Free Brief - District Court of California - California

Case 3:07-cv-06058-CRB

Document 28

Filed 12/14/2007

Page 1 of 16

1 SHARON L. BROWNE, No. 119246 [email protected] 2 RALPH W. KASARDA, No. 205286 (Admission Pending) [email protected] 3 JOSHUA P. THOMPSON, No. 250955 (Admission Pending) [email protected] 4 Pacific Legal Foundation 3900 Lennane Drive, Suite 200 5 Sacramento, California 95834 Telephone: (916) 419-7111 6 Facsimile: (916) 419-7747 7 Attorneys for Plaintiff 8 9 10
3900 Lennane Drive, Suite 200 Sacramento, CA 95834 (916) 419-7111 FAX (916) 419-7747

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA

PACIFIC LEGAL FOUNDATION

11 AMERICAN CIVIL RIGHTS FOUNDATION, a non-profit, public benefit corporation, 12 Plaintiff, 13 v. 14 CITY OF OAKLAND, CALIFORNIA, a political 15 subdivision of the State of California, and the PORT OF OAKLAND, a public entity, 16 Defendants. 17 18 19 20 21 22 23 24 25 26 27 28
Memo of Ps&As in Supp of Pltf's Mtn to Remand & Req for Attys' Fees - No. CV 07-06058 CRB

) ) ) ) ) ) ) ) ) ) ) ) )

No. CV 07-06058 CRB MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF'S MOTION TO REMAND AND REQUEST FOR ATTORNEYS' FEES Date: Time: Place: Judge: January 25, 2008 10:00 a.m. Courtroom 8, 19th Floor The Hon. Charles R. Breyer

Case 3:07-cv-06058-CRB

Document 28

Filed 12/14/2007

Page 2 of 16

1 2

TABLE OF CONTENTS Page

3 TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii 4 ISSUES PRESENTED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 5 SUMMARY OF ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 6 INTRODUCTION AND STATEMENT OF FACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 7 ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 8 9 10
3900 Lennane Drive, Suite 200 Sacramento, CA 95834 (916) 419-7111 FAX (916) 419-7747

I. THIS ACTION SHOULD BE REMANDED TO STATE COURT BECAUSE DEFENDANTS FAILED TO TIMELY REMOVE THE CASE TO FEDERAL COURT . . . . . . . . . . . . . . . . . . . . 4 II. THIS COURT DOES NOT HAVE SUBJECT MATTER JURISDICTION TO HEAR THE CASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 A. Plaintiff Has Not Alleged a Cause of Action Under Federal Law . . . . . . . . . . . . . . 7

PACIFIC LEGAL FOUNDATION

11 12 13 14 15 16 CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 17 18 19 20 21 22 23 24 25 26 27 28
Memo of Ps&As in Supp of Pltf's Mtn to Remand & Req for Attys' Fees - No. CV 07-06058 CRB

B. Plaintiff Has Standing Pursuant to California Citizen and Taxpayer Standing Rules But Does Not Have Standing to Maintain an Action in Federal Court . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 III. PLAINTIFF SHOULD BE AWARDED ITS COSTS INCLUDING REASONABLE ATTORNEYS' FEES INCURRED IN OPPOSING THIS IMPROPER REMOVAL . . . . . . . . . . . . . . . . . . . . 10

-i-

Case 3:07-cv-06058-CRB

Document 28

Filed 12/14/2007

Page 3 of 16

1 2 3

TABLE OF AUTHORITIES Page Cases

4 Akin v. Big Three Industries, Inc., 851 F. Supp. 819 (E.D. Tex. 1994) . . . . . . . . . . . . . . . . . . . 6 5 Avitts v. Amoco Prod. Co., 111 F.3d 30 (5th Cir. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 6 Bender v. Williamsport Area Sch. Dist., 475 U.S. 534 (1986) . . . . . . . . . . . . . . . . . . . . . . . . . 9 7 Brooks v. Solomon Co., 542 F. Supp. 1229 (N.D. Ala. 1982) . . . . . . . . . . . . . . . . . . . . . . . . . . 7 8 California v. Beltz Travel Serv., Inc., 379 F. Supp. 948 (N.D. Cal. 1974) . . . . . . . . . . . . . 1, 10 9 Carter v. Bldg. Material & Constr. Teamsters' Union Local 216, 928 F. Supp. 997 (N.D. Cal. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 10 Curtis v. Nevada Bonding Corp., 53 F.3d 1023 (9th Cir. 1995) . . . . . . . . . . . . . . . . . . . . . . . 10 11 Emrich v. Touche Ross & Co., 846 F.2d 1190 (9th Cir. 1988) . . . . . . . . . . . . . . . . . . . . . . . . . 3 12 Franchise Tax Bd. of the State of Cal. v. Constr. Laborers 13 Vacation Trust for S. Cal., 463 U.S. 1 (1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 14 Gaus v. Miles, Inc., 980 F.2d 564 (9th Cir. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 15 Gorman v. Abbott Labs., 629 F. Supp. 1196 (D.R.I. 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 16 Gotro v. R & B Realty Group, 69 F.3d 1485 (9th Cir. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . 11 17 Gully v. First Nat'l Bank in Meridian, 299 U.S. 109 (1936) . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 18 Harris v. Bankers Life & Cas. Co., 425 F.3d 689 (9th Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . 7 19 Hubbard v. Union Oil Co. of Cal., 601 F. Supp. 790 (S.D.W. Va. 1985) . . . . . . . . . . . . . . . . . 5 20 In re Willis, 228 F.3d 896 (8th Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 21 Langford v. Gates, 610 F. Supp. 120 (C.D. Cal. 1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 10 22 Libhart v. Santa Monica Dairy Co., 592 F.2d 1062 (9th Cir. 1979) . . . . . . . . . . . . . . . . . . . . . 3 23 Lofstrom v. Dennis, 829 F. Supp. 1194 (N.D. Cal. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 24 Louisville & Nashville R.R. Co. v. Mottley, 211 U.S. 149 (1908) . . . . . . . . . . . . . . . . . . . . . . . 8 25 Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 26 Maine Ass'n of Interdependent Neighborhoods v. Comm'r, Maine Dep't of Human Servs., 876 F.2d 1051 (1st Cir. 1989) . . . . . . . . . . . . . . . . . . . . . 9-10 27 Martin v. Franklin Capital Corp., 393 F.3d 1143 (10th Cir. 2004) . . . . . . . . . . . . . . . . . . . . 11 28
Memo of Ps&As in Supp of Pltf's Mtn to Remand & Req for Attys' Fees - No. CV 07-06058 CRB

