Andrew Smith v. Mylan Inc. , 761 F.3d 1042 ( 2014 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ANDREW SMITH, individually and as No. 12-56028
successor-in-interest to Jennifer
Roberts (deceased); A. S., by and D.C. No.
through her Guardian Ad Litem, 5:12-cv-00216-
Tera Harden Esq.; individually and ODW-SP
as successor-in-interest to Jennifer
Roberts (deceased); S. N., by and
through her Guardian Ad Litem, OPINION
Sherry Kinnison; individually and as
successor-in-interest to Jennifer
Roberts (deceased),
Plaintiffs-Appellees,
v.
MYLAN INC.; MYLAN
PHARMACEUTICALS, INC.; MYLAN
TECHNOLOGIES INC.; MYLAN
INSTITUTIONAL INC.,
Defendants-Appellants.
Appeal from the United States District Court
for the Central District of California
Otis D. Wright II, District Judge, Presiding
2 SMITH V. MYLAN, INC.
Submitted February 10, 2014*
Pasadena, California
Filed August 4, 2014
Before: Dorothy W. Nelson, Richard A. Paez,
and Jacqueline H. Nguyen, Circuit Judges.
Opinion by Judge Nguyen
SUMMARY**
Diversity Jurisdiction / Removal
The panel vacated the district court’s dismissal based on
lack of subject matter jurisdiction of a wrongful death case,
and remanded to the district court.
Defendants invoked diversity jurisdiction and filed a
notice of removal fourteen months after the lawsuit was filed
in state court. The district court sua sponte remanded on the
ground that Defendants had removed the case too late, and
pursuant to 28 U.S.C. § 1447(c) found that it lacked subject
matter jurisdiction.
*
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
SMITH V. MYLAN, INC. 3
The panel held that it had jurisdiction to review the
district court’s remand order. The panel also held that the
district court acted in excess of its statutory authority because
the one-year time limitation for removal of diversity cases
under 28 U.S.C. § 1446(b) (current version at 28 U.S.C.
§ 1446(c)) was a procedural requirement rather than
jurisdictional. The panel held that the district court could not
remand sua sponte based on a non-jurisdictional defect
because procedural deficiencies were waivable. The panel
concluded that Plaintiffs’ failure to object constituted a
waiver of any right to contest the removal.
COUNSEL
Clem C. Trischler and Jason M. Reefer, Pietragallo Gordon
Alfano, Pittsburgh, Pennsylvania; Julian G. Senior, Spencer
LLP, Manhattan Beach, California, for Defendants-
Appellants.
Patricia A. Law, Law Offices of Patricia A. Law, Riverside,
California, for Plaintiffs-Appellees.
OPINION
NGUYEN, Circuit Judge:
A state court action may not be removed to federal court
on the basis of diversity jurisdiction more than one year after
the action was filed. See 28 U.S.C. § 1446(b) (current
version at 28 U.S.C. § 1446(c)). Defendants in this wrongful
death case invoked diversity jurisdiction and filed a notice of
removal fourteen months after the lawsuit was filed in state
4 SMITH V. MYLAN, INC.
court. The district court sua sponte remanded on the ground
that Defendants had removed the case too late. The court,
relying on 28 U.S.C. § 1447(c), found that it lacked subject
matter jurisdiction.
We hold that the district court acted in excess of its
statutory authority because the one-year time limitation for
removal of diversity cases under § 1446(b) is a procedural
requirement rather than jurisdictional. While the district
court may remand at any time prior to final judgment for lack
of subject matter jurisdiction, it cannot remand sua sponte
based on a non-jurisdictional defect because procedural
deficiencies are waivable. Here, Plaintiffs’ failure to object
constitutes a waiver of any right to contest the removal. We
therefore vacate and remand.
