Tanious v. Gattoni

• Decision Date: 08 April 2021
• Docket Number: Case No. 20-cv-08595-JSW
• Citation: 533 F.Supp.3d 770
• Parties: Hany TANIOUS, et al., Plaintiffs, v. James B. GATTONI, et al., Defendants.
• Court: U.S. District Court — Northern District of California

533 F.Supp.3d 770

Hany TANIOUS, et al., Plaintiffs,

v.James B. GATTONI, et al., Defendants.

Case No. 20-cv-08595-JSW

United States District Court, N.D. California.

Signed April 8, 2021

Motaz M. Gerges, Law Offices of Motaz M. Gerges, Northridge, CA, for Plaintiffs.

Christopher Chad McNatt, Jr., Scopelitis Garvin Light Hanson & Feary, LLP, Pasadena, CA, Elizabeth Ashley Paynter, James Anthony Eckhart, Scopelitis Garvin Light Hanson and Feary, P.C., Indianapolis, IN, Adam Carl Smedstad, Scopelitis Garvin Light Hanson & Feary, P.C., Chicago, IL, for Defendants.

ORDER DENYING PLAINTIFFS’ MOTION TO REMAND AND GRANTING DEFENDANTS LEAVE TO FILE SUR-REPLY

Re: Dkt. Nos. 11, 14

JEFFREY S. WHITE, United States District Judge Now before the Court are Hany Tanious ("Tanious") and Loussine S. Mazmanian's (together, "Plaintiffs") motion to remand and the administrative motion for leave to file a sur-reply filed by James B. Gattoni ("Gattoni"), Patrick J. O'Malley ("O'Malley"), Landstar System, Inc. ("LSI"), and Landstar Ranger, Inc. ("LRI") (collectively, "Defendants"). For the reasons set forth below, the Court DENIES Plaintiffs’ motion to remand and GRANTS Defendants’ motion to file a sur-reply.

BACKGROUND

Plaintiffs filed this putative class action in the Superior Court of California, County of Alameda on October 9, 2020. In their complaint, Plaintiffs alleged that Defendants engaged in a "deliberate scheme" to misclassify their California truck drivers as independent contractors. (Complaint ("Compl.") ¶ 1.) Plaintiffs assert thirteen causes of action, most of which arise under the California Labor Code, California's Unfair Competition Law, and the California Constitution. (Id. ¶¶ 116-249.)

On December 4, 2020, Defendants removed this case to the United States District Court for the Northern District of California. Defendants assert that the Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. section 1332(a), 28 U.S.C. section 1331, and the Class Action Fairness Act of 2005 ("CAFA"), 28 U.S.C. section 1332(d)(2).

On January 8, 2021, Plaintiffs filed a motion to remand, challenging Defendants’ three jurisdictional bases and arguing that CAFA's local-controversy exception, see 28 U.S.C. § 1332(d)(4)(A) (" Section 1332(d)(4)(A)"), precludes this Court from exercising subject matter jurisdiction over this case. Defendants filed an opposition on January 22, 2021. On January 29, 2021, Plaintiffs filed their reply, in which they argue—for the first time—that Defendants failed to show that they all consented to removal as required by 28 U.S.C. section 1446(b)(2)(A). Defendants seek leave to file a sur-reply in order to address Plaintiffs’ new argument.¹

The Court will address additional facts as necessary in its analysis.

ANALYSIS

A. Applicable Legal Standard.

A defendant may remove any civil action over which district courts of the United States have original jurisdiction. Franchise Tax Bd. v. Constr. Laborers Vacation Tr. , 463 U.S. 1, 7-8, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983) (citation omitted); see also 28 U.S.C. § 1441. The action may be removed to the district court for the district and division embracing the location where the state court action is pending. Franchise Tax Bd. , 463 U.S. at 7-8, 103 S.Ct. 2841. However, federal courts are courts of limited jurisdiction. See, e.g., Kokkonen v. Guardian Life Ins. Co. of Am. , 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994).

The burden of establishing federal jurisdiction for purposes of removal is on the party seeking removal, and the removal statute is construed strictly against removal jurisdiction. Valdez v. Allstate Ins. Co. , 372 F.3d 1115, 1117 (9th Cir. 2004) ; see also Gaus v. Miles, Inc. , 980 F.2d 564, 566 (9th Cir. 1992). To determine whether the removing party has met its burden, a court may consider the contents of the removal petition and "summary-judgment-type evidence." Valdez , 372 F.3d at 1117. A court must evaluate whether it has jurisdiction based on the circumstances that exist at the time the notice of removal is filed. See, e.g., Sparta Surgical Corp. v. Nat'l Ass'n of Secs. Dealers, Inc. , 159 F.3d 1209, 1211 (9th Cir. 1998).

A party seeking to establish diversity jurisdiction must demonstrate that no defendant is a citizen of the same state as any plaintiff and show that the amount in controversy exceeds $75,000. 28 U.S.C. § 1441(b) ; see also 28 U.S.C. § 1332(a). Complete diversity must exist "as of the time the complaint is filed and removal is effected." Strotek Corp. v. Air Transp. Ass'n of Am. , 300 F.3d 1129, 1132 (9th Cir. 2002).

