Smith v. Walmart Inc. ( 2024 )

2 3 UNITED STATES DISTRICT COURT 4 DISTRICT OF NEVADA 5 * * * 6 JULIE SMITH, Case No. 3:24-cv-00222-MMD-CSD 7 Plaintiff, ORDER v. 8 WALMART INC., 9 Defendant. 10 11 I. SUMMARY 12 Plaintiff Julie Smith filed a personal injury action in state court against Defendant 13 Walmart Inc. following a slip-and-fall accident that occurred on the premises of one of 14 Defendant’s stores. (ECF No. 1-2.) Defendant removed the action to this Court. (ECF No. 15 1.) Before the Court is Plaintiff’s motion to remand to state court (ECF No. 9 (“Motion”)).1 16 Because Defendant’s removal was untimely—and as further explained below—the Court 17 will grant the Motion. 18 II. BACKGROUND 19 In August 2022, Plaintiff slipped and fell on a puddle of clear liquid near the produce 20 displays in a Walmart store in Elko, Nevada, and sustained injuries. (ECF No. 1-2 at 2.) 21 Plaintiff’s counsel sent Walmart Claims Services, Inc. a demand letter on October 18, 22 2023, documenting special damages of $274,596.81 and demanding $1.8 million to settle 23 her claims against Defendant. (ECF No. 9-1 at 2, 7, 9.) Plaintiff filed this case against 24 Defendant in state court on January 9, 2024. (ECF No. 1-2 at 1.) Plaintiff brought a single 25 claim of negligence against Defendant, seeking general and special damages “in excess 26 of $15,000” and reasonable attorneys’ fees. (Id. at 4.) 27 /// 28 2 court case on March 5, 2024. (ECF No. 10 at 2.) On March 26, 2024, Plaintiff mailed 3 Defendant “Plaintiff’s Initial List of Witnesses and Documents Pursuant to NRCP 16.1 4 (Plaintiff’s initial disclosures),” which noted that Plaintiff was claiming $274,596.81 in 5 special damages. (ECF Nos. 9-2 at 6 (noting damages amount), 7 (stating that document 6 was mailed to three attorneys at the law firm Hall & Evans, LLC in Las Vegas, Nevada); 7 see also ECF No. 11-1 at 2 (indicating that a letter was mailed with cost code Elko Smith 8 Julie); ECF No. 11-2 (swearing that she mailed it to Kurt Bonds at Hall & Evans and 9 asserting that the receipt included as ECF No. 11-1 reflects that mailing).) As further 10 discussed below, Defendant contends its counsel and their staff never received this 11 document on or around March 26, 2024. (ECF No. 10-5 at 3; ECF No. 10-6 at 3; ECF No. 12 10-7 at 3; ECF No. 10-8 at 2-3; ECF No. 10-9 at 2-3.) 13 Plaintiff’s counsel Sean Rose swears that he had a telephonic Early Case 14 Conference with Defendant’s counsel Tanya Fraser on April 3, 2024, where they 15 specifically discussed Plaintiff’s initial disclosures served on March 26, 2024. (ECF No. 16 9-3 at 3.) Ms. Fraser swears that she never acknowledged receiving Plaintiff’s initial 17 disclosures during this phone call. (ECF No. 10-5 at 2.) 18 On April 18, 2024, Stacy Stallings, the officer manager at Plaintiff’s counsel’s 19 office, sent a copy of a draft joint case conference report in the state court case to 20 Defendant’s counsel for their review, asking if she could affix their signature to it and file 21 it. (ECF No. 11-3 at 4.) That draft joint case conference report stated that Plaintiff’s initial 22 disclosures had been made March 26, 2024. (ECF No. 11-4 at 4; see also ECF No. 11-2 23 at 3 (swearing she attached this document to her April 18, 2024, email).) Ms. Stallings 24 followed up again on April 29, 2024. (ECF No. 11-3 at 4.) Later that same day, 25 Defendant’s counsel Mr. Bonds forwarded Ms. Stallings’ email about reviewing the joint 26 case conference report to Cassidy Pappas, Ms. Fraser, and Omar Nagy, writing, “This 27 would be another good one for Omar. Can we get our initial disclosures out and revise 28 this jccr[.]” (Id. at 3.) 2 and Ms. Fraser, cc’ing Plaintiff’s counsel Mr. Rose and several other people, writing, “[o]ur 3 apologies for the delay if you have not received a response from us, however this is 4 approved to have Tanya’s signature affixed for filing.” (Id. at 2.) 