O'Keefe v. Target Corporation ( 2020 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ALISON R. O’KEEFE, et al., Case No. 19-cv-08470-JCS 8 Plaintiffs, ORDER DENYING MOTION TO 9 v. REMAND AND ORDERING DISCOVERY 10 TARGET CORPORATION, Re: Dkt. No. 12 Defendant. 11 12 13 I. INTRODUCTION 14 Plaintiffs Alison and Jonathan O’Keefe brought this action in state court against Defendant 15 Target Corporation and several Doe Defendants, asserting claims arising from an incident in a 16 Target store where Alison O’Keefe was struck by a cart operated by at least one Doe Defendant 17 employed by Target. After requesting and receiving a statement of damages from the O’Keefes, 18 Target removed to this Court, asserting diversity jurisdiction under 28 U.S.C. § 1332. The 19 O’Keefes move to remand on the grounds that Target’s removal was untimely and that an 20 impending amendment, once the O’Keefes discover the identity of the employee or employees 21 operating the cart, will destroy diversity. The Court finds the matter suitable for resolution 22 without oral argument, and VACATES the hearing set for February 28, 2020. For the reasons 23 discussed below, the motion to remand is DENIED, the O’Keefes are GRANTED leave to serve 24 an early interrogatory as specified below no later than February 28, 2020, and, if they do so, 25 Target is ORDERED to respond no later than March 13, 2020. If warranted by Target’s 26 interrogatory response, the O’Keefes may file a motion for leave to amend to identify one or more 27 of the Doe Defendants and renewed motion to remand under 28 U.S.C. § 1447(e) no later than 1 March 27, 2020.1 2 II. BACKGROUND 3 The O’Keefes allege that Alison O’Keefe was struck by a restocking cart in a Target store 4 on August 2, 2019. Notice of Removal (dkt. 1) Ex. A (Compl.) ¶ 1. In addition to Target, the 5 complaint names as defendants Does 1 through 5, identified only as Target employees who 6 negligently operated the cart, and Does 6 through 10, identified only as owning the store and 7 employing the first five Does jointly with Target. See id. ¶¶ 7–9. The complaint did not claim any 8 particular amount of damages or provide any description Alison O’Keefe’s injury. The O’Keefes 9 filed this action in the California Superior Court for the County of Sonoma on October 7, 2019 10 and served Target on November 4, 2019. See generally id. 11 Target requested a statement of damages on December 2, 2019. Roger Dreyer Decl. (dkt. 12 8-1) Ex. D. On December 23, 2019, the O’Keefes provided Target with a statement of damages 13 totaling close to ten million dollars. Notice of Removal Ex. B. Target removed to this Court on 14 December 31, 2019. See generally Notice of Removal. The O’Keefes argue that Target should 15 have known that the amount in controversy exceeded $75,000 earlier based on: (1) an incident 16 report prepared by Target employees on the date of the accident, Mot. (dkt. 8) at 3 (citing Roger 17 Dreyer Decl. Ex. A); (2) past experience with the O’Keefes’ attorney, who “does not handle cases 18 that have valuation of under $75,000” and instead specializes “in handling catastrophic injury 19 cases,” id. at 3–4; and (3) a December 9, 2019 email from the O’Keefes’ attorney stating that 20 Alison O’Keefe “suffered a serious head injury in the incident,” id. at 4 (citing Roger Dreyer Decl. 21 Ex. C). The O’Keefes also argue that the case should be remanded because Target “consent[ed] to 22 personal jurisdiction at the state level” by answering the complaint in state court before removing, 23 id. at 5, and that they expect that discovering the identity of the Doe Defendant who operated the 24 cart will provide a separate basis for remand on account of a non-diverse defendant, id. at 5–6. 25 The O’Keefes seek to recover their attorneys’ fees and costs for what they contend is an improper 26 removal. Id. at 6–7. 27 1 Target argues that its removal was timely because it had no indication that the amount in 2 controversy exceeded the jurisdictional threshold2 until it received the damages statement on 3 December 23, 2019. Opp’n (dkt. 11) at 2–5. Target also contends that its filing of an answer has 4 no effect on removal, and that the potential addition of an individual defendant is both unnecessary 5 to the case and irrelevant to whether Target’s removal without such a defendant being named was 6 proper. Id. at 5–6. 7 The O’Keefes all but concede in their reply that Target’s removal was timely under 8 applicable Ninth Circuit precedent, but contend that allowing removal here is contrary to public 9 policy and that, based on communications between counsel, Target was aware of the amount in 10 controversy before receiving the O’Keefes’ damages statement. Reply (dkt. 12) at 2. The 11 O’Keefes devote the majority of their reply to arguing that they should be permitted to serve an 12 early interrogatory to identify the Target employee who was pushing the cart at the time of the 13 incident, and should be granted leave to amend their complaint to name that individual as a 14 defendant. Id. at 2–5. 15 III. ANALYSIS 16 A. Legal Standard 17 Federal courts have limited subject matter jurisdiction, and may only hear cases falling 18 within their jurisdiction. Generally, a defendant may remove a civil action filed in state court if 19 the action could have been filed originally in federal court. 28 U.S.C. § 1441. The removal 20 statutes are construed restrictively so as to limit removal jurisdiction. Shamrock Oil & Gas Corp. 21 v. Sheets, 313 U.S. 100, 108−09 (1941). The Ninth Circuit recognizes a “strong presumption 22 against removal.