Lively v. Wild Oats Markets ( 2006 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
EMMA C. LIVELY, 
Plaintiff-Appellee, No. 04-56682
v.
 D.C. No.
CV-04-00117-RGK
WILD OATS MARKETS, INC., a
Delaware corporation, OPINION
Defendant-Appellant.

Appeal from the United States District Court
for the Central District of California
R. Gary Klausner, District Judge, Presiding
Argued and Submitted
May 4, 2006—Pasadena, California
Filed July 27, 2006
Before: Michael Daly Hawkins and Richard A. Paez,
Circuit Judges, and Neil V. Wake,* District Judge.
Opinion by Judge Paez
*The Honorable Neil V. Wake, United States District Judge for the Dis-
trict of Arizona, sitting by designation.
8425
8428 LIVELY v. WILD OATS MARKETS
COUNSEL
Richard M. Koep and James A. Rossi, Crandell Wade &
Lowe, Calabasas, California, for the defendant-appellant.
Leonard M. Tavera, Towle, Denison, Smith & Tavera, LLP,
Los Angeles, California, for the plaintiff-appellee.
OPINION
PAEZ, Circuit Judge:
Defendant-Appellant Wild Oats Market, Inc. (“Wild Oats”)
appeals the district court’s order remanding this action to state
court. Wild Oats removed this action to the District Court for
the Central District of California alleging that, because the
parties were completely diverse and the amount in contro-
versy exceeded $75,000, diversity jurisdiction existed under
28 U.S.C. § 1332, and therefore removal was proper under 28
U.S.C. § 1441(a).1 Plaintiff-Appellee Emma C. Lively
1
In its notice of removal, Wild Oats stated that “this action may be
removed . . . pursuant to the provisions of 28 U.S.C. Section 1441(b).”
LIVELY v. WILD OATS MARKETS 8429
(“Lively”) did not object to the removal. However, after the
case had been pending in the district court for approximately
eight months, the court, acting sua sponte and invoking its
authority under 28 U.S.C. § 1447(c), determined that diversity
jurisdiction did not exist because Wild Oats, contrary to the
removal requirement of 28 U.S.C. § 1441(b), was a citizen of
the state of California. Treating this requirement as a jurisdic-
tional limitation on Wild Oats’ right of removal under
§ 1441(a), the district court remanded Lively’s action to state
court.
Although Wild Oats does not dispute that it is a citizen of
California and therefore a forum defendant within the mean-
ing of § 1441(b),2 it argues that its violation of the forum
defendant rule was a procedural defect in the removal process,
which Lively had to raise within the 30 days following
removal as required by § 1447(c). Because Lively did not
object within the 30-day period, Wild Oats argues that Lively
waived the defect and that the district court lacked authority
to remand the case to state court.
We must decide whether the forum defendant rule con-
tained in § 1441(b) is jurisdictional or procedural, and thus
whether a violation of this rule constitutes a jurisdictional or
procedural defect. This issue has been addressed by nine of
Because Wild Oats’ removal was based on diversity jurisdiction, we
assume that Wild Oats meant to state that removal was proper under
§ 1441(a), not § 1441(b).
2
Section 1441(b) provides:
Any civil action of which the district courts have original juris-
diction founded on a claim or right arising under the Constitution,
treaties or laws of the United States shall be removable without
regard to the citizenship or residence of the parties. Any other
such action shall be removable only if none of the parties in inter-
est properly joined and served as defendants is a citizen of the
State in which such action is brought.
28 U.S.C. § 1441(b) (2006).
8430 LIVELY v. WILD OATS MARKETS
our sister circuits. It is, however, an issue of first impression
in this circuit.3 We join eight of the nine circuits that have
decided this issue and hold that the forum defendant rule is pro-
cedural,4 and therefore a violation of this rule is a waivable
defect in the removal process that cannot form the basis for
a district court’s sua sponte remand order. Because the forum
defendant rule is non-jurisdictional, we further hold that 28
U.S.C. § 1447(d) does not bar appellate review of the district
court’s remand order, which was based on Wild Oats’ viola-
tion of the forum defendant rule.
