Toledo Cadena v. Polaris Indus.

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ANDREA MARGARITA TOLEDO CADENA, Plaintiff, v. POLARIS INDUSTRIES INC., a Foreign Corporation; and C. DELMER BRINK, a Resident of Oregon, as Trustee of the BRINK REV LIVING TRUST, Defendants.

No. 3:23-cv-00443-YY

United States District Court, D. Oregon, Portland Division

September 15, 2023

FINDINGS AND RECOMMENDATIONS

Youlee Yim You, United States Magistrate Judge

FINDINGS

Currently pending is plaintiff's motion to remand this case to state court. ECF 5. That motion should be denied because subject matter jurisdiction exists over this case based on the diversity between the parties and the amount in controversy, and defendant Polaris Industries, Inc.'s removal did not violate the forum defendant rule codified at 28 U.S.C. § 1441(b)(2) because no in-forum defendant had been served when defendant Polaris removed the case.

I. Legal Standard

Federal courts have limited jurisdiction, generally encompassing actions based on complete diversity between the parties or those presenting a federal question. Exxon Mobil Corp.v Allapattah Servs., Inc., 545 U.S. 546, 552 (2005); 28 U.S.C. §§ 1331, 1332. A plaintiff is “master” of the complaint and “has the choice of pleading claims for relief under state or federal law (or both).” Hansen v. Grp. Health Coop. 902 F.3d 1051, 1056 (9th Cir. 2018). If the plaintiff's claims give rise to jurisdiction in either state or federal court and the plaintiff elects to file the suit in state court, the defendant may remove the action to federal court under the general removal statute, 28 U S.C. § 1441. See also id. The removal statute is strictly construed, and the party asserting removal jurisdiction has the burden of overcoming the strong presumption that a cause is not removable. Gaus v. Miles, Inc., 980 F.2d 564 566 (9th Cir. 1992); Corral v. Select Portfolio Servicing, Inc., 878 F.3d, 770, 773 (9th Cir. 2017); Hansen, 902 F.3d at 1057 (“We must exercise prudence and restraint when assessing the propriety of removal because determinations about federal jurisdiction require sensitive judgments about congressional intent, judicial power, and the federal system.”) (simplified).

II. Discussion

Plaintiff, a resident of New York, was seriously injured in an all-terrain vehicle accident in Grants Pass, Oregon, in March of 2021. Compl. ¶ 1-12, ECF 1-1. She filed this suit in state court in March of 2023 against defendant Polaris, the Minnesota-based manufacturer of the vehicle, and defendant C. Delmer Brink, an Oregon resident and trustee of the trust that owned the property where the accident occurred. Id. Plaintiff formally served defendant Polaris with the state court complaint on March 20, 2023. Not. Removal 1, ECF 1. On March 28, 2023, defendant Polaris removed the case to federal court under 28 U.S.C. § 1332 based on diversity jurisdiction. Id. On March 30, 2023, plaintiff served defendant Brink. Pickett Decl. Ex. 2, ECF 9-1. Plaintiff then filed this motion to remand. Mot. Remand 1, ECF 9.^[1]

Plaintiff asserts that removal of this case is improper under the forum defendant rule, codified at 28 U.S.C. § 1441(b)(2), because defendant Brink is a resident of Oregon. Mot. Remand 5, ECF 9. That statute provides that “[a] civil action otherwise removable solely on the basis of [diversity jurisdiction] may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.” 28 U.S.C. § 1441(b)(2).

The analysis begins, “as always, with the language of the statute.” Duncan v. Walker, 533 U.S. 167, 172 (2001). Under a plain reading of § 1441(b)(2), the forum defendant rule does not apply because defendant Polaris removed the case before in-forum defendant Brink had been “properly joined and served.” See McAboy v. Intel Corp., No. 3:21-cv-01773-IM, 2022 WL 1519081, at *3 (D. Or. May 13, 2022) (“The bar to removal under 28 U.S.C. § 1441(b)(2) is only triggered if the forum defendant is served.”). “Challenges to removal jurisdiction require an inquiry into the circumstances at the time the notice of removal is filed.” Spencer v. U.S. Dist.Ct. for N. Dist. of Ca., 393 F.3d 867, 871 (9th Cir. 2004). “When removal is proper at that time, subsequent events, at least those that do not destroy original subject-matter jurisdiction, do not require remand.” Id. A straight-forward application of that principle here shows that removal was proper. There is no dispute that the parties are completely diverse and that the amount in controversy is sufficient to confer the court with diversity jurisdiction under 28 U.S.C. § 1332 at the time the case was removed.