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (internal quotation marks 23 omitted). Any doubts as to removability should generally be resolved in favor of remand. 24 Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003). The defendant 25 bears the burden of showing that removal is proper. Valdez v. Allstate Ins. Co., 372 F.3d 1115, 26 2 Target erroneously states throughout its opposition brief that the amount in controversy must be 27 more than $74,999 to invoke diversity jurisdiction. Under 28 U.S.C. § 1132(a), the amount in 1 1117 (9th Cir. 2004). 2 Target asserts that this Court has subject matter jurisdiction based on diversity of 3 citizenship pursuant to 28 U.S.C. § 1332. In relevant part, that statute provides federal courts with 4 jurisdiction over “all civil actions where the matter in controversy exceeds the sum or value of 5 $75,000” that are between “citizens of different States.” 28 U.S.C. § 1332(a). Diversity 6 jurisdiction under § 1332(a) “applies only to cases in which the citizenship of each plaintiff is 7 diverse from the citizenship of each defendant.” Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996). 8 “The notice of removal of a civil action or proceeding shall be filed within 30 days after 9 the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting 10 forth the claim for relief upon which such action or proceeding is based, or within 30 days after 11 the service of summons upon the defendant . . . .” 28 U.S.C. § 1446(b)(1). “Except as provided 12 [elsewhere in the statute], if the case stated by the initial pleading is not removable, a notice of 13 removal may be filed within thirty days after receipt by the defendant, through service or 14 otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first 15 be ascertained that the case is one which is or has become removable.” Id. § 1446(b)(3). “If the 16 case stated by the initial pleading is not removable solely because the amount in controversy does 17 not exceed the amount specified in section 1332(a), information relating to the amount in 18 controversy in the record of the State proceeding, or in responses to discovery, shall be treated as 19 an ‘other paper’ under subsection (b)(3).” Id. § 1446(c)(3)(A). 20 The Ninth Circuit has rejected arguments that “clues” to removability should trigger a duty 21 to investigate, and instead adopted a “bright-line approach” that “the first thirty-day period for 22 removal in 28 U.S.C. § 1446(b) only applies if the case stated by the initial pleading is removable 23 on its face.” Harris v. Bankers Life & Cas. Co., 425 F.3d 689, 694, 697 (9th Cir. 2005). 24 The jurisdictional and procedural interests served by a bright-line approach are obvious. First and foremost, objective analysis of the 25 pleadings brings certainty and predictability to the process and avoids gamesmanship in pleading. Just as important, an objective baseline 26 rule avoids the spectre of inevitable collateral litigation over whether the pleadings contained a sufficient “clue,” whether defendant had 27 subjective knowledge, or whether defendant conducted sufficient We are unpersuaded by the argument that a predictable rule will result 1 in strategic delay in removal, thereby burdening the state courts with a case that will ultimately be removed. Once defendant is on notice of 2 removability, the thirty-day period begins to run. Defendant has neither the incentive nor the ability to tinker with either actual notice 3 or the time frame. 4 Additionally, 28 U.S.C. § 1446(b) prevents, at least in the context of removal based on diversity, unreasonable waste of judicial resources 5 by limiting the extended period of removal to one year after “commencement of the action.” The one-year bar gives the defendant 6 sufficient incentive and time to determine the facts to justify removal without imposing an undue burden to investigate removal within the 7 first thirty days of receiving an indeterminate complaint. [Citation omitted.] 8 Our reluctance to embrace [a “clues”-based] framework is also 9 motivated by the concern that defendants may be encouraged to engage in premature removals in order to ensure that they do not 10 waive their right to removal. Otherwise, defendants will be subject to a court’s post-hoc consideration of whether there was a “clue” in the 11 initial pleading and whether the defendant exercised due diligence to discover the grounds for removability. As observed in Lovern, the 12 pressure to file a premature notice of removal may lead to the imposition of Rule 11 sanctions. 13 Finally, we are not unmindful of the canon that instructs that removal 14 statutes should be construed narrowly in favor of remand to protect the jurisdiction of state courts. [Citations omitted.] Our interpretation 15 of 28 U.S.C. § 1446(b) is consistent with the goal of the canon, which guards against premature and protective removals and minimizes the 16 potential for a cottage industry of removal litigation. By assuring that removal occurs once the jurisdictional facts supporting removal are 17 evident, we also ensure respect for the jurisdiction of state courts. 18 Id. at 697–98 (footnotes omitted). 