I. Background
On September 26, 2003, Lively filed a personal injury
action against Wild Oats in state court seeking damages for a
3
Although we have not directly addressed the nature of the forum defen-
dant rule, this issue was raised in Spencer v. United States Dist. Court for
the N. Dist. of Cal., 393 F.3d 867 (9th Cir. 2004). Spencer involved a post-
removal joinder of a local, diverse defendant. In determining that the join-
der did not necessitate a remand to state court, “[t]he district court deter-
mined that the ‘forum defendant’ rule is procedural rather than
jurisdictional.” Id. at 869. We affirmed, holding that the district court did
not err in determining that diversity jurisdiction was not destroyed by the
post-removal joinder. Id. at 868. The basis for our decision was the fact
that the local defendant was joined after the case had been removed to fed-
eral court, and, therefore, the defendants did not violate the forum defen-
dant rule at the time of removal. Id. at 871. Notably, we affirmed the
district court’s ruling without expressing disagreement with its character-
ization of § 1441(b) as a procedural rule.
4
Part of the difficulty with this issue may be attributed to semantics. The
forum defendant rule does not fit neatly within the traditional meaning of
removal procedure—a concept that 28 U.S.C. § 1446 reserves for more
programmatic rules, such as filing deadlines and service requirements.
Perhaps a more accurate descriptor for the forum defendant rule in
§ 1441(b) is one which does not detract from its substantive nature, such
as “non-jurisdictional.” We acknowledge, however, that our sister circuits
often use the term “procedural,” and that there exists a conventional
dichotomy of jurisdiction and procedure in the context of removal pro-
ceedings under § 1441(b). We therefore use both “procedural” and “non-
jurisdictional” interchangeably to describe the forum defendant rule.
LIVELY v. WILD OATS MARKETS 8431
slip and fall accident that occurred in one of Wild Oats’ Cali-
fornia stores. On January 8, 2004, Wild Oats filed a notice of
removal pursuant to 28 U.S.C. § 1441(e), asserting that diver-
sity jurisdiction existed under 28 U.S.C. § 1332 because it
was a citizen of Delaware, its state of incorporation, and Col-
orado, its principal place of business, and that Lively was a
citizen of New York. Wild Oats also alleged that the amount
in controversy exceeded $75,000. Lively did not object to the
removal.
On August 25, 2004, after discovery ensued and after Wild
Oats filed a motion for summary judgment, the district court
issued an order to show cause why the case should not be
remanded to state court. According to the district court, “re-
moval appear[ed] to be improper” because Wild Oats’ princi-
pal place of business was California, not Colorado. Wild Oats
insisted that removal was proper even if it were a California
citizen because diversity jurisdiction still existed, and there-
fore the district court could only remand the case to state
court if Lively so moved within the 30-day time limit imposed
by 28 U.S.C. § 1447(c). Because the time limit had expired,
Wild Oats argued that the district court could not order a
remand.
The district court nonetheless remanded the case to state
court for lack of subject matter jurisdiction. As noted, the dis-
trict court determined that removal was improper because
Wild Oats, a California citizen and local defendant, violated
the forum defendant rule contained in § 1441(b). The court
determined that this violation “constitute[d] a jurisdictional
defect” and therefore remand was “timely and proper” pursu-
ant to § 1447(c). Wild Oats timely appealed.
II. Discussion
Jurisdiction & Standard of Review
Lively argues that we lack jurisdiction to address whether
the forum defendant rule is jurisdictional or procedural
8432 LIVELY v. WILD OATS MARKETS
because § 1447(d) bars appellate review of the district court’s
remand order, which was based on a lack of subject matter
jurisdiction pursuant to § 1447(c). We disagree. As explained
below, although § 1447(d) limits appellate review of district
court remand orders, this does not mean that we must simply
turn this case away because the district court asserted that it
lacked jurisdiction and assume that the remand was autho-
rized by § 1447(c). Rather, we must determine whether the
district court correctly applied § 1447(c) by deciding that the
forum defendant rule is a jurisdictional limitation that may be
invoked sua sponte at any time. In so doing, we determine our
own jurisdiction. See Special Invs., Inc. v. Aero Air, Inc., 360
F.3d 989, 992 (9th Cir. 2004) (“We, of course, have jurisdic-
tion to determine our own jurisdiction.”).
