Shamrock Manufacturing Co., Inc. v. Ammex Corporation et al, No. 1:2010cv00908 - Document 27 (E.D. Cal. 2010)
Court Description: MEMORANDUM DECISION and ORDER Denying Plaintiff's Motion to Remand 14 , Granting Defendant's Motion to Transfer Venue 9 , and Directing Clerk of The Court to Transfer This Action to The United States District Court For The Central District of California, Eastern Division signed by Judge Oliver W. Wanger on 8/9/2010. (Esteves, C)
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Shamrock Manufacturing Co., Inc. v. Ammex Corporation et al Doc. 27 1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT FOR THE 7 EASTERN DISTRICT OF CALIFORNIA 8 9 SHAMROCK MANUFACTURING CO., 10 Plaintiff, 11 12 vs. 13 AMMEX CORPORATION, 14 15 16 Defendant. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) No. CV-F-10-908 OWW/SKO MEMORANDUM DECISION AND ORDER DENYING PLAINTIFF'S MOTION TO REMAND (Doc. 14), GRANTING DEFENDANT'S MOTION TO TRANSFER VENUE (Doc. 9), AND DIRECTING CLERK OF THE COURT TO TRANSFER THIS ACTION TO THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA, EASTERN DIVISION 17 18 On April 9, 2010, Shamrock Manufacturing Co. ( Shamrock ) 19 filed a complaint for breach of contract, account stated, goods 20 had and received, and open book account against Ammex Corporation 21 ( Ammex ) in the San Bernardino County Superior Court. 22 On May 20, 2010, Ammex removed the action to this Court 23 rather than to the United States District Court for the Central 24 District of California on the basis of diversity of citizenship 25 pursuant to 28 U.S.C. § 1332(a). 26 1 Dockets.Justia.com 1 Shamrock moves to remand the action to the San Bernardino 2 County Superior Court on the ground that Ammex removed the action 3 to an incorrect district court. 4 was removed to an incorrect district court, but moves to transfer 5 venue of this action pursuant to 28 U.S.C. § 1406(a) or 28 U.S.C. 6 § 1631, to the United States District Court for the Central 7 District of California, the correct district, to be consolidated 8 with Ammex Corporation v. Shamrock Manufacturing Co., No. CV-F- 9 10-637 RAJ, filed by Ammex on April 14, 2010 in the United States 10 District Court for the Western District of Washington, either in 11 California or in Washington. Ammex concedes that the action 12 In opposition to the motion to remand and in support of the 13 motion to transfer venue, Ammex files the Declaration of H. Troy 14 Romero, counsel for Ammex: 15 16 17 18 3. On April 14, 2010, Ammex filed the Washington Action and served Plaintiff with the complaint and summons for the same on April 21. 2010 ... After being served with notice of Plaintiff s California State Court action ... on April 27, 2010, Ammex timely removed Plaintiff s California State action to the federal system .... 19 20 21 22 23 24 25 26 4. Based on a clerical error in my office, Ammex removed the California Action from the Superior Court in San Bernardino County. My legal assistant misread a map indicating which court superior courts were in the various Federal Districts for California. Based on this reading, we removed the California Action to the Eastern District of California instead of the Eastern Division of the Central District .... 5. Late in the afternoon of May 28, 2010 (at the start of the three day Memorial Day weekend) - after Ammex s originial thirty 2 6 days to file a notice of removal had run Plaintiff informed Ammex of its mistaken removal to the Eastern District by facsimile transmission. Due to the timing of Plaintiff s facsimile - the Friday leading up to the Memorial Day weekend - I was unable to act until June 1, 2010, the next business day, when I contacted Plaintiff seeking a stipulation to have the California Action transferred to the Central District ... Plaintiff refused to stipulate. 7 At the hearing, Shamrock conceded that the parties are 1 2 3 4 5 8 diverse, but asserted that the amount in controversy was not 9 established. There is no question that federal subject matter 10 jurisdiction over this action on the basis of diversity exists. 11 Shamrock and Ammex are citizens of different states and 12 Shamrock s complaint seeks over $200,000.00 in damages, exclusive 13 of interest and costs. 14 ground that federal subject matter jurisdiction over the action 15 does not exist. 16 17 18 19 20 21 22 23 24 25 26 Shamrock does not seek remand on the 28 U.S.C. § 1441(a) provides: (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 .... 