Opinion
Nos. C 02-2041 SC, C 02-2042 SC, C 02-2127 SC
September 10, 2002
Richard D. Bowles, Esq., Bowles Verna, LLP, Walnut Creek, CA; William Hurley, Esq., Steven C. Adelman, Esq., Miller, Morton, Caillat Nevis, San Jose, CA, for Webcor Builders, Inc.
Michael J. Coffino, Esq., David T. Vanalek, Esq., Steefel, Levitt Weiss, San Francisco, CA; Ben C. Brooks, Esq., W. Todd Barnett, Esq., Curt M. Langely, Houston, TX, for Omni San Francisco Corporation.
Eric J. Phillips, Esq., Teresa Jenkins Main, Esq., Bell, Rosenbert Hughes LLP, Oakland, CA; Cathleen M. Curl, Esq., Manos Curl LLP, Milbrae, CA; Stephen M. Fenster, Esq., Schwartz Fenster, Beverly Hills, CA; Kevin J. Kelly, Esq., Ferrari Ottoboni LLP, San Jose, CA; Ted R. Gropman, Esq., Law Offices of Ted R. Gropman, Woodland Hills, CA; Andrew C. Muzi, Esq., Muzi Associates, Santa Ana, CA; Richard L. Thurn, Esq., Gray and Thurn, Inc., Sacremento, CA; Shahab E. Fotouhi, Esq., Phillips, Spallas Fotouhi LLP, San Francisco, CA; Terry Carlson, Esq., San Rafael, CA; Michael L. Mau, Esq., Law Offices of Michael L. Mau, San Francisco, CA; and Laura J. Dawson, Esq., Jones, Bothwell, Dion LLP, San Francisco, CA, for Counter Defendants.
George A. Sykulski, Esq., Sykulski Todd, Encino, CA, for Plaintiff American Building Supply, Inc.
William H. McInerney, Esq., McInerney Dillon, P.C., Oakland, CA for J.W. McClenahan.
Robert E. Leslie, Esq, Frederick C. Hannemann, Esq., LESLIE, POWELL HANNEMANN, San Francisco, CA, Attorneys for Third Party Defendant, Counterclaimant and Cross-Claimant ICONCO, Inc.
ORDER REMANDING ACTION TO STATE COURT
I. INTRODUCTION
Now pending before this Court are Plaintiff Webcor Builders' motions to amend the complaint and remand the case, and Defendant Omni San Francisco Corporation's motions to dismiss, to strike, and for a more definite statement. For the reasons set forth below, this Court declines to rule on these motions and remands the above-captioned cases to the Superior Court for the State of California, County of San Francisco, for lack of subject matter jurisdiction.
II. BACKGROUND
On March 27, 2002, Webcor Builders, a corporation organized and existing under the laws of the State of California, filed an action (No. C 02-2041 SC) against Omni San Francisco Corporation ("Omni").
On March 28, 2002, American Building Supply ("ABS"), a corporation organized and existing under the laws of the State of California, filed suit (No. C 02-2042 SC) against Defendant Omni. ABS sued: (1) to foreclose a mechanic's lien, (2) on a mechanic's lien release bond, (3) to enforce a stop notice, and (4) on a stop notice release bond.
On April 29, 2002, J.W. McClenahan Co. ("JWM"), a corporation organized and existing under the laws of the State of California, filed suit (No. C 02-2127 SC) against Omni to foreclose on a mechanic's lien.
The disputes underlying these three lawsuits all arise from the construction of a luxury hotel in San Francisco, California, that is owned and operated by Omni. On April 25, 2002, Omni removed from state court to this Court the actions filed by Webcor Builders (No. C 02-2041 SC) and by ABS (No. C 02-2042 SC). On May 1, 2002, Omni removed from state court to this Court the action filed by JWM (No. C 02-2127 SC). In its removal notices, Omni alleged diversity of citizenship as the sole basis for this Court's subject matter jurisdiction over each of the three above-captioned cases.
III. LEGAL STANDARD
A complaint filed originally in state court may be removed to federal court pursuant to 28 U.S.C. § 1441 within thirty days of service on the defendant. 28 U.S.C. § 1446(b). The plaintiff has thirty days in which to contest removal for any defect except subject matter jurisdiction. 28 U.S.C. § 1447(c). "if at any time before final judgment it appears the court lacks subject matter jurisdiction, the case will be remanded." Id.
A defendant bears the burden of showing that a federal court would have had jurisdiction from the outset; in other words, that removal was proper. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). There is a "strong presumption" against removal and the removal statute is strictly construed against removal jurisdiction. Id. All doubts are resolved in favor of remand. Plute v. Roadway Package Sys., Inc., 141 F. Supp.2d 1005, 1008 (N.D. Cal. 2001) (citing Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979)).
A district court's subject matter jurisdiction is determined from the complaint at time of removal, not as subsequently amended. Sparta Surgical Corp. v. National Ass'n of Sec. Dealers, Inc. 159 F.3d 1209, 1213 (9th Cir. 1998); Rudow v. Monsanto Co., No. C 99-4700 TEH, 2001 WL 228163, at *4 (N.D. Cal. March 1, 2001) ("[ W] henever a district court becomes aware that federal subject matter jurisdiction was lacking at the time of removal, that court is constrained to remand the action to state court.").
If a plaintiff and a defendant in an action are both citizens of the same state, there can be no diversity of citizenship. 28 U.S.C. § 1332(a)(1). For the purposes of determining the presence of diversity jurisdiction, "a corporation shall be deemed to be a citizen of any state by which it has been incorporated and of the state where it has its principal place of business." 28 U.S.C. § 1332(c)(1). "Where a corporation is engaged in only one business activity, substantially all of whose operations occur in one state, even though policy and administrative decisions are made elsewhere, the state of operations is the corporation's principal place of business." Bialac v. Harsh Building Co., 463 F.2d 1185, 1186 (9th Cir. 1972).
IV. DISCUSSION
There is no dispute that Webcor Builders, ABS, and JWM were at the time of removal and are now citizens of the State of California. Further, there appears to be no dispute that Omni is incorporated under the laws of the State of Delaware. However, while Omni contends that its principal place of business is in the State of Texas, there is no evidence in the record to support that contention. The record nowhere indicates that Omni San Francisco Corporation engages in any business other than the operation of a luxury hotel in San Francisco, California. Under Bialac, 463 F.2d at 1186, it is, therefore, clear that Omni's principal place of business was, at the time each of the above-captioned cases was removed, in California, even if Omni's headquarters were located in Texas.
Because Omni's principal place of business was in California at the time of removal, Omni was a citizen of California at the time of removal. Since Plaintiffs in each of the above-captioned cases were also citizens of California at the time of removal, Plaintiffs and Omni are not diverse parties.
V. CONCLUSION
For the reasons set forth above, this Court finds that it lacked subject matter jurisdiction over the three above-captioned actions at the time each was removed. Accordingly, this Court hereby REMANDS these actions (Nos. C 02-2041 SC, C 02-2042 SC, and C 02-2127 SC) to the Superior Court for the State of California, County of San Francisco.
IT IS SO ORDERED.