Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_08-cv-01338/USCOURTS-cand-3_08-cv-01338-1/pdf.json

Nature of Suit Code: 368
Nature of Suit: Asbestos Personal Injury - Prod.liab.
Cause of Action: 28:1332 Diversity-Product Liability

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United States District Court

For the Northern District of California

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C-08-1338 REMAND Page 1 of 5

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

Russell C. Roberts, Jr,

Plaintiff,

v.

A.W. Chesterton Company, et al.,

Defendants.

________________________________/

No. C 08-1338 JL

ORDER GRANTING PLAINTIFF’S

MOTION FOR REMAND FOR LACK OF

SUBJECT MATTER JURISDICTION

(Docket # 5)

Introduction

This matter was submitted without oral argument pursuant to Civil Local Rule 7-1(b). 

The Court considered Defendant Crane Co.’s request for oral argument but concluded that

the parties’ pleadings were adequate for the Court to render its decision, and the Court’s

calendar did not permit a hearing on an expedited basis. Both parties consent to this

Court’s jurisdiction over this matter, pursuant to 28 U.S.C. §636(c) and Civil Local Rule 73.

Factual and Procedural Background

Plaintiff Russell C. Roberts Jr. (“Roberts”) is 58 years old, a California resident, and 

dying from mesothelioma. On June 18, 2007, Roberts filed a personal injury action in

Superior Court, County of San Francisco, against Crane Co. (“Crane”) and 27 other

Case 3:08-cv-01338-JL Document 34 Filed 03/24/08 Page 1 of 5
United States District Court

For the Northern District of California

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C-08-1338 REMAND Page 2 of 5

defendants, alleging that the products and activities of these defendants exposed Roberts

to asbestos, which caused his injuries. 

Throughout the course of the litigation, various defendants were dismissed, while

others engaged in negotiations with plaintiff that yielded different agreements and

arrangements with regard to settlement. Trial began on February 4, 2008 in Department

303 of the San Francisco Superior Court before the Honorable Julie Tang. By March 7,

2008, Roberts had reached agreements to settle with 13 defendants. Only three of these

defendants have paid settlement money and been dismissed or are in the process of being

dismissed. A settlement was reached with a California resident-defendant Warren Pumps,

Inc., and payment was due on January 25, 2008. However, Roberts alleges payment has

not yet been rendered and that court intervention to enforce the settlement may be

necessary. Two defendants whose settlements are not final and who have not been

dismissed are California resident-defendants J.T. Thorpe & Son, Inc. and Metalclad

Insulation Corporation. Thorpe Insulation Co., also remains a defendant. This defendant

recently filed for bankruptcy and its motion for a stay of state court proceedings was

granted.

During the trial on March 7, 2008, outside the presence of the jury, counsel for

Roberts informed the court and opposing counsel for Crane and Durabla Manufacturing

Company (“Durabla”) that plaintiff had reached a confidential settlement with defendant

Metalclad, pending performance of certain conditions that plaintiff expected would be

completed in roughly 30 days. Counsel for Roberts stated that it was not dismissing

Metalclad from the action until payment of the settlement amount was received. The court

noted that Metalclad remained a party in the case until dismissed following performance of

the agreement. Crane immediately announced its intent to remove this case to federal

court based on complete diversity, which it did later that day. Subsequently, Roberts filed

the instant motion to remand to the Superior Court, County of San Francisco for lack of

subject matter jurisdiction. Roberts alleges that at least one California defendant remains

in the action and that Crane failed to obtain unanimous consent of the remaining

Case 3:08-cv-01338-JL Document 34 Filed 03/24/08 Page 2 of 5
United States District Court

For the Northern District of California

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C-08-1338 REMAND Page 3 of 5

defendants (Durabla specifically), which makes Crane’s removal petition procedurally

defective.

Legal Analysis

Pursuant to 28 U.S.C. § 1441(a), a defendant in a civil action may remove a case

from state court to federal district court if the district court has subject matter jurisdiction

over the case. The district court has subject matter jurisdiction if there is diversity of

citizenship between the parties or if the action is founded on a claim arising under the

Constitution, laws, or treaties of the United States. 28 U.S.C. § 1441(b); 28 U.S.C. § 1331

(federal question); 28 U.S.C. § 1332 (diversity jurisdiction); Ethridge v. Harbor House

Restaurant, 861 F.2d 1389, 1393 (9th Cir. 1988). Section 1441(b) further provides that if

the basis for federal jurisdiction is diversity of citizenship, removal is available only if no

defendant is a citizen of the forum state. As the party seeking to remove the action, the

defendant bears the burden of establishing that subject matter jurisdiction exists. Ethridge,

861 F.2d at 1393. Since the Court strictly construes the removal statute against removal, if

there is any doubt as to the existence of federal jurisdiction, then the Court should remand

the matter to state court. See Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992).

