MARGARET M. MORROW, District Judge.
On October 20, 2011, plaintiffs Ebony Bridewell-Sledge and Bettie Perry filed this putative class action in San Francisco Superior Court against Blue Cross of California ("Blue Cross"), Anthem Blue Cross Life and Health Insurance Company ("Anthem"), and various fictitious defendants, alleging claims for employment discrimination and unfair business practices.
On November 19, 2013, the Los Angeles Superior Court consolidated the case with a related class action, Jermaine Crowder v. Blue Cross.
On July 17, 2014, the court issued an order to show cause why the Bridewell action should not be remanded to state court for lack of subject matter jurisdiction.
The court discharged the order to show cause in the Bridewell action on August 28, 2014, finding that the citizenship of the parties was minimally diverse, and that the home state controversy exception was inapplicable because Wellpoint is a primary defendant and not a citizen of California.
The same day it discharged the order to show cause in Bridewell-Sledge, the court issued an amended order to show cause why the Crowder case should not be remanded.
Plaintiffs replied on September 16, 2014,
Defendants filed objections to plaintiffs' reply on September 29, 2014, contending that it exceeded the scope of the order to show cause and their response.
The right to remove a case to federal court is entirely a creature of statute. See Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979). The removal statute, 28 U.S.C. § 1441, allows defendants to remove when a case originally filed in state court involves a federal question or is between citizens of different states and involves an amount in controversy that exceeds $75,000. See 28 U.S.C. §§ 1441(a), (b). Only state court actions that could originally have been filed in federal court can be removed. 28 U.S.C. § 1441(a) ("Except as otherwise expressly provided by Act of Congress, 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"); see Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987); Ethridge v. Harbor House Rest., 861 F.2d 1389, 1393 (9th Cir. 1988).
The Ninth Circuit "strictly construe[s] the removal statute against removal jurisdiction," and "[f]ederal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance." Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (citing Boggs v. Lewis, 863 F.2d 662, 663 (9th Cir. 1988), Takeda v. Northwestern Nat'l Life Ins. Co., 765 F.2d 815, 818 (9th Cir. 1985), and Libhart, 592 F.2d at 1064). "The `strong presumption' against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper." Id. (citing Nishimoto v. Federman-Bachrach & Assocs., 903 F.2d 709, 712 n. 3 (9th Cir. 1990), and Emrich v. Touche Ross & Co., 846 F.2d 1190, 1195 (9th Cir. 1988)).
In 2005, Congress enacted CAFA, Pub. L. No. 109-2, 119 Stat. 4. CAFA gives district courts original jurisdiction to hear class actions "in which the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs," and "in which[, inter alia,] any member of a class of plaintiffs is a citizen of a State different from any defendant." 28 U.S.C. § 1332(d)(2); see also Luthis v. Countrywide Homes Loans Servicing LP, 533 F.3d 1031, 1033-34 (9th Cir. 2008) ("The Class Action Fairness Act of 2005 § 4(a), 28 U.S.C. § 1332(d)(2), amended the requirements for diversity jurisdiction by granting district courts original jurisdiction over class actions exceeding $5,000,000 in controversy where [the citizenship of] at least one plaintiff is diverse from at least one defendant. In other words, complete diversity is not required. CAFA also provided for such class actions to be removable to federal court. See 28 U.S.C. § 1453(b). CAFA was enacted, in part, to `restore the intent of the framers of the United States Constitution by providing for Federal court consideration of interstate cases of national importance under diversity jurisdiction.' Pub.L. No. 109-2, § 2(b)(2), 119 Stat. 4, 5 (codified as a note to 28 U.S.C. § 1711)").
