UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION
May 17, 2011
GREENSPUN CORP., ET AL.,
The opinion of the court was delivered by: Lucy H. Koh United States District Judge
ORDER REMANDING CASE TO SANTA CLARA COUNTY SUPERIOR COURT
On June 22, 2010, the Honorable Jeremy Fogel remanded this action to the Santa Clara County Superior Court. See Case No. 10-CV-01247-JF, Dkt. #27 ("June 22, 2010 Order"). In 19 brief, Judge Fogel determined that Robert Schwartz was not fraudulently joined and was not a "sham" defendant for purposes of diversity jurisdiction. Id. at 7. Thus, Judge Fogel ruled that 21 complete diversity between the parties did not exist because both Plaintiff and Mr. Schwartz are 22 citizens of California. Id. 23
Nearly a year later, on March 10, 2011, Defendants again removed this
action. See Notice
of Removal [dkt. #1]. Defendants claim that they only recently
learned that Plaintiff Merhdad
Nikoonahad, in his capacity as CEO of a company called Solar Notion,
Inc., signed a "release" of 26 claims against Robert Schwartz. Based
on that "release," Defendants argue (again) that Mr.
Schwartz is just a "sham" defendant, and that the Court does have
diversity jurisdiction over the 28 action. Plaintiff has filed a
motion to remand, contending that the complaint and the parties named
therein have not changed, but what has changed is that the Santa Clara
Superior Court denied
Defendants' motion for summary judgment, including with respect to
Robert Schwartz, and 3 assigned the case a May 23, 2011 trial date.
See Pl.'s Mot. to Remand [dkt. #15].
determined that Robert Schwartz is not a "sham" defendant. Defendants' claim of a newly 6 discovered "release" lacks merit. In fact, Plaintiff expressly references the "release" in Paragraph 51 of his original Complaint filed on April 2009, a filing that Defendants attached to their 8 opposition to Plaintiff's motion to remand in the 2010 case. See Exh. 1, in Support of Defendants'
The Court finds that remand is appropriate. Judge Fogel's June 22, 2010 Order already Opposition to Motion for Remand in Case No. 10-CV-01247 [dkt. #24-1] ("Defendants acted in 10 bad faith toward Nikoonahad] to coerce [Nikoonahad] to perform liquidation duties without compensation . . . Although defendants had insisted on and obtained release agreements for their directors [including Schwartz], they gave no such release to [Nikoonahad] and threatened to sue 13 [Nikoonahad]"). Moreover, the alleged newly discovered "release" is part of the exact contract 14 that Plaintiff seeks to rescind. See Paragraph 1(c) of Amendment No. 1, attached as Exh. F to Pl.'s 15 Compl. in Case No. 10-CV-01247-JF [dkt. 1-1] (requiring Solar Notion, Inc. to "execute and 16 deliver a Release, the form of which is attached hereto as Exhibit A, to each of Robert Schwartz 17 and Brian Greenspun"). Finally, Mr. Schwartz, in a declaration previously filed with the Court, 18 expressly agreed that he is a party to Amendment No. 1 (part of the contract Plaintiff seeks to 19 rescind) and will be bound by it. See Decl. of Robert Schwartz, attached as Exh. 2 to Decl. of Ardell Johnson in Support of Mot. to Remand in Case No. 11-CV-01171-LHK [dkt. #15-2].
parties to the action in state court, and the substantial progress made in state court, including the 23 denial of summary judgment and the scheduling of trial, the Court finds no reason to delay any 24 further the proceedings in Santa Clara County Superior Court. See Jackson v. Wal-Mart Stores, Inc., 588 F. Supp. 2d 1085, 1087-88 (N.D. Cal. 2008) (federal removal statute "reflects a balanced 26 policy designed to discourage forum shopping and conserve judicial resources" and was intended
In light of Judge Fogel's June 22, 2010 Order remanding the action, no change in the
to discourage 'removal after substantial progress has been made in state court.'"). Accordingly, the 2 case is REMANDED to the Santa Clara County Superior Court. The Clerk shall close the file.
IT IS SO ORDERED.
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