3900 Lennane Drive, Suite 200 Sacramento, CA 95834 (916) 419-7111 FAX (916) 419-7747

PACIFIC LEGAL FOUNDATION

- ii -

Case 3:07-cv-06058-CRB

Document 28

Filed 12/14/2007

Page 4 of 16

1

Page

2 Martin v. Franklin Capital Corp., 546 U.S. 132 (2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-11 3 Nishimoto v. Federman-Bachrach & Assocs., 903 F.2d 709 (9th Cir. 1990) . . . . . . . . . . . . . . 3 4 Rivet v. Regions Bank of La., 522 U.S. 470 (1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 5 Salveson v. Western States Bankcard Ass'n, 731 F.2d 1423 (9th Cir. 1984) . . . . . . . . . . . . . . . 3 6 Samura v. Kaiser Found. Health Plan, Inc., 715 F. Supp. 970 (N.D. Cal. 1989) . . . . . . . . . . . 5 7 Seigler v. Am. Sur. Co. of N.Y., 151 F. Supp. 556 (N.D. Cal. 1957) . . . . . . . . . . . . . . . . . . . . . 4 8 Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (1941) . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 9 Whitaker v. Am. Telecasting, Inc., 261 F.3d 196 (2d Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . 7 10 Wilson v. Republic Iron & Steel Co., 257 U.S. 92 (1921) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3900 Lennane Drive, Suite 200 Sacramento, CA 95834 (916) 419-7111 FAX (916) 419-7747

PACIFIC LEGAL FOUNDATION

11

California Constitution

12 Cal. Const. art. I, § 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-2, 7, 9 13 Federal Statutes

14 28 U.S.C. § 1441(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 7-8 15 16 17 18 § 1446 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 3 § 1446(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 3-4, 6-7 § 1447(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 3, 7, 9-12 Miscellaneous

19 Chemerinsky, Erwin, Federal Jurisdiction (3d ed. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 20 21 22 23 24 25 26 27 28
Memo of Ps&As in Supp of Pltf's Mtn to Remand & Req for Attys' Fees - No. CV 07-06058 CRB

- iii -

Case 3:07-cv-06058-CRB

Document 28

Filed 12/14/2007

Page 5 of 16

1 2 1.

ISSUES PRESENTED Whether this Court, pursuant to 28 U.S.C. § 1446, should remand this matter to the

3 California state court in which it began because: 4 5 6 7 8 9 10
3900 Lennane Drive, Suite 200 Sacramento, CA 95834 (916) 419-7111 FAX (916) 419-7747

(a)

Defendants failed to remove this action within the 30-day time limit prescribed by 28 U.S.C. § 1446(b);

(b)

Plaintiff has not stated a cause of action granting this Court subject matter jurisdiction; and/or

(c)

Plaintiff's standing is based on state law principles, thus Plaintiff does not have Article III standing.

2.

Whether this Court should grant Plaintiff its costs and attorneys' fees, pursuant to

PACIFIC LEGAL FOUNDATION

11 28 U.S.C. § 1447(c), incurred in opposing this improper removal. 12 13 SUMMARY OF ARGUMENT This Court should remand this matter to the state trial court where the case began for three

