Zhao v. Costco Wholesale Corporation

• Court: District Court, N.D. California
• Decided: February 14, 2025
• Docket: 5:24-cv-07551
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 JOANNA ZHAO, et al., Case No. 5:24-cv-07551-EJD

9 Plaintiffs, ORDER GRANTING MOTION TO REMAND 10 v.

11 COSTCO WHOLESALE CORPORATION, Re: Dkt. No. 8 Defendant. 12

13 Before the Court is Plaintiffs Joanna Zhao and Ronald Zaidman’s (“Plaintiffs”) motion to 14 remand their California tort case back to state court following Defendant Costco Wholesale 15 Corporation’s (“Costco”) removal to this Court. Mot., ECF No. 8; Opp’n, ECF No. 18; Reply, 16 ECF No. 19. After carefully reviewing the relevant documents, the Court finds this matter 17 suitable for decision without oral argument pursuant to Local Rule 7-1(b). 18 For the reasons stated below, the Court GRANTS Plaintiffs’ motion to remand. 19 I. BACKGROUND 20 Plaintiffs commenced this action on June 10, 2024, in the Superior Court of California, 21 County of Santa Cruz. Notice of Removal, ECF No. 1. Plaintiffs served the complaint and 22 summons on Defendant on September 24, 2024. Id. at 2:19–20. The complaint erroneously 23 named the defendant as “Costco Wholesale Membership” rather than “Costco Wholesale 24 Corporation.” Id. On October 23, 2024, Costco’s counsel contacted Plaintiffs’ counsel to request 25 an extension of time to respond to the complaint and inform Plaintiffs of their error. Id. 26 Plaintiffs’ counsel agreed to a 30-day extension to file a responsive pleading, and the parties 27 discussed procedures for correcting Costco’s name in the complaint. Defendant claims that it 1 believed Plaintiffs also agreed to a 30-day extension to file for removal. Plaintiffs contend that it 2 never consented to removal or to extending the deadline for Defendant to file for removal. On 3 October 31, 2024, Defendant filed an Answer and Notice of Removal to this Court. 4 On November 7, 2024, Judge Cousins issued an order to show cause regarding the 5 timeliness of removal. The case was subsequently transferred to the Undersigned. The parties 6 responded to Judge Cousins’s order, and Plaintiffs’ motion to remand followed soon after. 7 II. LEGAL STANDARD 8 Generally, “any civil action brought in a State court of which the district courts of the 9 United States have original jurisdiction, may be removed by the defendant or the defendants, to 10 the district court[.]” 28 U.S.C. § 1441(a). A defendant must file a notice of removal “within 30 11 days after the receipt by the defendant, through service or otherwise, of a copy of the initial 12 pleading setting forth the claim for relief upon which such action or proceeding is based.” Id. § 13 1446(b)(1). 14 The party seeking removal bears the burden of establishing jurisdiction. Gaus v. Miles, 15 Inc., 980 F.2d 564, 566 (9th Cir. 1992). The Court strictly construes the removal statute against 16 removal jurisdiction. Id. Federal jurisdiction must be rejected if there is any doubt as to the right 17 of removal in the first instance. Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 18 1979). Indeed, federal courts are “particularly skeptical of cases removed from state court.” 19 Warner v. Select Portfolio Servicing, 193 F. Supp. 3d 1132, 1134 (C.D. Cal. 2016) (citing Gaus, 20 980 F.2d at 566). 21 III. DISCUSSION 22 After receiving notice of this action on September 24, 2024, Defendant’s deadline to file a 23 notice of removal was October 24, 2024. Defendant filed its notice of removal on October 31, 24 2024. Defendant argues that its untimely notice of removal should be excused because the 25 summons and complaint it received misstated Defendant’s name, and the parties stipulated to a 30- 26 day extension of Defendant’s deadline to file a notice of removal. The Court will address each in 27 turn. A. Service 1 First, Defendant argues that the period for removal has not commenced because Plaintiffs 2 improperly served Defendant using the wrong name—the complaint lists “Costco Wholesale 3 Membership” as the defendant rather than “Costco Wholesale Corporation.” 