5 On May 8, 2024, the parties filed a joint case conference report in the state court 6 case (ECF No. 10-4; see also ECF No. 11-5 (the same document)), which had Plaintiff’s 7 initial disclosures attached to it, still dated March 26, 2024, listing Plaintiff’s special 8 damages as $274,596.81 (ECF No. 10-4 at 14). This copy of Plaintiff’s initial disclosures 9 also had the certificate of service dated March 26, 2024, attached to it as well. (Id. at 15.) 10 Defendant’s counsel Ms. Fraser swears she never received Plaintiff’s initial 11 disclosures dated March 26, 2024, until May 13, 2024. (ECF No. 10-5 at 3.) Defendant’s 12 counsel Omar Nagy says he reviewed the joint case conference report filed May 8, 2024, 13 on May 17, 2024, and noticed that Plaintiff’s initial disclosures attached to it were dated 14 March 26, 2024. (ECF No. 10-9 at 2.) Defendant’s counsel Mr. Bonds and Patrice 15 Stephenson-Johnson ‘categorically deny’ ever seeing or reviewing Plaintiff’s initial 16 disclosures dated March 26, 2024 until May 20, 2024. (ECF No. 10-7 at 3; ECF No. 10-8 17 at 2-3.) 18 On May 24, 2024, Defendant filed a petition for removal to this Court. (ECF No. 1.) 19 Plaintiff subsequently filed the Motion on June 11, 2024. (ECF No. 9.) 20 III. DISCUSSION 21 Plaintiff argues for remand because Defendant’s removal was untimely; 22 alternatively arguing that Defendants knew the amount in controversy requirement was 23 satisfied when she filed her complaint because of her pre-litigation settlement demand or 24 because she included her assertion that she had already suffered $274,596.81 in special 25 damages in her initial disclosures served March 26, 2024, and Defendant did not remove 26 until May 24, 2024. (ECF No. 9 at 6-9.) Defendant counters that Plaintiff’s prelitigation 27 settlement demand is not admissible to prove the amount in controversy and the 30-day 28 removal clock did not start running until May 8, 2024, when the parties filed the joint case 2 timely. (ECF No. 10 at 5-9.) Though the Court does not entirely agree with either party’s 3 arguments, the Court overall agrees that Defendant did not timely remove. 4 Federal courts are courts of limited jurisdiction, having subject-matter jurisdiction 5 only over matters authorized by the Constitution and Congress. See U.S. Const. art. III, 6 § 2, cl. 1; e.g., Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). A 7 suit filed in state court may be removed by the defendant to federal court if the federal 8 court would have had original jurisdiction over the suit. See 28 U.S.C. § 1441(a). 9 However, courts “strictly construe the removal statute against removal jurisdiction,” and 10 “[f]ederal jurisdiction must be rejected if there is any doubt as to the right of removal in 11 the first instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (citations 12 omitted). “The ‘strong presumption’ against removal jurisdiction means that the defendant 13 always has the burden of establishing that removal is proper.” Id. (citations omitted). After 14 removal, a plaintiff may move to remand the action to state court for lack of federal 15 jurisdiction or for procedural defects. See 28 U.S.C. § 1447(c). And a “court may remand 16 for defects other than lack of subject matter jurisdiction only upon a timely motion to 17 remand.” Smith v. Mylan Inc., 761 F.3d 1042, 1044 (9th Cir. 2014) (citations omitted).2 18 Defendant removed this action under 28 U.S.C. § 1332 based on diversity 19 jurisdiction. (ECF No. 1 at 3-5.) The parties do not dispute that the diversity of citizenship 20 requirement is satisfied or that the amount in controversy exceeds $75,000. (ECF No. 9 21 at 6; ECF No. 10 at 3-4.) As noted, Plaintiff moves to remand based on untimeliness—a 22 procedural defect—of Defendant’s removal. (ECF No. 9 at 4-9.) See also Smith, 761 F.3d 23 at 1045 (finding the time limit requirements in the removal statute to be procedural). 