United States District Court, N.D. California
ORDER RE REMAND Re: Dkt. No. 26
Donato United States District Judge.
Michael Matsuno is a resident of Los Angeles, California, and
a veteran of service in Somalia with the United States
military. In the course of his deployment, the military
required him to take Lariam, a drug manufactured and marketed
by defendants for the prevention of malaria. Matsuno contends
that Lariam proved to be a toxic formulation associated with
severe psychiatric and neurological outcomes, including
suicide, delusions and fits of rage.
filed a complaint in California state court alleging claims
under California law against defendants. Defendants removed
the case to this Court on a claim of diversity jurisdiction
under 28 U.S.C. Section 1441. Dkt. No. 1. Matsuno asks for a
remand to state court for lack of complete diversity. Dkt.
No. 26. The Court concludes that the case was removed
improvidently and without jurisdiction, and remands it to the
San Mateo County Superior Court pursuant to 28 U.S.C. Section
jurisdiction arises when a plaintiff sues a citizen of a
different state over an amount in controversy exceeding $75,
000. 28 U.S.C. § 1332(a). An out-of-state defendant may
remove to federal court “any civil action brought in a
State court of which the district courts of the United States
have original jurisdiction.” Id. §
1441(a). A plaintiff may move to remand the action to state
court if the case was improperly removed because of a lack of
subject matter jurisdiction. Id. § 1447(c).
is a strong presumption against removal, and the removal
statute is strictly construed against finding federal
jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566
(9th Cir. 1992). Principles of federalism, comity, and
respect for the state courts also counsel strongly in favor
of scrupulously confining removal jurisdiction to the precise
limits that Congress has defined. Shamrock Oil & Gas
Corp. v. Sheets, 313 U.S. 100, 109 (1941). The defendant
always “bears the burden of overcoming the
‘strong presumption against removal
jurisdiction.'” Hansen v. Grp. Health
Coop., 902 F.3d 1051, 1057 (9th Cir. 2018) (quoting
Geographic Expeditions, Inc. v. Estate of Lhotka ex rel.
Lhotka, 599 F.3d 1102, 1107 (9th Cir. 2010)). Any doubt
about removal weighs in favor of remand. Hawaii ex rel.
Louie v. HSBC Bank Nevada, N.A., 761 F.3d 1027, 1034
(9th Cir. 2014).
dispositive question for the remand motion is whether any of
the properly joined defendants is a California citizen. The
parties do not dispute that the amount in controversy exceeds
the statutory threshold, or that Matsuno resides in Los
Angeles and is a California citizen for diversity purposes.
Consequently, if one of the properly joined defendants are
citizens of California, complete diversity is lacking and the
case must be remanded for lack of subject matter
jurisdiction. See 28 U.S.C. § 1332(a);
Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996).
diversity and removal purposes, a corporation is a citizen of
each State where it is incorporated as well as the State in
which it has its principal place of business. 28 U.S.C.
§ 1332(c). As alleged in the complaint, defendant F.
Hoffman-La Roche Ltd. (“FHLR”) is a Swiss
corporation that manufactured Lariam. Defendant Hoffmann-La
Roche Inc. (“HLR”) is an affiliated New Jersey
corporation that was responsible for labeling and packing
Lariam in the United States. Defendant Roche Laboratories
Inc. is another affiliated Delaware corporation that marketed
and sold Lariam to the Department of Defense. Dkt. No. 1-3
¶¶ 17-18, 47-48. The complaint also names as
defendants Genentech Inc. and Genentech USA, Inc., which were
acquired by Roche Holdings, Inc. in 2009. Id. ¶
19. The Genentech entities are incorporated in Delaware but
maintain their principal place of business in South San
Francisco, California. Id. ¶¶ 19-20.
main jurisdictional dispute is over the citizenship of
defendants HLR and Roche Laboratories. Matsuno alleges that
HLR and Roche Laboratories maintain their principal place of
business in South San Francisco, California, and so should be
deemed citizens of the state. Defendants say that these
entities are headquartered in Little Falls, New Jersey.
have not carried their burden of establishing that HLR and
Roche Laboratories have a principal place of business outside
California. A corporation's principal place of business
is its “nerve center, ” or “the place where
a corporation's officers direct, control, and coordinate
the corporation's activities.” Hertz Corp. v.
