-MJS Lerma v. Arends et al, No. 1:2011cv00533 - Document 30 (E.D. Cal. 2011)
Court Description: ORDER DENYING Plaintiff's Request for Reconsideration of Remand 28 , signed by District Judge Lawrence J. O'Neill on 6/22/11. (Hellings, J)
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-MJS Lerma v. Arends et al Doc. 30 1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 EASTERN DISTRICT OF CALIFORNIA 8 9 JUSTIN J. LERMA, CASE NO. 1:11-cv-00533-LJO-MJS 10 Plaintiff, 11 v. 12 13 ORDER DENYING PLAINTIFF'S REQUEST FOR RECONSIDERATION OF REMAND JON LEE ARENDS, et al., (Doc. 28) 14 Defendants. 15 / 16 17 18 19 I. INTRODUCTION Plaintiff, Justin J. Lerma,1 seeks reconsideration of the Order (ECF No. 26) denying 20 21 22 Plaintiff’s Motion for Remand in this employment discrimination and wrongful termination action. Plaintiff asserted in the Motion that Defendant URS Federal Support Services’ 23 Notice of Removal was untimely and therefore improper. For the reasons discussed below, 24 this Court DENIES the Request for Reconsideration and to set aside remand. 25 1 26 27 It is noted that Petitioner's father, Carlos Manuel Lerm a, has filed a nearly identical m atter in a separate case. See Lerm a v. Arends, 11-cv-00536-LJO-MJS. Both cases follow the sam e procedural history and are subject to the sam e request for reconsideration of the order denying rem and. -1- Dockets.Justia.com 1 II. 2 BACKGROUND A. Procedural History Regarding Service of Complaint 3 On December 21, 2010, Plaintiff filed his Complaint against defendant Arends and 4 5 URS Corporation in Fresno County Superior Court alleging defamation, racial 6 discrimination under the Fair Employment and Housing Act ("FEHA") and other claims, 7 including intentional infliction of emotional distress. On January 10, 2011, URS Corporation 8 was personally served with the summons and Complaint; Arends was served on January 9 10 16. On February 4, 2011, defense counsel informed Plaintiff that URS Corporation was 11 12 improperly named and served and that the proper defendant was URS Federal Support 13 Services ("URS FSS"). Defense counsel also informed Plaintiff's counsel that she intended 14 to remove the case to Federal Court based upon diversity jurisdiction once the correct 15 corporate entity was joined. The parties stipulated to provide Defendants until February 16 17 24, 2011, to file a responsive pleading. On February 23, 2011, after further discussions, Plaintiff's counsel voluntarily amended the state court action to substitute URS FSS for 18 19 20 URS Corporation as the proper corporate Defendant. He did so, in part, in return for Defense counsel's agreement to accept service on behalf of the Defendants. On that 21 same date Plaintiff's counsel sent a copy of the Amended Complaint by mail to defense 22 counsel and provided a courtesy copy by e-mail. However, no amended summons or 23 notice of acknowledgment of receipt accompanied the mailing of the Amended Complaint. 24 On March 16, 2011, at Defendants' request, Plaintiff's counsel mailed an 25 26 27 Acknowledgment of Receipt of Summons form to defense counsel. Defense counsel signed and returned it, and on March 21, 2011, Plaintiff filed it with the California Superior -2- 1 2 3 Court. Defendant URS FSS responded to the Amended Complaint on March 29, 2011, with an Answer and a Notice of Removal. On April 25, 2011, Plaintiff filed the instant Motion to Remand. 4 5 B. Removal 6 Defendant URS FSS removed the matter based on diversity jurisdiction under 28 7 U.S.C. § 1332(a)(1). Plaintiff challenged the timeliness of removal under 28 U.S.C. § 8 1446(b), not the diversity basis for it. Specifically, Plaintiff alleged that February 23, 2011, 9 10 the date Plaintiff filed and sent to Defendant’s counsel the Amended Complaint, started the time within which removal could be sought, and therefore that the Notice of Removal filed 11 12 13 on March 29, 2011, 34 days later, was four days too late. In response, URS FSS argued that the time for calculating removal did not start to run until at least March 16, 2011, when 14 the Notice and Acknowledgment of Receipt were received, signed and returned, and 15 therefore that the March 29, 2011 removal was timely. 