Rivera v. Fitbit, Inc.

          ORDER GRANTING PLAINTIFFS' MOTIONS TO REMAND

          SUSAN ILLSTON UNITED STATES DISTRICT JUDGE

         Plaintiffs in these related cases have filed motions to remand their cases to state court. Having considered the arguments and papers submitted, and for the reasons set forth below, the Court hereby GRANTS plaintiffs’ motions and REMANDS these actions back to their respective Superior Courts: Case No. 16-cv-02890 to the Superior Court of the State of California, County of San Mateo (“San Mateo County Superior Court”) and Case No. 16-cv-03381 to the Superior Court of the State of California, County of San Francisco (“San Francisco County Superior Court”). Pursuant to Civil Local Rule 7-1(b), the Court determines that these matters are appropriate for resolution without oral argument and hereby VACATES the hearings originally scheduled for August 5 and August 25, 2016.

         BACKGROUND

         On April 28, 2016, plaintiff Raul Rivera commenced a securities class action alleging only claims under the federal Securities Act of 1933 (the “Securities Act”) in the San Mateo County Superior Court. Case No. 16-cv-02890, Dkt. No. 1. On May 27, 2016, defendant Fitbit, Inc. (“Fitbit”) removed the action to this Court under 28 U.S.C. § 1441(a). Id. On May 17, 2016, plaintiff Ana da Luz commenced a securities class action alleging only federal Securities Act claims in the San Francisco County Superior Court. Case No. 16-cv-03381, Dkt. No. 1. Defendant Fitbit removed that case to this Court on May 17, 2016, pursuant to 28 U.S.C. § 1441(a). Id. On June 17 and June 24, 2016, plaintiffs Rivera and da Luz, respectively, moved to remand their cases back to the Superior Court, arguing that the Securities Act, 15 U.S.C. § 77v(a), prohibits removal of class actions brought in state court alleging only federal Securities Act claims and that the Securities Litigation Uniform Standards Act (“SLUSA”) did not eliminate concurrent state court jurisdiction of such cases. Case No. 16-cv-02890, Dkt. No. 29 at 8-9 (“Rivera Mot.”); Case No. 16-cv-03381, Dkt. No. 30 at 8 (“da Luz Mot.”). Fitbit has filed oppositions, and other defendants in the actions have filed joinders to those oppositions.^[1] Case No. 16-cv-02890, Dkt. Nos. 33 (“Rivera Opp.”), 35; Case No. 16-cv-03381, Dkt. Nos. 32 (“da Luz Opp.”), 34, 35. On July 8, 2016, the Court found these two actions to be related to Robb v. Fitbit, Inc., Case No. 3:16-cv-00151, pursuant to Civil Local Rule 3-12(f). Case No. 16-cv-02890, Dkt. No. 36; Case No. 16-cv-03381, Dkt. No. 36.

         LEGAL STANDARD

         28 U.S.C. § 1441(a) states, “[e]xcept 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.” Where subject matter jurisdiction is lacking, federal law provides that a district court shall remand the action. 28 U.S.C. § 1447(c). Courts must strictly construe removal statutes against removal. Luther v. Countrywide Home Loans Servicing LP, 533 F.3d 1031, 1034 (9th Cir. 2008). “Federal 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 Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979)). The burden of establishing grounds for federal jurisdiction rests on the removing party. Id. “However, a plaintiff seeking remand has the burden to prove that an express exception to removal exists.” Luther, 533 F.3d at 1034 (citations omitted).

         DISCUSSION

         I. Motions to Remand

         The question before the Court is whether the Securities Act prohibits removal of these actions. Rivera Mot. at 7; da Luz Mot. at 7. Plaintiffs on both sides argue that it does, and that this Court lacks jurisdiction and must remand the case. Rivera Mot. at 9; da Luz Mot. at 8. Defendants counter that the 1998 SLUSA amendments gave federal courts exclusive jurisdiction over covered class actions brought under the Securities Act, thereby granting this court jurisdiction. Rivera Opp. at 9; da Luz Opp. at 7.

         The parties agree that nearly every court within this district that has addressed this issue since 2012 has remanded this type of case back to state court, ruling that the Securities Act explicitly bars removal of securities class actions asserting only federal claims.^[2] Defendants do not meaningfully argue that anything has changed since those decisions were issued, but urges this Court to part ways with other judges in this district and to find, consistent with what defendants describe as the SLUSA’s intent, that the SLUSA “explicitly divested state courts of jurisdictions over class actions” brought under the Securities Act. Rivera Opp. at 2; da Luz Opp. at 2. Having examined the statutory language and persuasiveness of previous authority, the Court agrees with the great majority of other judges in this district and finds that remand is proper.

         “As with any question of statutory interpretation, [the Court] begins with the plain language of the statute.” Jimenez v. Quarterman, 555 U.S. 113, 118 (2009) (citation omitted). “In ascertaining the plain meaning of the statute, the court must look to the particular statutory language at issue, as well as the language and design of the statute as a whole.” K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 291 (1988) (citations omitted). Accordingly, the Court looks to the Securities Act’s jurisdiction and anti-removal provisions.

         The Securities Act, as amended by the SLUSA, provides:

The district courts of the United States and the United States courts of any Territory shall have jurisdiction of offenses and violations under this subchapter . . . and, concurrent with State and Territorial courts, except as provided in section 77p of this title with respect to covered class actions, of all suits in equity and actions at law brought to enforce any liability or duty created by this subchapter ..... Except as provided in section 77p(c) of this title, no case arising under this ...