[1] In addition to one inapplicable exception, § 1447(d)
provides that “[a]n order remanding a case to the State court
from which it was removed is not reviewable on appeal or
otherwise.” The Supreme Court has cabined this broad lan-
guage by construing § 1447(d)’s bar on appellate review as
applicable only to remand orders issued pursuant to § 1447(c).
See Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S. 336,
345-46 (1976) (stating that §§ 1447(d) and (c) “must be con-
strued together . . . . This means that only remand orders
issued under § 1447(c) and invoking grounds specified therein
. . . are immune from review under § 1447(d)”), abrogated on
other grounds in Quackenbush v. Allstate Ins. Co., 517 U.S.
706 (1996).5 Section 1447(c) provides, in relevant part:
A motion to remand the case on the basis of any
defect other than lack of subject matter jurisdiction
must be made within 30 days after the filing of the
5
The Supreme Court recently reiterated § 1447(c)’s limitation on the
scope of § 1447(d). Kircher v. Putnam Funds Trust, ___ U.S. ___, 126
S. Ct. 2145, 2153 (2006) (“In Thermtron, we held that § 1447(d) applies
only to remands based on the grounds specified in § 1447(c), that is, a
defect in removal procedure or lack of subject matter jurisdiction.”).
LIVELY v. WILD OATS MARKETS 8433
notice of removal under section 1446(a). If at any
time before final judgment it appears that the district
court lacks subject matter jurisdiction, the case shall
be remanded.
28 U.S.C. § 1447(c) (2006). Following the Supreme Court’s
direction, this court has determined that, taken together,
§§ 1447(c) and (d) bar appellate review of a remand order
only if the district court had authority to remand under
§ 1447(c). Kelton Arms Condo. Owners Ass’n., Inc. v. Home-
stead Ins. Co., 346 F.3d 1190, 1191 (9th Cir. 2003) (“If . . .
the district court had the power to remand sua sponte under
section 1447(c), section 1447(d) would apply, and we would
have no jurisdiction to review even if the remand was errone-
ous.”).
[2] Lively is correct that if the district court remanded
under its § 1447(c) authority, we would lack jurisdiction to
review the order. See United Investors Life Ins. Co. v. Wad-
dell & Reed Inc., 360 F.3d 960, 963 (9th Cir. 2004); Hansen
v. Blue Cross of Cal., 891 F.2d 1384, 1387 (9th Cir. 1989);
and Kunzi v. Pan Am. World Airways, Inc., 833 F.2d 1291,
1293 (9th Cir. 1987). Rather than assuming the existence of
this authority, as Lively would have us do, we must determine
its veracity—we must determine whether the district court had
the authority under § 1447(c) to remand. Stated differently,
the question raised on appeal is not whether the district
court’s remand order was correct, but whether the district
court exceeded the scope of its § 1447(c) authority by issuing
the remand order in the first place. Such an inquiry is well
within our jurisdictional bounds—because it “takes aim at the
district court’s authority to issue the remand order, we have
jurisdiction.” In re Ford Motor Co./Citibank, 264 F.3d 952,
965 (9th Cir. 2001); see also N. Cal. Dist. Council of Labor-
ers v. Pittsburg-Des Moines Steel Co., 69 F.3d 1034, 1038
(9th Cir. 1995) (“[U]nder Thermtron, we have jurisdiction to
decide whether a district court has the power to do what it did
[in issuing a remand order], although we cannot examine
8434 LIVELY v. WILD OATS MARKETS
whether a particular exercise of power was proper.” (internal
quotation marks and citations omitted) (second alteration in
original)).6
[3] Therefore, because, as the Third Circuit noted in Korea
Exch. Bank, N.Y. Branch v. Trackwise Sales Corp., 66 F.3d
46, 47 (3d Cir. 1995), our jurisdiction is “inextricably inter-
twined” with the district court’s remand authority, we must
consider them together. In an effort to determine the district
court’s authority to issue the remand order, we must address
the underlying merits of the district court’s ruling—whether
the forum defendant rule is jurisdictional or procedural in
nature. That is, “[t]his is one of those rare cases in which we
must decide the merits [of the appeal] to decide [the propriety
of our] jurisdiction.” Kelton, 346 F.3d at 1192; see also
Abada v. Charles Schwab & Co., Inc., 300 F.3d 1112, 1118
(9th Cir. 2002) (“In this case, resolution of the substantive
legal question was a necessary predicate to deciding the exis-
tence of subject matter jurisdiction.”). In sum, we have “juris-
diction to decide jurisdiction,”7 and therefore turn to the
merits of the district court’s remand order. Kelton, 346 F.3d
at 1192.