16 17 At hearing, Magistrate Judge Michael J. Seng denied the Motion to Remand. Judge Seng relied on the reasoning of Murphy Bros., Inc. v Michetti Pipe Stringing, Inc., 526 U.S. 18 19 20 344, 356 (1999), and held the thirty day period to remove the matter did not begin to run until URS FSS was formally served with the Amended Complaint, regardless of the fact that 21 URS FSS was provided a copy of the Amended Complaint before it was served. See 22 Murphy Bros., Inc., 526 U.S. at 347 ("[A] defendant is not obliged to engage in litigation 23 unless notified of the action, and brought under a court's authority, by formal process."). 24 Judge Seng further held that in California a party is brought within the court's jurisdiction by 25 proper service of process in accordance with the provisions of the California Code of Civil 26 27 Procedure. Accordingly, in a case involving service by mail, service is not effective until a -3- 1 2 3 Notice of Acknowledgment of receipt is signed. As this did not occur until March 16, 2011, and the Notice of Removal was filed on March 29, 2011, Judge Seng found the notice timely and denied the Motion for Remand. 4 5 III. DISCUSSION 6 A. 7 “The Federal Magistrates Act, 28 U.S.C. §§ 631-39, governs the jurisdiction and 8 authority of federal magistrates.” United States v. Reyna-Tapia, 328 F.3d 1114, 1118 (9th 9 10 Ability of a Magistrate Judge to Decide a Motion for Remand Cir. 2003) (en banc). The Act allows the district court to assign Magistrate Judges certain enumerated duties, as well as any “additional duties as are not inconsistent with the 11 12 Constitution and laws of the United States.” 28 U.S.C. § 636(b)(3). Local Rule 302(a) 13 provides that Magistrate Judges may perform all duties permitted by 28 U.S.C. § 636(a), 14 (b)(1)(A), or other law where the standard of review of the Magistrate Judge's decision is 15 clearly erroneous or contrary to law. Local Rule 302(a) also provides that, while specific 16 17 duties are enumerated in Local Rule 302 subsections (b) and (c), “those described duties are not to be considered a limitation of this general grant.” Further, Local Rule 302(d) looks 18 19 20 21 22 23 24 upon applications, such as the one presented here, with “disfavor.” Local Rule 302(d) (“Applications for retention of such matters, however, are looked upon with disfavor and granted only in unusual and compelling circumstances.”). The Ninth Circuit has not taken a position on whether motions to remand are dispositive and deprive a Magistrate Judge of jurisdiction. Some other Circuits found such motions dispositive. See, e.g., Williams v. Beemiller, Inc., 527 F.3d 259, 264-266 (2d Cir. 25 26 27 2008); Vogel v. U.S. Office Products Co., 258 F.3d 509, 514-17 (6th Cir. 2001) (noting a lack of decisions from other circuits). -4- 1 2 3 However, other courts have found motions to remand to be non-dispositive motions. See, e.g., Delta Dental of Rhode Island v. Blue Cross & Blue Shield of Rhode Island, 942 F.Supp. 740, 745 (D.R.I. 1996); Bellocchio v. Enodis Corp., 499 F.Supp. 2d 254 (E.D.N.Y. 4 5 6 2007); Wachovia Bank, N.A. v. Deutsche Bank Trust Co. Americas, 397 F.Supp. 2d 698 (D.C.N.Y. 2005); see generally Peter J. Gallagher, In Search of a Dispositive Answer on 7 Whether Remand is Dispositive, 5 Seton Hall Cir. Rev. 303, 304 (Spring 2009) (“Nearly 8 every district court has treated remand as nondispositive and thus within the scope of this 9 authority, but all four circuit courts that have confronted the issue have deemed remand 10 dispositive and thus beyond the scope of a magistrate's authority.”). 