A case which is not removable when commenced can only become removable,

based on diversity, when the diversity is created by a voluntary act by the plaintiff. Self v.

General Motors Corp., 588 F.2d 655, 659-660 (9th Cir. 1978). Crane does not contend that

the instant suit was removable when commenced. 

The voluntary act necessary to create removal jurisdiction must be an act that

“unequivocally effects an abandonment of any resident defendant.” Schmidt v. Capital Life

Ins. Co., 626 F.Supp. 1315, 1318 (N.D. Cal. 1986). In Mertan v. E.R. Squibb & Sons, Inc.,

581 F. Supp. 751 (C.D. Cal. 1980), the Court held that complete diversity, necessary for

removal to federal district court, did not exist because “the defendant Boyle & Co. has not

yet been dismissed from the State action and is still a viable defendant.” Id. at 753. The

court found the defendant was still a party to the action because the state court had not

signed or filed a written dismissal of the defendant from the action. Id. 

Case 3:08-cv-01338-JL Document 34 Filed 03/24/08 Page 3 of 5
United States District Court

For the Northern District of California

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C-08-1338 REMAND Page 4 of 5

Crane argues that, in Mertan, the failure to formally dismiss the California defendant

was merely an alternative ground for the court to grant plaintiff’s request for remand of the

action to state court, and so Mertan has limited or no precedential value. This argument is

unpersuasive. In explaining its decision to remand, the court set out the three infirmities it

saw in the defendant’s petition for removal that justified remand. Id. at 753. The court

found that any of the three justified remand. The lack of complete diversity, based on the

fact that a non-diverse defendant had not been formally dismissed from the action, was

one. The distinctions Crane draws between Mertan and the case at bar are unpersuasive. 

In Guerrero v. General Motors Corp., 392 F.Supp.2d 1133 (N.D. Cal. 2005), the

court cited with approval the holding in Mertan that formal, written dismissal of the

defendants was necessary for purposes of complete diversity. Id. at 1135. It also

specifically rejected General Motors’ argument that plaintiffs had indicated their intent not to

proceed against the non-diverse defendants by reaching settlement agreements with those

defendants and that the case was therefore removable despite the fact that the non-diverse

defendants had not been dismissed from the case. Id. However, the settlement

agreements reached by the non-diverse defendants were not yet binding and those

defendants had not been dismissed from the case. Id. The court remanded the case to

superior court. 

The only difference between Guerrero and the case at bar is the reason why the

settlement agreements were not binding. Guerrero required another step (court approval)

beyond signing the agreement in order for the settlement to be binding. The settlement

agreement required court approval because four of the plaintiffs in Guerrero were minors. 

In the instant case, there are several defendants who do not appear to have formal, binding

settlement agreements and have not been formally dismissed from the case. Two

defendants whose settlements are not final and who have not been dismissed are

California resident-defendants J.T. Thorpe & Son, Inc. and Metalclad Insulation

Corporation. Thorpe Insulation Co., has filed for bankruptcy and obtained a stay of the

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United States District Court

For the Northern District of California

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C-08-1338 REMAND Page 5 of 5

state court proceedings. Finally, plaintiff has only a non-binding “agreement to agree” with

Waldron Duffy, Inc., a California citizen.

Crane has the burden of establishing that subject matter jurisdiction exists. If there

is any doubt as to the existence of federal jurisdiction, the court should remand. Gaus, 980

F. 2d at 566. The record before the Court does not establish that binding settlement

agreements have eliminated all non-diverse Defendants from the state court action. 

Consequently, complete diversity did not exist at the time of removal. This Court is

therefore without subject matter jurisdiction.

Conclusion

For the foregoing reasons, plaintiff’s motion to remand this action to the Superior

Court of California, County of San Francisco, is GRANTED. This case is hereby remanded

to San Francisco Superior Court. 

IT IS SO ORDERED.

DATED: March 24, 2008

___________/s/_____________________

 James Larson

 Chief Magistrate Judge

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