United States District Court, E.D. California
MEMORANDUM AND ORDER
MORRISON C. ENGLAND, JR. UNITED STATES DISTRICT JUDGE.
August 31, 2016, Plaintiff Core Communication, Inc.
(“Plaintiff”) filed this action in state court on
grounds that Defendant Henkels & McCoy, Inc.
(“Defendant”) breached the terms of a
construction subcontract agreement between the parties for
work performed in Amador County, California. Defendant
subsequently removed the case to this Court on November 23,
2016, citing diversity of citizenship pursuant to 28 U.S.C.
§ 1332. Plaintiff now moves to remand, arguing that this
Court should abstain from exercising jurisdiction since the
case presents only issues of state law. For the reasons set
forth below, Plaintiff's Motion is DENIED.
litigation stems from a project to install underground fiber
optic cable in Amador County. Compl, ¶ 10. Defendant was
the contractor, and Plaintiff acted as a subcontractor
pursuant to the terms of a written subcontract. See
Subcontract Agreement, Ex. A to Pl.'s Compl. Plaintiff
alleges that it is owed some $224, 791.85 on the contract,
and further seeks a judicial determination that specific
parts of the subcontract violate applicable California law,
are contrary to California public policy, and are therefore
void and unenforceable. More specifically, Plaintiff alleges
that provisions in the subcontract making its payments
contingent upon payment to Defendant for the work performed
violates California law, since such “pay if paid”
provisions have been rejected by applicable case
Plaintiff further contends that the subcontract's forum
selection and choice of law provisions are also contrary to
California law pursuant to California Code of Civil Procedure
§ 410.42, which prohibits enforcement of construction
contract provisions that require disputes between contractors
and California subcontractors to be litigated outside
indicated above, Defendant removed this matter here on
November 23, 2016, and Plaintiff subsequently filed the
motion to remand now before the Court.
case “of which the district courts of the United States
have original jurisdiction” is initially brought in
state court, the defendant may remove it to federal court
“embracing the place where such action is
pending.” 28 U.S.C. § 1441(a). There are two bases
for federal subject matter jurisdiction: (1) federal question
jurisdiction under 28 U.S.C. § 1331, and (2) diversity
jurisdiction under 28 U.S.C. § 1332. A district court
has federal question jurisdiction in “all civil actions
arising under the Constitution, laws, or treaties of the
United States.” Id. § 1331. A district
court has diversity jurisdiction “where the matter in
controversy exceeds the sum or value of $75, 000, . . . and
is between citizens of different states, or citizens of a
State and citizens or subjects of a foreign state . . .
.” Id. § 1332(a)(1)-(2).
defendant may remove any civil action from state court to
federal district court if the district court has original
jurisdiction over the matter. 28 U.S.C. § 1441(a).
“The party invoking the removal statute bears the
burden of establishing federal jurisdiction.”
Ethridge v. Harbor House Rest., 861 F.2d 1389, 1393
(9th Cir. 1988) (citing Williams v. Caterpillar Tractor
Co., 786 F.2d 928, 940 (9th Cir. 1986)). Courts
“strictly construe the removal statute against removal
jurisdiction.” Gaus v. Miles, Inc., 980 F.2d
564, 566 (9th Cir. 1992) (internal citations omitted).
“[I]f there is any doubt as to the right of removal in
the first instance, ” the motion for remand must be
granted. Id. Therefore, “[i]f at any time
before final judgment it appears that the district court
lacks subject matter jurisdiction, the case shall be
remanded” to state court. 28 U.S.C. § 1447(c).
moving for remand, Plaintiff urges the Court to abstain from
exercising diversity jurisdiction over this matter on grounds
that the instant dispute is over payment for work that took
place in Amador County, and that the dispute should be
resolved in California courts since it involves the
interpretation of California law and was initially filed in
diversity jurisdiction, however, as indicated above, a
defendant is entitled to remove any case filed against it,
provided that the defendant is not a citizen of the state in
which the action is brought and the amount in controversy
exceeds $75, 000. See 28 U.S.C. § 1441(b)(2);
28 U.S.C. § 1332(a). Neither of these prerequisites for
the exercise of diversity jurisdiction is disputed here.
as Defendant notes, Plaintiff in essence asks the Court to
deny Defendant's right to a federal forum simply because
Plaintiff's claims implicate state law issues and
therefore, according to Plaintiff, a state court would
consequently be better suited to adjudicate the parties'
dispute. Plaintiff's arguments in favor of abstention on
those grounds, however, lack merit.
initially argues, citing Burford v. Sun Oil Co., 319
U.S. 315, 327 (1943), that exercising federal jurisdiction
here would precipitate needless conflict with state
administrative procedures. According to Plaintiff, so-called
Burford abstention is necessary in order to avoid
disrupting “state efforts to establish a coherent
policy with respect to a matter of substantial public
concern.” Colorado River Water Conservation Dist.
v. United States, 424 U.S. 800, 814 (1976). Courts view
abstention under this doctrine as appropriate so as to
“avoid resolving difficult state law issues involving
important public policies or avoid interfering with state
efforts to maintain a coherent policy in an area of
comprehensive regulation or administration.”
American Disposal Services., Inc. v. O'Brien,
839 F.2d 84, 87 (2d Cir. 1988).
summarily contends that its subcontract's compliance with
state law, with respect to both its payment and venue
provisions, “are issues subject to specific California
statutory and regulatory schemes and involving complex state
administrative processes.” Pl.'s Mot., 5:17-22.
Plaintiff fails to explain why this is so, and identifies no
state proceeding, determination or order with which this
Court could possibly interfere. Indeed, to the extent this
lawsuit involves straightforward breach of contract claims,
as well as a single cause of action involving California Code
of Civil Procedure § 410.42, no ...