28 U.S.C. § 1446(a) provides: A defendant or defendants desiring to remove any civil action ... from a State court shall file in the district court ... for the district and division within which such action is pending a notice of removal .... Courts strictly construe the removal statute against removal 3 1 jurisdiction. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 2 108-109 (1941); Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th 3 Cir.1992). 4 jurisdiction means that the defendant always has the burden of 5 establishing that removal is proper. 6 establishing federal jurisdiction is on the party seeking 7 removal, and the removal statute is strictly construed against 8 removal jurisdiction. 9 167 F.3d 1261, 1265 (9th Cir.1999). The strong presumption against removal Gaus, id. The burden of Prize Frize, Inc. v. Matrix (U.S.) Inc., 10 Whether this Court is required to remand the action to the 11 San Bernardino Superior Court or has the power to transfer this 12 action to the Western District of Washington or is subject to a 13 split of authority. 14 Circuit authority on point. 15 There is no binding Supreme Court or Ninth Shamrock cites Maysey v. CraveOnline Media, LLC, 2009 WL 16 3740737 (D.Ariz., Nov. 5, 2009); Addison v. North Carolina Dept. 17 of Crime and Public Safety, 851 F.Supp. 214 (M.D.N.C.1994); 18 Willingham v. Creswell-Keith, 160 F.Supp. 741 (W.D.Ark.1958); and 19 Gopcevic v. California Packing Corporation, 272 F. 994 20 (N.D.Cal.1921), as authority that this Court has no power to 21 transfer the action as requested by Ammex and must remand. 22 In Gopcevic, California then had two districts, the Northern 23 and the Southern. The Northern District was divided into two 24 divisions, the Northern division and the Southern division. 25 action was filed in Lake County, one of the counties designated 26 as within the Northern division of the Northern District. 4 The 1 Defendant removed the action to the Southern District. Plaintiff 2 moved to remand and the District Court, strictly construing the 3 then applicable statutes, remanded the action to the state court. 4 In Willingham v. Creswell-Keith, the action was removed to 5 the wrong district in Arkansas, which in itself, is sufficient 6 reason to require the Court to remand the case. 7 744. 8 not removable because there was no basis for subject matter 9 jurisdiction based on federal question or diversity of 10 11 160 F.Supp. at However, the District Court also ruled that the action was citizenship. Id. In Addison, the plaintiff filed an employment discrimination 12 action in state court. 13 stated that plaintiff was a resident of Rowan County, which is 14 within the Middle District of North Carolina and removed the 15 action to the Middle District of North Carolina, even though the 16 removed action was pending in the state court within the 17 boundaries of the Western District of North Carolina. 18 plaintiff moved to remand, defendants argued that, even though 19 they failed to observe the literal terms of the statute, the 20 District Court should transfer the case to the Western District 21 pursuant to 28 U.S.C. § 1404 for the convenience of the parties 22 and witnesses. 23 24 25 26 When defendants removed the action, they The District Court remanded the action: When There is no question that 28 U.S.C. § 1441(a) requires that the defendants should have removed this case to the Western District. Defendants argue that they merely saved time by removing the action to this district because plaintiff lived here during the pendency of the cause of action. This 5 1 2 3 4 5 factual premise is not supported. The complaint states that plaintiff was a citizen and resident of Mecklenburg County at the time of the incident alleged in the complaint. While defendants contend in their brief that personnel records show that plaintiff was assigned to live and work in Rowan County in this district, there is no evidence before the Court to support this assertion. 6 7 8 9 10 11 12 13 Even if defendants residency argument were supported, their unilateral action should not be countenanced. Defendants argument that they merely saved the court and the parties time by making their unilateral removaltransfer decision is not well taken. Time is rarely saved by purposefully not following proper procedure. The removal statute contemplates that the federal court to which an action is removed may not be one of proper venue if the action had been originally filed in it ... Notwithstanding, the removal is deemed proper and the matter may thereafter be transferred to correct venue or for the convenience of the parties and witnesses .... 