14 reasons. First, Defendants failed to remove this case within the statutorily prescribed 30-day time15 limit to remove actions to federal court. 28 U.S.C. § 1446(b). Defendants were served with the 16 complaint on August 6, 2007, yet failed to remove until November 30, 2007. During that time, 17 Defendants filed numerous documents in the trial court involving the precise issues upon which 18 their Notice of Removal is based. Second, this Court is without subject matter jurisdiction to hear 19 this case. Plaintiff has not stated a cause of action under federal law, and defenses based on federal 20 law cannot be the basis for removal. Plaintiff's complaint is solely a facial challenge to 21 Defendants' Airport Concession Disadvantaged Business Enterprise (ACDBE) Program under 22 Article I, section 31, of the California Constitution. Lastly, Plaintiff has standing based on 23 California citizen and taxpayer standing principles. Because Plaintiff brought this case in state 24 court, Plaintiff does not have nor is it required for Plaintiff to have Article III standing to maintain 25 this action in state court. Thus, remand is proper. California v. Beltz Travel Serv., Inc., 379 F. 26 Supp. 948, 950-51 (N.D. Cal. 1974); Langford v. Gates, 610 F. Supp. 120, 123 (C.D. Cal. 1985). 27 Given that Defendants have no basis for removal, this Court should award Plaintiff its costs and 28 attorneys' fees incurred in opposing this improper removal.
Memo of Ps&As in Supp of Pltf's Mtn to Remand & Req for Attys' Fees - No. CV 07-06058 CRB

-1-

Case 3:07-cv-06058-CRB

Document 28

Filed 12/14/2007

Page 6 of 16

1 2

INTRODUCTION AND STATEMENT OF FACTS On July 6, 2007, this action was filed in the California Superior Court for Alameda County

3 by the American Civil Rights Foundation (Plaintiff) against the City of Oakland and the Port of 4 Oakland (collectively Defendants). The action is a facial challenge under the California

5 Constitution to Defendants' race- and sex-based Port of Oakland Disadvantaged Business 6 Enterprise Program (ACDBE Program). The Complaint for Declaratory and Injunctive Relief 7 (Complaint) alleges only one cause of action, namely that the ACDBE Program violates Article I, 8 section 31, of the California Constitution (Article I, section 31 or Proposition 209). Defendants' 9 Notice of Manual Filing of Superior Court Record Volumes 1-4 (Record) at Vol. 1, Tab 1.1 10 Article I, section 31 prohibits the state and local governments from granting preferential treatment
3900 Lennane Drive, Suite 200 Sacramento, CA 95834 (916) 419-7111 FAX (916) 419-7747

PACIFIC LEGAL FOUNDATION

11 to, or discriminating against, any group or individual on the basis of race, color, ethnicity, sex, or 12 national origin in the operation of public contracting. 13 Plaintiff filed its complaint July 6, 2007. Record at Vol. 1, Tab 1. The complaint was

14 served on Defendants on August 6, 2007. Id. at Tabs 9-12. A week later, on August 13, 2007, the 15 California trial court endorsed an order granting Defendants a 45-day extension of time to file their 16 responsive pleading. Id. at Tab 14. On September 24, 2007, nearly 50 days after Defendants were 17 served with the Complaint, Defendants demurred to the Complaint arguing, inter alia, that the 18 ACDBE Program was mandated under federal law. Id. at Tab 15. Plaintiff responded to 19 Defendants' demurrer on November 26, 2007. Id. at Vol. 4, Tab 24. Thereafter, on November 30, 20 2007, nearly four months after the complaint was served and four days after Plaintiff filed its 21 /// 22 23 24 25 26 27 The Port [of Oakland] has implemented and is enforcing a public contracting program for food/beverage, retail, and duty free concessions at the Oakland International Airport that discriminates against and grants preferential treatment to individuals and groups on the basis of race, sex, color, ethnicity, or national origin in the operation of public contracting . . . . [T]he ACDBE Program is designed for the specific purpose of providing preferential treatment to particular businesses based on the owner's race or sex while discriminating against others based on those same immutable characteristics and constitutes a violation of Section 31.
1

As set out in Plaintiff's complaint:

28 Record at Vol. 1, Tab 1 (Complaint ¶ 10).
Memo of Ps&As in Supp of Pltf's Mtn to Remand & Req for Attys' Fees - No. CV 07-06058 CRB

-2-

Case 3:07-cv-06058-CRB

Document 28

Filed 12/14/2007

Page 7 of 16

1 opposition to demurrer, Defendants filed their notice of removal in this Court under 28 U.S.C. 2 § 1441(b). 3 This motion seeks to have this action remanded back to the California trial court in which

4 it was filed. As will be established below, Defendants cannot establish removal jurisdiction. 5 Procedurally, Defendants failed to remove this action within the time prescribed by 28 U.S.C. 6 § 1446. Substantively, this Court lacks subject matter jurisdiction to hear this case. The action 7 should therefore be remanded forthwith to the state courts, and Plaintiff should be awarded its costs 8 (including reasonable attorneys' fees) incurred in opposing Defendants' improper removal. See 9 28 U.S.C. § 1447(c). 10
3900 Lennane Drive, Suite 200 Sacramento, CA 95834 (916) 419-7111 FAX (916) 419-7747

ARGUMENT Defendants, as the removing parties, bear the burden of establishing federal jurisdiction.