Under CAFA, the number of members of all proposed classes must exceed 100 in the aggregate. 28 U.S.C. § 1332(d)(5)(B). See also Serrano v. 180 Connect, Inc., 478 F.3d 1018, 1020-21 (9th Cir. 2007) ("As a threshold matter, CAFA applies to `class action' lawsuits where the aggregate number of members of all proposed plaintiff classes is 100 or more persons and where the primary defendants are not `States, State officials, or other governmental entities against whom the district court may be foreclosed from ordering relief.' § 1332(d)(5). . . . Once the prerequisites of § 1332(d)(5) are satisfied, CAFA vests federal courts with `original' diversity jurisdiction over class actions if (1) the aggregate amount in controversy exceeds $5,000,000, and (2) any class member is a citizen of a state different from any defendant. § 1332(d)(2)"); id. at 1021 n. 3 ("The Fifth Circuit characterized § 1332(d)(5) as an `exception' to CAFA jurisdiction conferred under § 1332(d)(2). . . . We view § 1332(d)(5) somewhat differently. . . . [S]atisfaction of § 1332(d)(5) serves as a prerequisite, rather than as an exception, to jurisdiction under § 1332(d)(2). This distinction is important because, as we address later, there are `exceptions' to the statute in which jurisdiction otherwise exists under § 1332(d)(2) but the federal courts either may or must decline to exercise that jurisdiction. See, e.g., § 1332(d)(3)-(4)").
The Ninth Circuit has confirmed that CAFA does not disturb the traditional rule that the burden of establishing removal jurisdiction is on the proponent of federal jurisdiction. Abrego Abrego v. The Dow Chemical Co., 443 F.3d 676, 685 (9th Cir. 2006) ("We . . . hold that under CAFA the burden of establishing removal jurisdiction remains, as before, on the proponent of federal jurisdiction").
Even if a defendant shows that removal is otherwise proper under 28 U.S.C. § 1332(d)(2), the district court may be required to decline jurisdiction under two exceptions — 28 U.S.C. § 1332(d)(4)(A), the "local controversy" exception, and 28 U.S.C. § 1332(d)(4)(B), the "home state controversy" exception. The local controversy exception applies if (1) "greater than two-thirds of the members of all proposed plaintiff classes in the aggregate are citizens of the State in which the action was originally filed"; (2) "at least 1 defendant is a defendant — (aa) from whom significant relief is sought by members of the plaintiff class; (bb) whose alleged conduct forms a significant basis for the claims asserted by the proposed plaintiff class; and (cc) who is a citizen of the State in which the action was originally filed"; (3) "principal injuries resulting from the alleged conduct or any related conduct of each defendant were incurred in the State in which the action was originally filed"; and (4) during the 3-year period preceding the filing of th[e] class action, no other class action has been filed asserting the same or similar factual allegations against any of the defendants on behalf of the same or other persons." 28 U.S.C. § 1332(d)(4)(A). The home state controversy exception, which is not relevant here, requires that the district court decline jurisdiction if "two-thirds or more of the members of all proposed plaintiff classes in the aggregate, and the primary defendants, are citizens of the State in which the action was originally filed." 28 U.S.C. § 1332(d)(4)(B).
The burden of establishing that these exceptions apply lies not with the removing party, but with the party seeking remand; here, this is plaintiffs. See Serrano, 478 F.3d at 1019 ("The structure of the statute and the long-standing rule on proof of exceptions to removal dictate that the party seeking remand bears the burden of proof as to any exception under CAFA").
Defendants concede that more than two-thirds of the plaintiffs are citizens of California, at least one defendant from whom significant relief is sought and whose alleged conduct forms a significant basis for the claims is a California citizen, and the principal injuries about which plaintiffs complain were suffered in California. The issue, therefore, is whether "during the 3-year period preceding the filing of [this] class action, no other class action has been filed asserting the same or similar factual allegations against any of the defendants on behalf of the same or other persons." 28 U.S.C. § 1332(d)(4)(A)(ii).
The court previously explained that courts applying the fourth prong of the local controversy exception to two actions filed the same day have looked to which action was filed first, and concluded that under the plain language of the statute, the first-filed action was filed within three years preceding the filing of the second action, such that the court lacks jurisdiction over the first-filed action but not the second.