14 15 16 17 18 19 20 21 22 23 24 25 26 A party who deliberately removes an action to the wrong district court has acted improvidently and outside of the removal statute, thereby violating removal procedure. Defendants were required to file their notice of removal in the Western District within thirty days ... Unless all of these conditions are met, removal is not effective ... While minor or nonconsequential defects may be cured subsequent to the notice of removal ..., the instant defect is not such a one. The error cannot be cured by amendment. Rather, the cure is for defendants to file a proper removal notice in the Western District. Therefore, the procedural defect in this case is more in the nature of an improvident removal ... Such defect normally should not be overlooked. 851 F.Supp. at 217-218. In Maysey, the plaintiff filed an action in the Maricopa County Superior Court. Defendants removed the case to the 6 1 Central District of California. After being informed by 2 plaintiff that the removal was to an incorrect court, defendants, 3 agreeing that the Central District of California was an incorrect 4 court, refused to withdraw the removal and requested plaintiff 5 stipulate to an order transferring the case to the Arizona 6 District Court. 7 filed an ex parte application to transfer the case from the 8 Central District to the District of Arizona. 9 District granted the ex parte application and transferred the Plaintiff refused to stipulate and defendants The Central 10 action to the Arizona District Court. 11 remanded the action to the Maricopa County Superior Court. 12 Relying on the strict construction standards applicable to 13 removal and Addison and Willingham, the District Court ruled that 14 when a party removes a case to the improper federal court 15 district, that district court s appropriate response should be to 16 remand the case back to state court and not to transfer it under 17 28 U.S.C. § 1406(a). 18 The Arizona District Court 2009 WL at *2. Ammex responds that these cases are not controlling: None 19 of Plaintiff s cases stand for Plaintiff s proffered bright-line 20 rule of remand and, in fact, the power of the court to transfer 21 based on the circumstances of the given case is discussed openly 22 in the relied-upon cases. 23 24 25 26 Ammex argues: Modern case law based on protecting the interests of justice rather than on justicedefeating adherence to procedural technicalities, including that from the Supreme Court, clearly outlines that the Court has the discretionary power to transfer the California Action, which undisputedly 7 2 belongs in the federal system, to the Central District rather than remand it to the state courts. [sic]. 3 Ammex, citing Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 4 22 (1998), contends that 28 U.S.C. § 1404(a) places discretion in 5 the district courts to transfer cases according to an 6 individualized, case-by-case consideration of convenience and 7 fairness. 8 used to support motions for transfer when party convenience calls 9 for the transfer, but contends that the underlying principles 1 Ammex concedes that this proposition is generally 10 of fairness, justice, and a case-by-case consideration of the 11 same, should be applied in this case. 12 Stewart Organization does not support Ammex s contention. 13 In Stewart Organization, the plaintiff filed an action based on 14 diversity of citizenship in the United States District Court for 15 the Northern District of Alabama. 16 forum-selection clause in the contract between the parties, moved 17 to transfer the action to the Southern District of New York under 18 Section 1404(a), which authorizes a district court to transfer an 19 action to any other district or division where it might have been 20 brought for the convenience of parties and witnesses and in the 21 interest of justice. 22 governed a district court s decision to grant a motion to 23 transfer a case to a venue provided in a contractual forum- 24 selection clause. 25 case was removed to the proper district court and whether that 26 court has authority to transfer a case. The defendant, relying on a The Supreme Court held that federal law There was no issue in the case whether the 8 1 2 3 4 Ammex further relies on Section 1406(a): The district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought. 