Opinion
Case No EDCV 04-777-VAP (SGLx).
October 26, 2004 Motion filed on August 3, 2004
ORDER DENYING PLAINTIFF'S MOTION TO REMAND
I. BACKGROUND AND PROCEDURAL HISTORY
On May 24, 2004, Michelle Anne Jewett ("Plaintiff") filed a Complaint against Defendant Standard Insurance Company ("Defendant") and Does 1 through 20 in the California Superior Court for the County of Riverside Defendant was served on June 1, 2004, and filed an Answer on June 30, 2004
On July 1, 2004, Defendant filed a Notice of Removal with this Court. On August 3, 2004, Plaintiff filed this Motion to Remand to State Court ("Mot") Defendant filed an Opposition ("Opp'n") on September 3, 2004, and Plaintiff replied on September 10, 2004.
As a preliminary matter, Defendant argues that Plaintiff's Motion should be denied because Plaintiff's counsel failed to meet and confer in accordance with Local Rule 7-3 [Opp'n at 3.] Plaintiff states that Plaintiff's counsel met and conferred with Defendant's counsel by telephone on or about August 15, 2004, after the Motion was filed. [Reply at 2] This does not satisfy Local Rule 7-3, which states "counsel contemplating the filing of any motion shall first contact opposing counsel to discuss thoroughly, preferably in person, the substance of the contemplated motion and any potential resolution"
In spite of this failure, the Court exercises its discretion to consider Plaintiff's Motion. Plaintiff's counsel, however, is directed to comply with this Rule before filing any future motions.
Courts in this District have imposed sanctions for failure to comply with the meet and confer requirement See, e.g., Cable Computer Tech, Inc. v. Lockheed Saunders, Inc., 175 F. R. D. 646, 649-650 (C.D. Cal. 1997); Walt Disney Co. v DeFabiis, 168 F. R. D. 281, 285 (C.D. Cal. 1996).
II. LEGAL STANDARD
Removal jurisdiction is governed by federal statute See 28 U.S.C. § 1441, et seq "[T]he defendant always has the burden of establishing that removal is proper." Gaus v. Miles, Inc, 980 F.2d 564, 566 (9th Cir 1992) (citing Nishimoto v. Federman-Bachrach Assocs., 903 F.2d 709, 712 n. 3 (9th Cir. 1990)). Removal is inappropriate when the district court would not have original jurisdiction over the case See 28 U.S.C. § 1441(a) A case shall be remanded when the court lacks subject matter jurisdiction See 28 U.S.C. § 1447(c)To establish federal diversity jurisdiction, the removing party must demonstrate both complete diversity of citizenship and that the amount in controversy exceeds $75,000. See 28 U.S.C. § 1332(a). In determining whether there is diversity of citizenship between a natural person and a corporate party, the 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." United Computer Sys, Inc v. ATT Corp., 298 F.3d 756, 763 (9th Cir 2002) (quoting Tosco Corp. v. Communities For a Better Environment, 236 F.3d 495, 499 (9th Cir 2001); 28 U.S.C. § 1332(c)(1)). "[T]he `principal place of business' is determined by the following two-part inquiry (1) in what state does a `substantial predominance' of corporate activity take place? or (2) if the corporation's activities are not predominant in a single state, then the principal place of business is where the majority of its executive and administrative functions are performed." United Computer, 298 F.3d at 763.
Determining whether a corporation's business activity substantially predominates in a given state "requires a comparison of that corporation's business activity in the state at issue to its business activity in other individual states."Tosco, 236 F.3d at 500 "Thus, `substantial predominance' does not require the majority of a corporation's total business activity to be located in one state, but instead, requires only that the amount of [the] corporation's business activity in one state be significantly larger than any other state in which the corporation conducts business." Id Several factors must be considered in determining if a given state contains a substantial predominance of corporate activity "location of employees, tangible property, production activities, sources of income, and where sales take place." Id.
III. DISCUSSION
Plaintiff, a citizen of California, argues that this Court lacks subject matter jurisdiction because Defendant "must be considered a California business which destroys diversity jurisdiction" [Mot. at 3] Plaintiff bases this argument solely on a finding by another District Court that Defendant's principal place of business is located in California [Id.] Plaintiff attaches the District Court's order in that case ("Clayton") as Exhibit 1.In Clayton, the District Court reviewed documents submitted by Defendant and concluded that "Defendant derives nearly twice as much income from California than any other state" and that Defendant has employees and owns tangible property in California [Id, Ex 1.] Based on the record, the District Court concluded that Defendant was a California corporation for the purpose of diversity jurisdiction. [Id]
Defendant presents evidence in its Opposition rebutting Plaintiff's claim that Defendant is a California corporation. According to Defendant, 78 63% of its employees work and reside in Oregon. [Opp'n at 6] Furthermore, Defendant states that 82% of its real property and 84 87% of its personal property are in Oregon [Id] In addition, Defendant's headquarters and production activities are based in Oregon. [Id at 7] With regard to sources of income, Defendant claims that 14 83% of its revenues is generated in California compared with 12 22% from Oregon [Id at 8.] Nevertheless, given the relative populations of the two states, the revenues per capita generated in California are significantly lower than from Oregon [Id.]
In Plaintiff's Reply, she argues that Defendant's principal place of business is California because it "realizes more money from California when compared to any other state in the Union" [Reply at 4.] The source of Defendant's revenues is only one factor in determining Defendant's principal place of business Although a slight plurality of Defendant's total revenues are generated in California, most of Defendant's operations, including employees, property, and management and production activities, are located in Oregon.
At most, the fact that 14 83% of Defendant's revenues are generated in California compared to 12.22% from Oregon suggests that no state has a "substantial predominance" of Defendant's corporate activity [See Opp'n at 8] In that event, "the principal place of business is where the majority of its executive and administrative functions are performed." United Computer, 298 F.3d at 763 It is undisputed that Defendant's headquarters are located in Oregon and that most of Defendant's executive and administrative functions are conducted in Oregon. [See Opp'n at 7.]
Therefore, Defendant's principal place of business is Oregon, and the Court has diversity jurisdiction over this case.
IV. CONCLUSION
For the forgoing reasons, Plaintiff's Motion to Remand is DENIED.
IT IS SO ORDERED.