United States District Court, N.D. California
ORDER GRANTING PLAINTIFF'S MOTION TO REMAND
DOCKET NO. 18
M. CHEN, UNITED STATES DISTRICT JUDGE.
John Doe has filed suit against Defendant Aetna, Inc.,
asserting claims for breach of contract, breach of the
implied covenant of good faith and fair dealing, and
violation of California Business and Professions Code §
17200. Aetna removed the case from state court to this Court
pursuant to diversity jurisdiction. See 28 U.S.C.
§ 1332. Currently pending before the Court is Doe's
motion to remand the action back to state court. Having
considered the parties' briefs and accompanying
submissions, as well as the oral argument of counsel, the
Court hereby GRANTS the motion to remand.
FACTUAL & PROCEDURAL BACKGROUND
initiated this case against Aetna in state court. Doe's
claims are related to the settlement of a separate putative
class action that included Doe as a plaintiff. See
Compl. ¶¶ 2-4; 28-31. The putative class action
concerned an Aetna policy that required enrollees diagnosed
with HIV/AIDS to fill their prescriptions for HIV medications
by mail order, as opposed to obtaining the medications at
their local pharmacies. See Compl. ¶ 1. The
policy also made purchases of these medications in local
pharmacies "out of network." See Compl.
¶ 1. Ultimately, the putative class action settled.
See Compl. ¶ 4. Under the settlement agreement,
Aetna was required to send letters, in July 2017, to
approximately 12, 000 individual Aetna enrollees nationwide.
See Compl. ¶ 6. As Doe alleges in the instant
case, Aetna ultimately sent the letters in envelopes that had
clear "windows" so large that text within the
letter was visible; that text included language disclosing
that members had been prescribed "HIV
Medications." See Compl. ¶¶ 8-10.
Doe filed suit against Aetna, asserting that it breached the
settlement agreement by sending the letters in the way that
it did. See Compl. ¶¶ 43-45. Doe's
theory is predicated on the fact that the settlement
agreement includes provisions requiring Aetna to comply with
relevant state and federal law, see Settlement
Agreement ¶ 11, including the California Confidentiality
of Medical Information Act ("CMIA") and the Health
Insurance Portability and Accountability Act
("HIPAA"). See Compl. ¶ 12. In
addition to his claim for breach of contract, Doe asserts a
related claim for breach of the implied covenant of good
faith and fair dealing and a claim for violation of
California Business and Professions Code § 17200.
See Compl. ¶¶ 46-47; 51-57. As relief, Doe
seeks compensatory damages, equitable relief, injunctive
relief, and attorney's fees and other costs. See
Compl. at 14 (prayer for relief).
December 18, 2017, Aetna removed Doe's case from state
court to this Court pursuant to diversity jurisdiction.
See 28 U.S.C. § 1332. The parties do not
contest that there is complete diversity of citizenship.
However, they dispute whether the amount in controversy
exceeds $75, 000, as required by § 1332. Doe now moves
to remand, arguing that (1) Aetna did not timely remove the
case to federal court and (2) there is no diversity
jurisdiction because the amount in controversy does not
exceed $75, 000.
Timeliness of Removal
notice of removal shall be filed within thirty days after the
receipt of the complaint by the defendant through service or
otherwise. See 28 U.S.C. § 1446(b). The Supreme
Court has held that the "clock" on the date of
removal begins to run on the date formal service was
effected. See Murphy Bros., Inc. v. Michetti Pipe
Stringing, Inc., 526 U.S. 344, 356 (1999) (finding that
faxing a "courtesy copy" of the complaint to one of
the defendant company's vice presidents did not trigger
the removal period because it did not constitute proper
service under applicable state law); see also BigB Auto.
Warehouse Distribs., Inc. v. Cooperative Computing,
Inc., No. 00-2602, 2000 U.S. Dist. LEXIS 16363, (N.D.
Cal. Oct. 31, 2000) (finding that plaintiffs must demonstrate
compliance with the requirements of service, and that proof
by plaintiffs that defendants actually received a copy of the
complaint by a particular date was not sufficient).
argues that it was not formally served until November 21,
2017, which thereby makes its removal on December 18, 2017,
timely. In support of its position, Aetna notes that the
parties initially had a dispute about whether Aetna was
properly served on October 25, 2017, which was ultimately
resolved when the parties entered into a stipulation - on
November 21 - that "Aetna agrees to accept service of
the Complaint effective November 21, 2017, " and that
"Aetna's responsive pleading is due December 21,
2017." Docket No. 1 (Stip. ¶¶ 1-2).
Court finds Aetna's position meritorious. There is no
evidence that Aetna was properly served (as Doe contends) on
October 25, 2017. For example, there is no evidence that CT
Corporation (California), upon whom Doe personally delivered
the summons and complaint, is in fact Aetna's authorized
agent for service of process. See Neugebauer Decl.
¶¶ 4-5 (testifying that Aetna's agent for
service of process is CT Corporation in East Hartford,
Connecticut, and that CT Corporation in Los Angeles,
California, is not an authorized agent for service of
process). Furthermore, the evidence reflects that Doe's
mail service on Aetna was deficient in that the mailing was
addressed to Aetna and not any specific individual. Serving a
corporate defendant by mail at an address outside the state
requires a plaintiff to mail the summons to &
person to be served on behalf of the corporation,
i.e., to one of the individuals specified in Code
Civ. Proc, § 416.10. Simply naming the company, instead
of an individual, is not sufficient. See Dill v. Berquist
Construction Co., 24 Cal.App.4th 1426 (1994) (finding
that plaintiffs mailing to corporate defendant did not
constitute proper service because plaintiff addressed the
mailing to the corporation rather than to any of the
individuals enumerated under Code Civ. Proc, § 416.10).
the clear intent of the stipulation was to resolve any
dispute about the date of service. Doe contends that the
stipulation only extended the date by which Aetna had to
respond to the complaint because it said nothing about
extending the time to remove. But this argument is unavailing
because the full text of the stipulation - reflecting that
"Aetna agrees to accept service of the Complaint
effective November 21, 2017" - establishes otherwise.
Docket No. 1 (Stip. ¶ 1).
Aetna filed its notice of removal on December 18, 2017,
within 30 days from the date of service of November 21, 2017,
its removal of the case to federal court was timely.
Amount in Controversy
noted above, diversity jurisdiction requires, inter
alia, that the amount in controversy exceed $75, 000.
See Urbino v. Orkin Services of Cal, 726 F.3d 1118,
1121 (9th Cir. 2013). Doe did not allege a specific dollar
amount for damages in his complaint. "Where ... 'it
is unclear or ambiguous from the face of a state-court
complaint whether the requisite amount in controversy is
pled, ' the 'removing defendant bears the burden of
establishing, by a preponderance of the evidence, that the
amount in controversy exceeds' the jurisdictional
threshold." Id; see also Guglielmino v. McKee Foods,
Inc., 506 F.3d 696, 699 (9th Cir. 2007) (stating the
same); cf. Gaus v. Miles, Inc., 980 F.2d 564, 566
(9th Cir. 1992) (stating that "[t]he 'strong
presumption' against removal jurisdiction means that the
defendant always has the burden of establishing that removal
instant case, Aetna argues that it has met its burden
because, per his complaint, Doe seeks as relief compensatory
damages, injunctive relief, and attorney's fees, each of
which is enough to bring the amount in controversy over $75,
000. As discussed below, the Court does not agree.