In their reply to the order to show cause in the Crowder action, plaintiffs asserted that the Bridewell-Sledge action had to be remanded because it was filed "exactly 13 minutes and 50 seconds" before Crowder.
As an initial matter, the court notes, as it did in discharging the order to show cause in this case, that courts have remanded cases under the local controversy exception even where, as here, they were previously consolidated with an action over which the court has jurisdiction.
The court agrees with the Sherman court's interpretation of the statute, as it merely applies the plain language of the statute. It therefore concludes that the fact the two cases have been consolidated does not necessitate a finding that the fourth prong of the local controversy exception is met. In their surreply, defendants do not dispute, and therefore concede, that Bridewell-Sledge was filed before Crowder. The court therefore finds that the fourth prong of the local controversy exception is satisfied as to the Bridewell-Sledge action, such that the court must decline to exercise jurisdiction over it.
Defendants do not dispute that Bridewell-Sledge was filed before Crowder, nor do they do contend other similar actions were filed within the preceding three year period.
When reviewing the language of a statute, the court's task is always to discern the intent of Congress. Northwest Forest Res. Council v. Glickman, 82 F.3d 825, 830 (9th Cir. 1996). The inquiry begins with the words of the statute. United States v. Nader, 542 F.3d 713, 717 (9th Cir. 2008). "When the words of a statute are unambiguous . . . this first canon is also the last: judicial inquiry is complete." Coleman v. Estes Exp. Lines, Inc., 631 F.3d 1010, 1015 (9th Cir. 2011) (quoting Conn. Nat'l Bank v. Germain, 503 U.S. 249, 253-54 (1992) (alterations original)).
Defendants identify no ambiguity in the text of the local controversy exception that requires recourse to expressions of legislative intent. Indeed, the meaning of the requirement that "during the 3-year period preceding the filing of the class action, no other class action ha[ve] been filed asserting the same or similar factual allegations against any of the defendants on behalf of the same or other persons," is not subject to reasonable dispute. 28 U.S.C. § 1332(d)(4)(A)(ii). Defendants cite the Senate report as support for their assertion that the Bridewell-Sledge action does not involve "a controversy that uniquely affect[s] a particular locality to the exclusion of all others." See S. REP. NO. 109-14 at 39. The court disagrees. There is no dispute that all members of the putative plaintiff class were employed by defendants solely in California. Thus, the controversy does uniquely affect a particular locality, i.e., California, to the exclusion of all others. Defendants' argument is curious, in fact, given that they have never disputed that two-thirds of the plaintiff class are citizens of California, and the principal injuries about which plaintiffs complain were suffered in California. Although it is true that Wellpoint is not a citizen of California, the local controversy exception requires only that "at least 1 defendant" from whom significant relief is sought and whose conduct forms a significant basis for the claim asserted by the class be a citizen of the state.
Moreover, Senate Report 109-14, the "legislative history" on which defendants rely, was not submitted until eighteen days after the Senate passed the bill, eleven days after the House passed the bill, and ten days after the President signed the bill into law. See id. (dated February 28, 2005); 151 Cong. Rec. H755 (daily ed. Feb. 17, 2005) (showing that the House passed CAFA on February 17, 2005); 151 Cong. Rec. S1249 (daily ed. Feb. 10, 2005) (reflecting that the Senate passed CAFA on February 10, 2005); Bush v. Cheaptickets, Inc., 425 F.3d 683, 684 (9th Cir. 2005) ("On February 18, 2005, the day after Bush filed his complaint in state court, the President signed [CAFA] into law"). For that reason, many courts have found the report "of minimal, if any, value in discerning congressional intent, as it was not before the Senate at the time of CAFA's enactment." Tanoh v. Dow Chem. Co., 561 F.3d 945, 954 n. 5 (9th Cir. 2009); Corsino v. Perkins, No. CV 09-09031 MMM (CWx), 2010 WL 317418, *6 (C.D. Cal. Jan. 19, 2010) ("The Senate Report was issued ten days after CAFA's enactment, which has caused some courts to question its value in discerning legislative intent"); Moua v. Jani-King of Minnesota, Inc., 613 F.Supp.2d 1103, 1108 n. 4 (D. Minn. 2009) (questioning the value of the report as an interpretive aid); Brook v. UnitedHealth Group Inc., No. CV 06-12954, 2007 WL 2827808, *5 (S.D.N.Y. Sep.27, 2007) ("The Senate report, however, was issued ten days after CAFA's enactment thereby suggesting it is of minimal value in discerning legislative intent," citing Blockbuster, Inc. v. Galeno, 472 F.3d 53, 58 (2d Cir. 2006)); Hangarter v. Paul Revere Life Ins. Co., No. CV 05-04558, 2006 WL 213834, *3 (N.D. Cal. Jan. 26, 2006) (finding the "report [to be] of dubious value as an interpretative aid"); cf. Heppner v. Alyeska Pipeline Serv. Co., 665 F.2d 868, 871 n. 1 (9th Cir. 1981) ("There is even the possibility that some legislative history is manufactured for the purpose of misleading the courts as to what most members of Congress intended to enact"). Thus, even were there an ambiguity, the court would not afford the Senate Report the persuasive force defendants ascribe to it.
