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Ali v. Downey Savings and Loan

July 7, 2010


The opinion of the court was delivered by: The Honorable Gary Allen Feess


Proceedings: (In Chambers)



Plaintiff Shahida Ali ("Plaintiff") filed this action against Downey Savings and Loan, Central Mortgage Company, and Deutsche Bank National Trust Company (collectively, "Defendants") in Los Angeles County Superior Court on March 15, 2010. (See Not., Ex. A [Complaint].)*fn1 Plaintiff served each defendant with the complaint on various dates thereafter: Deutsche Bank National Trust Company ("Deutsche Bank") was served on April 19, 2010 (Mot. to Remand, Ex. 2.); Downey Savings and Loan ("Downey") on May 11, 2010 (id., Ex. 1.), and Central Mortgage Company ("CMC") on May 12, 2010 (id.). Defendants do not contest the accuracy of these dates of service. (See Opp. to Remand at 2.)

On May 20, 2010, default was entered against Deutsche Bank in state court. (Mot. to Remand ¶¶ 7, 14, Ex. 3.) The same day, Deutsche Bank and CMC removed the action to this Court. (Docket No. 1.) Downey separately filed a consent to removal on June 10, 2010. (Docket No. 15.)

Defendants' notice indicates that removal was "timely filed as thirty (30) days have not elapsed since Defendants became aware of the Complaint in this action." (Not. ¶ 11.) However, Defendants subsequently clarified that removal was timely only for CMC, and not for Deutsche Bank. (Opp. to Remand at 4.) Nevertheless, Defendants contend that because removal was timely for CMC, it was therefore timely for all Defendants. (Id.)

Plaintiff now moves to remand the case on four separate grounds: (1) Defendants removed after the 30-day statutory period and removal was therefore untimely; (2) Downey failed to join in the removal in violation of the unanimity requirement; (3) default against Deutsche Bank deprives Defendants of the ability to remove the case to federal court;*fn2 and (4) Plaintiff's claim does not involve a federal question.*fn3 Because this Court finds that Defendants' removal was both untimely, and in violation of the unanimity requirement, the Court GRANTS Plaintiff's remand motion. The Court explains its reasoning in greater detail below.



In order to remove an action that was removable at the time of filing, a defendant must file a notice of removal "within thirty days after 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...." 28 U.S.C. § 1446(b).

"There is currently a split of authority on the construction of § 1446(b) when applied to multiple defendants." United Computer Sys. v. AT&T Info. Sys., 298 F.3d 756, 763 n.4 (9th Cir. 2002); Bonner v. Fuji Photo Film, 461 F. Supp. 2d 1112, 1117 (N.D. Cal. 2006). Under the "first-served" rule, the thirty-day period begins to run on the date the first defendant receives a copy of the initial complaint. McAnally Enters., Inc. v. McAnally, 107 F. Supp. 2d 1223, 1226 (C.D. Cal. 2000) (collecting cases and adopting the first-served rule); Getty Oil Corp. v. Ins. Co. of N. Am., 841 F.2d 1254, 1262-63 (5th Cir. 1988) ("In cases involving multiple defendants, the thirty-day period begins to run as soon as the first defendant is served (provided the case is then removable)."). By contrast, under the "last-served" defendant rule, the last-served defendant is provided a full thirty days to remove after being served. See, e.g., Brierly v. Alusuisse Flexible Packaging, Inc., 184 F.3d 527, 533 (6th Cir. 1999) (collecting cases and adopting the last-served rule); Bonner, 461 F. Supp. 2d at 1116-19 (N.D. Cal. 2006) (same). This Court maintains discretion to apply either the "first-served" or the "last-served" rule, and elects to adopt the former.

Under the "first-served" rule, the first-served defendant's failure to remove a state court action within thirty days precludes removal by later-served defendants. McAnally Enters., Inc., 107 F. Supp. 2d at 1226-28. The failure to file a timely notice of removal constitutes a procedural defect under 28 U.S.C. § 1446(b). Id. at 1226. Accordingly, because "remand may be ordered...for 'any defect' in the removal procedure," Aguon-Schulte v. Guam Election Com'n., 469 F.3d 1236, 1240 (9th Cir. 2006) (citing 28 U.S.C. § 1447(c)), remand is appropriate if the first-served defendant fails to file a timely removal notice. Id.

Here, CMC and Deutsche Bank filed their removal notice on May 20, 2010 (see [Docket No. 1].), and now concede that removal was more than thirty days after Deutsche Bank received Plaintiff's complaint. (See Opp. to Remand at 4 ("Deutsche Bank received the Complaint on April 19, 2010, and filed the notice of removal on May 20, 2010, one day late.").) Because Deutsche Bank failed to remove within the thirty-day time limit, Deutsche Bank is precluded from removing this action pursuant to 28 U.S.C. ยง 1446(b). Applying the "first-served" rule, CMC and ...

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