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Robert Boxer, On Behalf of Himself and All Others Similarly Situated v. Accuray Incorporated

November 28, 2012


The opinion of the court was delivered by: United States District Judge Saundra Brown Armstrong


The parties are presently before the Court on Plaintiff's Motion to Remand Pursuant 19 to 28 U.S.C. § 1447(c). Dkt. 7. Having read and considered the papers filed in connection 20 with this matter and being fully informed, the Court hereby GRANTS the motion to 21 remand, but DENIES Plaintiff's request for an award of fees and costs. The Court, in its 22 discretion, finds this matter suitable for resolution without oral argument. See Fed. R. Civ. 23 P. 78(b); N.D. Cal. Civ. L.R. 7-1(b).


On November 1, 2012, Plaintiff Robert Boxer filed a class action complaint in Santa 26Clara County Superior Court against Accuray Incorporated ("Accuray") and eight of its 27 Board members ("Individual Defendants"). The first claim is for breach of fiduciary duty 28 under Delaware law as to the Individual Defendants, while the second claim is against Accuray for aiding and abetting the aforementioned alleged breach. Plaintiff seeks to 2 enjoin a vote on two shareholder proposals (referred to as "Proposal Two" and "Proposal 3 Three") which are to be considered at the shareholder meeting scheduled for November 30, 4 2012, in Palo Alto, California. Proposal Two relates to executive compensation, while 5 Proposal Three seeks to increase the amount of Accuray's total authorized shares of stock. 6 Notice of Removal, Ex. A ("Compl.") ¶¶ 3-4, Dkt. 1. Plaintiffs alleges that neither 7 proposal was adequately described in Accuray's Proxy Statement ("Proxy") filed with the 8 Securities and Exchange Commission on October 19, 2012. Id. ¶ 2. 9 On November 7, 2012, Defendants removed the action to this Court under 28 U.S.C. 10§ 1441 on the grounds that the instant action "arises under" federal law. Notice of Removal 11

¶ 3. In particular, Defendants contend that the challenges to the adequacy of the disclosures 12 in the Proxy regarding executive compensation are premised on the requirements of the 13 Dodd-Frank Wall Street Reform and Consumer Exchange Act of 2010 ("Dodd-Frank 14 Act"), which amended the Securities Exchange Act of 1934. Id. ¶ 4. Plaintiff counters that 15 removal jurisdiction is lacking, and has filed a motion to remand in which he seeks to 16 remand the action to state court, along with an award of attorney's fees and costs pursuant 17 to 28 U.S.C. § 1447(c). The Court set an expedited briefing schedule and the matter is now 18 fully briefed. 1 19


"A motion to remand is the proper procedure for challenging removal." Moore- 21Thomas v. Alaska Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir. 2009). Remand may be 22 ordered either for lack of subject matter jurisdiction or for any defect in the removal 23 procedure. 28 U.S.C. § 1447(c). "If a district court lacks subject matter jurisdiction over a 24 25 enjoin the shareholder vote on Proposal Two and Proposal Three at the shareholder meeting scheduled for November 30, 2012. Dkt. 17. Plaintiff also filed a separate motion for 26 expedited discovery. Dkt. 18. Because these motions address the merits of the instant action, the Court must determine, as a threshold matter, whether it has subject matter 27 jurisdiction. See United Investors Life Ins. Co. v. Waddell & Reed Inc., 360 F.3d 960, 965 (9th Cir. 2004). As will be set forth below, the Court finds that jurisdiction is lacking and 28 that remand is appropriate. Therefore, these particular motions are denied as moot.

On November 26, 2012, Plaintiff filed a motion for temporary restraining order to

1removed action, it has the duty to remand it, for removal is permissible only where original 2 jurisdiction exists at the time of removal or at the time of the entry of final judgment[.]"

Sparta Surgical Corp. v. Nat'l Ass'n of Securities Dealers, 159 F.3d 1209, 1211 (9th Cir. 4 1998) (internal quotations omitted). "[R]emoval statutes are strictly construed against 5 removal." Luther v. Countrywide Home Loans Servicing, LP, 533 F.3d 1031, 1034 (9th 6 Cir. 2008). "The presumption against removal means that the defendant always has the 7 burden of establishing that removal is proper." Moore-Thomas, 553 F.3d at 1244. As such, 8 any doubts regarding the propriety of the removal favors remanding the case. See Gaus v. 9


13 that could have been brought in federal court in the first instance. Hall v. N. Am. Van 14

Lines, Inc., 476 F.3d 683, 686-87 (9th Cir. 2007). Under 28 U.S.C. § 1331, federal courts 15 have original jurisdiction over "all civil actions arising under the Constitution, laws, or 16 treaties of the United States." "[T]he presence or absence of federal-question jurisdiction is 17 governed by the 'well-pleaded complaint rule,' which provides that federal jurisdiction 18 exists only when a federal question is presented on the face of the plaintiff's properly 19 pleaded complaint." Provincial Gov't of Marinduque v. Placer Dome, Inc., 582 F.3d 1083, 20

1091 (9th Cir. 2009) (citation and quotation marks omitted). "[T]he plaintiff is 'master' of 21 her case, and if she can maintain her claims on both state and federal grounds, she may 22 ignore the federal question, ...

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