Erica Arroyo v. Yard House USA, Inc.

• Court: District Court, C.D. California
• Decided: January 19, 2024
• Docket: 8:23-cv-01915
• Status: Unknown

Opinion

JS-6 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 SOUTHERN DIVISION

11 ) ERICA ARROYO, ) Case No.: SACV 23-01915-CJC (ADSx) 12 ) ) 13 Plaintiff, ) ) 14 v. ) ORDER GRANTING PLAINTIFF’S ) MOTION TO REMAND AND 15 ) DENYING REQUEST FOR YARD HOUSE IRVINE SPECTRUM, ) SANCTIONS [Dkt. 13] 16 ) LLC; and DOES 1–100, ) 17 ) ) 18 Defendants. ) ) 19 ) ) 20 ) ) 21

22 I. INTRODUCTION 23

24 On July 29, 2023, Plaintiff Erica Arroyo, a California citizen, filed this action 25 against Defendant Yard House Irvine Spectrum in the Superior Court of California, 26 County of Orange, asserting claims for premises liability and negligence arising out of a 27 slip-and-fall incident at Defendant’s business. (See Dkt. 1-1 [Compl.] at 1–5.) Defendant 1 timely removed on October 11, 2023 based on diversity jurisdiction. (See Dkt. 1 [Notice 2 of Removal].) Now before the Court is Plaintiff’s motion to remand for lack of subject 3 matter jurisdiction and request for sanctions. (Dkt. 13.) “Defendant does not oppose 4 Plaintiff’s Motion for Remand … [and] proposed that parties enter into a stipulation for 5 remand, due to Defendant’s good-faith mistake.” (Dkt. 16 [Opp’n to Mot. to Remand, 6 hereinafter “Opp.”] at 1.) Defendant’s counsel explains that it removed on the belief that 7 Defendant Yard House Irvine Spectrum, LLC had completed a merger with Delaware 8 corporation Yard House USA, Inc. and that Defendant was therefore not a resident of 9 California. (See id. at 2.) After realizing that Defendant “was in queue for merger but 10 such was not completed[,] … [Defendant’s counsel] immediately called Plaintiff’s 11 counsel and … sent Plaintiff’s counsel a proposed stipulation to remand ….” (See id. at 12 2–3.) For the following reasons, the Court GRANTS the motion to remand and DENIES 13 the request for sanctions.1 14 15 II. ANALYSIS 16 17 “‘Federal courts are courts of limited jurisdiction,’ possessing ‘only that power 18 authorized by Constitution and statute.’” Gunn v. Minton, 568 U.S. 251, 256 (2013) 19 (citation omitted). A federal district court has jurisdiction over a civil action removed 20 from state court only if the action could have been brought in the federal court originally. 21 See 28 U.S.C. § 1441(a). Federal district courts have diversity jurisdiction over suits 22 when over $75,000 is in controversy and the citizenship of each plaintiff is different from 23 that of each defendant. See 28 U.S.C. § 1332(a). The parties agree that this Court lacks 24 subject matter jurisdiction since Plaintiff and Defendant are both domiciled in the state of 25 California. (See Opp. at 1.) Accordingly, the only remaining issue to decide is whether 26

27 1 Having read and considered the papers presented by the parties, the Court finds this matter appropriate 1 to impose sanctions. 2 3 “An order remanding the case may require payment of just costs and any actual 4 expenses, including attorney fees, incurred as a result of the removal.” 28 U.S.C. 5 § 1447(c). “Absent unusual circumstances, courts may award [costs and expenses] under 6 § 1447(c) only where the removing party lacked an objectively reasonable basis for 7 seeking removal. Conversely, when an objectively reasonable basis exists, [an award] 8 should be denied.” Martin v. Franklin Cap. Corp., 546 U.S. 132, 141 (2005). 9 “[R]emoval is not objectively unreasonable solely because the removing party’s 10 arguments lack merit . . ..” Lussier v. Dollar Tree Stores, Inc., 518 F.3d 1062, 1065 (9th 11 Cir. 2008). A court may conclude that removal was objectively unreasonable when “the 12 relevant case law clearly foreclosed the defendant’s basis of removal.” Id. at 1066. 13 Whether to award costs and expenses is within a district court’s discretion. See Jordan v. 14 Nationstar Mortg. LLC, 781 F.3d 1178, 1184 (9th Cir. 2015). 15 16 Although the Court cautions Defendant’s counsel that they should take better care 17 to avoid unnecessary errors in the future, the Court exercises its discretion to decline 18 awarding costs and expenses here. Defendant several months ago conceded this Court 19 lacked diversity jurisdiction and offered to stipulate to remand. Defendant has asserted a 20 reasonable basis for its removal on a mistaken belief about its present citizenship. See 21 Martin, 546 U.S. at 141. And had the contemplated merger been completed, Defendant’s 22 removal would not have been improper. The Court declines to sanction what appears to 23 be an honest mistake followed by a prompt attempt to correct course. 24 /// 25 /// 26 /// 27 /// 1 CONCLUSION 2 3 For the foregoing reasons, Arroyo’s motion to remand is GRANTED, and the 4 ||request for sanctions is DENIED. This action is REMANDED to the Superior Court of 5 California, County of Orange. 6 7 DATED: — January 19, 2024 Ko fe 8 ff? _f ee 9 CORMAC J. CARMEY 10 UNITED STATES DISTRICT JUDGE 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28