6
Lest there be any confusion, our review of the remand order does not
conflict with this court’s case law that bars review of § 1447(c) remand
orders. In Kunzi, for example, we refused to review a district court’s
remand order because we concluded that it was based on a “jurisdictional
determination that falls within section 1447(c), and is thus unreviewable.”
833 F.2d at 1294 (emphasis added). The basis for the jurisdictional bar in
Kunzi was not the mere fact that the district court cited § 1447(c) in its
remand order, but rather our determination that the district court remanded
based on a jurisdictional ground, within its § 1447(c) authority. This is the
precise determination we must make in the present case.
7
Our jurisdiction is premised on 28 U.S.C. § 1291. Although the district
court did not enter a final judgment on the merits of Lively’s slip and fall
claim, its remand order had the force of a final order given that it “put the
litigants effectively out of [federal] court.” Quackenbush, 517 U.S. at 713(internal quotation marks omitted); see also Huth v. Hartford Ins. Co. of
the Midwest, 298 F.3d 800, 802 (9th Cir. 2002).
LIVELY v. WILD OATS MARKETS 8435
We review de novo a district court’s decision to remand a
removed case and its determination that it lacks subject matter
jurisdiction. Neb. ex rel. Dep’t of Soc. Servs. v. Bentson, 146
F.3d 676, 678 (9th Cir. 1998); United States v. Peninsula
Commc’ns., Inc., 287 F.3d 832, 836 (9th Cir. 2002). We also
review de novo a district court’s interpretation and construc-
tion of a federal statute. SEC v. McCarthy, 322 F.3d 650, 654
(9th Cir. 2003).
Forum Defendant Rule
[4] Separate and apart from the statute conferring diversity
jurisdiction, 28 U.S.C. § 1332, § 1441(b) confines removal on
the basis of diversity jurisdiction to instances where no defen-
dant is a citizen of the forum state. As explained below, we
hold that this additional limitation on diversity-based removal
jurisdiction is a procedural, or non-jurisdictional, rule. Our
holding is compelled by a close analysis of the legislative his-
tory of § 1447(c),8 the policy rationale of § 1441(b), the pre-
vailing law of our sister circuits, and Supreme Court
precedent.
As originally written, § 1447(c) required the district court
to remand a case to state court “[i]f at any time before final
judgment it appears that the case was removed improvidently
and without jurisdiction.” 28 U.S.C. § 1447(c) (1948)
(emphasis added). Due to the ambiguous nature of the term
“improvidently,” Congress amended the subsection in 1988 to
provide, in relevant part:
A motion to remand the case on the basis of any
defect in removal procedure must be made within 30
days after the filing of the notice of removal under
§ 1446(a). If at any time before final judgment it
8
For a comprehensive overview of the history of § 1447(c), see Snap-
per, Inc. v. Redan, 171 F.3d 1249, 1254-59 (11th Cir. 1999).
8436 LIVELY v. WILD OATS MARKETS
appears that the district court lacks subject matter
jurisdiction, the case shall be remanded. . . .
Judicial Improvements and Access to Justice Act of 1988,
Pub. L. No. 100-702, § 1016(c)(1) (emphasis added).
