United States District Court, N.D. California
KENNETH J. RADER, JR., Plaintiff,
SUN LIFE ASSURANCE COMPANY OF CANADA; DAVE JONES, AS COMMISSIONER OF INSURANCE; DOES 1-20, Defendants
For Kenneth J. Rader, Jr., Plaintiff: Arnold Ross Levinson, Terrence J. Coleman, LEAD ATTORNEYS, Pillsbury & Levinson LLP, Transamerica Pyramid, San Francisco, CA; Ryan Hideki Opgenorth, Pillsbury Levinson LLP, San Francisco, CA.
For Sun Life Assurance Company of Canada, Defendant: Daniel William Maguire, Esq., Michael Bernard Bernacchi, LEAD ATTORNEYS, Burke Williams & Sorensen, LLP, Los Angeles, CA.
YVONNE GONZALEZ ROGERS, UNITED STATES DISTRICT COURT JUDGE.
Order Granting Motion of Plaintiff Kenneth J. Rader, Jr., to Remand
Plaintiff Kenneth J. Rader (" Rader" ) filed his complaint in the Superior Court of California, County of San Francisco, alleging claims against Defendant Sun Life Assurance Company of Canada (" Sun Life" ) for breach of contract and breach of the covenant of good faith and fair dealing with regard to his group disability insurance policy, and against Defendant Dave Jones, California Insurance Commissioner (" the Commissioner" ), for a writ of mandamus on account of his approval of the policy allegedly in contravention of provisions of the California Insurance Code. Sun Life removed the action to this Court by Notice of Removal filed February 8, 2013, on grounds of diversity jurisdiction under 28 U.S.C. § 1441(a), contending that the Commissioner is a sham defendant. (Dkt. No. 1, Notice of Removal [" NOR" ].) Rader has filed a Motion to Remand the action to the state court. (Dkt. No. 7.)
Having carefully considered the papers submitted and the pleadings in this action, and for the reasons set forth below, the Court hereby Grants the Motion to Remand. 
Rader's complaint alleges breach of contract and breach of the covenant of good faith and fair dealing against Sun Life. It also alleges a claim for a writ of mandamus against the Commissioner on the grounds that he abused his discretion by approving the policy Sun Life issued since it included provisions violating California law, including: (1) conditioning payment of disability benefits without regard to whether the insured is able to perform the substantial and material duties of his own occupation with reasonable continuity and in the usual and customary way; (2) limiting benefits payable for disabilities due to drug and alcohol illness and mental disabilities where there is no evidence that such limitations are based on sound actuarial principals or reasonably anticipated experience, in violation of California Insurance Code section 10144; and (3) a Proof of Claim provision that purportedly requires the contemporaneous submission of treatment records that would allow Sun Life to withhold benefits even where, as here, the disability is established by the certifications and statements of treating physicians. Each of these limitations, Rader claims, violates California law and should not have been approved by the Commissioner.
Sun Life contends that the Commissioner was fraudulently joined by Rader in order to defeat diversity jurisdiction and should be disregarded. In its Notice of Removal, Sun Life argued four bases for removal. First, Sun Life contended that the requested writ of mandamus is not legally cognizable under California law because mandamus only lies to compel a clear, present, ministerial duty per California Code of Civil Procedure section 1085. Because the Commissioner's enforcement of the Insurance Code sections at issue in the Complaint involves the exercise of his discretion, the writ relief sought cannot be granted. Second, Sun Life argued that no basis exists for the Court to order the remedy Rader seeks because the Commissioner only has the authority to withdraw his approval of a disability policy form on a prospective basis, not to revoke or rescind a previously approved group disability policy.
Third, Sun Life argued that writ relief is only appropriate where the petitioner has no plain, speedy, or adequate remedy at law, and here Rader has such a remedy - namely to ask the Court to conform the policy to state law if any violation is found. Finally, Sun Life maintained that the Commissioner should be considered a sham defendant because other cases by Plaintiff's counsel under similar circumstances have been dismissed or were not pursued by Plaintiff's counsel in the ...