Perez v. General Packer, Inc., SA CV 91-312 AHS (RWRx).

• Decision Date: 22 April 1992
• Docket Number: No. SA CV 91-312 AHS (RWRx).,SA CV 91-312 AHS (RWRx).
• Citation: 790 F. Supp. 1464
• Parties: Monica PEREZ an individual, and Jaime Perez, an individual, Plaintiffs, v. GENERAL PACKER, INC., Rion Netsugaku, Inc. and Does I-X, inclusive, Defendants.
• Court: U.S. District Court — Central District of California

790 F. Supp. 1464

Monica PEREZ an individual, and Jaime Perez, an individual, Plaintiffs, v. GENERAL PACKER, INC., Rion Netsugaku, Inc. and Does I-X, inclusive, Defendants.

No. SA CV 91-312 AHS (RWRx).

United States District Court, C.D. California.

April 22, 1992.

R.D. Kirwan, Lisa E. Feldman, Pillsbury, Madison & Sutro, Los Angeles, Cal., for plaintiffs.

James J. Barker, Santa Monica, Cal., for defendants.

MEMORANDUM OPINION ON ORDER REMANDING ACTION FOR LACK OF JURISDICTION

STOTLER, District Judge.

I. INTRODUCTION

This action to recover for personal injuries suffered by plaintiff Monica Perez brought against four Japanese corporations raises these issues. First, whether a case should be remanded where, although pending for over two (2) years in the state court, the removing defendants were not served until 30 days before they removed the case and plaintiffs did not move to remand the action within 30 days after the date of removal. If the answer is that the limitation on removal of actions pending in the state court over one year is jurisdictional, then the Court must remand this case. Second, if the one-year limitation on removal is only procedural, whether the Court is obliged to exercise jurisdiction over the case because plaintiffs' failure to move for remand bars the Court from ordering remand on the same basis.

By this Order, the Court remands the action to state court on the basis that removal was sought in violation of 28 U.S.C. § 1446(b) and that plaintiffs' failure to move for remand does not preclude the Court from so ordering.

II. PROCEDURAL BACKGROUND

According to the complaint, plaintiff Monica Perez's right hand was "caught and injured" on December 12, 1988, by a mushroom-packaging machine she was operating at Southern California Mushroom, Inc., her place of employment. Plaintiffs Monica and Jaime Perez filed this action for personal injuries in the Superior Court for the County of San Bernardino on December 12, 1989. Plaintiffs sued defendants General Packer, Inc. ("General Packer"), Rion Netsugaku, Inc. ("Rion"), and Does 1 through 10, for negligence, products liability, and loss of consortium. Both General Packer and Rion are Japanese corporations. (Complaint ¶¶ 3, 4).

Defendants General Packer and Rion were served on August 31, 1990. (Decl. of James J. Barker, attached to Supplemental Opposition to Motion to Dismiss, p. 4) The Notice of Removal alleges that General Packer has never appeared in this action and that plaintiffs have "agreed" not to pursue their case against General Packer for lack of personal jurisdiction. (Notice of Removal, ¶ 5) Plaintiffs do not dispute this. Plaintiffs state that they voluntarily dismissed defendant Rion from the action, with prejudice, for lack of personal jurisdiction on an unspecified date. (Memo of Points and Authorities in Opposition to Motion to Dismiss, p. 2; see also Notice of Removal, ¶ 5)

Sometime between December 10, 1990, and February, 1991, plaintiffs learned that the machine that injured Monica Perez was sold by Kabushiki Kaisha Chikuma Kasei ("Chikuma") to Shoei Trading Co., Ltd. ("Shoei"). (Decl. of Komatsu, Pres. of Chikuma, ¶ 13; Decl. of Ken Imamura, p. 2) Shoei then sold the machine to Southern California Mushroom, Inc. (Decl. of Ishii, Pres. of Shoei, ¶ 12) Plaintiffs also learned that Shoei and Chikuma are Japanese corporations. (Notice of Removal, ¶ 4)

On March 28, 1991, plaintiffs amended their complaint to name Shoei and Chikuma as Doe defendants I and II, respectively. On May 13, 1991, almost 1½ years after the action was filed, plaintiffs served Shoei and Chikuma in accordance with the Hague Convention by forwarding a copy of the Summons and Complaint to the District Court in Japan, which delivered the documents to the defendants.