Although the new clause, “defect in removal procedure,” was
an improvement from “improvident,” confusion remained
over what removal defects triggered the 30-day time limit. See
David D. Siegel, Commentary on 1996 Revision of Section
1447(c), 28 U.S.C.A. § 1447 (West Supp. 1988). Removal
defects that were not traditionally categorized as procedural,
but also did not impact subject matter jurisdiction, occupied
a grey area in the law. Until Congress enacted further revi-
sions to § 1447(c) in 1996, some courts placed the forum
defendant rule in this grey area. See Snapper, 171 F.3d at
1258 (“The revised language [of the 1996 Amendments]
would seem to address neatly the issue [regarding § 1441(b)]
that had concerned courts under the 1988 version, suggesting
that removal in violation of § 1441(b) is subject to the 30-day
time limit.”).
[5] As amended in 1996, a remand motion “on the basis of
any defect other than lack of subject matter jurisdiction must
be made within 30 days after the filing of the notice of
removal under § 1446(a).” Pub. L. No. 104-219, § 1 (1996)
(emphasis added). We agree with the Eleventh Circuit’s his-
torical analysis of § 1447(c), which concludes that, by substi-
tuting “defect other than lack of subject matter jurisdiction”
for “defect in removal procedure,” Congress sought to ensure
that even the “more substantive” removal defects, such as
§ 1441(b) violations, were subject to the 30-day time limit.
Snapper, 171 F.3d at 1257-58. Therefore, although the forum
defendant rule is not a traditional rule of removal procedure,
as articulated in § 1446, we agree that the 1996 amendments
to § 1447(c) subject § 1441(b) violations to the 30-day time
limit. Id.; see also Siegel, Commentary on 1996 Revision
(“[I]t’s awkward to describe as a defect of ‘procedure’ some-
thing that has to do not with mechanics, but with the citizen-
LIVELY v. WILD OATS MARKETS 8437
ship of a party. The defect . . . is nevertheless subject to the
30-day limit.”).
[6] The purpose of the forum defendant rule also supports
treating it as a non-jurisdictional requirement. Removal based
on diversity jurisdiction is intended to protect out-of-state
defendants from possible prejudices in state court. See Tosco
Corp. v. Cmtys. for a Better Env’t., 236 F.3d 495, 502 (9th
Cir. 2001) (“The purpose of diversity jurisdiction is to provide
a federal forum for out-of-state litigants where they are free
from prejudice in favor of a local litigant.” (internal quota-
tions marks omitted)). The need for such protection is absent,
however, in cases where the defendant is a citizen of the state
in which the case is brought. Within this contextual frame-
work, the forum defendant rule allows the plaintiff to regain
some control over forum selection by requesting that the case
be remanded to state court. A procedural characterization of
this rule honors this purpose because the plaintiff can either
move to remand the case to state court within the 30-day time
limit, or allow the case to remain in federal court by doing
nothing. Either way, the plaintiff exercises control over the
forum. Although a jurisdictional reading of the rule preserves
the plaintiff’s right to remand beyond the 30-day limit, it also
allows the court to remand sua sponte, even if the plaintiff
prefers to remain in federal court. See Skranak v. Castenada,
425 F.3d 1213, 1216 (9th Cir. 2005) (“[J]urisdictional bars
cannot be waived by the parties and may be addressed sua
sponte.”).
[7] Our interpretation of § 1441(b) comports with eight of
the nine circuits that have addressed this issue. See, e.g., Han-
delsman v. Bedford Vill. Assocs. Ltd. P’ship, 213 F.3d 48, 50
n.2 (2d Cir. 2000) (describing a violation of the forum defen-
dant rule as a waivable “procedural defect”); Hurley v. Motor
Coach Indus. Inc., 222 F.3d 377, 380 (7th Cir. 2000) (holding
that the forum defendant rule “is more a matter of removal
procedure, and hence waivable, than a matter of jurisdic-
tion”); Blackburn v. United Parcel Serv., Inc., 179 F.3d 81, 90
8438 LIVELY v. WILD OATS MARKETS
n.3 (3d Cir. 1999) (describing a § 1441(b) violation as a waiv-
able removal defect); Pacheco De Perez v. AT & T Co., 139
F.3d 1368, 1372 n.4 (11th Cir. 1998) (same); In re Shell Oil
Co., 932 F.2d 1518, 1523 (5th Cir. 1991) (same); Farm
Constr. Servs., Inc. v. Fudge, 831 F.2d 18, 22 (1st Cir. 1987)
(holding that a violation of the forum defendant rule did not
strip the district court of its jurisdiction because it was a
“technical” defect that had been waived); Am. Oil Co. v.
