Emma C. Lively v. Wild Oats Markets, Inc., a Delaware Corporation

456 F.3d 933, 2006 U.S. App. LEXIS 18793, 2006 WL 2074734
CourtCourt of Appeals for the Ninth Circuit
DecidedJuly 27, 2006
Docket04-56682
StatusPublished
Cited by257 cases

This text of 456 F.3d 933 (Emma C. Lively v. Wild Oats Markets, Inc., a Delaware Corporation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Emma C. Lively v. Wild Oats Markets, Inc., a Delaware Corporation, 456 F.3d 933, 2006 U.S. App. LEXIS 18793, 2006 WL 2074734 (9th Cir. 2006).

Opinion

PAEZ, Circuit Judge:

DefendanL-Appellant Wild Oats Market, Inc. (“Wild Oats”) appeals the district court’s order remanding this action to state court. Wild Oats removed this action to the District Court for the Central District of California alleging that, because the parties were completely diverse and the amount in controversy exceeded $75,000, diversity jurisdiction existed under 28 U.S.C. § 1332, and therefore removal was proper under 28 U.S.C. § 1441(a). 1 Plaintiff-Appellee Emma C. Lively (“Lively”) did not object to the removal. However, after the case had been pending in the district court for approximately eight months, the court, acting sua sponte and invoking its authority under 28 U.S.C. § 1447(c), determined that diversity jurisdiction did not exist because Wild Oats, contrary to the removal requirement of 28 U.S.C. § 1441(b), was a citizen of the state of California. Treating this requirement as a jurisdictional limitation on Wild Oats’ right of removal under § 1441(a), the district court remanded Lively’s action to state court.

Although Wild Oats does not dispute that it is a citizen of California and therefore a forum defendant within the meaning of § 1441(b), 2 it argues that its violation of the forum defendant rule was a procedural defect in the removal process, which Lively had to raise within the 30 days following removal as required by § 1447(c). Because Lively did not object within the 30-day period, Wild Oats argues that Lively waived the defect and that the district court lacked authority to remand the case to state court.

We must decide whether the forum defendant rule contained in § 1441(b) is jurisdictional or procedural, and thus whether a violation of this rule constitutes a jurisdictional or procedural defect. This issue has been addressed by nine of our sister circuits. It is, however, an issue of *936 first impression in this circuit. 3 We join eight of the nine circuits that have decided this issue and hold that the forum defendant rule is procedural, 4 and therefore a violation of this rule is a waivable defect in the removal process that cannot form the basis for a district court’s sua sponte remand order. Because the forum defendant rule is non-jurisdictional, we further hold that 28 U.S.C. § 1447(d) does not bar appellate review of the district court’s remand order, which was based on Wild Oats’ violation of the forum defendant rule.

I. Background

On September 26, 2003, Lively filed a personal injury action against Wild Oats in state court seeking damages for a slip and fall accident that occurred in one of Wild Oats’ California stores. On January 8, 2004, Wild Oats filed a notice of removal pursuant to 28 U.S.C. § 1441(e), asserting that diversity jurisdiction existed under 28 U.S.C. § 1332 because it was a citizen of Delaware, its state of incorporation, and Colorado, its principal place of business, and that Lively was a citizen of New York. Wild Oats also alleged that the amount in controversy exceeded $75,000. Lively did not object to the removal.

On August 25, 2004, after discovery ensued and after Wild Oats filed a motion for summary judgment, the district court issued an order to show cause why the case should not be remanded to state court. According to the district court, “removal appear[ed] to be improper” because Wild Oats’ principal place of business was California, not Colorado. Wild Oats insisted that removal was proper even if it were a California citizen because diversity jurisdiction still existed, and therefore the district court could only remand the case to state court if Lively so moved within the 30-day time limit imposed by 28 U.S.C. § 1447(c). Because the time limit had expired, Wild Oats argued that the district court could not order a remand.

The district court nonetheless remanded the case to state court for lack of subject matter jurisdiction. As noted, the district court determined that removal was improper because Wild Oats, a California citizen and local defendant, violated the *937 forum defendant rule contained in § 1441(b). The court determined that this violation “constitute[d] a jurisdictional defect” and therefore remand was “timely and proper” pursuant to § 1447(c). Wild Oats timely appealed.

II. Discussion

Jurisdiction & Standard of Revieiv

Lively argues that we lack jurisdiction to address whether the forum defendant rule is jurisdictional or procedural because § 1447(d) bars appellate review of the district court’s remand order, which was based on a lack of subject matter jurisdiction pursuant to § 1447(c). We disagree. As explained below, although § 1447(d) limits appellate review of district court remand orders, this does not mean that we must simply turn this case away because the district court asserted that it lacked jurisdiction and assume that the remand was authorized by § 1447(c). Rather, we must determine whether the district court correctly applied § 1447(c) by deciding that the forum defendant rule is a jurisdictional limitation that may be invoked sua sponte at any time. In so doing, we determine our own jurisdiction. See Special Invs., Inc. v. Aero Air, Inc., 360 F.3d 989, 992 (9th Cir.2004) (‘We, of course, have jurisdiction to determine our own jurisdiction.”).

In addition to one inapplicable exception, § 1447(d) provides that “[a]n order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise.” The Supreme Court has cabined this broad language by construing § 1447(d)’s bar on appellate review as applicable only to remand orders issued pursuant to § 1447(c). See Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S. 336, 345-46, 96 S.Ct. 584, 46 L.Ed.2d 542 (1976) (stating that §§ 1447(d) and (c) “must be construed together.... This means that only remand orders issued under § 1447(c) and invoking grounds specified therein ... are immune from review under § 1447(d)”), abrogated on other grounds in Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 116 S.Ct. 1712, 135 L.Ed.2d 1 (1996). 5

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456 F.3d 933, 2006 U.S. App. LEXIS 18793, 2006 WL 2074734, Counsel Stack Legal Research, https://law.counselstack.com/opinion/emma-c-lively-v-wild-oats-markets-inc-a-delaware-corporation-ca9-2006.