United States District Court, C.D. California
Bridewell-Sledge, et al.
Blue Cross of California, et al.
REMANDING ACTION TO LOS ANGELES SUPERIOR COURT
MARGARET M. MORROW, District Judge.
I. FACTUAL AND PROCEDURAL BACKGROUND
On October 20, 2011, plaintiffs Ebony Bridewell-Sledge and Bettie Perry filed this putative class action in San Francisco Superior Court against Blue Cross of California ("Blue Cross"), Anthem Blue Cross Life and Health Insurance Company ("Anthem"), and various fictitious defendants, alleging claims for employment discrimination and unfair business practices. On November 30, 2011, defendants filed a motion to transfer the case to Los Angeles Superior Court, which was denied. They filed a renewed motion to transfer that was granted on January 26, 2012.
On November 19, 2013, the Los Angeles Superior Court consolidated the case with a related class action, Jermaine Crowder v. Blue Cross.  On July 19, 2013, the state court sustained defendants' demurrer to the complaint in part. Plaintiffs amended their complaint to substitute the Wellpoint Companies, Inc. ("Wellpoint") and the Wellpoint Companies of California, Inc. ("Wellpoint California") (collectively, "the Wellpoint defendants"), for two of the fictitious defendants on May 12, 2014. They served the Wellpoint defendants on May 21, 2014. On June 19, 2014, defendants removed this action, and separately removed the Crowder action, invoking the court's jurisdiction under the Class Action Fairness Act ("CAFA"), codified at 28 U.S.C. § 1332(d)(2), et seq.  As had the state court, the court thereafter consolidated the cases.
On July 17, 2014, the court issued an order to show cause why the Bridewell action should not be remanded to state court for lack of subject matter jurisdiction. It directed defendants to demonstrate that there was minimal diversity of citizenship and to brief whether the court was required to decline jurisdiction under CAFA's home state and/or local controversy exceptions. Plaintiffs, for their part, filed a motion to remand on July 21, 2014. In it, they contended that defendants removal was untimely and that the court should decline jurisdiction under the home controversy exception. On July 24, 2014, defendants filed a response to the order to show cause. Plaintiffs filed a reply on July 29, 2014.
The court discharged the order to show cause in the Bridewell action on August 28, 2014, finding that the citizenship of the parties was minimally diverse, and that the home state controversy exception was inapplicable because Wellpoint is a primary defendant and not a citizen of California. The court also found that there was insufficient evidence in the record to find that the local controversy exception applied. One of the prerequisites to application of the local controversy exception is that "during the 3-year period preceding the filing of th[e] class action, no other class action has been filed asserting the same or similar factual allegations against any of the defendants on behalf of the same or other persons." See 28 U.S.C. § 1332(d)(4)(A)(ii). Based on the evidence in the record at the time the court discharged the Bridewell-Sledge order to show cause, it could not determine whether the Bridewell or Crowder action had been filed first, and thus could not decide whether the local controversy exception applied.
The same day it discharged the order to show cause in Bridewell-Sledge, the court issued an amended order to show cause why the Crowder case should not be remanded. As in this action, the court directed defendants to demonstrate that there was minimal diversity of citizenship between the parties, and that the court was not required to decline jurisdiction under the local controversy and/or home state controversy exceptions. On September 9, 2014, defendants filed a response. In it, defendants argued that the local controversy exception did not apply because plaintiffs "ha[d] not shown which class action was filed first and [thus] ha[d] not met their burden to prove that no similar class action [had been] filed within three years before the Crowder [c]omplaint was filed."
Plaintiffs replied on September 16, 2014,  asserting that the Bridewell-Sledge action had been filed "exactly 13 minutes and 50 seconds" before the Crowder action. As a result, plaintiffs asserted that the local controversy exception covered the Bridewell-Sledge action, and that it should be remanded. On September 17, 2014, plaintiffs filed an amended declaration in support of their reply, which proffered evidence as to when the Crowder and Bridewell-Sledge actions were filed.
Defendants filed objections to plaintiffs' reply on September 29, 2014, contending that it exceeded the scope of the order to show cause and their response. Specifically, they argued that plaintiffs' argument concerning remand of the Bridewell-Sledge action was improper. Defendants asked that the court not consider the new argument and evidence; alternatively, they sought leave to file a surreply. On October 23, 2014, the court granted defendants leave to file a surreply. The same day, the court denied plaintiffs' motion to remand, concluding that defendants' notice of removal was timely, and that the home state controversy exception was inapplicable; the court did not address the local controversy exception as it was not raised in the motion. On October 30, 2014, defendants filed their surreply. On November 5, 2014, they filed a request for judicial notice in support of the surreply.
A. Legal Standard Governing Removal Jurisdiction
The right to remove a case to federal court is entirely a creature of statute. See Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979). The removal statute, 28 U.S.C. § 1441, allows defendants to remove when a case originally filed in state court involves a federal question or is between citizens of different states and involves an amount in controversy that exceeds $75, 000. See 28 U.S.C. §§ 1441(a), (b). Only state court actions that could originally have been filed in federal court can be removed. 28 U.S.C. § 1441(a) ("Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending"); see Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987); Ethridge v. Harbor House Rest., 861 F.2d 1389, 1393 (9th Cir. 1988).
The Ninth Circuit "strictly construe[s] 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) (citing Boggs v. Lewis, 863 F.2d 662, 663 (9th Cir. 1988), Takeda v. Northwestern Nat'l Life Ins. Co., 765 F.2d 815, 818 (9th Cir. 1985), and Libhart, 592 F.2d at 1064). "The strong presumption' against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper." Id. (citing ...