Allision v. Scott Dolich & Park Kitchen LLC

NANCY ALLISION and HOLLY BURNEY, Plaintiffs, v. SCOTT DOLICH and PARK KITCHEN LLC, an Oregon limited liability company, Defendants.

Case No.: 3:14-CV-1179-AC

UNITED STATES DISTRICT COURT DISTRICT OF OREGON PORTLAND DIVISION

December 16, 2014

OPINION AND ORDER

ACOSTA, Magistrate Judge:

Introduction

Presently before the court is the motion to remand this action to state court filed by plaintiffs Nancy Allison and Holly Burney (collectively "Plaintiffs"). Plaintiffs argue the removal of this action by defendants Park Kitchen LLC, an Oregon limited liability company ("Park"), and Scott Dolich ("Dolich") (collectively "Defendants"), was procedurally deficient and their claims do notinvolve a controversy arising under the laws of the United States as required under 28 U.S.C. § 1441(a).

The court finds the procedural deficiencies do not warrant remand but this court lacks subject matter jurisdiction over the claims alleged in the complaint. Accordingly, Plaintiffs' motion to remand is granted.¹

Background

Plaintiffs filed this action in the Circuit Court of the State of Oregon for the County on Multnomah on June 23, 2014, alleging violations of Oregon's wage and hour laws, as well as other common-law claims. Defendants removed the action to this court on July 24, 2014, pursuant to 28 U.S.C. § 1441(a), asserting Plaintiff's claims for conversion, minimum wage violations, and unjust enrichment are based squarely on the federal Fair Labor Standards Act (29 U.S.C. §§ 201 - 219) (the "Act"). In the Notice of Removal ("Notice"), Defendants represent "[n]otice of this removal will promptly be served on Plaintiffs and the Clerk of the State of Oregon for the County of Multnomah," and "[i]n compliance with 28 U.S.C. § 1446(a), true and correct copies of all process, pleadings and orders served in this action, including the Summon and Complaint (Exhibit 1), are attached hereto." (Defs.' Notice of Removal under 28 U.S.C. §§ 1331 and 1441 ("Defs.'Notice") 3.) The documents attached to the Notice include the Individual and Class Action Complaint filed in state court (the "Complaint"), the summons issued to Park, a declaration of mailing of the Complaint and summons to Park, and affidavits of service establishing service of the Complaint and summons on Park and Dolich on June 25, 2014. (Compl. Ex. 1.)

Legal Standard

28 U.S.C. § 1441(a) provides that "any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." Such removal can be based on either diversity jurisdiction or federal question jurisdiction. 28 U.S.C. §§ 1441(b) and (c) (2014). When a plaintiff feels that an action has been improperly removed to federal court, a motion to remand is appropriate. 28 U.S.C. § 1447(c) provides:

If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded. An order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal.

The removal statute is strictly construed and any doubt about the right of removal is resolved in favor of remand. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). The presumption against removal jurisdiction means "the defendant always has the burden of establishing that removal is proper." Id.

Discussion

I. Procedural Deficiencies

Plaintiffs assert that by failing to file the Notice with the state court or the summons issued to Dolich with this court, Defendants have not complied with the procedural requirements for removal found in 28 U.S.C. § 1446. Plaintiffs argue these procedural deficiencies require remand of this action to state court. Defendants assert that the procedural deficiencies are de minimis, may be cured, and do not require remand.

The remand statute differentiates between procedural defects and lack of subject matterjurisdiction. The statute provides that procedural defects may be waived if not asserted within thirty days of the filing of a notice of removal, while lack of subject matter jurisdiction may be raised anytime, or even sua sponte by the court, and requires immediate remand. 28 U.S.C. § 1447(c) (2014).² The Ninth Circuit has held where the procedural defect is de minimis, such as failure to attach an original complaint as well as the operative amended complaint to the notice of removal, the defect was curable even after the thirty-day removal period. Kuxhausen v. BMW Financial Services NA LLC, 707 F.3d 1136, 1142 (9th Cir. 2013). The court relied, in part, on "a leading treatise" which explained that " 'both the failure to file all the state court papers and the failure to provide the Federal Civil Rule 11 signatures are curable in the federal court.' " Id. (quoting 14C CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 3733 (4th ed. 2011)).

