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Penn, v. Amazon.Com, Inc.

United States District Court, C.D. California

May 24, 2017

Shauna Penn,
v., Inc., et al.




         Having read and considered the papers presented by the parties, the Court finds this matter suitable for determination without oral argument. See Fed. R. Civ. P. 78; Local Rule 7-15. Accordingly, the hearing scheduled for June 5, 2017 at 1:3O p.m. is VACATED and OFF CALENDAR.


         Plaintiffs Shauna and Jonathan Penn ("Plaintiffs") bring this case against Defendants Amazon. Com, Inc. ("Amazon"), and American International Industries ("All", collectively "Defendants"). Plaintiffs allege, inter alio, a products liability claim arising from Shauna Perm's injury while using a callus remover manufactured by All and sold and distributed by Amazon. On April 7, 2017, Amazon removed this action to federal court based on diversity jurisdiction. On May 1, 2017, Plaintiffs filed a motion for remand. For the following reasons, the motion is GRANTED.


         On March 21, 2017, Plaintiffs filed this action in California state court. The parties do not dispute that diversity of citizenship exists between all parties and the amount in controversy is over $75, 000. Thus, the Court has diversity jurisdiction over the case. See 28 U.S.C. § 1332. It is also undisputed that AH is a resident of California. Further, 28 U.S.C. § 1441(b)(2) prohibits removal "if any of the parties in interest properly joined and seived as defendants is a citizen of the State in which [an] action is brought." On April 7, 2017, Amazon removed the case to federal court. At this point, neither defendant had been served. On April 20, 2017, Plaintiffs seived All-the forum defendant.


         The district court may remand a case for lack of subject matter jurisdiction or for any defect in the removal procedure. 28 U.S.C. § 1447(c). In light of the "strong presumption against removal jurisdiction, " a defendant "always has the burden of establishing that removal is proper." Gaits v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (internal quotations omitted). We "strictly construe the removal statute against removal jurisdiction, " id., and "[w]here doubt regarding the right to removal exists, a case should be remanded to state court, " Matheson v. Progressive Specialty Im. Co., 319 F.3d 1089, 1090 (9th Cir. 2003); see also 28 U.S.C. § 1447(c).


         There is no dispute that the plain language of § 1441(b)(2) did not prohibit Amazon from removing the case. That section prohibits removal when a forum defendant is "properly joined and served". Id. (emphasis added). When amazon removed the case there was no forum defendant served at the time.

         Plaintiffs argue that the Court should not follow the plain language of § 1441(b)(2). Essentially, then argument is that when Congress enacted § 1441(b)(2) the technology did not exist for corporate defendants to monitor state dockets and identify cases in which they have been named, but not served. This technology allows defendants to remove cases that would otherwise not be removable after service of process is complete. This concern is "far from academic." Phillips Constr., LLC v. Daniels Law Finn, PLLC, 93 F.Supp.3d 544, 555 (S.D. W.Va. 2015) (finding "substantial evidence that sophisticated defendants monitor court dockets for the chance to hastily remove new complaints."). Plaintiffs argue that even though Amazon's removal conformed to the plam language of the statute, it produces an "unreasonable result[] at variance with the policy of the legislation as a whole." See Standing v. Watson Pharm., Inc., No. CV09-0527 DOC(ANX), 2009 WL 842211, at *4 (CD. Cal. Mar. 26, 2009).

         District courts are split on this issue and there is no authority from the Ninth Circuit. Though almost all district courts have foimd the plain language of § 1441(b)(2) allows removal before a forum-defendant is seived, some district courts find that adherence to the plain language would lead to an absurd result, and thus depart from the plain language. See Standing, 2009 WL 842211, at *2-5 (finding that removal one day after the case was filed was an unreasonable result and thus departing from the plain language of § 1441(b)(2)). These courts "look past a literal reading of the statute, determine that a blind application of the plam meaning of Section 1441(b)(2) is contrary to legislative intent or produces absurd results." Phillips Constr., LLC, 93 F.Supp.3d at 552. "[T]he emerging trend seems in favor of disallowing pre-service removal." Perez v. Forest Labs., Inc., 902 F.Supp.2d 1238, 1245 (E.D. Mo. 2012).[1]

         This Court is convinced by the cases finding that removal in this simation "produces unreasonable results at variance with the policy of the legislation as a whole." Standing, 2009 WL 842211, at *4; cf City-of Ann Arbor Employees' Retirement System v. Gecht, No. C-06-7453 EMC, 2007 WL 760568, at *8 (N.D. Cal. Mar. 9, 2007) (declining to follow the plain language of § 1441(b)(2) because "[a] court Took[s] beyond the express language of a stamte where a literal interpretation would thwart the piupose of the overall statutory scheme or lead to an absurd or futile result."') (citing Albertson's, Inc. v. Commissioner of Internal Revenue,42 F.3d 537, 545 (9th Cir. 1994)). The requirement for a forum-defendant to be "properly joined and served" is intended "as an effort to prevent gamesmanship by plaintiffs." Goodwin v. Reynolds, 757 F.3d 1216, 1221 (11th Cir. 2014) (citing Sullivan v. Novartis Pharms. Corp.,575 F.Supp.2d 640, 643 (D.N.J. 2008)). This requirement prevents a plaintiff from preventing removal by joining a forum-defendant whom the plaintiff has no intent to proceed against, or even serve. See Id. A literal reading of ยง ...

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