United States District Court, S.D. California
STEVE WICKENS, individually and on behalf of others similarly situated, Plaintiff,
Blue Cross of California, Inc., d/b/a Anthem Blue Cross; Anthem Blue Cross Life and Health Insurance Company, Defendants.
ORDER REMANDING CASE TO STATE COURT
GONZALO P. CURIEL, District Judge.
Before the Court is an order to show cause why the case should not be remanded for lack of subject matter jurisdiction. (Dkt. No. 22.) Defendants filed a response on July 2, 2015. (Dkt. No. 23.) Plaintiff filed a reply on July 10, 2015. (Dkt. No. 24.) Based on the reasoning below, the Court REMANDS the case to state court for lack of subject matter jurisdiction.
On March 16, 2015, Plaintiff Steve Wickens ("Plaintiff") filed a class action complaint against Defendants Blue Cross of California Inc. d/b/a Anthem Blue Cross; and Anthem Blue Cross Life and Health Insurance Company in San Diego Superior Court for state law causes of action based on Defendants' failure to secure and safeguard Plaintiff's personal identifying information.
According to the complaint, on February 4, 2015, Anthem, Inc., a related entity, announced that cyber hackers had gained unauthorized access to its information technology system exposing the name, personal information, birthday, Social Security number, health care ID number, income data, employment data, street address, email address, and other personal details of about 80 million current and former customers and employees. (Dkt. No. 1-2, Compl. ¶ 4.) The class action complaint alleges causes of action for breach of contract, violation of the California Records Act, violation of the California unfair competition laws, negligence, invasion of privacy, public disclosure of private facts, and unjust enrichment. (Dkt. No. 1-2, Compl.)
On April 15, 2015, Defendants removed the case to this Court under the Class Action Fairness Act, ("CAFA"). (Dkt. No. 1, Notice of Removal at 6.) On April 24, 2015, the case was transferred to the undersigned judge pursuant to the low number rule. See Local Civ. R. 40.1. (Dkt. No. 7.) On May 5, 2015, Plaintiff filed a motion to remand. (Dkt. No. 8.) On May 7, 2015, Defendants filed a motion to stay, or in the alternative, for an extension of time to respond pending ruling on transfer motion pursuant to 28 U.S.C. § 1407. (Dkt. No. 11.)
On June 18, 2015, the Court denied Plaintiff's motion to remand and granted Plaintiff leave to file an amended complaint, and denied Defendants' motion to stay as moot. (Dkt. No. 20.) The Court concluded that while Defendants demonstrated that there was minimal diversity to support CAFA jurisdiction because Plaintiff alleged "residents" of California in the class description, the Court granted Plaintiff leave to amend the complaint to change the term "residents" of California to "citizens" of California in the class description. (Id. at 9.) While citizenship of the plaintiff class is determined on the date the case became removable, the Court concluded that the change from "resident" to "citizens" of California constituted a clarification and not an amendment. (Id. at 11.)
On June 19, 2015, Plaintiff filed an amended complaint changing the term "residents" to "citizens" in the class description. (Dkt. No. 21.) On June 22, 2015, the Court set an order to show cause hearing why the case should not be remanded for lack of subject matter jurisdiction. (Dkt. No. 22.) Defendants present two arguments in response.
A. Complete Preemption
First, Defendants argue the Court has subject matter jurisdiction because the breach of contract claim is completely preempted by the exclusive civil enforcement provisions of the Employee Retirement Income Security Act ("ERISA") because Plaintiff is insured under an ERISA plan. Plaintiff opposes arguing that Defendants' new allegation of federal question is untimely and not proper. Moreover, even if the Court considered the preemption argument, it is without merit since the claims assert an independent legal duty irrespective of the ERISA plan.
1. Timeliness of New Allegation
The Ninth Circuit has held that a defendant must state the basis for removal jurisdiction in the petition for removal which must be filed within thirty days of receiving the complaint. O'Halloran v. Univ. of Washington, 856 F.2d 1375, 1381 (9th Cir. 1988) (citing Barrow Dev. Co. v. Fulton Ins. Co., 418 F.2d 316, 317 (9th Cir. 1969) (denying leave to amend the removal petition because a removal petition cannot be thereafter amended to allege substantial changes and can only be amended to clarify "defective allegations' of jurisdiction previously made")).
Here, the notice of removal was timely filed on April 15, 2015. (Dkt. No. 1, Notice of Removal ¶¶ 9-10.) Defendants removed the action under CAFA. (Id. ¶ 14.) Defendants now raise a new argument not raised in the notice of removal that the Court has subject matter jurisdiction under ERISA. Based on the cases cited, Defendants cannot now raise a new basis for ...