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D. Cummins Corporation v. United States Fidelity and Guaranty Co.

United States District Court, N.D. California

May 28, 2014

D. CUMMINS CORPORATION and D. CUMMINS HOLDING LLC, Plaintiffs,
v.
UNITED STATES FIDELITY AND GUARANTY COMPANY, UNITED STATES FIRE INSURANCE COMPANY, and DOES 1-100, Defendants.

ORDER REMANDING CASE

SAMUEL CONTI, District Judge.

I. INTRODUCTION

Plaintiffs D. Cummins Corporation ("Cummins Corp.") and D. Cummins Holding LLC ("Cummins Holding") brought this action in California Superior Court against Defendants United States Fidelity and Guaranty Company ("USF&G") and United States Fire Insurance Company ("US Fire") seeing declaratory judgment regarding the terms of Cummins Corp.'s insurance contracts. Defendants removed the action to federal court pursuant to 28 U.S.C. § 1441.

Now before the Court is Plaintiffs' motion to remand the matter to state court. The motion is fully briefed[1] and suitable for determination without oral argument per Civil Local Rule 7-1(b). For the reasons set forth below, Plaintiffs' motion is GRANTED and the matter is REMANDED to the California Superior Court.

II. BACKGROUND

Cummins Corp., formerly known as Valley Asbestos Company, was an installer of insulation products. Some of the products it installed contained asbestos, and it now faces hundreds of asbestos bodily injury lawsuits. ECF No. 1 ("Removal Not.") at 31-32. Cummins Corp. is insured by Defendants. Id. at 33. Plaintiffs brought this action in California state court seeking declaratory relief. Primarily, Cummins Corp. seeks declarations that the insurance policies provide defense and indemnity coverage for liability arising out of claims alleging bodily injury as a result of exposure to asbestos, and that the policies require Defendants to defend and indemnify Cummins Corp. against such claims. Id. at 31. Defendants removed this action to federal court.

III. LEGAL STANDARD

Defendants to a civil action brought in state court may remove the matter to federal district court, so long as the district court has original jurisdiction. 28 U.S.C. § 1441. "If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C.A. § 1447(c). Courts "strictly construe the removal statute against removal jurisdiction, " and "[f]ederal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance." Gaus v. Miles, Inc. , 980 F.2d 564, 566 (9th Cir. 1992).

Federal district courts have original jurisdiction over "all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. They also have original jurisdiction over civil actions where the amount in controversy exceeds $75, 000 and is between citizens of different states. 28 U.S.C. § 1332.

IV. DISCUSSION

The parties agree that federal question jurisdiction does not exist in this case, as the sole cause of action is grounded in California law. However, the parties differ as to whether diversity jurisdiction exists.

A. Diversity Jurisdiction

Diversity jurisdiction exists in civil actions between citizens of different states where the amount in controversy exceeds $75, 000. There appears to be no dispute in this case as to whether the amount in controversy requirement is met; the sole issue in dispute is whether the parties are diverse. Diversity jurisdiction under 28 U.S.C. § 1332(a) requires complete diversity: no plaintiff can be from the same state as any defendant. Kuntz v. Lamar Corp. , 385 F.3d 1177, 1181 (9th Cir. 2004).

A corporation is a citizen of the state in which it is incorporated and the state where it has its principal place of business. 28 U.S.C. § 1332(c)(1); Johnson v. Columbia Properties Anchorage, LP , 437 F.3d 894, 899 (9th Cir. 2006). Plaintiff Cummins Corp. is incorporated in California, and its principal place of business is there as well. Id. at 31. Therefore Cummins Corp. is a citizen of California only. USF&G is incorporated in Connecticut with its principal place of business in Connecticut. Id. at 3. USF&G is a citizen of Connecticut only. U.S. Fire is incorporated in Delaware with its principal place of business in New ...


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