5 Ammex contends that federal courts have treated the type of 6 mistake made here as being more akin to an improper venue 7 situation and allowed transfer pursuant to Section 1406(a). 8 Ammex cites Goldlwar, Inc. v. Heiman, 369 U.S. 463 (1962). 9 In Goldlwar, a private anti-trust suit was filed in the Eastern 10 District of Pennsylvania. The Eastern District of Pennsylvania 11 heard motions to dismiss for improper venue and lack of 12 jurisdiction as to two of the defendants. The Eastern District 13 refused to dismiss the action as to those two defendants, 14 choosing instead to transfer the action to the Southern District 15 of New York pursuant to Section 1406(a). Defendants appealed and 16 the Supreme Court affirmed the District Court: 17 18 19 20 21 22 23 24 25 26 Nothing in that language [Section 1406(a)] indicates that the operation of the section was intended to be limited to actions in which the transferring court has personal jurisdiction over the defendants. And we cannot agree that such a restrictive interpretation can be supported by its legislative history ... The problem which gave rise to the enactment of the section was that of avoiding the injustice which had often resulted to plaintiffs from dismissal of their actions merely because they had made an erroneous guess with regard to the existence of some elusive fact of the kind upon which venue provisions often turn. Indeed, this case is itself a typical example of the problem sought to be avoided, for dismissal here would have resulted in 9 1 2 3 4 5 plaintiff s losing a substantial part of its cause of action under the statute of limitations merely because it made a mistake in thinking that the respondent corporations could be found or that they transaction ... business in the Eastern District of Pennsylvania. The language and history of § 1406(a) ... show a congressional purpose to provide as effective a remedy as possible to avoid precisely this sort of injustice. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 The language of § 1406(a) is amply broad enough to authorize the transfer of cases, however wrong the plaintiff may have been in filing his case as to venue, whether the court in which it was filed had personal jurisdiction over the defendants or not. The section is thus in accord with the general purpose which has prompted many of the procedural changes of the past few years that of removing whatever obstacles may impede expeditious and orderly adjudication of cases and controversies on their merits. When a lawsuit is filed, that filing shows a desire on the part of the plaintiff to being his case and thereby toll whatever statute of limitations would otherwise apply. The filing itself shows the proper diligence on the part of the plaintiff which such statutes of limitation were intended to insure. If by reason of the uncertainties of proper venue a mistake is made, Congress, by the enactment of § 1406(a), recognized that the interest of justice may require that the complaint not be dismissed but rather that it be transferred in order that the plaintiff not be penalized by what the late Judge Parker aptly described as time-consuming and justice-defeating technicalities. It would at least frustrate this enlightened congressional objective to import ambiguities into § 1406(a) which do not exist in the language Congress used to achieve the procedural reform it desired. [Emphasis added] 369 U.S. at 465-467. 25 Ammex asserts that federal courts have applied Goldlwar to 26 situations in which the defendant made this mistake by removing 10 1 an action to an incorrect federal district court. 2 Cook v. Shell Chemical Co., 730 F.Supp. 1381 (M.D.La.1990). 3 4 Ammex cites In Cook, the defendant removed the case to the wrong district in Louisiana. The District Court held: 17 Counsel have failed to address in their supplemental memoranda whether removing to the wrong district is procedural or jurisdictional. If the defect is procedural, any objection to it has been waived as untimely. This court has been unable to find any cases explaining whether removing to the wrong district is procedural or jurisdictional. However, it is clear in the case at bar that this court has subject matter jurisdiction over the controversy via 28 U.S.C. § 1332. The removal to the wrong district is more akin to an improper venue situation. 