Newman v. Dexcom, Inc.

[7] 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA [10] 11 Newman, Case No.: 22cv02011-JO-MMP 12 Plaintiff, ORDER GRANTING PLAINTIFF’S 13 v. MOTION TO REMAND AND DENYING DEFENDANT’S MOTION 14 Dexcom, Inc., TO DISMISS 15 Defendant. [18] 19 On December 19, 2022, Plaintiff James Newman filed a state law product liability 20 action against Defendant Dexcom, Inc. in San Diego County superior court. Dkt. 10, Ex. 21 A. On December 19, 2022, Defendant filed a Notice of Removal of the action to this Court. 22 Dkt. 1. On January 9, 2023, Defendant filed a motion to dismiss, and on January 17, 2023, 23 Plaintiff filed a motion to remand the action to state court for lack of subject matter 24 jurisdiction. Dkts. 6, 10. For the reasons stated below, the Court grants Plaintiff’s motion 25 to remand and denies Defendant’s motion to dismiss as moot. 26 I. BACKGROUND 27 Plaintiff initiated a product liability suit in state court but Defendant removed the 28 action to federal court before Plaintiff effected service of the complaint. On December 19, 1 2022, Plaintiff filed a product liability complaint against Defendant, a citizen of California, 2 in state court. Dkt. 10, Ex. A. On December 19, 2022, Defendant filed a Notice of 3 Removal on the basis of diversity jurisdiction. Dkt. 1. Plaintiff served Defendant with the 4 complaint on December 21, 2022. Dkt. 10, Ex. B. On January 17, 2023, Plaintiff filed a 5 motion to remand the action to state court arguing that Defendant could not remove on the 6 basis of diversity jurisdiction as a forum defendant. Dkt. 10.1 7 II. LEGAL STANDARD 8 A defendant may remove an action from state court only if the federal court would 9 originally have had federal question or diversity jurisdiction over the action and certain 10 procedural requirements are met. See 28 U.S.C. § 1441 ; Kokkonen v. Guardian Life Ins. 11 Co. of Am., 511 U.S. 375, 377 (1994). Diversity jurisdiction requires complete diversity 12 of citizenship among the parties and an amount in controversy exceeding $75,000. 28 13 U.S.C. § 1332 . In order to remove an action on diversity grounds, a defendant must meet 14 an additional requirement: according to the “forum defendant rule,” a civil action may not 15 be removed if any defendant “properly joined and served[] is a citizen of the State” where 16 the complaint was filed. 28 U.S.C. § 1441 (b)(2). The forum defendant rule thus “confines 17 removal on the basis of diversity jurisdiction to instances where no defendant is a citizen 18 of the forum state.” Lively v. Wild Oats Mkts., Inc., 456 F.3d 933, 939 (9th Cir. 2006); see 19 also Spencer v. U.S. Dist. Court for N. Dist. of Cal., 393 F.3d 867 , 870 (9th Cir. 2004). 20 This rule reflects the reality that the need to “protect out-of-state defendants from possible 21 prejudices in state court” does not exist where the defendant is a resident of the state in 22 which the case is brought. Lively, 456 F.3d at 940 . A party can waive the right to remand 23 based on the forum defendant rule by failing to object in a timely manner. See 28 U.S.C. 24 § 1447(c); Lively, 456 F.3d at 940 . [28] 1 In considering a remand, the court construes any doubts against the removing party. 2 There is a “strong presumption against removal jurisdiction,” which means that “the 3 defendant always has the burden of establishing that removal is proper, and that the court 4 resolves all ambiguity in favor of remand to state court.” Hunter v. Philip Morris USA, [5] 582 F.3d 1039, 1042 (9th Cir. 2009); Luther v. Countrywide Homes Loans Servicing, LP, [6] 533 F.3d 1031, 1034 (9th Cir. 2008) (“[R]emoval statutes are strictly construed against 7 removal.”). Thus, a court must reject federal jurisdiction “if there is any doubt as to the 8 right of removal in the first instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 9 1992). 10 III. DISCUSSION 11 The Court finds that this action must be remanded to state court because as a citizen 12 of California, Defendant cannot remove this action on grounds of diversity jurisdiction. At 13 the time of removal, Defendant was a citizen of California and, therefore, a forum 14 defendant. Dkt. 1 (stating Defendant is a citizen of California and maintains its principal 15 place of business in San Diego, California); see also 28 U.S.C. § 1332 (c)(1) (for the 16 purposes of diversity jurisdiction, “a corporation shall be deemed to be a citizen of every 17 State and foreign state by which it has been incorporated and of the State or foreign state 18 where it has its principal place of business…”). As a forum defendant, Defendant could 19 not remove this action solely on the basis of diversity jurisdiction, and Plaintiff timely filed 20 a motion to remand on this ground. 28 U.S.C. §§ 1441 (b)(2), (c). 21 Despite its admitted status as a California citizen, Defendant argues that it evaded 22 the forum defendant rule simply by filing a Notice of Removal prior to being served. 23 Defendant points to the language of § 1441(b)(2) which prohibits the removal of a diversity 24 action “if any of the parties in interest properly joined and served as defendants.” 25 §1441(b)(2). Because Dexcom, the only defendant in the case, had not yet been served, 26 the company argued that the forum defendant rule does not apply. The Court does not 27 credit Dexcom’s interpretation of this statutory language to circumvent the forum 28 defendant rule. The clear purpose of the forum defendant rule is to prevent “a local | ||}defendant from removing on the basis of diversity jurisdiction” and, thereby, “allow[] the 2 || plaintiff to regain some control over forum selection”. Lively, 456 F.3d at 940 ; Home 3 || Depot U.S.A., Inc. v. Jackson, 139 S. Ct. 1743, 1748 (2019) (“[W]hen federal jurisdiction 4 ||is based on diversity jurisdiction...the case may not be removed if any defendant is a 5 || Citizen of the State in which such action is brought”). Here, Dexcom is the only defendant 6 ||in the case and, admittedly, a California citizen. To interpret the language of the forum 7 defendant rule to allow Defendant to evade this limitation simply by removing the case 8 || before it is served does not serve the purpose of the removal statutes.” 9 IV. CONCLUSION 10 For the reasons discussed above, the Court GRANTS Plaintiff's motion to remand 11 |/[Dkt. 10] and DENIES Defendant’s motion to dismiss [Dkt. 6] as moot. The Court 12 || instructs the Clerk to remand the action to San Diego County Superior Court and close the 13 || case. 14 IT IS SO ORDERED. [15] 16 ||Dated: August 14, 2023 [17] 18 Honorable Jinsook Ohta” 19 United States District Judge [24] 26 2 In 1948, Congress added the “properly joined and served” language to the existing forum defendant rule in order to protect defendants against gamesmanship from plaintiffs who fraudulently join 27 |!a defendant to improperly prevent removal. See Deutsche Bank Nat’l Trust Co. as Tr. for Am. Home 7g || Mortgage Invest. Tr., 532 F. Supp. 34 1004, 1010 (D. Nev. 2021) (examining legislative history of § 1441(b)(2)).