Case Gets Crated and Barreled Back to State Court: A Paper Filed In State Court Has More Weight Than One Filed In Federal Court At Least For Removal

Salmonson v. Euromarket Designs, Inc., No. CV 11–5179 PSG (PLAx), 2011 WL 4529396 (C.D. Cal. Sept. 28, 2011).

Recently, a District Court in California held that only a paper filed in state court and not federal court opens § 1446(b)’s second thirty-day removal window.

On February 14, 2011, the plaintiff, Jason Salmonson, filed this class action in California state court against Euromarket Designs, Inc. d/b/a Crate & Barrel, asserting one cause of action for violation of the Song–Beverly Credit Card Act, Cal. Civ.Code § 1747.08.

On February 16, the plaintiff served Crate & Barrel with the summons and complaint, and on March 23—i.e., 35 days after service of the complaint—Crate & Barrel removed the action to the federal court under CAFA, 28 U.S.C. § 1332(d). Crate & Barrel contended that it was not evident from the face of the complaint that the case was removable and Crate & Barrel did not discover that the case was removable until it examined its own records on March 22.

On April 1, the plaintiff moved to remand the case to state court arguing that removal was improper and untimely.

On June 9, the Court granted the plaintiff’s motion to remand, and noted that under 28 U.S.C. § 1446(b), the statute governing removal procedure, there are two time periods during which a case may be removed: First, a thirty-day window triggered by receipt of the initial pleading or summons if the case stated by the initial pleading is removable “on its face”, and second, a thirty-day window triggered by receipt of “a copy of an amended pleading, motion, order or other paper” from which removability may be first ascertained, if the initial pleading does not indicate, on its face, that the case is removable.

The Court also found that removability was not ascertainable from the face of the complaint, and thus § 1446(b)’s first thirty-day window never opened. And even if removability had been ascertainable from the face of the complaint, the Court noted the defendant had not removed within 30 days of service of the complaint, and thus removal was untimely.

The Court also found that Crate & Barrel had never been served with any “amended pleading, motion, order or other paper” that would trigger the opening of § 1446(b)’s second thirty-day window. Thus, the Court concluded, at the time the case was removed, it was not removable.

Twelve days after the Court remanded the case, however, Crate & Barrel removed it again contending that removal was now timely and proper because the plaintiff’s April 1 motion to remand triggered § 1446(b)’s second thirty-day removal period, which was then tolled until the Court ruled on the motion.

The plaintiff again moved to remand, which the District Court granted again.

In its second notice of removal, Crate & Barrel contended that the case was properly removed within the second thirty-day window. It argued that the window was opened on April 1 by the plaintiff’s first motion to remand, because in that motion the plaintiff conceded that the Court had CAFA jurisdiction over the case. The thirty-day period was then tolled, according to Crate & Barrel, until June 9, when the Court issued its order granting the plaintiff’s motion and remanding the case to state court.

Against Crate & Barrel’s position, the plaintiff made two arguments. First, the plaintiff argued that, as a matter of law in the Ninth Circuit, his first motion to remand could not have triggered § 1446(b)’s second thirty-day removal period because the motion was filed in federal court, rather than state court.

Second, the plaintiff argued that, even assuming his motion to remand did trigger the second removal period, there was simply no authority for Crate & Barrel’s contention that the period was tolled while the motion was pending.

Crate & Barrel relied on Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 376 (9th Cir. 1997), where the Ninth Circuit implicitly indicated that a paper filed in federal court may trigger § 1446(b)’s second thirty-day removal period. The Court, however, observed that the Ninth Circuit has spoken most explicitly on the subject in Peabody v. Maud Van Cortland Hill Schroll Trust, 892 F.2d 772, 775 (9th Cir. 1989). In Peabody, the Ninth Circuit concluded that a motion for summary judgment filed in federal court did not open § 1446(b)’s second thirty-day removal window because the motion was filed in federal court, rather than in state court. The Ninth Circuit explained, “the record of the state court is considered the sole source from which to ascertain whether a case originally not removable has since become removable.”

Because the plaintiff’s April 1 motion to remand was filed in federal court, the Court concluded that it did not trigger § 1446(b)’s second thirty-day removal period. The Court pointed that Crate & Barrel had thus, again, removed this case before it was removable.

Accordingly, the Court remanded the action to state court.