28 U.S.C. § 1441(a) provides that the proper venue for removal is the district court of the United States for the district and division embracing the place where such action is pending. Under Fed.R.Civ.P. 12(b), the defense of improper venue is waived if not made timely. Therefore, removal to the wrong district is a procedural defect, like improper venue, which was waived by the failure to object to it timely. Plaintiff has therefore waived her grounds for remand. 18 See also Mortensen v. Wheel Horse Products, Inc., 772 F.Supp. 85, 19 89 (N.D.N.Y.1991), citing Cook. 20 F.D.I.C., 852 F.Supp. 218 (S.D.N.Y.1994). 21 plaintiff filed suit in Queens County, which was within the 22 Eastern District of New York. 23 the United States District Court for the Southern District of New 24 York. 25 than the motion to remand, ruling: 5 6 7 8 9 10 11 12 13 14 15 16 26 Ammex also cites Ullah v. In Ullah, the Defendant removed the action to The District Court granted the motion to transfer rather Improper removal to this district of a state 11 1 2 3 court action pending in the Eastern District of New York does not compel remand of the case to the state court so that it can then be removed to the Eastern District. That would bring about additional delay and expense while serving no useful purpose. 4 5 6 Federal courts have broad authority to reach a proper result by the most expedient means. Where a case can be sent directly to its proper site, this may be done without resort to unnecessary intermediate steps. 7 852 F.Supp. at 221. 8 In Tanzman v. Midwest Express Airlines, Inc., 916 F.Supp. 9 1013 (S.D.Cal.1996), the plaintiff filed his complaint in the San 10 Mateo County Superior Court. Defendants motion to transfer 11 venue to the San Diego County Superior Court was granted. After 12 transfer to the San Diego Superior Court, defendants removed the 13 action to the Southern District. The Southern District ruled 14 that the initial transfer from the San Mateo County Superior 15 Court to the San Diego County Superior Court was a nullity and 16 that the removal to the Southern District was void and of no 17 effect: Since this Court has no pending case before it, there is 18 nothing to remand. Id. at 1016. The Southern District rejected 19 plaintiff s argument that the case should not be dismissed but, 20 rather, transferred to the Northern District because there was no 21 case in the Southern District to be transferred. Id. at 1017. 22 In Lee v. Thomas Tours & GSA, Inc., 1997 WL 638428 23 (N.D.Cal., Sept. 29, 1997), the plaintiff filed an action in the 24 San Francisco County Superior Court for a tort that occurred in 25 Yosemite National Park. After the action was removed to the 26 12 1 Northern District, the Northern District, relying on Tanzman and 2 Ullah, ruled that plaintiff had venued the action in an incorrect 3 state court and further ruled: 8 In light of the improper venue, defendants removal to this court also venued this case in the incorrect district. See order of Judge Wagner [sic] (ED Cal) requiring defendants to remove this action to the Northern District. When a case is removed to the wrong district, a federal district court can transfer the case to the correct venue rather than remand the case to state court. 9 See also Capretto v. Stryker Corporation, 2007 WL 2462138 at *1, 4 5 6 7 10 11 12 13 14 15 16 fn.1 (N.D.Cal., Aug. 29, 2007): Stryker mistakenly removed the case to the Northern District instead of the Eastern District of California. This error does not require a remand to state court. According to 28 U.S.C. § 1406(a), [t]he district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought. 17 Shamrock cites Polizzi v. Cowles Magazines, Inc., 345 U.S. 18 663 (1953) as authority that Section 1406(a) has no application 19 to this action. 20 In Polizzi, a libel action filed in the Florida state court 21 was removed to the Southern District of Florida and then 22 dismissed for want of jurisdiction under 28 U.S.C. § 1391(c) 23 because defendant was not at the time of service of the summons 24 doing business in the Southern District of Florida. 25 Court addressed whether the District Court correctly dismissed 26 the action for lack of jurisdiction: 13 The Supreme 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Both courts below held that the District Court lacked jurisdiction but they reached that conclusion by deciding that Respondent was not doing business in Florida within the meaning of 28 U.S.C. ... § 1391(c) ... Section 1391 is a general venue statute. In a case where it applies, if its requirements are not satisfied, the District Court is not deprived of jurisdiction, although dismissal of the case might be justified it a timely objection to the venue were interposed ... 