Summary
declining to consider the effect of § 415.50 under the first served rule not at issue in this case
Summary of this case from Steppechange LLC v. Veon Ltd.Opinion
No. C 02-05761 WHA
February 27, 2003
ORDER GRANTING PLAINTIFFS' MOTION TO REMAND AND DENYING PLAINTIFFS' REQUEST FOR COSTS AND ATTORNEY'S FEES
INTRODUCTION
This order GRANTS plaintiff's' motion to remand this case to state court and DENIES plaintiff's' request for attorney's fees.
STATEMENT
Plaintiffs filed suit in state court on October 28, 2002, seeking damages for personal injury and loss of consortium allegedly resulting from asbestos exposure. On November 1, plaintiff's sent defendant DaimlerChrysler a copy of the summons and complaint via certified mail (Notice of Removal ¶ 2). The return receipt indicated that it was delivered on November 4, 2002 (LeRoy Decl. ¶ 2, Exh. A). On November 4, a registered California process server personally served defendants Parker-Hannifin Corporation, General Motors Corporation, Ford Motor Company, Caterpillar Inc., and Honeywell International, Inc. (LeRoy Exh. B). Defendant Bridgestone/Firestone North American Tire LLC was personally served on November 5 (LeRoy Exh. C).
On December 10, defendant DaimlerChrysler filed a notice of removal. The notice of removal asserted federal-enclave jurisdiction under 28 U.S.C. § 1441 and Article I, Section 8, Clause 17 of the Constitution (Notice of Removal ¶ 3). The notice of removal stated that "[a]ll defendants who have been served with Summons and Complaint and who have appeared in the action" have agreed to join the notice of removal (id. ¶ 4). Filed concurrently with the notice of removal were joinders of Bridgestone/Firestone North American Tire, General Motors Corporation, Honeywell International, Inc., and Caterpillar, Inc. (ibid.).
Plaintiffs now move to remand the case to state court. The motion is premised on the grounds that the removal was untimely, that DaimlerChrysler failed to obtain the unanimous and timely consent of all defendants, and that DaimlerChyrsler failed to carry its burden of showing that federal jurisdiction exists. In addition, plaintiff's request costs and attorney's fees.
ANALYSIS
1. TIMELINESS OF REMOVAL.
"The notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based. . . ." 28 U.S.C. § 1446(b). In this case, the summons and complaint were mailed on November 1, 2002, and delivered to DaimlerChrysler three days later, on November 4. Plaintiffs argue that because the summons and complaint were received on November 4, the deadline for DaimlerChrysler to remove was thirty days later, on December 4. DaimlerChrysler, however, points out that under California Code of Civil Procedure 415.40, the statute pursuant to which DaimlerChrysler was served, service is not deemed complete until ten days after the mailing of the summons and complaint. Thus, DaimlerChrysler argues, it had until December 11 to remove, and its December 10 removal was timely.
California Code of Civil Procedure 415.40 provides:
A summons may be served on a person outside this state in any manner provided by this article or by sending a copy of the summons and of the complaint to the person to be served by first-class mail, postage prepaid, requiring a return receipt. Service of a summons by this form of mail is deemed complete on the 10th day after such mailing.
Although this order favors plaintiffs' analysis, it need not resolve the issue of whether the thirty-day period for removal commences upon receipt of the summons and complaint or when service is deemed complete under Section 415.40. Rather, this order holds that regardless of the effect of Section 415.40, the removal was untimely. Under the first-served-defendant rule, the thirty-day period for removal commences when the first defendant is served. Here, Parker-Hannifin Corporation, General Motors Corporation, Ford Motor Company, Caterpillar Inc., and Honeywell International, Inc. were all personally served on November 4. Thus, even if the delivery of the summons and complaint to DaimlerChrysler on November 4 did not itself start the thirty-day removal period, service on the other defendants did so. In the thirty days following November 4, no defendant acted to remove the case. The notice of removal and joinders were filed on December 10, six days after the December 4 deadline. Accordingly, removal was untimely.
