The opinion of the court was delivered by: Conti, U.S. District Judge.
ORDER GRANTING PLAINTIFF'S
MOTION FOR REMAND
Before the Court is Plaintiff's motion, filed on March 8, 2001, to
remand this case to the Superior Court of California, County of San
Francisco, where it was originally filed. Specifically, Plaintiff
contends Defendant's removal on January 17, 2001 was untimely and there
is no federal subject matter jurisdiction over his claims. Plaintiff also
seeks to recover the costs incurred as a result of the removal.
The procedural and substantive history of this case spans two and a
half years. In brief, Plaintiff filed a class-action suit in the Superior
Court of California for the County of San Francisco on September 8,
1998. The complaint alleges that Defendant breached its fiduciary duty
and engaged in unfair business acts by failing to execute sell orders at
the best available price and by trading ahead of its clients. Complaint
¶ 2. According to the complaint, on February 8, 1996, Plaintiff
instructed Defendant, his broker, to sell 14,000 shares of Netscape for
at least $65 per share at market open. Complaint ¶ 21. Although
Defendant received the order prior to the market's opening, Defendant
waited 77 minutes, during which time Defendant sold its own shares and
the market price dropped $2.50, before offering Plaintiff's shares for
sale. Complaint ¶ 21-26. Defendant then purchased Plaintiff's shares
at a price lower than the price it had just sold its shares. Complaint
¶ 26. Plaintiff alleges that this conduct breached fiduciary duties
owed to Plaintiff. Complaint ¶ 18. Plaintiff also alleges that
Defendant's conduct in conjunction with statements that it obtains the
best price for its clients violates California Business and Professions
Code §§ 17200 et seq. and §§ 17500 et seq. Complaint
In September 1998, Defendant timely removed the action to federal court
asserting diversity jurisdiction, however, the district court remanded
finding the amount in controversy requirement was not met. Roskind v.
Morgan Stanley Dean No. 98-3712 (N.D.Cal. filed Dec. 21, 1998).*fn2
Defendant then demurred on the grounds that the state claims were
preempted by federal law and violated the commerce clause. The district
court found the state claims preempted, however the Court of Appeals
reversed finding that the state claims did not conflict with the federal
scheme for regulating securities trading. Roskind v. Morgan Stanley Dean
Witter & Co., 80 Cal.App.4th 345, 95 Cal.Rptr.2d 258 (2000), cert.
denied, 531 U.S. 1119, 121 S.Ct. 868, 148 L.Ed.2d 781 (2001). Defendant
then sought and was denied a rehearing before the Court of Appeals,
depublication of the opinion, review by the
California Supreme Court, and finally, review by the United States
Supreme Court, which was denied on January 16, 2001.
On January 17, 2001, Defendant filed a Second Notice of Removal, this
time asserting federal jurisdiction based on the existence of a federal
question raised in Plaintiff's Brief in Opposition to Petition for
Certiorari. Plaintiff filed the present motion for remand on March 7,
2001 asserting both procedural and jurisdiction grounds. Specifically,
Plaintiff contends the Defendant's removal was not timely, that Defendant
waived its right to remove, that Defendant is estopped from removing the
action, and that federal question jurisdiction is lacking. Plaintiff also
seeks to recover the costs incurred as a result of the removal under
28 U.S.C. § 1447 (c).
A. Legal Standard for Removal
With some exceptions not at issue here, a defendant may remove a civil
action brought in state court to a federal district court so long as the
district court has original jurisdiction. 28 U.S.C. § 1441 (a). In
the Ninth Circuit, section 1441 is construed strictly against removal
jurisdiction. Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th
Cir. 1979). "Federal jurisdiction must be rejected if there is any doubt
as to the right of removal in the first instance." Gaus v. Miles,
980 F.2d 564, 566 (9th Cir. 1992). Consequently, the defendant bears the
burden of establishing federal jurisdiction. See Ethridge v. Harbor House
Restaurant, 861 F.2d 1389, 1393 (9th Cir. 1988).
A defendant must remove the action within thirty days of receipt of the
initial pleading. 28 U.S.C. § 1446 (b). 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 . . . 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."
28 U.S.C. § 1446 (b).
B. Remand Based on a Defect in Removal Procedure
A plaintiff may seek to have the district court remand the case to the
state court from which it was removed if the district court lacks
jurisdiction or if there is a defect in the removal procedure.
28 U.S.C. § 1447 (c). A motion to remand on the basis of a defect in
removal procedure must be made within 30 days after the filing of the
notice of removal. 28 U.S.C. § 1447 (c). In the Ninth Circuit, a
"district court ha[s] no authority to remand . . . on the basis of a
defect in removal procedure raised for the first time more than 30 days
after the filing of the notice of removal." Northern California District
Council of Laborers v. Pittsburg-Des Moines Steel, 69 F.3d 1034, 1038
(9th Cir. 1995); see also Maniar v. FDIC, 979 F.2d 782, 784-85 (9th Cir.
1992) (holding that a court's sua sponte remand must take place within
the thirty day period).
Plaintiff's Motion to Remand was not filed until March 7, 2001, which
is forty-nine days after Defendant filed its Second Notice of Removal on
January 17, 2001.*fn3 Since more than thirty days have elapsed, this
Court no longer has the authority to remand based on procedural defects.
Three of Plaintiff's grounds for remand are potentially procedural: (1)
that Defendant's removal was untimely; (2) that Defendant ...