Defendants next contend that the fourth prong of the local controversy exception should be construed liberally based on comments in the Senate Report concerning the discretionary nature of the exception set forth in § 1332(d)(3).
Defendants reference the fact that another action against them, Early Strong v. Blue Cross of California, Case No. BC 382405, was filed in Los Angeles Superior Court on December 28, 2007.
Finally, while simultaneously advancing their § 1332(d)(3) argument, defendants contend that because the court retains jurisdiction over Crowder, it can exercise supplemental jurisdiction over Bridewell-Sledge.
The fact that the Bridewell-Sledge and Crowder actions were consolidated following their removal to federal court does not alter this conclusion. Section 1367 "does not allow a party to remove an otherwise unremovable action to federal court for consolidation with a related federal claim." Morales v. Prolease PEO, LLC, No. CV 11-10389 MMM (JCGx), 2011 WL 6740329, *4 (C.D. Cal. Dec. 22, 2011) (quoting Estate of Tabas, 879 F.Supp. 464, 467 (E.D. Pa. 1995)); see also In re Pac. Gas & Elec. Co., 281 B.R. 1, 12 (Bankr. N.D. Cal. 2002) (same), aff'd sub nom. City & County of San Francisco v. PG & E Corp., 433 F.3d 1115 (9th Cir. 2006); Chase v. Auerbach, No. CV 94-5892, 1994 WL 590588, *2 (E.D. Pa. Oct. 26, 1994) ("It is also established that `[a] District Court is not . . . endowed with jurisdiction to hear a case on removal merely because . . . a related case is pending in the federal court'" (citation omitted). To conclude otherwise would run contrary to the longstanding rule that "[o]nly state-court actions that originally could have been filed in federal court may be removed to federal court by the defendant." Caterpillar, 482 U.S. at 392. The fact that the court has jurisdiction to hear Crowder thus does not support the exercise of supplemental jurisdiction over the claims in Bridewell-Sledge.
In sum, plaintiffs have demonstrated that Bridewell-Sledge was filed 13 minutes and 50 seconds before Crowder. Because it is undisputed that no other action alleging the same or similar claims was filed against defendants within the three year period preceding the filing of Bridewell-Sledge, and because the parties concede that the first three requirements for invocation of the local controversy exception are satisfied, the court lacks subject matter jurisdiction under the local controversy exception, and must remand the case to Los Angeles Superior Court. See 28 U.S.C. § 1447(c) ("If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded").
For the reasons stated, the court finds that the local controversy exception mandates that it decline to exercise jurisdiction over the Bridewell-Sledge action. Accordingly, the court lacks subject matter jurisdiction to hear the action. The clerk is directed to remand the Bridewell-Sledge action to Los Angeles Superior Court forthwith. The court will issue a separate order addressing the order to show cause in Crowder.