The post-removal service on defendant Brink does not change that analysis. The forum defendant rule is procedural, not jurisdictional. Lively v. Wild Oats Markets, Inc., 456 F.3d 933, 939 (9th Cir. 2006) (holding that the forum defendant rule's “additional limitation on diversitybased removal jurisdiction is a procedural, or non-jurisdictional, rule”). That distinguishes this case from others where no diversity existed between the parties, or a non-diverse defendant is added after removal, thus destroying the court's subject matter jurisdiction. See Clarence E. Morris, Inc. v. Vitek, 412 F.2d 1174, 1176 (9th Cir. 1969) (“A nonresident defendant cannot remove a ‘nonseparable' action if the citizenship of any codefendant, joined by the plaintiff in good faith, destroys complete diversity, regardless of service or nonservice upon the codefendant[.]”); Greenway Nutrients, Inc. v. Pierce, No. 2:22-cv-03322-MWF-AFM, 2022 WL 17486359, at *2 (C.D. Cal. Dec. 6, 2022) (“[W]hen evaluating whether diversity exists, a court cannot ignore a defendant's citizenship simply because the defendant has not yet been served.”) (citations omitted); Murphy v. Am. Gen. Life Ins. Co., 74 F.Supp.3d 1267, 1278 (C.D. Cal. 2015) (“[W]here a proposed amendment would add a non-diverse party after removal-thereby precluding existing, diversity jurisdiction-there is greater discretion in determining whether to allow the amendment.”).

Plaintiff does not contest the plain reading of § 1441(b)(2). Instead, plaintiff urges the court to look beyond the plain language of the forum defendant rule because a strict interpretation of the statute leads to an “absurd or unreasonable” result that is contrary to its purpose. Mot. Remand 8-10, ECF 9 (citing Deutsche Bank Nat'l Tr. Co. v. Chicago Title Ins. Co., No. 2:21-cv-01854-CDS-DJA, 2022 WL 2819844, at *4 (D. Nev. July 18, 2022)).

Plaintiff characterizes defendant Polaris's removal as exploiting a controversial interpretation of the forum defendant rule under which a defendant races to remove the case before the plaintiff can formally serve the in-forum defendant. Id.; see also Sohal v. Mondelez Glob. LLC, No. 3:22-cv-00998-MO, 2022 WL 6233833, at *1 (D. Or. Sept. 6, 2022) (“Because of its perceived unfairness to plaintiffs and contrariness to the concepts underlying diversity jurisdiction, snap removal has been criticized by some courts and scholars.”). This so-called “snap removal” tactic is based on the language of the forum defendant statute, which only prohibits removal of a diversity case if any “properly joined and served” defendant is a citizen of the forum state. 28 U.S.C. § 1441(b)(2) (emphasis added). Snap removal defendants, like defendant Polaris here, assert that so long as removal is achieved before the in-forum defendant is formally served, the forum defendant rule does not apply. Courts are split on how to interpret and apply the “properly joined and served” language to pre-service or snap removals, and plaintiff urges this court to follow those that have remanded cases where the defendant utilizes this tactic to avoid the forum defendant rule and secure removal of what would otherwise be a non-removable case. Mot. Remand 9, ECF 9; see also Hong Kong Cont'l Trade Co. Ltd. v. Nat. Balance Pet Foods, Inc., No. 2:22-cv-00571-JAK-AFM, 2023 WL 2664246, at *3 (C.D. Cal. Mar. 28, 2023) (collecting cases).

There does not appear to be a Ninth Circuit case on the propriety of pre-service or snap removal, though other circuit courts and numerous district courts in the Ninth Circuit and around the country have grappled with this “seemingly simple question” with varying results. Plymouth v. Dimension Serv. Corp., No. 2:17-cv-00130, 2017 WL 726943, at *1 (S.D. Ohio Feb. 24, 2017) (collecting cases and explaining that snap removal “turns out to have a very complicated answer and has tested the analytical abilities of more than one judge”). The cases generally fall into three categories.

In one category, an out-of-forum defendant seeks to remove the case before any defendant is formally served with the state court complaint. Compare Hawkins v Cottrell, Inc., 785 F.Supp.2d 1361, 1369 (N.D.Ga. 2011) (reasoning that a plain reading of the statute “necessarily restricts removal to cases where at least one defendant has been served.”); Gentile v.Biogen Idec, Inc., 934 F.Supp.2d 313, 317 (D. Mass. 2013) (laying out various approaches to snap removal analysis and following Hawkins); Pratt v. Alaska Airlines, Inc., No. 2:21-cv-00084-DWC, 2021 WL 1910885, at *4 (W.D. Wash. May 12, 2021) (“The word ‘any' in ‘any parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought,' means at least one defendant must have been properly served before an out-of-state defendant can remove a state court case to federal court on the basis of diversity jurisdiction.”) with Valido-Shade v. WYETH, LLC, 875 F.Supp.2d 474, 477 (E.D. Pa. 2012), aff'd (Apr. 29, 2015) (“[T]here is simply no statutory requirement that the removing defendant must first have been served with the complaint.”); Carrs v. AVCO Corp., No. 3:11-cv-03423-L, 2012 WL...