PACIFIC LEGAL FOUNDATION

11

12 See Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97 (1921) ("the petitioning defendant must 13 take and carry the burden of proof, he being the actor in the removal proceeding"); Emrich v. 14 Touche Ross & Co., 846 F.2d 1190, 1195 (9th Cir. 1988) ("The burden of establishing federal 15 jurisdiction is upon the party seeking removal."). Importantly, "the removal statute is strictly 16 construed against removal jurisdiction." Salveson v. Western States Bankcard Ass'n, 731 F.2d 17 1423, 1426 (9th Cir. 1984) (citing Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 18 (9th Cir. 1979). If there is any doubt as to the right of removal, remand is necessary. Gaus v. 19 Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (citing Libhart, 592 F.2d at 1064); see also 20 Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108 (1941) ("Not only do[] . . . [the removal 21 statutes] evidence the Congressional purpose to restrict the jurisdiction of the federal courts on 22 removal, but the policy . . . is one calling for the strict construction of such legislation."). "The 23 `strong presumption' against removal jurisdiction means that the defendant always has the burden 24 of establishing that removal is proper." Gaus, 980 F.2d at 566 (citing Nishimoto v.

25 Federman-Bachrach & Assocs., 903 F.2d 709, 712 n.3 (9th Cir. 1990); Emrich, 846 F.2d at 1195). 26 Defendants cannot overcome the strong presumption against removal jurisdiction.

27 Defendants failed to remove this case within the 30-day time-limit prescribed by 28 U.S.C. 28 § 1446(b). Additionally, Defendants cannot meet their burden to show that this Court had original
Memo of Ps&As in Supp of Pltf's Mtn to Remand & Req for Attys' Fees - No. CV 07-06058 CRB

-3-

Case 3:07-cv-06058-CRB

Document 28

Filed 12/14/2007

Page 8 of 16

1 subject matter jurisdiction over this matter for two reasons: (1) Plaintiff has not stated a federal 2 claim; and (2) Plaintiff's standing is based on California standing principles, therefore Plaintiff 3 does not have nor is it necessary for Plaintiff to have Article III standing to maintain this action in 4 state court. Therefore, as explained in detail below, this Court should remand this action to state 5 court. 6 7 8 9 I THIS ACTION SHOULD BE REMANDED TO STATE COURT BECAUSE DEFENDANTS FAILED TO TIMELY REMOVE THE CASE TO FEDERAL COURT Pursuant to 28 U.S.C. § 1446(b), Defendants have 30 days after receipt of the pleading or

10 service of summons to remove a civil action from state to federal court.2 In California, the removal
3900 Lennane Drive, Suite 200 Sacramento, CA 95834 (916) 419-7111 FAX (916) 419-7747

PACIFIC LEGAL FOUNDATION

11 period begins to run upon receipt of the complaint. See Lofstrom v. Dennis, 829 F. Supp. 1194, 12 1196 (N.D. Cal. 1993); Carter v. Bldg. Material & Constr. Teamsters' Union Local 216, 928 F. 13 Supp. 997, 1001 (N.D. Cal. 1996). Where a Defendant fails to file its petition for removal within 14 the time required by law, the right is lost. Seigler v. Am. Sur. Co. of N.Y., 151 F. Supp. 556, 559 15 (N.D. Cal. 1957); see also Gorman v. Abbott Labs., 629 F. Supp. 1196, 1199 (D.R.I. 1986) (citation 16 omitted) ("[T]he time limitation is mandatory and must be strictly applied and where a party fails 17 to file a petition within the applicable time limits he is [thereafter] precluded from doing so."). 18 Plaintiff filed its action in California Superior Court on July 6, 2007. Record at Vol. 1,

19 Tab 1. Defendants were served with the complaint on August 6, 2007. Id. at Tabs 9-12. Instead 20 of removing the action to federal court at that time, Defendants asked the state court for an 21 extension of time to respond to Plaintiff's complaint. Id. at Tab 14. Defendants then demurred to 22 the complaint on September 24, 2007. Id. at Tab 15. On that date Defendants filed: (1) a demurrer 23 to Plaintiff's complaint (id.); (2) a 23-page points and authorities in support of their demurrer (id.); 24 25 26 27 28 The notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within thirty days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter.
Memo of Ps&As in Supp of Pltf's Mtn to Remand & Req for Attys' Fees - No. CV 07-06058 CRB
2

28 U.S.C. § 1446(b) reads (emphasis added):

-4-

Case 3:07-cv-06058-CRB

Document 28

Filed 12/14/2007

Page 9 of 16

1 and (3) two requests for judicial notice (1488 pages and 309 pages respectively). Id. at Vol. 2, 2 Tab 16; Vol. 3, Tab 17. On November 26, 2007, Plaintiff filed its Opposition to Defendants' 3 Demurrer. Id. at Vol. 4, Tab 24. Four days later, on November 30, 2007, nearly four months after 4 the complaint was served, Defendants' filed their Notice of Removal. 5 Defendants' untimely removal runs afoul of both justifications for the 30-day time-limit on

6 removal. The 30-day time-limit 7 8 9 10 Samura v. Kaiser Found. Health Plan, Inc., 715 F. Supp. 970, 972 (N.D. Cal. 1989). Here,
3900 Lennane Drive, Suite 200 Sacramento, CA 95834 (916) 419-7111 FAX (916) 419-7747

deprive[s] the defendant of the undeserved tactical advantage that he would have if he could wait and see how he was faring in state court before deciding whether to remove the case to another court system; and [it] prevent[s] the delay and waste of resources involved in starting a case over in a second court.