In so holding, this order acknowledges that there is a split in authority as to whether, in cases involving multiple defendants, the thirty-day period begins when the first defendant is served or when the last defendant is served. See United Computer Sys. v. ATT Info. Sys., Inc., 298 F.3d 756, 763 n. 4 (9th Cir. 2002) (noting the split in authority while "express[ing] no opinion [at that time] as to the propriety of either rule"). This order adopts the first-served rule. The first-served rule "has been apparently adopted by the majority of courts that have addressed this issue." Id. at 762. It is consistent with the tenet that the removal statute is to be strictly construed in favor of remand. See Duncan v. Stuetzle, 76 F.3d 1480, 1485 (9th Cir. 1996). The rule also promotes the early determination of the forum in which litigation is to take place. Brown v. Demco, Inc., 792 F.2d 478, 482 (5th Cir. 1986). To the extent the rule is subject to abuse, it need not be applied when an inequitable result would follow. See ibid.; Biggs Corp. v. Wilen, 97 F. Supp.2d 1040, 1045 (D. Nev. 2000).
DaimlerChrysler argues that even if the first-served rule applies, the removal should stand based on "exceptional circumstances." This order disagrees. There is no indication that application of the first-served rule is somehow unjust on these facts or that plaintiff's acted in bad faith to deprive DaimlerChrysler of the opportunity to remove. DaimlerChrysler received the summons and complaint by mail on the very day that Parker-Hannifin Corporation, General Motors Corporation, Ford Motor Company, Caterpillar Inc., and Honeywell International, Inc., were personally served. Thus, DaimlerChrysler had notice of the action a full thirty days before the removal period expired, and nevertheless, failed to remove in time. That removal was "just six days" late is not an exceptional circumstance. Once again, the applicable statute is to be strictly construed in favor of remand. Duncan, 76 F.3d at 1485. One day late would be fatal.
2. UNANIMOUS CONSENT OF CO-DEFENDANTS.
As an alternative and independent ground for remand, this order finds that the removal was procedurally defective with regard to the unanimity requirement. To satisfy 28 U.S.C. § 1446(a), all properly-served defendants in a state action must join in or consent to the petition for removal. Emrich v. Touche Ross Co., 846 F.2d 1190, 1193 n. 1 (9th Cir. 1988). The only permissible exceptions are nominal, unknown, or fraudulently-joined defendants. Ibid. Parker-Hannifin, a defendant in the instant case, was served on November 4, 2002 (LeRoy Exh. B). There is no indication, however, that Parker-Hannifin consented to removal.
DaimlerChrysler's attempts to explain away this defect are unsuccessful. It does not matter that Parker-Hannifin had not filed an answer; what matters is that Parker-Hannifin was named as a defendant and served. See Emrich, 846 F.2d at 1193 n. 1. DaimlerChrysler's suggestion, raised in its opposition brief, that Parker-Hannifin is a sham defendant likewise does not preclude remand. The Ninth Circuit has held that "[w]here fewer than all the defendants have joined in a removal action, the removing party has the burden under section 1446(a) to explain affirmatively the absence of any co-defendants in the notice for removal" Prize Fize, Inc. v. Matrix (U.S.) Inc., 167 F.3d 1261, 1266 (9th Cir. 1999) (emphasis added). DaimlerChrysler did not do so. The fact that there is a large number of defendants in this case does not excuse DaimlerChrysler's noncompliance with this requirement.
3. FEDERAL-ENCLAVE JURISDICTION.
In light of the foregoing, it is unnecessary to reach the issue of whether DaimlerChrysler sufficiently substantiated its assertion of federal-enclave jurisdiction.
4. REQUEST FOR COSTS AND ATTORNEY'S FEES.
Plaintiffs request an award of costs and attorney's fees pursuant to 28 U.S.C. § 1447(c), which provides that an order of remand "may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal." A court has "wide discretion" in deciding whether to award attorney's fees under this provision. Moore v. Permanente Med. Group, 981 F.2d 443, 447 (9th Cir. 1992). Although this order grants plaintiff's' motion to remand, DaimlerChrysler's arguments regarding the propriety of removal were not unfounded. Because DaimlerChrysler had a colorable basis for removal, plaintiff's' request for costs and attorney's fees is denied.
CONCLUSION
For all the foregoing reasons, plaintiff's' motion to remand is GRANTED. DaimlerChrysler's request for judicial notice is GRANTED as to Exhibits A through D of the Chatowski Declaration, and DENIED as moot as to Exhibit E. The case is REMANDED to the Superior Court for the County of San Francisco. Plaintiffs' request for costs and attorney's fees is DENIED.
IT IS SO ORDERED.