FACTUAL BACKGROUND
Plaintiffs Andrew Smith, Alexandra Smith, and Sarah
Nevitt (collectively, “Plaintiffs”), individually and as
successors-in-interest to their mother, filed a wrongful death
action in state court on December 22, 2010. In October 2011,
Plaintiffs served Defendants Mylan Inc., Mylan
Pharmaceuticals, Inc., Mylan Technologies, Inc., and Mylan
Institutional, Inc. (collectively, “Defendants”) with an
amended complaint. At that point, however, Defendants
could not have removed the case because there was no federal
question jurisdiction and the parties were not completely
diverse. See 28 U.S.C. §§ 1331, 1332, 1441. On January 30,
2012, more than one year after the filing of the case, the state
court dismissed the last remaining non-diverse defendant.
Two weeks later, on February 9, 2012, Defendants removed
the matter to federal court, invoking diversity jurisdiction.
SMITH V. MYLAN, INC. 5
Plaintiffs did not file a motion to remand or otherwise
object to removal. To the contrary, shortly after removal, the
parties filed a joint report pursuant to Rule 26(f) of the
Federal Rules of Civil Procedure in preparation for a
scheduling conference with the court. Nonetheless, a few
weeks later, on May 3, 2012, the district court sua sponte
remanded the case pursuant to § 1447(c) for lack of subject
matter jurisdiction, finding that the case was improperly
removed more than one year after it commenced in state
court. Defendants timely appealed.
DISCUSSION
A.
As a threshold matter, we must decide whether we have
jurisdiction to review the district court’s remand order. Aside
from certain exceptions not relevant here, § 1447(d) states
that a remand order “is not reviewable on appeal or
otherwise.” Despite this broad language, § 1447(d) does not
preclude review if the district court lacked authority to
remand under § 1447(c) in the first instance. Kelton Arms
Condo. Owners Ass’n v. Homestead Ins. Co., 346 F.3d 1190,
1191 (9th Cir. 2003). “If, on the other hand, 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 erroneous.” Id.Thus, our resolution of the merits here determines
whether we have jurisdiction. As discussed below, the
district court lacked authority under § 1447(c) to remand sua
sponte based on Defendants’ failure to remove within the
one-year time limitation prescribed in § 1446(b). We
6 SMITH V. MYLAN, INC.
therefore conclude that we have jurisdiction to review the
district court’s remand order.
B.
We now turn to the merits. Under § 1447(c), the district
court must remand “[i]f at any time before final judgment it
appears that the district court lacks subject matter
jurisdiction[.]” However, the court may remand for defects
other than lack of subject matter jurisdiction only upon a
timely motion to remand. See § 1447(c) (“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 notice of removal under section 1446(a).”);
Kelton, 346 F.3d at 1193 (holding that “the district court
cannot remand sua sponte for defects in removal procedure”).
Therefore, the question that we must decide is whether
§ 1446(b)’s one-year time limitation for removal of diversity
cases is jurisdictional, rather than procedural in nature.
Section 1446(b) provides in relevant part:
The notice of removal of a civil action or
proceeding shall be filed within thirty days
after the receipt by the defendant . . . of a copy
of the initial pleading setting forth the claim
for relief upon which such action or
proceeding is based . . . .
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 . . . of a copy of an amended
pleading . . . from which it may first be
SMITH V. MYLAN, INC. 7
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.
