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Hip Hop Beverage Corp. v. Michaux

United States District Court, C.D. California

July 25, 2016

Hip Hop Beverage Corp.
v.
Juneice Deanna Michaux, et al.

          PRESENT: HONORABLE MICHAEL W. FITZGERALD, U.S. DISTRICT JUDGE

          (IN CHAMBERS): ORDER DENYING PLAINTIFF’S MOTION TO REMAND TO STATE COURT [12]

          HONORABLE MICHAEL W. FITZGERALD, U.S. DISTRICT JUDGE

         Before the Court is Plaintiff’s Motion to Remand (the “Motion”), filed on June 6, 2016. (Docket No. 12). Defendant Chase Bank submitted an Opposition on June 27, 2016, and Plaintiff’s Reply followed on July 5, 2016. (Docket Nos. 16, 17). The Court reviewed and considered all papers submitted on the Motion and held a hearing on July 18, 2016.

         The Motion is DENIED. The Court has subject matter jurisdiction over this action because the parties are completely diverse and the amount in controversy exceeds $75, 000. Defendant Chase Bank’s removal was timely, moreover, as it was effected shortly after the facts establishing the Court’s jurisdiction were discovered.

         I. BACKGROUND

         This action arises out of an alleged embezzlement scheme carried out by one of Plaintiff’s former executives, Defendant Michaux. The scheme, according to the Third Amended Complaint (“TAC”), operated as follows:

         Defendant Michaux was in charge of all financial matters related to one of Plaintiff’s largest clients-ANHAM FZZCO, LLC. (TAC ¶¶ 12, 14 (Docket No. 1-2)). On numerous occasions during a sixteen-month period, Defendant Michaux funneled the sale proceeds from ANHAM FZZCO to a shell company with an almost identical name, AHNM FZCO, LLC. (Id. ¶¶ 36, 47). Defendant Michaux then moved a portion of the money to Plaintiff’s account, and the rest to her own personal account. (Id. ¶ 47). To make it look as if it were Plaintiff’s client, as opposed to Defendant Michaux’s shell company, that was transferring funds into Plaintiff’s account, Defendant Michaux enlisted the services of a manager working for Defendant Chase Bank. (Id. ¶¶ 30-46). With her help, Defendant Michaux successfully embezzled millions of dollars that belonged to Plaintiff. (Id. ¶ 47).

         On May 13, 2015, Plaintiff initiated this action in the Los Angeles Superior Court against Defendants Michaux, AHNM FZCO, and Chase Bank. Plaintiff asserts a claim for breach of fiduciary duty against Defendant Michaux, a claim for accounting against Defendants Michaux and AHNM FZCO, and a claim for aiding and abetting breach of fiduciary duty against Defendant Chase Bank. (Id. ¶¶ 59-74).

         On May 12, 2016, Defendant Chase Bank removed the action to this Court under 28 U.S.C. § 1446(a). (Notice of Removal at 1 (Docket No. 1)). According to Defendant Chase Bank, this Court has diversity jurisdiction because the amount in controversy exceeds $75, 000 and the parties are completely diverse. (Id. at 3-4). Plaintiff now brings this Motion to contest the removal on both substantive and procedural grounds.

         II. DISCUSSION

         A defendant seeking to remove a state court action to federal court bears the burden of establishing subject matter jurisdiction. Generally speaking, jurisdiction is proper when the amount in controversy exceeds $75, 000 and the state of domicile of each plaintiff is different from that of each defendant at the time the action is filed. 28 U.S.C. § 1332. A person's domicile is her permanent home; it changes only when the person physically resides in another state with the intent to remain there indefinitely. See Lew v. Moss, 797 F.2d 747, 750 (9th Cir. 1986) (“A change in domicile requires the confluence of (a) physical presence at the new location with (b) an intention to remain there indefinitely.”). An individual’s intent to remain in a particular state may be inferred from evidence of “current residence, voting registration and voting practices, location of personal and real property, location of brokerage and bank accounts, location of spouse and family, membership in unions and other organizations, place of employment or business, driver’s license and automobile registration, and payment of taxes.” Id.

         Even if the defendant succeeds in establishing subject matter jurisdiction, removal may be nonetheless improper if it violates the procedural requirements of 28 U.S.C. § 1446(b). The defendant must, among other things, file for removal no later than thirty days after receiving notice of removability. 28 U.S.C. § 1446(b). That notice could come from the initial pleading or some “other paper.” Id. “Other paper” could be deposition testimony, Steiner v. Horizon Moving Systems Inc., 568 F.Supp.2d 1084, 1086-87 (C.D. Cal. 2008), a letter from opposing counsel, Harris v. Bankers Life & Cas. Co., 425 F.3d 689, 691-96 (9th Cir. 2005), or even an email, Rollins v. Fresenius USA, Inc., No. CV 13-09394, 2014 WL 462822 *5 (C.D. Cal. 2014). When removability cannot be ascertained from any pleading or paper, no thirty-day clock is triggered even if the defendant could have ascertained facts supporting removal jurisdiction on its own. See Roth v. CHA Hollywood Med. Ctr., L.P., 720 F.3d 1121, 1125 (9th Cir. 2013) (“[I]f a defendant could have discovered grounds for removability through investigation, it does not lose the right to remove because it did not conduct such an investigation and then file a notice of removal within thirty days of receiving the indeterminate document.”).

         Plaintiff contends both that this Court lacks diversity jurisdiction and that Defendant Chase Bank’s removal was untimely. The Court examines each contention in turn.

         A. Subject ...


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