19 B. Target’s Removal Was Proper 20 All of the purported early indications of a sufficient amount in controversy on which the 21 O’Keefes rely—the August 2019 incident report, which stated that Alison O’Keefe “almost passed 22 out” and had pain in her right arm; the complaint, which does not describe her injuries at all; and 23 the O’Keefes’ attorney’s usual practice of taking high-value cases—are at most the type of “clues” 24 to potential removability that the Ninth Circuit held insufficient in Harris, and weak clues at that. 25 As the panel noted in that case, questions of notice and timeliness invert the effect of the general 26 rule to construe removal statutes narrowly, because a holding that Target should have removed at 27 the slightest hint of a larger amount in controversy would encourage thinly-supported removals by 1 that Target took instead—asking the O’Keefes for an estimate of their damages, and removing a 2 mere eight days after receiving a definitive statement of a sufficient amount in controversy— 3 comports with the removal statutes, Harris, and considerations of efficiency for the parties and the 4 courts. 5 Assuming for the sake of argument that informal communication between counsel could be 6 sufficient to trigger the deadline for removal, the O’Keefes’ argument that such communication 7 here renders Target’s removal untimely is frivolous. The only such communication identified by 8 the O’Keefes is an email dated December 9, 2019. See Roger Dreyer Decl. Ex. C. Target 9 removed the case on December 31, 2019—less than thirty days later. Accordingly, even if the 10 thirty-day clock for § 1446’s removal deadline began to run on December 9, 2019, the removal 11 was timely. 12 To the extent that the O’Keefes’ motion suggests that the case should be remanded based 13 on their intent to amend to add an individual defendant, such an argument has no basis in law. “In 14 determining whether a civil action is removable on the basis of [diversity] jurisdiction . . . , the 15 citizenship of defendants sued under fictitious names shall be disregarded.” 28 U.S.C. 16 § 1441(b)(1). The O’Keefes have not yet identified the person they wish to name as a defendant, 17 nor have they yet sought or received leave of the Court to so amend. See 28 U.S.C. § 1447(e) (“If 18 after removal the plaintiff seeks to join additional defendants whose joinder would destroy subject 19 matter jurisdiction, the court may deny joinder, or permit joinder and remand the action to the 20 State court.”). Even if the Court were to grant such leave, it is not yet clear whether the potential 21 individual defendant is a citizen of California who would destroy diversity—it is conceivable that 22 this person was not domiciled in California despite working here, or that they have since moved 23 away before the O’Keefes filed this action. See Harris, 425 F.3d at 695–96 (noting that 24 “[d]iversity jurisdiction is based on the status of the parties at the outset of the case,” i.e., “the 25 filing of the complaint”). Thus far, the O’Keefes have not shown that the case will ever be subject 26 to remand, much less that remand is appropriate on their present complaint. 27 Finally, the O’Keefes cite no authority for their assertion that a defendant who has 1 account of diversity jurisdiction is based on coextensive federal court jurisdiction, not a lack of 2 personal jurisdiction in the state court. Any act of acquiescence to the state court’s jurisdiction is 3 irrelevant. 4 The motion to remand is DENIED. 5 C. The O’Keefes’ Request for Discovery 6 In their reply brief, the O’Keefes seek a Court order authorizing them to serve a single 7 interrogatory before the parties’ initial conference under Rule 26(f), in order to determine the 8 identity of any employees responsible for the operation of the cart on the day of the accident. 9 Reply at 5. The O’Keefes’ proposed interrogatory reads as follows: 10 State the name of any and all employees of TARGET CORPORATION who caused, permitted, constructed, managed, 11 operated, drove, maintained, inspected, and/or supervised the subject U-Boat [i.e., the cart involved in the accident] on August 2, 2019 at 12 the subject location, 401 Kenilworth Drive, Petaluma, California, 92952. 13 14 Reply Ex. C. Aspects of that proposed interrogatory are nonsensical. For example, it is not clear 15 what it would mean to “cause” or “permit” a cart. Moreover, the interrogatory goes well beyond 16 the desired information described in the O’Keefes reply—the identity of “the individual pushing 17 the U-boat,” Reply at 5—and the extraneous information required in response not only imposes an 18 added investigatory burden on Target, but also might well serve to obscure the identity of an 19 appropriate additional defendant. In the interest of reaching an efficient resolution of whether 20 amendment should be allowed and the case should be remanded, the Court instead authorizes the 21 O’Keefes to serve the following interrogatory no later than February 28, 2020:3 22 State the names of any and all employees of TARGET CORPORATION who operated, drove, or pushed the subject U-Boat 23 cart at or immediately before the time of the incident involving Alison O’Keefe at approximately 1:10 PM on August 2, 2019 at the subject 24 location, 401 Kenilworth Drive, Petaluma, California, 92952. 25 Target is ORDERED to respond no later than March 13, 2020. 26 27 1 IV. CONCLUSION 2 For the reasons discussed above, the motion to remand is DENIED, without prejudice to 3 the O’Keefes moving for leave to amend and remand under 28 U.S.C. § 1447(e) no later than 4 || March 27, 2020. The parties shall complete early discovery consisting of one interrogatory as 5 stated above. 6 IT IS SO ORDERED. 7 Dated: February 25, 2020 J PH C. SPERO 9 ief Magistrate Judge 10 11 12 © 15 16 = 17 Z 18 19 20 21 22 23 24 25 26 27 28