A. Dolich Summons

Pursuant to 28 U.S.C. 1446(a), a defendant removing a civil action from state court must file a notice of removal in federal court "together with a copy of all process, pleadings, and orders served upon such defendant or defendants in such action." Dolich participated in the removal of this action but failed to attach a copy of the summons served upon him by Plaintiffs to the Notice. While this is a violation of the removal procedure, it is de minimis, did not result in prejudice to the courts or any party, and is curable. Countryman v. Farmer Ins. Exchange, 639 F.3d 1270, 1272 (10th Cir.2011)("The omission of a summons from Defendants' joint notice of removal was an inadvertent, minor procedural defect that was curable, either before or after expiration of the thirty-day removal period.")(cited with approval in Kuxhausen, 707 F.3d at 1142). Defendants' failure to file a copy of the summons served upon Dolich does not warrant remand of this action to state court, especially so because Plaintiffs do not argue that Defendants failed to remove the case within the time required under the removal statute.

B. Filing Notice of Removal with State Court

28 U.S.C. § 1446(d) provides, in relevant part:

Promptly after the filing of such notice of removal of a civil action the defendant or defendants shall . . . file a copy of the notice with the clerk of such State court, which shall effect the removal and the State court shall proceed no further unless and until the case is remanded.

Plaintiffs contend Defendants failed to file a copy of the Notice in state court. Defendants represent in the Notice they will promptly file a copy of the Notice on the Clerk of the State of Oregon for the County of Multnomah. However, Defendants have failed to offer evidence of such filing, either before or after Plaintiffs' motion to remand was filed and, in fact, do not dispute this procedural deficiency.

This court has addressed the effect of a failure to promptly file a notice of removal on at least two occasions. In Miller v. Aqua Glass, Inc., Civil No. 07-3088-CL, 2008 WL 2854125, at *1 (D. Or. July 21, 2008), the parties believed two actions had been properly removed from state court in December 2007. When the state court advised the plaintiff in March 2008 that one of the cases would be dismissed for lack of prosecution and that the notice of removal had not been filed with the state court, the plaintiff moved to remand. Id. The court explained:

[t]he dispositive question is whether a failure to notify the state court that the matter has been removed constitutes a mere procedural defect - which is subject to the 30-day limitation in § 1447(c) - or if it constitutes a jurisdictional defect that may be raised at any time.

Id. The court concluded the failure to file the notice of removal did not deprive the federal court of jurisdiction but, rather, created concurrent jurisdiction in both the state and federal court. Accordingly, the failure to file the notice of removal with the state court was a procedural defect waived by the plaintiff's failure to raise such defect within thirty days. Id. at *2. The court denied the motion to remand. Id. at *3.

A year later, the court considered the effect of the failure to file a notice of removal in state court when the plaintiff raised the defect in a timely manner. Duncan v. Patine, Inc., Civil Case No. 08-1258-SU, 2009 WL 1227776 (D. Or. May 4, 2009). In Duncan, the plaintiff filed an action in state court and served the defendant with the summons and complaint on September 24, 2008. Id. at *1. The defendant filed a notice of removal in this court on October 24, 2008. Id. On October 28, 2008, the plaintiff advised the defendant of its failure to file a copy of the notice of removal in state court, which prompted the defendant to file a notice of removal in state court on October 30, 2008. Id. The court rejected the defendant's argument the term "promptly" should be construed to mean before the state court has taken any action, instead requiring the notice of removal to be filed in state court within the thirty-day removal period found in 28 U.S.C. § 1446(b). Id. at *2. The court relied on the strict construction of the removal statutes, the resolution of any doubt in favor of remand required by the Ninth Circuit in Gaus, and on the view taken by the Oregon District Court that "any defect in removal procedure must be cured within the 30-day removal period or it is fatal to the removal." Id. at *3 (quoting Employers-Shopmens Local 516 Pension Trust v. Travelers Cas.and Sur. Co. of Am., No. 05-444-KI, 2005 WL 1653629, at *4 (D. Or. July 6, 2005)). The court remanded the action to state court for failure to strictly comply with the requirements of the removal statute. Id. at *4.

The strict construction required under Duncan would appear to apply here, as Defendants did not file a copy of the Notice with the state court...