24 /// 25 26 2Defendant does not argue Plaintiff’s Motion was untimely, but for absence of doubt, Plaintiff timely filed her Motion. Defendant filed its notice of removal on May 24, 27 2024 (ECF No. 1) and Plaintiff moved to remand on June 11, 2024 (ECF No. 9), or less than 30 days later. See Smith, 761 F.3d at 1044 (“A motion to remand the case on the 28 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).”) (quoting § 1447(c)). 2 is removable,” a defendant may file its notice of removal within 30 days after it receives 3 “a copy of an amended pleading, motion, order or other paper from which removability 4 may first be ascertained.” Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876, 885 (9th 5 Cir. 2010) (citing 28 U.S.C. § 1446(b)(3)) (quotations omitted); see also Durham v. 6 Lockheed Martin Corp., 445 F.3d 1247, 1251 (9th Cir. 2006) (stating courts do not charge 7 defendants “with notice of removability until they’ve received a paper that gives them 8 enough information to remove”). “If the notice of removal was untimely, a plaintiff may 9 move to remand the case back to state court.” Carvalho, 629 F.3d at 885 (citations 10 omitted). 11 The parties agree that removability was not clear from the face of the Complaint, 12 as Plaintiff therein alleged only general and special damages exceeding $15,000. (ECF 13 No. 9 at 5; ECF No. 10 at 4.) Thus, the question before the Court is when Defendant 14 received other paper from which removability may first be ascertained. See Carvalho, 629 15 F.3d at 885. 16 Plaintiff’s first argument based on the prelitigation settlement demand fails to 17 persuade for two reasons. (ECF No. 9 at 6-7.) First, the prelitigation settlement demand 18 was mailed to Walmart Claims Services, Inc., so it did not necessarily make its way to 19 Defendant Walmart, Inc. or Defendant’s counsel in this case, Hall & Evans, LLC. (ECF 20 No. 9-1.) Second, and more importantly, even assuming the prelitigation settlement 21 demand made its way to Defendant, a settlement demand that precedes the filing of the 22 initial pleading cannot and does not constitute “other paper” that would set the 30-day 23 removal clock running. Kuxhausen v. BMW Fin. Servs. NA LLC, 707 F.3d 1136, 1142 (9th 24 Cir. 2013).3 And Plaintiff sent the settlement demand she relies on before she filed her 25 3The Court accordingly does not need to address Defendant’s other argument that 26 the settlement demand is ‘inadmissible,’ but feels compelled to note that Defendant’s read of Cohn v. Petsmart, Inc., 281 F.3d 837, 840 (9th Cir. 2002) is incorrect. (ECF No. 10 at 27 5.) Cohn clearly states that “[a] settlement letter is relevant evidence of the amount in controversy if it appears to reflect a reasonable estimate of the plaintiff’s claim.” 281 F.3d 28 at 840 (footnote and citation omitted). And indeed, the Cohn court found a demand letter 2 January 9, 2024).) 3 As to Plaintiff’s second argument (ECF No. 9 at 7-9), the parties, “both admit that 4 Plaintiff’s Initial Disclosures were sufficient to put Defendant on notice of the removability 5 of the matter” (ECF No. 10 at 6). Thus, the question is when Defendant received Plaintiff’s 6 initial disclosures. And Defendant does not meet its burden to show its removal was 7 timely, see Gauss 980 F.2d at 566 (assigning Defendant the burden to show that removal 8 was proper), because Defendant “received a paper that [gave] them enough information 9 to remove[,]” see Durham, 445 F.3d at 1251, by April 18, 2024 at the latest, when Ms. 10 Stalling sent Defendant’s counsel the draft joint case conference report that undisputedly 11 stated Plaintiff had served her initial disclosures on March 26, 2024. (ECF No. 11-3 at 4; 12 ECF No. 11-4 at 4; see also ECF No. 11-2 at 3 (swearing she attached ECF No. 11-4 to 13 her April 18, 2024, email).) 