28 U.S.C.A. § 1406. But even on the question of venue, § 1391 has no application to this case because it is a removed action. The venue of removed actions is governed by 28 U.S.C. ... § 1441(a) ..., and under that section venue was properly laid in the Southern District of Florida ... Section 1391(a) limits the district in which the action may be brought. Section 1391(c) similarly limits the district in which a corporation may be sued. This action was not brought in the District Court, nor was Respondent sued there; the action was brought in a state court and removed to the District Court. Section 1441(a) expressly provides that the proper venue of a removed action is the district court of the United States for the district and division embracing the place where such action is pending. The Southern District of Florida is the district embracing Dade County, the place where this action was pending .... Therefore, the question whether Respondent was doing business in Florida within the meaning of § 1391(c) is irrelevant, and the discussion of that question is beside the point. The District Court based its holding that it lacked jurisdiction on a statute which has no application to the case, and the Court of Appeals affirmed on the same reasoning. 345 U.S. at 665-666. 24 Cases have construed Polizzi as precluding reliance on 25 Section 1406(a) as authority to transfer venue of a removed 26 action on the theory that venue is the defendant s privilege and 14 1 defendant chose to remove the action to the District Court under 2 Section 1441(a). 3 Fuqua Homes, Inc., 2010 WL 1838364 at * 3 (D.Nev., May 6, 4 2010)( [A] party in a removed action may not challenge venue as 5 being improper under § 1406, but may only challenge it as being 6 more convenient under § 1404"); Maysey, supra, 2009 WL 3740737 at 7 * 2 ( The transfer statute, 28 U.S.C. § 1406(a), is a general 8 venue statute and provides no authority to transfer the venue of 9 removed actions ); Prestar Financial Corp. v. Infraegis, Inc., 10 11 See, e.g., Western Showcase Homes, Inc. v. 2009 WL 3425348 at *1 (C.D.Cal., Oct. 19, 2009). Ammex argues that Polizzi has been superceded by Goldlwar, 12 making Section 1406(a) applicable authority to transfer this 13 action to the Central District of California. 14 involve a removed action and cannot be read as superseding 15 Polizzi, which did involve a removed action. 16 analyzing Section 1406(a) Polizzi makes little sense because 17 Ammex removed the action to an incorrect district court. 18 Goldlwar did not Nonetheless, Shamrock argued at the hearing that Mr. Romero s averment 19 that the case was removed to this Court as a result of a mistake 20 in reading a map is conclusory and should not be considered. 21 Shamrock complains that Mr. Romero provides no details of the 22 steps that led to the mistake. 23 establish that a mistake was made. 24 California has no interest in this action and both parties agree 25 that the action should not have been removed to the Eastern 26 District of California, but to the Central District of Mr. Romero s averment suffices to 15 The Eastern District of 1 California, Eastern Division. Although the removal statutes are strictly construed, in the 2 3 absence of controlling Supreme Court or Ninth Circuit authority, 4 the better view supports the transfer of this action to the 5 Central District of California, rather than remanding it to the 6 San Bernardino Superior Court. 7 nothing before the Court from which it may be inferred that Ammex 8 removed the action to the Eastern District of California in a 9 deliberate attempt to bring the case before this Court. A mistake was made; there is Federal 10 subject matter jurisdiction over the action existed when it was 11 removed, making the underlying concern one of venue.1 CONCLUSION 12 13 For the reasons stated: 14 1. Plaintiff s motion to remand is DENIED; 15 2. Defendant s motion to transfer this action to the 16 Central District of California, Eastern Division is GRANTED; 3. 17 The Clerk of the Court is directed to transfer this 18 action to the Central District of California, Eastern Division. 19 IT IS SO ORDERED. 20 Dated: 668554 August 9, 2010 /s/ Oliver W. Wanger UNITED STATES DISTRICT JUDGE 21 22 23 24 25 26 1 This conclusion makes unnecessary resolution of Ammex s argument that transfer of the action is authorized by 28 U.S.C. § 1631. 16
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