Perez v. General Packer, Inc.Perez v. General Packer, Inc.
MEMORANDUM OPINION ON ORDER REMANDING ACTION FOR LACK OF JURISDICTION
I.
INTRODUCTION
This action to recover for personal injuries suffered by plaintiff Monica Perez brought against four Japanese corporations raises these issues. First, whether a
By this Order, the Court remands the action to state court on the basis that removal was sought in violation of
II.
PROCEDURAL BACKGROUND
According to the complaint, plaintiff Monica Perez’s right hand was “caught and injured” on December 12, 1988, by a mushroom-packaging machine she was operating at Southern California Mushroom, Inc., her place of employment. Plaintiffs Monica and Jaime Perez filed this action for personal injuries in the Superior Court for the County of San Bernardino on December 12, 1989. Plaintiffs sued defendants General Packer, Inc. (“General Packer”), Rion Net-sugaku, Inc. (“Rion”), and Does 1 through 10, for negligence, products liability, and loss of consortium. Both General Packer and Rion are Japanese corporations. (Complaint H113, 4).
Defendants General Packer and Rion were served on August 31, 1990. (Deck of James J. Barker, attached to Supplemental Opposition to Motion to Dismiss, p. 4) The Notice of Removal alleges that General Packer has never appeared in this action and that plaintiffs have “agreed” not to pursue their ease against General Packer for lack of personal jurisdiction. (Notice of Removal, 11 5) Plaintiffs do not dispute this. Plaintiffs state that they voluntarily dismissed defendant Rion from the action, with prejudice, for lack of personal jurisdiction on an unspecified date. (Memo of Points and Authorities in Opposition to Motion to Dismiss, p. 2; see also Notice of Removal, 115)
Sometime between December 10, 1990, and February, 1991, plaintiffs learned that the machine that injured Monica Perez was sold by Kabushiki Kaisha Chikuma Kasei (“Chikuma”) to Shoei Trading Co., Ltd. (“Shoei”). (Decl. of Komatsu, Pres, of Chi-kuma, II13; Deck of Ken Imamura, p. 2) Shoei then sold the machine to Southern California Mushroom, Inc. (Deck of Ishii, Pres, of Shoei, ¶ 12) Plaintiffs also learned that Shoei and Chikuma are Japanese corporations. (Notice of Removal, 114)
On March 28, 1991, plaintiffs amended their complaint to name Shoei and Chikuma as Doe defendants I and II, respectively. On May 13,1991, almost IV2 years after the action was filed, plaintiffs served Shoei and Chikuma in accordance with the Hague Convention by forwarding a copy of the Summons and Complaint to the District Court in Japan, which delivered the documents to the defendants.
On June 12, 1991, specially appearing defendants Shoei and Chikuma filed a Notice of Removal alleging jurisdiction pursuant to
The Court thereafter issued a draft Memorandum Opinion On Order Remanding Action for Lack of Jurisdiction and invited further comment from and supplemental briefing by the parties. Both defendants
III.
THE REMOVAL STATUTES
A. Whether the One-year Time Limit Applies
The Removal Statutes,
The notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within thirty days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter.
If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable, except that a case may not be removed on the basis of jurisdiction conferred bysection 1332 of this title more than 1 year after commencement of the action.28 U.S.C. § 1446(b) (West 1991) (emphasis added).
The case at issue showed the diversity of the parties on the face of the initial complaint. As such, it falls within the first paragraph of
Defendants urge the Court to adopt the reasoning in
Zogbi v. Federated Dept. Store,
Although the case had been pending for over three years in the California Superior Court, the
Zogbi
court denied plaintiffs motion to remand. It concluded that the one-year limit applies only to diversity cases that become removable by way of a subsequent paper. The
Zogbi
court reasoned, first, that as a general rule, a qualifying phrase only modifies that which immediately precedes it.
Id.
at 1039. Thus, the “except that” clause modifies only the language preceding it in the second paragraph. Second, the policy of limiting federal courts’ jurisdiction cannot overcome the plain meaning of the language of
Zogbi
is the only case to date to construe
... it is well-established policy that removal statutes are to be strictly construed against removal. Shamrock Oil & Gas Corp. v. Sheets,313 U.S. 100 , 108-09,61 S.Ct. 868 , 872,85 L.Ed. 1214 (1941); Gould v. Mutual Life Ins. Co. of New York,790 F.2d 769 , 773 (9th Cir.1986) ce rt. denied,479 U.S. 987 ,107 S.Ct. 580 ,93 L.Ed.2d 582 (1986). Strict construction is especially warranted in diversity cases, where ‘concerns of comity mandate that state courts be allowed to decide state cases unless the removal action falls squarely within the bounds Congress has created.’ Phillips v. Allstate Ins. Co.,702 F.Supp. 1466 , 1468 (C.D.Cal.1989).
Horn
at 1344-45. The
Horn
court concluded, “[t]his Court need not consider the legislative history underlying section 1016 of the Judicial Improvements Act [
In
Rezendes v. Dow Corning Corp.,
A district court should give serious consideration to decisions of other district courts within the same circuit.
Haleiwa Theatre Co. v. Forman,
First, the language of removal statutes is to be strictly construed against removal.