14 Indeed, while Defendants vigorously dispute whether they ever got the initial 15 disclosures on or around March 26, 2024, when Plaintiff mailed them, see supra, they do 16 not dispute that they got Ms. Stallings’ email with the draft joint case conference report 17 attached to it on April 18, 2024. Nor do they dispute that draft joint case conference report 18 stated that Plaintiff filed her initial disclosures on March 26, 2024. Defendant’s counsel 19 even approved that joint case status report for filing on May 3, 2024 (ECF No. 11-3 at 2), 20 rendering their assertion that they could not have been aware that the amount in 21 controversy requirement was satisfied until the joint case conference report was filed on 22 May 8, 2024, incredible. 23 In addition, Mr. Bonds emailed the draft joint case conference report to his 24 colleagues on April 29, 2024. (Id. at 3.) This confirms that he received the joint case 25 conference report containing the statement that Plaintiff filed her initial disclosures on 26 March 26, 2024, earlier than the May 8 date Defendant relies upon in responding to the 27 was sufficient to establish the amount in controversy. See id. Said otherwise, it is not the 28 fact that it was a settlement demand letter that matters, but instead the timing of the demand letter. 2 that the amount in controversy was satisfied until either May 8 (as argued in the motion, 3 ECF No. 10 at 6-9) or May 20, 2024 (as he states in his declaration, ECF No. 10-7), but 4 the pertinent law does not ask whether he read it, it asks whether he “received a paper 5 that [gave] [him] enough information to remove[.]” See Durham, 445 F.3d at 1251. If he 6 or his colleagues had followed the reference to the initial disclosures in the joint case 7 status report to those disclosures, Defendant does not even dispute that they would have 8 put Defendant on notice of the case’s removability. (ECF No. 10 at 6.) 9 In sum, even if Defendant did not get Plaintiff’s initial disclosures on March 26, 10 2024, Defendant got a document Defendant’s counsel later signed on to that should have 11 led them back to Plaintiff’s initial disclosures on April 18, 2024—and thus gave them 12 enough information to remove. Defendant’s petition for removal was not filed with this 13 Court until May 24, 2024, which exceeds the 30-day removal deadline. (ECF No. 1.) The 14 Court accordingly grants Plaintiff’s Motion. See Things Remembered, Inc. v. Petrarca, 15 516 U.S. 124, 128 (1995) (stating that remand based on untimely removal is “precisely 16 the type of removal defect contemplated by § 1447(c)”); Fristoe v. Reynolds Metals Co., 17 615 F.2d 1209, 1212 (9th Cir. 1980) (stating that “a timely objection to a late petition will 18 defeat removal”); Beck v. Nationstar Mortg., No. 3:19-cv-00545-MMD-WGC, 2019 WL 19 5839311, at *2 (D. Nev. Nov. 6, 2019) (granting the plaintiff’s motion to remand because 20 defendants’ removal was untimely). 21 IV. CONCLUSION 22 The Court notes that the parties made several arguments and cited to several 23 cases not discussed above. The Court has reviewed these arguments and cases and 24 determines that they do not warrant discussion as they do not affect the outcome of the 25 motion before the Court. 26 It is therefore ordered that Plaintiff’s motion to remand to state court (ECF No. 9) 27 is granted. This action is remanded to the Fourth Judicial District Court of Elko County, 28 Nevada. 1 The Clerk of Court directed to close this case. 2 DATED THIS 27" Day of September 2024. 4 MIRANDA M. DU 5 CHIEF UNITED STATES DISTRICT JUDGE 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28