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Liu v. Xoom Corporation

United States District Court, N.D. California, San Jose Division

June 25, 2015

ALEXANDER LIU, individually and on behalf of all others similarly situated, Plaintiff,
v.
XOOM CORPORATION, et al., Defendants. PATRICK ANDREW BARRETT, individually and on behalf of all others similarly situated, Plaintiff
v.
XOOM CORPORATION, et al., Defendants.

ORDER GRANTING MOTION TO REMAND Related Case No. 15-CV-01319-LHK

LUCY H. KOH, District Judge.

Plaintiff Alexander Liu ("Plaintiff") brings a putative securities class action against Xoom Corporation ("Xoom"), John Kunze, and Ryno Blignaut (collectively, "Defendants"). ECF No. 1-1 ("Compl.") ¶¶ 1, 6-9. Before the Court is Plaintiff's motion to remand this action to San Francisco County Superior Court. ECF No. 10 ("Mot."). Defendants oppose the motion, ECF No. 15 ("Opp."), and Plaintiff has replied, ECF No. 16 ("Reply").

The Court finds this matter suitable for decision without oral argument under Civil Local Rule 7-1(b) and hereby VACATES the motion hearing and initial case management conferences set for July 2, 2015, at 1:30 p.m. Having considered the submissions of the parties, the relevant law, and the record in this case, the Court hereby GRANTS Plaintiff's motion to remand.

On March 26, 2015, the Court granted the parties' motion to relate Barrett v. Xoom Corp., No. 15-CV-01319, to Liu v. Xoom Corp., No. 15-CV-00602. ECF No. 14. Pursuant to the parties' stipulation, the Court's ruling on the instant motion to remand applies to both the Liu action and the related Barrett action. Id. at 2. All ECF references are to the Liu action.

I. BACKGROUND

Plaintiff brings a putative securities fraud class action on behalf of all persons who purchased or otherwise acquired the common stock of Xoom pursuant or traceable to Xoom's Registration Statement and Prospectus, declared effective by the Securities and Exchange Commission ("SEC") on February 14, 2013, and issued in connection with Xoom's initial public offering ("IPO"). Compl. ¶ 1. Plaintiff's complaint asserts two causes of action, both of which arise under the Securities Act of 1933 (the "Securities Act"). Id. ¶ 2. Specifically, Plaintiff alleges violations of (1) section 11 of the Securities Act, id. ¶¶ 29-35; and (2) section 15 of the Securities Act, id. ¶¶ 36-41. Plaintiff alleges no state law causes of action.

Plaintiff originally filed suit on January 6, 2015, in San Francisco County Superior Court. See Compl. Service was attempted on January 8, 2015, and January 15, 2015. ECF No. 1 at 1. Defendants continue to dispute whether service was proper. See id. at 1 n.1.

On February 6, 2015, Defendants removed this action to federal court pursuant to 28 U.S.C. § 1441(a), which authorizes removal "[e]xcept as otherwise expressly provided by Act of Congress." On February 27, 2015, Plaintiff filed the instant motion to remand. Mot. at 9. Defendants opposed the motion on March 30, 2015. Opp. at 23. Plaintiff replied on April 6, 2015. Reply at 10.

II. LEGAL STANDARD

A suit may be removed from state court to federal court only if the federal court would have had subject matter jurisdiction over the case. 28 U.S.C. § 1441(a); see Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987) ("Only state-court actions that originally could have been filed in federal court may be removed to federal court by the defendant."). "In civil cases, subject matter jurisdiction is generally conferred upon federal district courts either through diversity jurisdiction, 28 U.S.C. § 1332, or federal question jurisdiction, 28 U.S.C. § 1331." Peralta v. Hispanic Bus., Inc., 419 F.3d 1064, 1068 (9th Cir. 2005). If it appears at any time before final judgment that the federal court lacks subject matter jurisdiction, the federal court must remand the action to state court. 28 U.S.C. § 1447(c).

"The removal statute is strictly construed, and any doubt about the right of removal requires resolution in favor of remand." Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir. 2009). This "strong presumption against removal jurisdiction" means that a defendant ordinarily "has the burden of establishing that removal is proper." Hunter v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009) (quoting Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (per curiam)). "However, a plaintiff seeking remand has the burden to prove that an express exception to removal exists." Luther v. Countrywide Home Loans Servicing LP, 533 F.3d 1031, 1034 (9th Cir. 2008).

III. DISCUSSION

The parties agree that, because there is no diversity of citizenship, federal question jurisdiction under 28 U.S.C. § 1331 provides the only basis for the Court to have subject matter jurisdiction in this case. ECF No. 1 at 2; see Caterpillar, 482 U.S. at 392 ("Absent diversity of citizenship, federal-question jurisdiction is required."). The parties also agree that Plaintiff's complaint, which alleges solely federal law claims, arises under federal law for purposes of 28 U.S.C. § 1331.

A civil action that originally could have been brought in federal court may be removed from state court to federal court, "[e]xcept as otherwise expressly provided by Act of Congress." 28 U.S.C. § 1441(a). "[Section 77v(a)] of the Securities Act of 1933 provides such an express exception to removal." Luther, 533 F.3d at 1034. For years, this antiremoval provision stated: "No case arising under this subchapter and brought in any State court of competent jurisdiction shall be removed to any court of the United States." 15 U.S.C. § 77v(a) (1997). The Securities Act also contained a jurisdictional provision allowing for concurrent jurisdiction over Securities Act claims in both state and federal courts: "The district courts of the United States... shall have jurisdiction of offenses ...


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