Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-00741/USCOURTS-cand-3_07-cv-00741-2/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 28:1441 Petition for Removal

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

PHOENIX AMERICAN INC.,

Plaintiff(s),

v.

CERTAIN UNDERWRITERS AT

LLOYD’S, LONDON, ENGLAND, et

al. 

Defendant(s).

CERTAIN UNDERWRITERS AT

LLOYD’S, LONDON, ENGLAND, 

Cross-Complaint, 

v. 

PHOENIX AMERICAN INC., et

al.

Cross-Defendants

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No. C 07-0741 BZ

ORDER GRANTING MOTION TO

REMAND

Certain Underwriters at Lloyd’s, London, England

(“Lloyd’s”) has moved to remand this action to the Superior

Court for the County of Marin, and also moved for fees and

costs. The motions have been briefed and were argued on May

16, 2007. 

Case 3:07-cv-00741-BZ Document 41 Filed 05/16/07 Page 1 of 3
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1 Lloyd’s proffers several additional grounds in

support of remand. Though these arguments appear to have

merit, I need not reach them to remand.

2 LMA and Constantin respond that they were

fraudulently joined and that their citizenship should not be

considered for purposes of determining diversity. The party

asserting fraudulent joinder must show that it cannot be liable

on any theory. Ritchy v. Upjohn Drug Co., 139 F.3d 1313, 1318

(9th Cir. 1998). For the reasons discussed at the hearing, the

cause of action against counterdefendants for unjust enrichment

appears to pose a viable theory on which Lloyd’s could recover. 

See Dinosaur Dev., Inc. v. White, 216 Cal. App. 3d 1310, 1316

(1989). Therefore, the fraudulent joinder argument does not

save the removal.

2

Removal statutes are to be strictly construed, and a

remand to state court is favored if there are doubts as to the

right of removal. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th

Cir. 1992). Generally, a case may not be removed on the basis

of diversity if any defendant lives in the forum state.1 28

U.S.C. § 1441(b); Lively v. Wild Oats Markets, Inc., 456 F.3d

933, 939 (9th Cir. 2006). The reason, in part, is that

diversity jurisdiction is intended to protect out-of-state

litigants from state court prejudice. See Tosco Corp. v.

Cmtys. for a Better Env’t., 236 F.3d 495, 502 (9th Cir. 2001). 

Here, Constantin and LMA assert diversity jurisdiction as the

basis for removal to federal court. Constantin and LMA,

however, both admit to being citizens of California, as does

Phoenix American, Inc., which joined in the removal. The

removal, therefore, was improper.2

I decline, however, to impose fees and costs on the

removing parties. The removal was not objectively

unreasonable. Martin v. Franklin Capital Corp., 546 U.S. 132,

141(2005). 

Case 3:07-cv-00741-BZ Document 41 Filed 05/16/07 Page 2 of 3
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For the foregoing reasons, IT IS ORDERED as follows: 

(1) Lloyd’s’ motion for remand to Superior Court for the

County of Marin is GRANTED.

(2) The Clerk is directed to TRANSFER this case to

Superior Court for the County of Marin for further

proceedings. 

(3) Lloyd’s’ motion for fees and costs is DENIED. 

Dated: May 16, 2007

 Bernard Zimmerman

United States Magistrate Judge

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