11 12 13 This Court finds that the Motion to Remand is not a dispositive motion. The decision on a motion to remand merely answers the question of whether there is basis for federal 14 jurisdiction to support removal, and as such, a remand order is not “dispositive of a claim 15 or defense of a party.” Remand transfers the action to a different forum rather than finally 16 resolving substantive rights and obligations of parties. Accordingly, the Motion to Remand 17 is not dispositive and findings and recommendations are not necessary to resolve the 18 19 20 motion. B. Standard Of Review 21 Plaintiff seeks reconsideration of remand in that Murphy Bros., Inc., 526 U.S. 344, 22 is not applicable and that service was effectuated on February 23, 2011, making the March 23 29, 2011 Notice of Removal untimely. Plaintiff objected to the order, pursuant to Fed. R. 24 Civ. P. 72(a) and seeks de novo reconsideration of the order of the Magistrate Judge. 25 26 27 A district court may refer pretrial issues to a magistrate judge under 28 U.S.C. § 636 (b)(1). See Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1414 (9th Cir. 1991). A magistrate -5- 1 2 3 judge may make rulings regarding the resolution of non-dispositive motions, but such rulings may be reviewed by the district court de novo. See 28 U.S.C. §§ 636(b)(1)(A); Fed. R. Civ. P. 72(a); Bhan, 929 F.2d at 1414; see also Grimes v. City of San Francisco, 951 F.2d 236, 4 5 6 240-241 (9th Cir. 1991). If a party objects to a pretrial ruling by a magistrate judge, the district court will review or reconsider the ruling under the "clearly erroneous or contrary to 7 law" standard. Fed. R. Civ. P. 72(a); Osband v. Woodford, 290 F.3d 1036, 1041 (9th Cir. 8 2002); Grimes, 951 F.2d at 240-241. A magistrate judge's factual findings are "clearly 9 erroneous" when the district court is left with the definite and firm conviction that a mistake 10 has been committed. Security Farms v. International Bhd. of Teamsters, 124 F.3d 999, 11 12 13 1014 (9th Cir. 1997); Green v. Baca, 219 F.R.D. 485, 489 (C.D. Cal. 2003). However, the district court "may not simply substitute its judgment for that of the deciding court." Grimes, 14 951 F.2d at 241. The "contrary to law" standard allows independent, plenary review of 15 purely legal determinations by the magistrate judge. See Haines v. Liggett Group, Inc., 975 16 F.2d 81, 91 (3rd Cir.1992); Green, 219 F.R.D. at 489; see also Osband, 290 F.3d at 1041. 17 "A decision is ‘contrary to law’ when it ‘fails to apply or misapplies relevant statutes, case 18 law or rules of procedure.’" Knutson v. Blue Cross & Blue Shield of Minn., 254 F.R.D. 553, 19 20 556 (D. Minn. 2008); Rathgaber v. Town of Oyster Bay, 492 F.Supp. 2d 130, 137 (E.D.N.Y. 21 2007); Surles v. Air France, 210 F.Supp. 2d 501, 502 (S.D.N.Y. 2001); see Adolph Coors 22 Co. v. Wallace, 570 F.Supp. 202, 205 (N.D. Cal. 1983). “Motions for reconsideration and 23 objections to a Magistrate Judge's order are not the place for a party to make a new 24 argument and raise facts not addressed in his original brief." Jones v. Sweeney, 2008 U.S. 25 Dist. LEXIS 83723, *4 (E.D. Cal. Aug. 21, 2008); see Paddington Partners v. Bouchard, 34 26 27 F.3d. 1132, 1137-38 (2d Cir. 1994); Campbell v. Cal. Dep't of Corr. & Rehab., 2009 U.S. -6- 1 2 3 Dist. LEXIS 71284, *2 (E.D. Cal. Aug. 4, 2009); United States Fire Ins. Co. v. Bunge N. Am., Inc., 244 F.R.D. 638, 641 (D. Kan. 2007). With these standards in mind, this Court turns to Plaintiff's challenges to remand. 4 5 6 7 8 9 10 C. Analysis 1. Service of the Amended Complaint Plaintiff has objected that the Magistrate Judge's decision is contrary to relevant law regarding removal. As an initial matter, the Magistrate Judge issued an oral order on the record during the hearing. Where a Magistrate Judge is considering a pretrial matter not dispositive of a 11 12 13 party's claim, Fed. R. Civ. P. 72(a) does not require the Magistrate Judge to issue a written order. The comments to Rule 72(a) state, "An oral order read into the record by the 14 magistrate will satisfy this requirement [to preserve the record and facilitate review]." See 15 also Jain v. Memphis-Shelby County Airport Auth. & Serv. Mgmt. Sys., 2010 U.S. Dist. 16 LEXIS 8032, 9-10 (W.D. Tenn. Jan. 29, 2010). As such, an oral order was appropriate, and 17 the Court shall determine if the order was clearly erroneous or contrary to law. 18 19 20 As stated, the only issue raised by Plaintiff in the underlying Motion for Remand and in the present Request for Reconsideration is that the Notice of Removal was untimely. 