PACIFIC LEGAL FOUNDATION

11 Defendants filed numerous, voluminous documents in the state trial court. Only after Plaintiff filed 12 its opposition to Defendants' demurrer and requests for judicial notice did Defendants remove the 13 case to federal court. Defendants are seeking an "undeserved tactical advantage" and are "wasting 14 court resources" by filing their notice of removal nearly four months after their time to do so 15 elapsed. 16 Separately, "[i]f a case is removable from the outset, it must be removed within the initial

17 thirty-day period specified by § 1446(b); subsequent events do not make it `more removable' or 18 `again removable'." Id. (quoting Hubbard v. Union Oil Co. of Cal., 601 F. Supp. 790, 795 (S.D.W. 19 Va. 1985) (citation omitted)). Defendants claim that their notice of removal is timely, because it 20 was filed within thirty days of "Plaintiff's Opposition to Defendants Demurrer . . . , wherein 21 Plaintiff clearly frames the issues raised in its Complaint as implicating questions of federal law." 22 Defs.' Notice of Removal at 3:5-7. To the contrary, in their demurrer, Defendants raised the same 23 "federal issues"3 upon which their current Notice of Removal is based.4 Moreover, Defendants 24 Plaintiff has consistently maintained, and continues to maintain, that any "federal issues" present are a result of Defendants' raising the issues as defenses (not Plaintiff's claim). Thus, these cannot 26 be a basis for removal. See infra Part II.A. 25 In their Notice of Removal, Defendants try to obfuscate when they were aware of the "federal issues" present in the case. Defendants state that "Plaintiff's Opposition to the Demurrer . . . 28 (continued...) 27
Memo of Ps&As in Supp of Pltf's Mtn to Remand & Req for Attys' Fees - No. CV 07-06058 CRB
4 3

-5-

Case 3:07-cv-06058-CRB

Document 28

Filed 12/14/2007

Page 10 of 16

1 acknowledge this in their Notice of Removal: "Defendants demurred to Plaintiff's Complaint . . . 2 [arguing] that because the Port of Oakland has entered into federal grant agreements . . . which 3 require compliance with federal affirmative action requirements . . . [Article I, section 31] does not 4 apply." Defs.' Notice of Removal at 1:18-22. 5 Although Plaintiff believes otherwise, assuming, arguendo, that Defendants had, at one

6 point, the right to remove, Defendants' Notice of Removal contradicts itself regarding when they 7 were aware of the right. Defendants cannot contend that they were unaware of their right to remove 8 until after they filed their Demurrer, when the same arguments made in the Demurrer are their 9 asserted basis for removal. Clearly, they were aware of the "federal issues" (which they now assert 10 entitle them to remove) before Plaintiff's Opposition to Demurrer. Plaintiff's Opposition to
3900 Lennane Drive, Suite 200 Sacramento, CA 95834 (916) 419-7111 FAX (916) 419-7747

PACIFIC LEGAL FOUNDATION

11 Demurrer did not make the case any more removable than it may have been originally. 12 Further, Defendants are likely to argue that their Notice of Removal is timely, because they

13 removed once they were aware that the cause of action was based on a federal claim. See 28 U.S.C. 14 § 1446(b); Akin v. Big Three Industries, Inc., 851 F. Supp. 819, 824 (E.D. Tex. 1994). This 15 argument is without merit. First, it should be reiterated that on September 24, 2007, Defendants 16 demurred that the ACDBE Progam was federally mandated. Record at Vol. 1, Tab 15. Although 17 Plaintiff contests this characterization of its claim for relief in that Plaintiff's complaint does not 18 state a federal cause of action,5 Defendants were at least aware of any federal issues as of that date. 19 Instead of removing, Defendants waited until after Plaintiff filed an opposition to their demurrer, 20 nearly four months after the complaint was served. Id. at Vol. 4, Tab 24. 21 22 (...continued) 23 argues . . . Defendants' ACDBE Program fails to satisfy [federal regulations] because it is unsupported by a disparity study." Defs.' Notice of Removal at 2:1-6. However, Plaintiff first 24 mentions Defendants lack of a disparity study in the Complaint, not the Opposition to Demurrer. Record at Vol. 1, Tab 1 (Complaint ¶ 15). Furthermore, Plaintiff attached a copy of Defendants' 25 ACDBE program to the complaint, which cites numerous federal regulations. Id. (Exhibit 1 to Complaint). Thus, Defendants were aware of any federal issue relating to a disparity study at that 26 time. That Defendants argue they are not required to conduct a disparity study is a defense that Plaintiff responds to in its Opposition to Demurrer, and which cannot be a basis for removal. See 27 infra Part II.A. 28
5 4

See infra Part II.A. -6-

Memo of Ps&As in Supp of Pltf's Mtn to Remand & Req for Attys' Fees - No. CV 07-06058 CRB

Case 3:07-cv-06058-CRB

Document 28

Filed 12/14/2007

Page 11 of 16

1

Additionally, the exception provided for in 28 U.S.C. § 1446(b) is usually reserved for