(emphasis added).1
We have never specifically considered whether
§ 1446(b)’s one-year time limitation is procedural or
jurisdictional. However, we have examined § 1446(b)’s
thirty-day time limit within which the defendant must file a
notice of removal after receipt of the complaint, and we have
found it to be merely procedural. In Fristoe v. Reynolds
Metals Co., we observed that “the [thirty-day] statutory time
limit for removal petitions is merely a formal and modal
requirement and is not jurisdictional.” 615 F.2d 1209, 1212
(9th Cir. 1980). We further explained that “[a]lthough the
time limit is mandatory and a timely objection to a late
petition will defeat removal, a party may waive the defect or
be estopped from objecting to the untimeliness by sitting on
his rights.” Id.; see also Maniar v. FDIC, 979 F.2d 782, 784
(9th Cir. 1992) (holding that “untimely removal is a
1
On December 7, 2011, Congress enacted the Federal Courts
Jurisdiction and Venue Clarification Act of 2011, Pub. L. No. 112-63, 125
Stat. 758 (2011) (“the Act”), which amended certain portions of Title 28
of the United States Code, including § 1446(b). The Act’s amendments
took effect on January 6, 2012 and applied only to: (1) cases that were
commenced in a district court on or after the Act’s effective date and
(2) cases that were removed from a state court to a district court and that
had been commenced on or after the Act’s effective date. See Pub. L.
112-63. Because this case was commenced in December 2010, before the
Act’s effective date, the version of § 1446(b) that is cited herein is the one
in effect at the time this case was removed.
8 SMITH V. MYLAN, INC.
procedural defect and not jurisdictional”); Kelton, 346 F.3d
at 1192–93 (same).
We see no reason to construe § 1446(b)’s one-year time
limitation any differently from its thirty-day requirement.
Accordingly, we hold that the one-year time limitation for
removal of diversity cases is a procedural, non-jurisdictional
requirement rather than jurisdictional. Because procedural
defects are waivable, a district court lacks authority to
remand based on the defendant’s violation of § 1446(b)’s one
year-time limitation absent a timely filed motion to remand.
See Kelton, 346 F.3d at 1192 (stating that procedural
requirements, like personal jurisdiction, may be waived).
Our conclusion is consistent with those of our sister
circuits that have addressed the one-year time limit in
§ 1446(b). See Music v. Arrowood Indem. Co., 632 F.3d 284,
288 (6th Cir. 2011) (“[W]e hold that the one-year time
limitation rule for removal, 28 U.S.C. § 1446(b), is
procedural, not jurisdictional, and therefore subject to
forfeiture.”); Ariel Land Owners, Inc. v. Dring, 351 F.3d 611,
616 (3d Cir. 2003) (“Because failure to remove within the
one-year time limit established by § 1446(b) is not a
jurisdictional defect, a district court has no authority to order
remand on that basis without a timely filed motion.”); In re
Uniroyal Goodrich Tire Co., 104 F.3d 322, 324 (11th Cir.
1997) (“The untimeliness of a removal is a procedural,
instead of a jurisdictional, defect.”); Barnes v. Westinghouse
Electric Corp., 962 F.2d 513, 516 (5th Cir. 1992) (“We are
not persuaded by [the plaintiff’s] arguments that section
1446(b) is jurisdictional in nature . . . .”).
Further, as the Third Circuit observed, a finding that the
time limit requirements in § 1446(b) are procedural is
SMITH V. MYLAN, INC. 9
supported by both the language of the statute and its
legislative history. “First, nothing in the text of the statute
suggests that the one-year limit operates differently from the
30-day limit. Neither provision expressly purports to limit
federal jurisdiction[.]” Ariel, 351 F.3d at 614. And, the
legislative history indicates that Congress passed the one-year
time limit “simply to close a procedural gap that had arisen in
the application of the 30-day time limit[.]” Id. at 615.
C.
Plaintiffs in this case did not file a motion to remand. “A
plaintiff may wish to remain in federal court even though he
or she originally filed in state court. For example, a plaintiff
might do this simply to expedite the litigation.” Kelton,
346 F.3d at 1192. That may have been the case here, since
Plaintiffs raised no objection to removal and instead joined
Defendants in filing a Rule 26 report in anticipation of a
scheduling conference with the court. Therefore, Plaintiffs
have implicitly waived any procedural defect in removal. By
remanding sua sponte on the basis of Defendants’ violation
of the one-year time limitation in § 1446(b), the district court
acted in excess of its statutory authority.
The parties shall bear their own costs on appeal.
VACATED AND REMANDED.