach Rule 4 alter-ego argument because federal rules apply post-removal |
Key Cases Cited
- Reyn’s Pasta Bella LLC v. Visa USA, Inc., 442 F.3d 741 (9th Cir. 2006) (courts may take judicial notice of public records and court filings)
- Ethridge v. Harbor House Rest., 861 F.2d 1389 (9th Cir. 1988) (party seeking removal bears burden to establish federal jurisdiction)
- Fristoe v. Reynolds Metals Co., 615 F.2d 1209 (9th Cir. 1980) (statutory time limit for removal is a formal requirement but not jurisdictional)
- Desfino v. Reiswig, 630 F.3d 952 (9th Cir. 2011) (adoption of later-served rule: each defendant has its own 30-day removal period)
- Von Saher v. Norton Simon Museum of Art at Pasadena, 592 F.3d 954 (9th Cir. 2010) (court may judicially notice existence of documents but not the truth of their contents)
- Kuxhausen v. BMW Financial Services NA Ltd. Liab. Co., 707 F.3d 1136 (9th Cir. 2013) (removal timing requirement is mandatory)
- Gibble v. Car-Lene Research, Inc., 67 Cal. App. 4th 295 (Cal. Ct. App. 1998) (California courts liberally construe service provisions to effectuate jurisdiction)