2 instances where the true diversity of the parties or amount in controversy becomes known after 3 filing of the complaint. See, e.g., Harris v. Bankers Life & Cas. Co., 425 F.3d 689, 695 (9th Cir. 4 2005); Whitaker v. Am. Telecasting, Inc., 261 F.3d 196, 206 (2d Cir. 2001); In re Willis, 228 F.3d 5 896, 897 (8th Cir. 2000). To the extent that the section 1446(b) exception is available for "federal 6 questions," the exception is only available where the federal claim was not ascertainable from the 7 face of the pleading; and even then, the 30-day time limit will begin to run as soon as defendants 8 are aware of the federal claim. See Brooks v. Solomon Co., 542 F. Supp. 1229, 1230-32 (N.D. Ala. 9 1982). Because Defendants were clearly aware of the issues involved in this action well before 10 they removed this case to federal court, the section 1446(b) exception is inapplicable.
3900 Lennane Drive, Suite 200 Sacramento, CA 95834 (916) 419-7111 FAX (916) 419-7747

PACIFIC LEGAL FOUNDATION

11

Because Defendants cannot meet their burden that their Notice of Removal was timely, the

12 Court should remand this action back to state court. 13 14 15 16 The commands of 28 U.S.C. § 1447(c) are clear: "If at any time before final judgment it II THIS COURT DOES NOT HAVE SUBJECT MATTER JURISDICTION TO HEAR THE CASE

17 appears that the district court lacks subject matter jurisdiction, the case shall be remanded." This 18 Court does not have subject matter jurisdiction over this matter for two separate and distinct 19 reasons. First, Plaintiff has not alleged any federal cause of action. Second, Plaintiff's standing 20 is based on California taxpayer and citizen standing requirements, thus, Plaintiff does not have 21 Article III standing required to maintain an action in federal court. For either of these reasons, this 22 Court should remand the action to state court pursuant to 28 U.S.C. § 1447(c). 23 A. Plaintiff Has Not Alleged a Cause of Action Under Federal Law 24 Plaintiff has not alleged a cause of action under federal law. Plaintiff's sole cause of action

25 is that Defendants' ACDBE Program violates Article I, section 31, of the California Constitution. 26 Record at Vol. 1, Tab 1 (Complaint ¶¶ 22-27). The ACDBE Program grants preferences to persons 27 and groups on the basis of race and sex in awarding contracts at the Oakland International Airport. 28 Id. 28 U.S.C. § 1441(b) reads in relevant part: "Any civil action of which the district courts have
Memo of Ps&As in Supp of Pltf's Mtn to Remand & Req for Attys' Fees - No. CV 07-06058 CRB

-7-

Case 3:07-cv-06058-CRB

Document 28

Filed 12/14/2007

Page 12 of 16

1 original jurisdiction founded on a claim or right arising under the Constitution, treaties or laws of 2 the United States shall be removable without regard to the citizenship or residence of the parties." 3 Since Plaintiffs have neither raised a claim nor right under the Constitution, treaties or laws of the 4 United States, this Court does not have subject matter jurisdiction to hear the matter and removal 5 was improper. 6 Defendants removed this case under 28 U.S.C. § 1441(b), arguing that "the claims and

7 defenses upon which the parties rely arise under the laws of the United States." Defs.' Notice of 8 Removal at 2:17-18 (emphasis added). But the law is clear that a defense does not grant a federal 9 district court subject matter jurisdiction. The "well-pleaded complaint rule" has been a hallmark 10 of American jurisprudence for nearly a century: "It is the settled interpretation . . . that a suit arises
3900 Lennane Drive, Suite 200 Sacramento, CA 95834 (916) 419-7111 FAX (916) 419-7747

PACIFIC LEGAL FOUNDATION

11 under the Constitution and laws of the United States only when the plaintiff's statement of his own 12 cause of action shows that it is based upon those laws or that Constitution." Louisville & Nashville 13 R.R. Co. v. Mottley, 211 U.S. 149, 152 (1908); see also Erwin Chemerinsky, Federal Jurisdiction 14 341 (3d ed. 1999) ("[A] federal law defense is insufficient by itself to permit removal because of 15 the well-pleaded complaint rule requiring that the federal question be on the face of the complaint 16 in order for federal jurisdiction to exist."). 17 Even where a federal " `defense is the only question truly at issue in the case,' " the Supreme

18 Court has held firm that federal courts may not exercise removal jurisdiction. Rivet v. Regions 19 Bank of La., 522 U.S. 470, 475 (1998) (quoting Franchise Tax Bd. of the State of Cal. v. Constr. 20 Laborers Vacation Trust for S. Cal., 463 U.S. 1, 14 (1983)). Throughout their Notice of Removal, 21 Defendants make clear that it is their defense that makes this case removable. Defs.' Notice of 22 Removal at 1:22-23, 2:21-22 ("Defendants further contend that the federally mandated ACDBE 23 Program complies with 49 CFR . . . ." "Defendants have asserted a defense based on the application 24 of federal law."). However, Defendants ignore clear Supreme Court precedent, which clarifies that 25 "a suit brought upon a state statute does not arise under an act of Congress or the Constitution of 26 the United States because prohibited thereby." Gully v. First Nat'l Bank in Meridian, 299 U.S. 27 109, 116 (1936) (emphasis added). 28 ///
Memo of Ps&As in Supp of Pltf's Mtn to Remand & Req for Attys' Fees - No. CV 07-06058 CRB