21 Here, Plaintiff asserts that while the Magistrate Judge referenced the appropriate law, such 22 law was wrongly applied. 23 24 Magistrate Judge Seng relied upon Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 356 (1999), in denying the motion to remand. In Murphy Brothers, the 25 Supreme Court addressed "whether the named defendant must be officially summoned to 26 27 appear in the action before the time to remove begins to run. Or, may the 30-day period -7- 1 2 3 start earlier, on the named defendant's receipt, before service of official process, of a 'courtesy copy' of the filed complaint faxed by counsel for the plaintiff?" Id. at 347. In answering the question, the Supreme Court held: 4 5 6 7 8 9 10 We read Congress' provisions for removal in light of a bedrock principle: An individual or entity named as a defendant is not obliged to engage in litigation unless notified of the action, and brought under a court's authority, by formal process. Accordingly, we hold that a named defendant's time to remove is triggered by simultaneous service of the summons and complaint, or receipt of the complaint, 'through service or otherwise,' after and apart from service of the summons, but not by mere receipt of the complaint unattended by any formal service. (Emphasis added.) Id. at 347-348. Finally, in concluding, the Supreme Court further reasoned, "In sum, it would 11 12 13 take a clearer statement than Congress has made to read its endeavor to extend removal time (by adding receipt of the complaint) to effect so strange a change - to set removal apart 14 from all other responsive acts, to render removal the sole instance in which one's procedural 15 rights slip away before service of a summons, i.e., before one is subject to any court's 16 authority." Id. at 356. 17 Here, Plaintiff asserts that Murphy Brothers is different from the present case. 18 19 20 Specifically Plaintiff asserts that Arends and URS Corporation (the wrongly named party) had previously been properly served with the original Complaint. Once served, they were 21 provided an extension of time to respond to the Complaint and at that time they urged 22 Plaintiff to amend the Complaint to substitute URS FSS for URS Corporation. Further, 23 Plaintiff focuses on the close relationship between URS Corporation and URS FSS; URS 24 FSS is a wholly owned subsidiary of URS Corporation and represented by the same 25 counsel. Finally, Plaintiff describes how defense counsel agreed to accept service on behalf 26 27 of URS FRS, and received an e-mailed copy of the Amended Complaint on Feburary 23, -8- 1 2 3 2011. Despite his protestations, Plaintiff does not address the fact that the Amended Complaint was not properly served on URS FSS until March 16, 2011. The Supreme Court 4 5 6 in Murphy Brothers, held that the time for removal only began once a defendant was formally served with a copy of the complaint. Murphy Bros., 526 U.S. at 356. A "courtesy 7 copy" sent to the defendant prior to proper service is not sufficient. Id.; see also Piazza v. 8 EMPI, Inc., 2008 U.S. Dist. LEXIS 28136, *18-22 (E.D. Cal. Feb. 28, 2008); Medrano v. 9 Genco Chain Solutions, 2011 U.S. Dist LEXIS 2315, *44-47 (E.D. Cal. Jan. 11, 2011). 