Friend, 559 U.S. 77, 92-93 (2010). The nerve center is
more than just “where the corporation holds its board
meetings (for example, attend by directors and officers who
have traveled there for the occasion)” or “the
mere filing of a form like the Securities and Exchange
Commission's Form 10-K.” Id. at 93, 97.
has proffered substantial evidence establishing that
HLR's “nerve center” was relocated to South
San Francisco following Roche Holding Inc.'s acquisition
of Genentech. This includes a number of external press
releases and articles discussing Roche's relocation of
its commercial headquarters to South San Francisco.
See Dkt. No. 26-3 (“Roche is moving Jersey
headquarters to Calif.”); Dkt. No. 26-8 (“The
Genentech site in California . . . also serves as the
headquarters of Roche Commercial Operations for North
America.”); Dkt. No. 26-14 (“South San Francisco
site to become headquarters of combined U.S. commercial
operations.”); Dkt. No. 26-22 at 3 (“George
Abercrombie, CEO and President of Hoffman-La Roche Inc. . . .
will assist . . . with the transition of the U.S. Commercial
Headquarters from Nutley[, New Jersey] to South San
Francisco.”). Internal reports and SEC filings also
emphasize Roche's headquarter relocation, including a
2008 press release filed with the SEC in which HLR stated
that “[w]e will base the headquarters for the combined
Genentech and Roche U.S. pharma business at the Genentech
South San Francisco campus.” Dkt. No. 26-11 at 4;
see also Dkt. No. 26-4 (“We remain committed
to . . . locating the combined company's U.S.
headquarters at Genentech's current facility in South San
Francisco.”). Other articles emphasize that
Genetech's Little Falls campus will house
“satellite” offices, including “corporate
support employees such as lawyers and procurement
executives.” Dkt. No. 26-6. Additional documents show
that HLR and Roche Laboratories' CEO, Sean A. Johnston,
maintains his primary business address in South San
Francisco. Dkt. Nos. 26-25, 26-26.
Roche Labs do not meaningfully dispute this evidence. HLR
puts substantial stock on a declaration by Gerald Bohm,
HLR's Assistant Secretary, for the proposition that
HLR's primary activities and decisions were “made
out of Little Falls, New Jersey.” Dkt. No. 28-7 ¶
11. The problem with the Bohm declaration is that it is
wholly conclusory and fails to provide facts that might
establish that HLR's principal place of business is in
Little Falls. For example, Bohm states that HLR's
“primary business activity is the licensing of its U.S.
patents, ” which is “directed from New
Jersey.” Id. ¶ 6. But Bohm does not
provide any information to back that up, or otherwise address
the evidence tendered by Matsuno. And while it may be true
that HLR's annual board of directors meeting takes place
“by unanimous written consent, which are prepared in
Little Falls, ” and that “the corporate minutes
books” are “housed in Little Falls, ”
id. ¶¶ 13-14, the Supreme Court has held
that a nerve center is “not simply an office where the
corporation holds its board meetings, ” Hertz,
559 U.S. at 93, let alone where such meeting agendas and
minutes are “prepared” or “housed.”
also worth noting that Bohm is far from clear about the
manner in which the board of directors and HLR's officers
manage and direct the corporation. He says only, again in
conclusory fashion, that five of HLR's “acting
officers sit and perform their job functions from Little
Falls.” Dkt. No. 28-7 ¶ 16. Bohm also does not
dispute that HLR's CEO Johnston is based in South San
Francisco, and offers only the tangential comment that
Johnston “holds director and/or officer positions for
other entities as well, ” including on Genentech,
Inc.'s board of directors. Id. ¶ 18.
not the first time that the California citizenship of HLR and
Roche Laboratories has been found. Two prior cases in this
district had no trouble in concluding on similar records that
HLR “failed to rebut evidence presented by Plaintiffs
indicating that HLR's ‘nerve center' is located
in California rather than New Jersey.” Sheets v. F.
Hoffmann-La Roche Ltd., No. 18-CV-04565-JST, 2018 WL
6428460 at *2 (N.D. Cal. Dec. 7, 2018); see also Pool v.