-8-

Case 3:07-cv-06058-CRB

Document 28

Filed 12/14/2007

Page 13 of 16

1

Plaintiff has consistently maintained that Defendants' ACDBE Program is prohibited under

2 Article I, section 31, of the California Constitution. It is in Defendants' demurrer that a federal 3 issue is first raised; Plaintiff responds to Defendants' defense by arguing that the race- and sex4 based preference ACDBE Program is not mandated by federal law. See Record at Vol. 4, Tab 24 5 (Pltf's. Opposition to Defs.' Motion for Demurrer at 12). At no time has Plaintiff stated a cause 6 of action under federal law. Any federal issues that arise are solely a result of Defendants' 7 defenses. The law is clear: whether a federal defense applies, does not grant federal courts subject 8 matter jurisdiction. Accordingly, this Court should remand this action to state court under 9 28 U.S.C. § 1447(c). 10 B. Plaintiff Has Standing Pursuant to California Citizen and Taxpayer Standing Rules But Does Not 11 Have Standing to Maintain an Action in Federal Court 12 Clearly, Plaintiff has standing in state court pursuant to California's citizen and taxpayer

3900 Lennane Drive, Suite 200 Sacramento, CA 95834 (916) 419-7111 FAX (916) 419-7747

PACIFIC LEGAL FOUNDATION

13 standing rules. See generally Record at Vol. 1, Tab 1 (Complaint ¶ 2); id. at Vol. 4, Tab 24 (Pltf's. 14 Opposition to Defs.' Motion for Demurrer at 15-22). Plaintiff's complaint does not allege, nor was 15 it necessary for Plaintiff to have, Article III standing in order to maintain an action in state court. 16 Plaintiff's alleged injury is that some of its taxpaying, California members' tax monies are being 17 used to fund Defendants' ACDBE Program, which is prohibited by Article I, section 31, of the 18 California Constitution.6 See id. at Vol. 1, Tab 1 (Complaint ¶ 2). Conversely, for Article III 19 standing in federal court a Plaintiff must establish an injury-in-fact, causation, and redressability. 20 Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992). Because Plaintiff's standing is based 21 solely on California standing principles, Plaintiff lacks a "concrete and particularized" injury under 22 the meaning of Lujan. 23 When a plaintiff lacks standing, federal courts lack subject matter jurisdiction to hear the

24 case. Maine Ass'n of Interdependent Neighborhoods v. Comm'r, Maine Dep't of Human Servs., 25 876 F.2d 1051, 1053-54 (1st Cir. 1989) (citing Bender v. Williamsport Area Sch. Dist., 475 U.S. 26 534, 541-42 (1986)). Moreover, where a plaintiff whose action has been removed to federal court 27 Plaintiff also maintains that it has "citizen standing" under California law. See Record at Vol. 4, 28 Tab 24 (Pltf's. Opposition to Defs.' Motion for Demurrer at 20-22).
Memo of Ps&As in Supp of Pltf's Mtn to Remand & Req for Attys' Fees - No. CV 07-06058 CRB
6

-9-

Case 3:07-cv-06058-CRB

Document 28

Filed 12/14/2007

Page 14 of 16

1 lacks standing, the proper recourse is to remand. See Curtis v. Nevada Bonding Corp., 53 F.3d 2 1023 (9th Cir. 1995) (lack of standing is a defect in subject matter jurisdiction mandating remand); 3 Maine Ass'n, 876 F.2d at 1054. 4 In fact, this Court has previously remanded cases where standing was originally based on

5 California's liberal standing requirements. For example, in Beltz Travel, 379 F. Supp. at 950-51, 6 this Court held: 7 8 9 10
3900 Lennane Drive, Suite 200 Sacramento, CA 95834 (916) 419-7111 FAX (916) 419-7747

In the present case Plaintiffs do not allege that they were personally injured, but claim a derivative right under section 3369(5) to sue on behalf of persons who did suffer such injury. Such a derivative right created by state law cannot confer upon Plaintiffs the right to sue in federal court because a state may not extend the jurisdiction of a federal court to where it did not previously exist . . . . Since Plaintiffs lack standing to maintain an action in federal court . . . , the case was improperly removed from state court . . . . [I]t is hereby ordered that this case be remanded to the state court Similarly, the Central District of California held that remand is the proper recourse where

PACIFIC LEGAL FOUNDATION

11 12

13 standing was based on California's taxpayer standing statute: 14 15 16 As noted, defendants have moved to dismiss all equitable claims. They contend that the taxpayer plaintiffs' lack of standing . . . is not jurisdictional, but results in a failure to state a claim. They are mistaken. It is clear that Article III standing "involves . . . constitutional limitations on federal-court jurisdiction." Therefore, the proper course is remand, not dismissal.