McMullin, 433 F.2d 1091, 1095 (10th Cir. 1970) (describing
a § 1441(b) violation as a waivable defect in removal pro-
ceedings); Handley-Mack Co. v. Godchaux Sugar Co., 2 F.2d
435, 437 (6th Cir. 1924) (describing removal by a forum
defendant as a “technical” violation); but see Hurt v. Dow
Chem. Co., 963 F.2d 1142, 1146 n.1 (8th Cir. 1992) (holding
that a violation of § 1441(b) is a non-waivable jurisdictional
defect).9
In contrast to the “overwhelming weight of authority . . . on
the ‘nonjurisdictional’ side of the debate,” Hurley, 222 F.3d
at 379, the Eighth Circuit is the sole circuit on the jurisdic-
tional side. See Hurt, 963 F.2d at 1146 n.1. In Hurt, the
Eighth Circuit reasoned that because removal jurisdiction is a
“creature of statute,” a violation of one of its statutory
requirements, e.g. the forum defendant rule, prevents the dis-
trict court from exercising jurisdiction over the matter. Id. at
1145. Thus, although the remand motion in Hurt was
untimely, the court held that remand was proper because
“subject-matter jurisdiction is not a mere procedural irregular-
ity capable of being waived.” Id. at 1146. Like the courts that
have considered Hurt,10 we reject the Eighth Circuit’s
9
Our holding also comports with our case law concerning other statu-
tory removal defects. See, e.g., Vasquez v. N. County Transit Dist., 292
F.3d 1049, 1062 (9th Cir. 2002) (holding that the workmen’s compensa-
tion non-removability statute is non-jurisdictional, and therefore a viola-
tion of the statute is waivable and does not divest the district court of
jurisdiction).
10
See, e.g., Shapiro v. Logistec USA, Inc., 412 F.3d 307, 313 n.2 (2d
Cir. 2005).
LIVELY v. WILD OATS MARKETS 8439
approach. In light of § 1447(c)’s legislative history, the pur-
pose of § 1441(b), and the approach used by the majority of
the other circuits, we are not persuaded that the forum defen-
dant rule is a statutory requirement, which, if not met,
deprives the district court of original jurisdiction.
In addition to citing Hurt, the district court in this case
relied on WRS Motion Picture and Video Lab. v. Post Modern
Edit, Inc., 33 F. Supp. 2d 876 (C.D. Cal. 1999) to conclude
that § 1441(b) imposes a jurisdictional requirement. In so
doing, the district court accepted WRS’s interpretation of the
Supreme Court’s decision in Grubbs v. Gen. Elec. Credit
Corp., 405 U.S. 699 (1972). In WRS, a forum defendant
removed a breach of contract case to federal court on the basis
of diversity jurisdiction. Like the present case, the district
court issued a sua sponte remand order based on a § 1441(b)
violation. In its memorandum remand order, the WRS court
determined that remand was appropriate because § 1441(b)
creates an additional limitation to diversity jurisdiction, and
therefore a violation of this constraint precludes subject mat-
ter jurisdiction. 33 F. Supp. 2d at 877 n.1, 878.
The WRS court recognized that, in Grubbs, the Supreme
Court held that a removal defect similar to a § 1441(b) viola-
tion does not defeat jurisdiction. 405 U.S. at 702; see also
Baggs v. Martin, 179 U.S. 206, 209 (1900) and Mackay v.
Uinta Dev. Co., 229 U.S. 173, 176-77 (1913). The WRS court,
however, distinguished the case before it on the basis that it
had not yet been tried. This distinction misunderstands the
import of the Supreme Court’s holding in Grubbs.