B. Plaintiffs’ Consent Argument Fails.

In their reply, Plaintiffs argue that removal is improper because Defendants’ counsel has failed to show that all Defendants have consented to removal as required by 28 U.S.C. section 1446(b)(2)(A). Specifically, Plaintiffs contend that because Gattoni and O'Malley have not provided declarations of their own citizenship, Defendants’ counsel may not be in contact with them whatsoever. Defendants argue that Plaintiffs waived their ability to challenge removal and contend that the consent issue is irrelevant because all defendants are represented by the same counsel and filed the notice of removal together.

First, the Court agrees with Defendants that Plaintiffs have waived their consent-based challenge to removal. A party seeking to challenge removal "on the basis of any defect other than lack of subject matter jurisdiction" must file a motion to remand within 30 days after a notice of removal is filed. 28 U.S.C. § 1447(c). Defendants filed their notice of removal on December 4, 2020, and Plaintiffs did not move to remand until January 8, 2021. Accordingly, Plaintiffs waived their procedural objection by failing to file a motion to remand within 30 days of the notice of removal's filing. See, e.g., Vasquez v. N. Cnty. Transit Dist. , 292 F.3d 1049, 1060 n.5 (9th Cir. 2002) (noting that party waived consent-based challenge by failing to timely file a motion to remand); Jasper v. Maxim Integrated Prods., Inc. , 108 F. Supp. 3d 757, 763 (N.D. Cal. 2015) (concluding that plaintiff waived procedural challenge to removal by failing to file a motion to remand within the 30-day period).

Moreover, even if Plaintiffs’ procedural challenge were timely, it would fail nonetheless. It is true that "all defendants who have been properly joined and served must join in or consent to" removal. 28 U.S.C. § 1446(b)(2)(A). However, this does not require "individual consent documents on behalf of each defendant." Proctor v. Vishay Intertechnology Inc. , 584 F.3d 1208, 1225 (9th Cir. 2009). Other courts within this circuit have concluded that formal consent is unnecessary "where the pleadings demonstrated defendants were all represented by the same counsel." Lewis v. City of Fresno , 627 F. Supp. 2d 1179, 1186 (E.D. Cal. 2008) (concluding that express consent was unnecessary where defendants were represented by the same counsel, defendants jointly filed the notice of removal, all defendants were on the civil cover sheet filed with the removal notice, and the allegedly non-consenting defendant paid the removal notice's filing fee); see also Bogosian v. CR Title Servs., Inc. , No. 5:11-cv-02043 EJD (HRL), 2011 WL 3607892, at *3 n.3 (N.D. Cal. Aug. 16, 2011) (noting that a defendant's consent could be "inferred because she [was] represented by the same counsel as the removing defendants"). The Court finds the reasoning in these cases persuasive.

Here, Defendants are represented by the same counsel and jointly filed the notice of removal. Defendants jointly filed not only their notice of removal, but also their opposition to Plaintiffs’ motion to remand and their motion for leave to file a sur-reply. Moreover, the civil cover sheet Defendants filed upon removal includes all Defendants. Therefore, even if Plaintiffs’ procedural challenge were timely, the Court can infer all Defendants consented to removal from the circumstances of this case. Accordingly, Defendants’ removal of this case was not procedurally improper.

C. This Court Has Diversity Jurisdiction.

Next, Plaintiffs argue that Defendants have neither established complete diversity of citizenship nor demonstrated that the amount in controversy exceeds $75,000. The Court addresses each issue in turn.

1. There is complete diversity of citizenship.

As a preliminary matter, the parties agree that Plaintiffs are California citizens. However, Plaintiffs argue that complete diversity is lacking for three reasons: (1) Gattoni and O'Malley are California citizens, (2) LRI and LSI are California corporations, and (3) the unnamed Doe defendants are California citizens.

First, Plaintiffs contend that Defendants have not offered "any proof" to support their assertion that Gattoni and O'Malley are, respectively, Florida and Iowa citizens. Instead, Plaintiffs seem to argue that O'Malley and Gattoni are "California residents" solely because their complaint identifies them as such. Generally, defendants are presumed to know their own citizenship. See, e.g., Leon v. Gordon Trucking, Inc. , 76 F. Supp. 3d 1055, 1063 (C.D. Cal. 2014) ("[A] corporate defendant, like any other, is presumed to know its own citizenship."). Further, "[t]he place where a person lives is taken to be his domicile until facts adduced establish the contrary." Anderson v. Watts , 138 U.S. 694, 706, 11 S.Ct. 449, 34 L.Ed. 1078 (1891).

Here, in addition to their allegations of their own citizenship, Defendants offer a declaration from Nancy J. Hasty ("Hasty"), Vice President of Human Resources for Landstar Systems Holdings, Inc. (Declaration of Nancy Hasty, Dkt. No. 12-2.) Hasty states that Gattoni has been a Florida resident since December 4, 2020 and has his tax information sent to Florida. (Id. ¶ 3.) Hasty also states that O'Malley resided in Florida at the time of his retirement on February 7, 2020, but he now has a "permanent residence" in Iowa. (Id. ¶ 4.) Beyond Plaintiffs’...