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TORTOLA RESTAURANTS, L.P. v. KIMBERLY-CLARK CORP.

August 29, 1997

TORTOLA RESTAURANTS, L.P., Plaintiff,
v.
KIMBERLY-CLARK CORP. et al., Defendants.



The opinion of the court was delivered by: ILLSTON

 On August 29, 1997, the Court heard argument on plaintiff's motion to remand and defendants' motion for stay of proceedings. Having considered the arguments of counsel and the papers submitted, the Court hereby GRANTS plaintiff's motion and DENIES defendants' motion

 BACKGROUND

 This is an action under the California Cartwright Act, California Business and Professions Code § 16720, et seq., in which plaintiff -- who seeks to represent a class of those similarly situated -- has alleged that the defendant paper companies conspired to fix and stabilize the price of commercial sanitary paper charged to "end-user" businesses in California. The class-action complaint was filed in San Francisco Superior Court on May 23, 1997. Several other cases against these defendants have been filed in other federal district and state courts, and on June 19, 1997, defendants filed a motion before the Judicial Panel on Multidistrict Litigation seeking transfer of all of the federal cases to the same district court for consolidated pretrial proceedings. On June 20, 1997, defendants removed this action to federal court. Plaintiff seeks to remand the case to state court. Defendants have filed a separate motion which seeks a stay of the proceedings in this matter pending a ruling from the Judicial Panel on Multidistrict Litigation on transfer and consolidation.

 LEGAL STANDARD

 A suit filed in state court may be removed to federal court if the federal court would have had original subject matter jurisdiction over that suit. 28 U.S.C. § 1441(a); Caterpillar, Inc. v. Williams, 482 U.S. 386, 96 L. Ed. 2d 318, 107 S. Ct. 2425 (1987); Snow v. Ford Motor Co., 561 F.2d 787, 789 (9th Cir. 1977).

 A motion to remand is the proper procedure for challenging removal. Remand to state court may be ordered either for lack of subject matter jurisdiction or for any defect in removal procedure. See 28 U.S.C. § 1447(c). The court may remand sua sponte or on motion of a party, and the parties who invoked the federal court's removal jurisdiction have the burden of establishing federal jurisdiction. See Emrich v. Touche Ross & Co., 846 F.2d 1190, 1195 (9th Cir. 1988) (citing Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97, 66 L. Ed. 144, 42 S. Ct. 35 (1921)); Salveson v. Western States Bankcard Ass'n, 525 F. Supp. 566, 571 (N.D. Cal. 1981), aff'd in part, rev'd in part, 731 F.2d 1423 (9th Cir. 1984); Schwarzer, Tashima, Wagstaffe, Federal Civil Procedure Before Trial, P 2:1093 (1992). In this case, defendants must meet this burden.

 The removal statute is strictly construed against removal jurisdiction and doubt is resolved in favor of remand. Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979).

 The existence of federal jurisdiction on removal must be determined on the face of the plaintiff's complaint. See Louisville & Nashville R.R. v. Mottley, 211 U.S. 149, 53 L. Ed. 126, 29 S. Ct. 42 (1908). A "cause of action arises under federal law only when the plaintiff's well pleaded complaint raises issues of federal law." Metropolitan Life Ins. Co v. Taylor, 481 U.S. 58, 63, 95 L. Ed. 2d 55, 107 S. Ct. 1542 (1987).

 However, the Court may examine the entire record to determine if the real nature of the claim is federal, notwithstanding plaintiff's characterization to the contrary, when the plaintiff has, by "artful pleading," attempted to defeat defendant's right to a federal forum. See Federated Dep't Stores, Inc. v. Moitie, 452 U.S. 394, 397 n.2, 69 L. Ed. 2d 103, 101 S. Ct. 2424 (1981); Salveson, 525 F. Supp. at 572.

 DISCUSSION

 1. Defendants' Motion for Stay.

 Defendants seek an order staying decision on plaintiff's pending remand motion until the Judicial Panel on Multidistrict Litigation reaches a decision on the motion for transfer and consolidation pending before it. Defendants contend that this action is one of "at least 26 cases" now pending in five different district courts throughout the U.S. asserting "virtually identical" price-fixing claims against the same defendants, and that in the interests of judicial efficiency and economy, this court should allow the transferee court to resolve the remand motion.

 A putative transferor court need not automatically postpone rulings on pending motions, or in any way generally suspend proceedings, merely on grounds that an MDL transfer motion has been filed. See Manual for Complex Litigation 3d § 31.131, p.252 (3d ed. 1995); see also Villarreal v. Chrysler Corp., 1996 U.S. Dist. LEXIS 3159, No. C-95-4414, 1996, WL 116832, at *1 (N.D. Cal. Mar. 12, 1996) ("a stay is improper. Judicial economy will ...


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