Shamrock Oil & Gas Corp. v. Sheets,
Second, while there is no need to consult the legislative background of
Defendants also argue that if Congress’ main goal was to reduce the Federal courts’ diversity caseload then Congress would not have allowed courts to interpret the 30-day remand limit as a procedural limit, thus allowing inattentive plaintiffs to overload the federal judiciary. Rather, defendants argue, Congress would have acted to define the 30-day limit as jurisdictional. However, this argument assumes a commonality of purpose between the 30-day and one-year limits. As discussed later, because the underlying basis for considering remand in this case, violation of the one-year limit, is jurisdictional in nature, the Court may raise such violation sua sponte. In this manner, federal courts may exercise control over their diversity caseloads while plaintiffs who seek to use motions for remand as a strategic card are limited to 30 days within which to make their bid. Therefore, the 30-day limit, treated as a procedural rule, accomplishes Congress’ objectives.
Finally, this Court also finds that the one-year limit applies to both paragraphs of
Accordingly, the. Court finds that the one-year limit applies to both paragraphs of
B. When Does a Case “Commence?"
A subsidiary issue raised by the wording of
Section 1446(b) provides in relevant part:
... except that a ease may not be removed on the basis of jurisdiction conferred by section 1332 of this title more than 1 year after commencement of the action.
Plaintiffs in this case claim to have discovered the existence of the removing defendants about one (1) year after the complaint was filed in state court. Plaintiffs served the removing defendants (Japanese corporations) approximately five (5) months thereafter. Defendants removed 30 days later. Defendants argue that the case should be deemed “commenced” when they were served with the complaint, or at least when a good faith effort was made to serve them with the complaint.
Greer v. Skilcraft,
Except for
Greer
and
Saunders,
however, all other courts addressing this issue have found that a case, for purposes of
Accordingly, the Court finds that the instant case “commenced,” for purposes of the one-year limit in
C. Whether the One-year Limit is Merely a Procedural Rule Which Plaintiffs Have Waived by Not Asserting Within 30 Days, or in the Nature of a Jurisdictional Rule Which the Court May Invoke Sua Sponte
Title
Cases interpreting
However, when a defendant files a Notice of Removal more than one year after commencement of the action, several cases have held that it is a jurisdictional defect.
Molden v. Firestone Tire & Rubber Co.,
Defendants, in supplemental briefing, argue that Wilson and Gray hold that the one-year limit is a procedural limit and that the Court should adopt their reasoning rather than the reasoning in the decisions contra. However, the Wilson and Gray decisions are set in the context of deciding whether the one-year limit is retroactive for cases that were pending in state court at the time of the 1988 Act. The Molden, Foiles and Smith decisions, on the other hand, address specifically whether the 30-day limit is procedural and/or the one-year limit is jurisdictional for purposes of waiver and sua sponte action by the court. Thus, the Molden, Foiles and Smith decisions are instructive in this case, while the Wilson and Gray decisions are not.
Further, several reasons point to the conclusion that the one-year limit is jurisdictional rather than merely procedural. First, the plain language of the statute itself is prohibitory and states: “a case may not be removed ... more than 1 year after the commencement of the action.” This, combined with the Supreme Court directive to construe removal statutes strictly against removal
5
means that this language should be construed as a jurisdictional bar. Defendants point out that the heading above
Second, to read the one-year rule as non-jurisdictional would encourage litigants over the one-year limit to file Notices of Removal regardless of the limit and wager that the plaintiff will not detect the statutory violation within 30 days. In response, defendants argue that because
Third, the interests of comity between state and federal courts, especially if the case has seen substantive progress at the state court, require remand for cases over the one-year limit — whether or not the plaintiff is alert or inspired enough to raise the one-year defect.
Therefore, the Court finds that the one-year rule is a jurisdictional rule and its violation a jurisdictional defect. As such, the Court may sua sponte challenge the removal on that basis.
D. Whether the Court May Challenge Removal More Than SO Days After Defendants File a Notice of Removal
Defendants in this case filed Notice of Removal on June 12,1991. Although plaintiffs did not move to remand during the 30-day time prescribed by statute, the Court did so on the basis of defendants’ violation of the one-year limit on removal. The Court indicated its intent at a hearing held July 15, 1991 — 33 days after the Notice of Removal was filed.
Defendants in this action cite
Air-Shields, Inc. v. Fullam,
As reasoned by the
Foiles by Foiles
court, to rule as defendants urge would be to disregard the plain language of
The Court, therefore, may order remand of this action to the state court although the plaintiffs failed to seek remand within 30 days after the Notice of Removal was filed.
YI.
CONCLUSION
For all the reasons set forth above, the Court finds that this case should be remanded to state court forthwith.
IT IS SO ORDERED.
IT IS FURTHER ORDERED that the Clerk shall serve a copy of this Order on all counsel of record and the Clerk of the San Bernardino Superior Court.
Notes
. It should be noted that the first-served defendants in this case, General Packer and Rion, did not file Notice of Removal within 30 days of receipt of the complaint. Normally, a defendant’s failure to remove a case within the 30 day limit waives the defendant’s option to remove.
Coman v. International Playtex, Inc.,
. Defendants also urge the Court to adopt the reasoning in
Greer v. Skilcraft,
.
If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.
. The Greer decision is not contra because it stated:
We expressly do not conclude whether the one-year limitation contained in [section 1446(b) ] is a jurisdictional bar or a procedural bar ...
Greer v. Skilcraft,
. Shamrock Oil & Gas Corp. v. Sheets,