United States District Court, N.D. California
ORDER GRANTING MOTION TO REMAND Re: Dkt. No. 9
NATHANAEL M. COUSINS, Magistrate Judge.
Before the Court is Tourigny's motion to remand this action to state court. Because the Court agrees that the plain language and policy behind the local defendant rule bars Symantec from removing the case, the Court GRANTS Tourigny's motion to remand.
In November 2014, plaintiff Paul Tourigny sued Symantec Corporation in California Superior Court for age discrimination in violation of the California Fair Employment and Housing Act. In January 2015, after Tourigny notified Symantec of an error in the initial service of process, Symantec removed the case to federal court on the basis of diversity jurisdiction. However, removal on the basis of diversity jurisdiction is procedurally flawed when the defendant is "local, " meaning a citizen of the state in which it is sued. Symantec argues that removal is nonetheless proper because a local defendant is only barred from removing to federal court when it has been served.
All parties have consented to the jurisdiction of a magistrate judge. Dkt. Nos. 6, 10.
I. LEGAL STANDARD
Federal courts are courts of limited jurisdiction and are presumptively without jurisdiction. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Removal of a state court action to federal court is appropriate only if the federal court would have had original subject matter jurisdiction over the suit. See 28 U.S.C. § 1441(a). A federal district court must remand a removed case to state court "[i]f at any time before the final judgment it appears that the district court lacks subject matter jurisdiction." Id. In deciding whether removal was proper, courts strictly construe the removal statute against finding jurisdiction, and the party invoking federal jurisdiction bears the burden of establishing that removal was appropriate. Provincial Gov't of Marinduque v. Placer Dome, Inc., 582 F.3d 1083, 1087 (9th Cir. 2009) (citations omitted). Where doubt exists regarding the right to remove an action, it should be resolved in favor of remand to state court. Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003).
Tourigny argues that remand is proper because (1) Symantec is barred from removing to federal court because it is a local defendant, and (2) in the alternative, Symantec was served prior to removal. Dkt. No. 9. The Court declines to reach Tourigny's second argument, finding that the local defendant rule bars removal to this Court.
Generally, a defendant to an action in state court has 30 days from service of the complaint to remove a case to federal court. 28 U.S.C. § 1446(b). In most cases, original federal subject matter jurisdiction may be premised on two grounds: (1) diversity jurisdiction, or (2) federal question jurisdiction. District courts have diversity jurisdiction over "all civil actions where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, " and the action is between citizens of different states. 28 U.S.C. § 1332. A corporation is a citizen of the states in which it is incorporated and has its principal place of business. 28 U.S.C. § 1332(c)(1).
Here, Symantec claims federal jurisdiction based on the diversity of the parties. Dkt. No. 1 at ¶ 7. Tourigny is a citizen of Massachusetts, and Symantec is a corporation, incorporated in Delaware with its principal place of business in California. Id. at ¶¶ 8, 9. Symantec states, and Tourigny does not challenge, that the amount in controversy exceeds $75, 000. Id. at ¶ 10-12. Additionally, Tourigny's claims are all based on state law, and not federal law. Dkt. No. 1. Thus, this Court has subject matter jurisdiction because the parties are properly diverse and the amount in controversy requirement has been met.
However, Congress created an exception for diversity jurisdiction when the defendant is "local, " or a citizen of the state in which he was sued. A local defendant cannot remove the case to federal court. 28 U.S.C. § 1441(b)(2). Specifically, this "local defendant rule" provides that a case may not be removed once "any of the defendants are joined and served." Id. The rule is a procedural limitation on removal, not a jurisdictional one; therefore, a plaintiff seeking remand of the case must make such a motion within thirty days of removal. Lively v. Wild Oats Markets, Inc., 456 F.3d 933, 939 (9th Cir. 2006); 28 U.S.C. § 1447(c). Here, Symantec is a local defendant, as a citizen of California, and Tourigny timely filed a motion for removal. Dkt. No. 9.
The question presented to the Court is whether a local defendant can remove a case to federal court based on diversity jurisdiction prior to service. Symantec argues that the local defendant rule only bars removal once a defendant has been served in state court. Dkt. No. 12 at 4. Reading the rule literally, Symantec argues, the statute only applies when all defendants are joined and served. Id. Symantec cites a number of district court cases in this district and others that have taken a literal approach to the text of the local defendant rule and find that a defendant can remove prior to service. Id. at 6. Tourigny argues that the same rule is intended to prevent local defendants from removing the case to federal court, regardless of whether they have been served. Dkt. No. 9 at 6. Tourigny points to the policy of protecting a plaintiff's choice of forum, and the general policy discouraging removal of cases to federal court. Id. Tourigny also cites district court cases supporting his reading of the removal statute. Id. at 9-12.
This Court is presented with a legal question which has yet to be decided by any circuit courts. District courts are divided in their interpretation of the local defendant rule. Generally, the district courts either (1) read the rule literally and conclude that removal prior to service is proper, or (2) find that such literal reading creates an absurd result that conflicts with the statute's purpose to bar local defendants from removal. Compare Holstrom v. Harad, 2005 WL 1950672 (N.D. Ill. Aug. 11, 2001), with Frick v. Novartis Pharms. Corp., 2006 WL 454360 (D.N.J. Feb. 23, 2006). However, nearly all courts that examine the statute do so in the context of multiple defendants. See Allen v. Glaxosmithkline PLC, 2008 WL 2247067 at *5 (E.D. Penn. May 30, 2008). This Court finds that under either approach, the result is the same and ...