17 Langford, 610 F. Supp. at 122-23 (citation omitted). 18 Plaintiff has never alleged that its standing is based on federal standing principles. In fact,

19 Plaintiff's current action is based solely on California state law standing principles. Because 20 Plaintiff does not have Article III standing, this Court lacks subject matter jurisdiction to hear the 21 case. 22 23 24 25 26 Accordingly, this Court should remand the case to the state court where this action began. III PLAINTIFF SHOULD BE AWARDED ITS COSTS INCLUDING REASONABLE ATTORNEYS' FEES INCURRED IN OPPOSING THIS IMPROPER REMOVAL This Court has discretion to award Plaintiff its costs, including reasonable attorneys' fees,

27 incurred in resisting this improper removal. See 28 U.S.C. § 1447(c); Martin v. Franklin Capital 28 Corp., 546 U.S. 132 (2005). 28 U.S.C. § 1447(c) reads: "An order remanding the case may require
Memo of Ps&As in Supp of Pltf's Mtn to Remand & Req for Attys' Fees - No. CV 07-06058 CRB

- 10 -

Case 3:07-cv-06058-CRB

Document 28

Filed 12/14/2007

Page 15 of 16

1 payment of just costs and any actual expenses, including attorney fees, incurred as a result of the 2 removal." Because Defendants have no objectively reasonable basis for asserting that this Court 3 has subject matter jurisdiction to hear this case, and it is clear that Defendants' Notice of Removal 4 is late, this Court should exercise its discretion to award such fees. 5 There is no presumption for or against awarding fees, but Defendants, as the removing

6 party, must have "an objectively reasonable basis" for removal to avoid paying the opposing party's 7 costs and attorneys' fees. Martin, 546 U.S. at 141. In Martin, the Supreme Court held that the 8 defendant had an objectively reasonable basis, because the defendant was relying on existing case 9 law, later overturned, supporting removal. Id. at 141 (citing Martin v. Franklin Capital Corp., 10 393 F.3d 1143, 1148 (10th Cir. 2004). Defendants have no objectively reasonable basis here. Not
3900 Lennane Drive, Suite 200 Sacramento, CA 95834 (916) 419-7111 FAX (916) 419-7747

PACIFIC LEGAL FOUNDATION

11 only have Defendants failed to remove within the time dictated by Congress, but they ignore 12 century-old hornbook law that prevents federal defenses from being the basis for a defendant's 13 removal. 14 Plaintiff is entitled to its costs and attorneys' fees incurred as a result of defending this

15 improper removal. 28 U.S.C. § 1447(c). These are "the litigation expenses . . . incurred in federal 16 court that would not have been incurred had the case remained in state court." Avitts v. Amoco 17 Prod. Co., 111 F.3d 30, 32 (5th Cir. 1997). Although this case is being handled on a pro bono 18 basis, that does not preclude this Court from awarding Plaintiff attorneys' fees. See Gotro v. R & 19 B Realty Group, 69 F.3d 1485, 1487 (9th Cir. 1995). The Ninth Circuit ruled that Congress used 20 the words "actual expenses incurred" in section 1447(c) to distinguish the fees awarded under that 21 section from a punitive fee award and to distinguish it from the former bonding requirement. Id. 22 at 1487-88. 23 Defendants filed their Notice of Removal well after their time to do so elapsed. Moreover,

24 Defendants were fully aware of all issues present in the case in September, 2007, when they filed 25 their Demurrer, yet Defendants failed to remove this case until November 30, 2007. To compound 26 the impropriety of this removal, it is clear from the face of the complaint that there are no statutory 27 grounds for this Court to exercise subject matter jurisdiction in this case. Additionally, Plaintiff 28 does not have Article III standing to pursue its claims in federal court. As set out in the
Memo of Ps&As in Supp of Pltf's Mtn to Remand & Req for Attys' Fees - No. CV 07-06058 CRB

- 11 -

Case 3:07-cv-06058-CRB

Document 28

Filed 12/14/2007

Page 16 of 16

1 accompanying Declarations of Sharon L. Browne and Joshua P. Thompson, a significant number 2 of hours of attorney time had to be devoted to the research and drafting of this motion to remand. 3 These are resources that could have been devoted to other cases, or even to the merits of this case. 4 Defendants should be ordered to bear these costs. As of December 13, 2007 those costs are as 5 follows: 6 7 8 9 Sharon L. Browne 6.90 hours at $475.00/hour = $3,277.50

Joshua P. Thompson 71.90 hours at $225.00/hour = $16,177.50 CONCLUSION This removal is untimely and this Court is without jurisdiction to hear this matter.

10 28 U.S.C. § 1447(c) provides that in such situations, the Court must remand the action to state
3900 Lennane Drive, Suite 200 Sacramento, CA 95834 (916) 419-7111 FAX (916) 419-7747

PACIFIC LEGAL FOUNDATION

11 court. In addition to remanding this action, this Court should also order Defendants to pay 12 Plaintiff's costs and attorneys' fees incurred in opposing this removal as set out in the 13 accompanying Declarations of Sharon L. Browne and Joshua P. Thompson. 14 15 16 17 18 19 By 20 21 22 23 24 25 26 27 28
Memo of Ps&As in Supp of Pltf's Mtn to Remand & Req for Attys' Fees - No. CV 07-06058 CRB

DATED: December 14, 2007. Respectfully submitted, SHARON L. BROWNE RALPH W. KASARDA JOSHUA P. THOMPSON

/s / Sharon L. Browne SHARON L. BROWNE

Attorneys for Plaintiff

- 12 -