On June 12, 1991, specially appearing defendants Shoei and Chikuma filed a Notice of Removal alleging jurisdiction pursuant to 28 U.S.C. § 1332. On June 18, 1991, Shoei and Chikuma filed a Motion to Dismiss for Lack of Personal Jurisdiction in this Court. At the hearing, the Court informed the parties of its intent to remand the action because defendants had not removed the suit within one year of its commencement in state court in violation of 28 U.S.C. § 1446(b). The defendants requested and were granted leave to file supplemental opposition to remand. Plaintiffs were granted leave to file a supplemental reply. Both parties filed supplemental papers, plaintiffs urging the Court to remand the action.

The Court thereafter issued a draft Memorandum Opinion On Order Remanding Action for Lack of Jurisdiction and invited further comment from and supplemental briefing by the parties. Both defendants and plaintiffs filed supplemental papers, defendants urging the Court not to remand the action.

III. THE REMOVAL STATUTES

A. Whether the One-year Time Limit Applies

The Removal Statutes, 28 U.S.C. §§ 1441-1452, govern the removal of a state court case to a federal district court. On November 19, 1988, the Removal Statutes were revised under the Judicial Improvements and Access to Justice Act (the "1988 Act"). Judicial Improvements Act, Pub.L. No. 100-702, 102 Stat. 4642 (1988). As a result of these revisions § 1446(b) now reads:

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, or within thirty days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter.

If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable, except that a case may not be removed on the basis of jurisdiction conferred by section 1332 of this title more than 1 year after commencement of the action. 28 U.S.C. § 1446(b) (West 1991) (emphasis added).

The case at issue showed the diversity of the parties on the face of the initial complaint. As such, it falls within the first paragraph of § 1446(b)¹. Thus, the first issue presented is whether the language "except that a case may not be removed ... more than 1 year after commencement of the action" applies only to a case that becomes removable when diversity is known by way of a subsequent paper (the second paragraph of § 1446(b)) or also to a case that was removable due to diversity when first filed (the first paragraph of § 1446(b)).

Defendants urge the Court to adopt the reasoning in Zogbi v. Federated Dept. Store, 767 F.Supp. 1037 (C.D.Cal.1991), which held that the one-year limit applies only to the second paragraph of § 1446(b). In Zogbi, defendant Federated Department Store received a copy of the complaint in a state court suit filed almost 3 years earlier. Within 30 days of the receipt of the paper, Federated filed a notice of removal, alleging diversity of jurisdiction as the ground for removal. Plaintiff objected to the removal in a filing which the Court treated as a substitute for a motion to remand.

Although the case had been pending for over three years in the California Superior Court, the Zogbi court denied plaintiff's motion to remand. It concluded that the one-year limit applies only to diversity cases that become removable by way of a subsequent paper. The Zogbi court reasoned, first, that as a general rule, a qualifying phrase only modifies that which immediately precedes it. Id. at 1039. Thus, the "except that" clause modifies only the language preceding it in the second paragraph. Second, the policy of limiting federal courts' jurisdiction cannot overcome the plain meaning of the language of § 1446(b). Id. Third, the legislative history of the Act shows that Congress was really only concerned with restricting removal of cases that had made some progress in state court. Id. at 1040.² (In Zogbi itself there is no indication whether any progress had in fact been made in the case during its years of pendency in the state court.) On these bases the Zogbi court declined to apply the one-year limit to an action continuing diverse citizens from the date of filing.

Zogbi is the only case to date to construe § 1446(b)'s language in this manner. Other courts that have considered this issue have ruled that the one-year limit applies to both paragraphs. In Hom v. Service Merchandise Co., Inc., 727 F.Supp. 1343 (N.D.Cal.1990), the court addressed whether the one-year limit applied to a case that was removable due to diversity from the beginning. The Hom court reasoned:

... it is well-established policy that removal statutes are to be strictly construed against removal. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09, 61 S.Ct. 868, 872, 85 L.Ed. 1214 (1941); Gould v. Mutual Life Ins. Co. of New York, 790 F.2d 769, 773 (9th Cir. 1986) cert. denied, 479 U.S. 987, 107 S.Ct. 580, 93 L.Ed.2d 582 (1986). Strict construction is especially warranted in diversity cases, where `concerns of comity mandate that state courts be allowed to decide state cases unless the removal action falls squarely within the bounds Congress has created.' Phillips v. Allstate Ins. Co., 702 F.Supp. 1466, 1468 (C.D.Cal.1989).

Hom at 1344-45. The Hom court concluded, "this Court need not consider the legislative history underlying section 1016 of the Judicial Improvements Act 28 U.S.C. § 1446 because the statutory language is plain." Id. at 1345. Without further discussion, the Hom court held that the one-year limit applied to a case showing diversity from the date of filing and remanded the action.

In Rezendes v. Dow Corning Corp., 717 F.Supp. 1435 (E.D.Cal.1989), the court...