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The People of the State of California v. Smartwear Technologies

January 24, 2012

THE PEOPLE OF THE STATE OF CALIFORNIA,
PLAINTIFF,
v.
SMARTWEAR TECHNOLOGIES, ET.
DEFENDANTS.



The opinion of the court was delivered by: John A. Houston United States District Judge

ORDER GRANTING PLAINTIFF'S MOTION TO REMAND AND DENYING PLAINTIFF'S MOTION FOR ATTORNEY FEES AND COSTS [Doc. Nos. 4, 5] al.,

Pending before the Court is Plaintiff the People of the State of California's ("the People") motion to remand and motion for attorney fees and costs. Defendants Robert Reed and Lexit Technology filed oppositions. Plaintiffs filed a reply. After a thorough review of the parties' submissions and for the reasons set forth below this Court GRANTS Plaintiff's motion to remand and DENIES Plaintiff's motion for sanctions.

BACKGROUND

Plaintiff originally filed this action in Superior Court of the State of California for the County of San Diego on September 9, 2008, and filed a First Amended Complaint in Superior Court on September 16, 2008, seeking relief for violations of the California Corporations Code. Smartwear Technologies, Norman Frank Reed, and Sean Borzage Boyd were named defendants and Global General Technologies, Inc. and Lexit Technology, Inc. were named as relief defendants. See Doc. No. 1. Defendant Lexit Technology removed the action to federal court on June 17, 2011. Trial began in Superior Court on June 21, 2011, when the court received notice of the removal. See Doc. No. 4.

Plaintiff filed the pending motions on July 1, 2011. Defendant Robert Reed, appearing in pro per, filed an opposition to the motion to remand and filed a joinder to Defendant Lexit Technologies' opposition. Defendant Lexit Technologies filed an opposition to the motion to remand and a separate opposition to the motion for attorney fees and costs on July 28, 2011. Plaintiff filed a reply on August 12, 2011. The motion was set for hearing but was taken under submission without oral argument.

LEGAL STANDARD

The federal court is one of limited jurisdiction. See Gould v. Mutual Life Ins. Co. v. New York, 790 F.2d 769, 774 (9th Cir. 1986). As such, it cannot reach the merits of any dispute until it confirms its own subject matter jurisdiction. See Steel Co. v. Citizens for a Better Environ., 523 U.S. 83, 93-94 (1998). Removal jurisdiction is governed by 28 U.S.C. § 1441 et seq. A state court action can be removed if it could have originally been brought in federal court. Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). Thus, a party invoking the federal removal statutes must establish jurisdiction by demonstrating the existence of: (1) a statutory basis; (2) a federal question; or (3) diversity of the parties. See Mir v. Fosburg, 646 F.2d 342, 345 (9th Cir. 1980). District courts must construe the removal statutes strictly against removal and resolve any uncertainty as to removability in favor of remanding the case to state court. Boggs v. Lewis, 863 F.2d 662, 663 (9th Cir. 1988).

The burden is on the removing party to demonstrate federal subject matter jurisdiction over the case. See Emrich v. Touche Ross & Co., 846 F.2d 1190, 1195 (9th Cir. 1988). The Court determines its jurisdiction from the complaint as it existed at the time of removal, not as subsequently amended. Libhart v. Santa Monica Dairy, Co., 592 F.2d 1062, 1065 (9th Cir. 1979).

DISCUSSION

Plaintiff argues Lexit Technologies cannot meet its burden to establish the existence of diversity jurisdiction and the notice of removal was procedurally defective. Plaintiff maintains removal is improper and the matter should be remanded.

Plaintiff also seeks attorney fees and costs associated with bringing the motion to remand.

I. Motion to Remand

A. Lack of Jurisdiction

Plaintiff argues States are not citizens of any state for diversity purposes and Lexit fails to demonstrate the amount in controversy ...


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