In Grubbs, the Supreme Court held that where a removed
case is tried on the merits without objection and the federal
court enters judgment, the jurisdictional issue on appeal is not
whether removal was proper, but whether the district court
would have had jurisdiction over the case had it been origi-
nally filed in federal court.11 405 U.S. at 702. The WRS court
11
In addition to a judgment entered after a trial on the merits, we have
held that Grubbs applies to a summary judgment order that disposes of a
8440 LIVELY v. WILD OATS MARKETS
interpreted Grubbs as authorizing a remand based on a
§ 1441(b) violation at any time unless the case proceeded to
a judgment on the merits and the federal court would have
had jurisdiction had the case been originally filed in federal
court. WRS, 33 F. Supp. 2d at 876.
Although the district court here was persuaded by this
interpretation of Grubbs, the WRS court misconstrued
Grubbs’s holding. Despite noting that the removal in Grubbs
was improper, the Supreme Court held that the district court
retained jurisdiction to enter judgment and the defect “may
not be raised for the first time on appeal.” Grubbs, 405 U.S.
at 700. A lack of subject matter jurisdiction, however, is a
non-waivable defect and “may be raised at any time.” Hill v.
Blind Indus. & Servs. of Md., 179 F.3d 754, 757 (9th Cir.
1999). Thus, we agree with the Third Circuit that the Supreme
Court, in Grubbs, “clearly suggested, even if it did not
directly hold, that it does not view the removal statute as
imposing independent jurisdictional restrictions on the federal
courts.”12 Korea Exch., 66 F.3d at 50. Rather, the Supreme
Court distinguished elements of removal procedure, such as
the “manner in which the case was brought or how the atten-
dance of the parties in the United States court was secured,”
from elements of diversity jurisdiction, suggesting that a
§ 1441(b) violation does not strip the district court of jurisdic-
tion. Grubbs, 405 U.S. at 703 (quoting Mackay, 229 U.S. at
176-77); see also Korea Exchange, 66 F.3d at 49 (“The
Mackay Court therefore recognized a clear distinction
case on the merits. See Gould v. Mut. Life Ins. Co. of N.Y., 790 F.2d 769,
773 (9th Cir. 1986).
12
In Hurt, the Eighth Circuit deemed Grubbs inapplicable because the
Grubbs plaintiff did not object to removal whereas the plaintiff in Hurt
objected in an untimely fashion. 963 F.2d at 1146. However, if the
removal statute imposes jurisdictional requirements, as Hurt holds, a
plaintiff’s non-objection on the one hand and untimely objection on the
other is a distinction without a difference because either way, the district
court has an obligation to determine if it lacked subject matter jurisdiction.
LIVELY v. WILD OATS MARKETS 8441
between the removal ‘process’ [such as ‘which party brought
the case to federal court’] and restrictions on the subject mat-
ter jurisdiction of the federal court over the case.”). For the
foregoing reasons, we conclude that Grubbs does not support
the district court’s determination that a violation of the forum
defendant rule creates a jurisdictional defect that can only be
overcome if the case proceeds to a judgment on the merits and
the federal court would have had jurisdiction had the case
been originally filed in federal court.13
In sum, the legislative history of § 1447(c), the policy ratio-
nale of § 1441(b), the result reached by the “overwhelming”
majority of our sister circuits, and Supreme Court precedent
compel our holding.
III. Conclusion
[8] We hold that the forum defendant rule embodied in
§ 1441(b) is a procedural requirement, and thus a violation of
this rule constitutes a waivable non-jurisdictional defect sub-
ject to the 30-day time limit imposed by § 1447(c). In this
case, because Lively failed to object, the district court
exceeded its § 1447(c) authority in ordering a remand. There-
fore, we review the district court’s remand order pursuant to
§ 1447(d), and vacate the order and remand for further pro-
ceedings consistent with this opinion.
ORDER VACATED and REMANDED.
13
The WRS court is not the only district court within the Ninth Circuit
that has addressed the forum defendant rule. The court in Geothermal Res.
Group, Inc. v. Puna Geothermal Venture, 216 F. Supp. 2d 1133, 1335 n.3
(D. Haw. 2001), was presented with the same issue and determined that
the forum defendant rule was non-jurisdictional.