4 It is not uncommon is cases against corporations for a plaintiff to make a mistake naming 5 the defendant corporation. In these cases, so long as the intended defendant received notice and 6 was not mislead, courts generally treat such mistakes as harmless misnomers. See, e.g., Billings v. 7 Edwards, 91 Cal.App.3d 826, 831 (1979); Plumlee v. Poag, 150 Cal.App.3d 541, 547 (1984); 8 Wilder v. Stearns Lending, Inc., No. CV 13-02369 MMM (CWX), 2013 WL 12638493, at *15 9 (C.D. Cal. Nov. 25, 2013). This is consistent with California’s long established rule that, even 10 when there is a misnomer in a defendant’s name, a court acquires jurisdiction over the defendant 11 when the defendant’s agent receives the summons and knows the contents of the complaint. See, 12 e.g., Hernandez v. YP Advert. & Publ'g LLC, No. CV169612FMOAJWX, 2017 WL 1536151, at 13 *2 (C.D. Cal. Apr. 26, 2017) (collecting cases) (citing Thompson v. S. Pac. Co., 180 Cal. 730, 734 14 (1919); Stephens v. Berry, 249 Cal.App.2d 474, 478 (1967); Canifax v. Hercules Powder Co., 237 15 Cal.App.2d 44, 58 (1965)). 16 Here, though Plaintiffs typed “Membership” instead of “Corporation,” Defendant had 17 otherwise been properly served, and its counsel moved forward with the understanding that 18 “Costco Warehouse Corporation” was the intended defendant. Defendant’s counsel himself 19 informed Plaintiffs “that the correct defendant entity for this lawsuit is ‘Costco Wholesale 20 Corporation.’” ECF No. 1-1. Defendant’s request to extend the responsive pleadings deadline, 21 despite the misnomer, also demonstrates that Defendant knew it was the intended defendant and 22 was cognizant of its obligations in this case. 23 The Court therefore finds that the period for removal began the day Defendant received 24 notice of this action, September 24, 2024. 25 B. Stipulation 26 Next, Defendant argues that its notice of removal is timely because Plaintiffs consented to 27 1 a 30-day extension during a meet and confer phone call on October 23, 2024. Plaintiffs contend 2 || that they did not, and would not have, stipulated to extending the deadline for Defendant to file a 3 notice of removal. Instead, Plaintiffs understood the agreement to provide Defendant a 30-day 4 || extension to file responsive pleadings, not a notice of removal. 5 The Court finds no evidence that Plaintiffs consented to extending the deadline for 6 || Defendant’s notice of removal. Plaintiffs state that Defendant never raised a request to continue 7 its removal deadline in their October 23, 2024, conversation, and this is not contradicted by 8 || Defendant’s account. While Defendant claims that it informed Plaintiff of its intent to file a notice 9 || of removal and Plaintiffs did not object, Plaintiffs’ lack of affirmative objection does not 10 || constitute an agreement to extend the deadline to file a notice of removal. The parties’ lack of 11 agreement regarding removal is further evident from Defendant’s email following the phone call, 12 || which clearly states that Plaintiffs “graciously granted a 30 day extension for Defendant’s 5 13 || responsive pleadings,” with no mention of removal. ECF No. 1-1. As Judge Cousins noted in his 14 || order to show cause, responsive pleadings do not include a notice of removal. See Fed. R. Civ. P. 3 15 || 7(a). a 16 Therefore, the Court finds that Defendant’s untimely notice of removal is not justified by 3 17 || the misnomer in the complaint or the parties’ stipulation. Accordingly, the Court GRANTS 18 Plaintiffs’ motion for remand. 19 || IV. CONCLUSION 20 Based on the foregoing, Plaintiffs’ motion to remand is GRANTED. The Clerk of Court 21 shall close this case. 22 IT IS SO ORDERED. 23 Dated: February 14, 2025 24

EDWARD J. DAVILA 26 United States District Judge 27 28 || Case No.: 5:24-cv-07551-EJD ORDER GRANTING MOTION TO REMAND