10 In California, a party is brought within the Court's jurisdiction by proper service of 11 12 13 process in accordance with the provisions of the California Code of Civil Procedure. In a case involving service by mail, service is not effective until a notice of acknowledgment of 14 receipt is signed. California Code of Civil Procedure § 415.30(a) provides: "A summons may 15 be served by mail as provided in this section. A copy of the summons and of the complaint 16 shall be mailed (by first-class mail or airmail, postage prepaid) to the person to be served, 17 together with two copies of the notice and acknowledgment provided for in subdivision (b) 18 and a return envelope, postage prepaid, addressed to the sender." "Service of a summons 19 20 pursuant to this section is deemed complete on the date a written acknowledgment of 21 receipt of summons is executed, if such acknowledgment thereafter is returned to the 22 sender." Cal. Code Civ. Proc. § 415.30(c). Here, the acknowledgment was not signed until 23 March 16, 2011. 24 Plaintiff does not claim that service was formally effectuated on URS FSS on 25 February 23, 2011. He has provided no other authority for the claim that the time for 26 27 removal starts before formal service is effectuated. Despite the close relationship of URS -9- 1 2 3 Corporation and URS FSS, proper service was required to involve URS FSS in the present action. Counsel for URS FSS agreed to accept service on behalf of the client, however it did not waive the right to receive formal service of the Amended Complaint. Accordingly, the 4 5 6 Magistrate Judge's finding that the Notice of Removal was timely was not "clearly erroneous or contrary to law". See Fed. R. Civ. P. 72(a). 2. 7 Did Defendant URS FSS Generally Appear in the Matter? 8 Plaintiff also asserts in his Request for Reconsideration that Defendant URS FSS 9 made a general appearance under California Code of Civil Procedure § 410.50(a) when its 10 counsel agreed to accept service of the Amended Complaint on behalf of URS FSS. The 11 12 13 issue of general appearance was first raised in Plaintiff's reply brief. (Reply at 4-5, ECF No. 25.) Reply papers should be limited to matters raised in the opposition papers. It is improper 14 for the moving party to introduce new facts or different legal arguments in the reply brief 15 than presented in the moving papers. See Lujan v. National Wildlife Federation, 497 U.S. 16 871, 894-895, 110 S.Ct. 3177, 3192, 111 L. Ed. 2d 695 (1990) (court has discretion to 17 disregard late-filed factual matters); Zamani v. Carnes, 491 F.3d 990, 997 (9th Cir. 2007) 18 ("district court need not consider arguments raised for the first time in a reply brief"); Ojo v. 19 20 Farmers Group, Inc., 565 F.3d 1175, 1186, fn. 13 (9th Cir. 2009); Clark v. County of Tulare, 21 755 F. Supp. 2d 1075 (E.D. Cal. 2010). Here, Plaintiff raised a new and different issue 22 which was not briefed in the moving papers nor raised in the opposition. Accordingly, it was 23 not clearly erroneous or contrary to law for the Magistrate Judge to disregard this argument 24 as it was improperly raised in the reply papers. 25 /// 26 27 /// -10- 1 3. 2 Assertion that Federal Law Rather than California Law Governs Procedure 3 URS FSS, in its opposition to the Motion for Remand, asserts that even if service of 4 5 6 the Amended Complaint was effectuated by being mailed on February 23, 2011, the Notice of Removal was still timely due to the application of California procedural rules that allow 7 for five extra days of service. Plaintiff now argues that Federal Rule of Civil Procedure 6 8 applies, and the Notice of Removal is untimely. Both arguments are based on the 9 assumption that service by mail was properly effectuated on February 23, 2011. As the 10 Court has previously determined that service was not effectuated until March 16, 2011, the 11 12 13 14 argument lacks merit. The Magistrate Judge's decision to deny this argument was not clearly erroneous or contrary to law. IV. CONCLUSION AND ORDER 15 For the reasons discussed above, this Court, after independent review, ADOPTS in 16 full the remand order and DENIES Plaintiff reconsideration relief. The remand order is 17 neither clearly erroneous nor contrary to law in that it correctly applied the pertinent legal 18 19 20 21 authority. IT IS SO ORDERED. Dated: b9ed48 June 22, 2011 /s/ Lawrence J. O'Neill UNITED STATES DISTRICT JUDGE 22 23 24 25 26 27 -11-
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