Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_16-cv-01081/USCOURTS-cand-4_16-cv-01081-1/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 28:1332 Diversity-Petition for Removal

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UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF CALIFORNIA 

OAKLAND DIVISION 

GARY FERRAS, an individual,

 Plaintiff, 

 vs. 

HUSQVARNA CONSTRUCTION 

PRODUCTS NORTH AMERICA, INC., 

HUSQVARNA NORTH AMERICA, 

HUSQVARNA GROUP, and DOES 1 

through 100 inclusive, 

 Defendants. 

Case No: C 16-01081 SBA

ORDER DENYING PLAINTIFF’S 

MOTION TO REMAND AND 

DENYING AS MOOT 

DEFENDANT’S MOTION TO STAY

PROCEEDINGS 

Plaintiff Gary Ferras (“Plaintiff”) initiated the instant discrimination and wrongful 

termination action against his former employer, Husqvarna Construction Products North 

America, Inc. (“Defendant”).1

 The matter is before the Court on Plaintiff’s Motion to 

Remand, Dkt. 6, and Defendant’s Motion for a Stay of Proceedings, Dkt. 9. Having read 

and considered the papers filed in connection these matters and being fully informed, the 

Court hereby DENIES Plaintiff’s motion to remand and DENIES as moot Defendant’s 

motion for a stay of proceedings. The Court, in its discretion, finds the matters suitable for 

resolution without oral argument. See Fed. R. Civ. P. 78(b); N.D. Cal. Civ. L.R. 7-1(b). 

 1 Plaintiff also named as defendants Husqvarna North America and Husqvarna 

Group. Husqvarna North America and Husqvarna Group are names used in North America 

and worldwide, respectively, to refer to the group of companies wholly owned by 

Husqvarna AB, a publicly held corporation organized under the laws of Sweden. Slocum 

Decl. ¶ 4, Dkt. 1-4. Husqvarna North American and Husqvarna Group are not formal 

entities, and thus, have not received service or appeared in this action. 

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I. BACKGROUND 

Plaintiff is a resident of Contra Costa County, California. Compl. ¶ 4, Dkt. 1, Ex. A. 

Defendant is a Delaware corporation regularly doing business in California. Id. ¶ 5. 

On January 25, 2016, Plaintiff commenced the instant employment action against 

Defendant in the Superior Court of California, Contra Costa County, alleging state law 

causes of action for: (1) age discrimination; (2) disability discrimination; (3) failure to 

prevent discrimination; (4) wrongful termination; and (5) unfair competition. 

On March 3, 2016, Defendant removed the action to this Court based on diversity 

jurisdiction. Dkt. 1. At the time of removal, Defendant had forfeited its corporate status in 

California for failure to file certain forms and pay associated penalties. See Cohen Decl., 

Ex. A., Dkt. 7; Arraneda Decl, ¶ 3, Dkt. 10-1. 

On April 4, 2016, Plaintiff filed the instant motion for remand. Dkt. 6. Plaintiff 

argues that Defendant lacked the legal capacity to remove the case because it forfeited its 

corporate rights, powers, and privileges. Defendant opposes the remand motion. 

Defendant acknowledges that it forfeited its corporate powers, but argues that revival of 

those powers will serve to ratify its prior litigation actions, including removal. 

Additionally, on April 19, 2016, Defendant filed the instant motion to stay the 

proceedings. Dkt. 9. Defendant asserts that the Court should not resolve the remand 

motion until Defendant has had an opportunity to secure revival of its corporate powers. 

Defendant thus argues that a brief stay of the proceedings is appropriate.2

On June 8, 2016, Defendant filed notice of the revival of its corporate powers. 

Dkt. 28. Defendant also filed an administrative motion to supplement the record to reflect 

the same. Dkt. 30. Plaintiff stipulates to the supplementation. Id. In light of the 

stipulation, and for good cause shown, the Court GRANTS Defendant’s motion to 

supplement the record. 

 2

 The parties initially noticed the motion to remand and motion to stay for May 11 

and June 8, 2016, respectively. Having found that the motions involve substantially the 

same issues, the Court set them for hearing on June 8. Dkt. 12. The Court subsequently 

took the matters under submission. Dkt. 25.

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II. LEGAL STANDARD 

A. REMAND

 A defendant may remove to federal court any civil action over which the district 

court would have had original jurisdiction. 28 U.S.C. § 1441(a). “A motion to remand is 

the proper procedure for challenging removal.” Moore-Thomas v. Alaska Airlines, Inc., 

553 F.3d 1241, 1244 (9th Cir. 2009). An action is subject to remand: (1) within 30 days of 

removal for any “defect” in the removal procedure; or (2) at any time before final judgment 

for lack of subject matter jurisdiction. 28 U.S.C. § 1447(c). “The removal statute is strictly 

construed, and any doubt about the right of removal requires resolution in favor of 

remand.” Moore-Thomas, 553 F.3d at 1244 (citing Gaus v. Miles, Inc., 980 F.2d 564, 566 

(9th Cir. 1992)). “The presumption against removal means that ‘the defendant always has 

the burden of establishing that removal is proper.’” Id. (quoting Gaus, 980 F.2d at 566). 

B. STAY OF PROCEEDINGS

A federal district court’s authority to stay ongoing proceedings is “incidental to the 

power inherent in every court to control the disposition of the causes on its docket with 

economy of time and effort for itself, for counsel, and for litigants.” Landis v. N. Am. Co., 

299 U.S. 248, 254 (1936). The court may “find it is efficient for its own docket and the 

fairest course for the parties to enter a stay of an action before it, pending resolution of 

independent proceedings which may bear upon the case.” Mediterranean Enter., Inc. v. 

Ssangyong Corp., 708 F.2d 1458, 1465 (9th Cir. 1983) (citation omitted). A district court’s 

decision to grant or deny a stay is a matter of discretion. See Dependable Highway Exp., 

Inc. v. Navigators Ins. Co., 498 F.3d 1059, 1066 (9th Cir. 2007).

III. DISCUSSION 

 Plaintiff moves for remand on the ground that Defendant lacked the capacity to 

remove the action because it forfeited its corporate powers. Defendant opposes remand and 

moves for a brief stay to permit revival of its corporate powers. As stated above, Defendant 

in fact revived its corporate powers subsequent to the filing of the instant motions. 

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A. Meet and Confer 

 Defendant asserts that the Court should strike Plaintiff’s remand motion for failure 

to meet and confer. The Court typically requires parties to meet and confer prior to filing 

any motion in order to ensure that there is, in fact, a dispute requiring judicial intervention. 

See Standing Order No. 4. Here, although Plaintiff failed to satisfy the meet-and-confer 

requirement prior to filing his motion, it is clear that judicial intervention is required to 

resolve the instant dispute. Indeed, the parties met and conferred before Defendant filed the 

instant motion for a stay, which involves substantially the same issues as the remand 

motion. The Court therefore declines to strike Plaintiff’s motion on this ground. 

 B. Timeliness of the Remand Motion 

 Defendant argues that the Court should deny Plaintiff’s remand motion as untimely 

because it was filed on “the 31st day after removal.” Opp’n at 4, Dkt. 8. Defendant’s 

reasoning is faulty. A motion for remand based on any defect other than lack of subject 

matter jurisdiction “must be made within 30 days after the filing of the notice of removal.” 

28 U.S.C. § 1447(c). If the motion deadline falls on a weekend or legal holiday, however, 

the period extends to the “next day that is not a Saturday, Sunday, or legal holiday.” Fed. 

R. Civ. P. 6(a)(1)(C). Defendant filed notice of removal on March 3, 2016; the remand 

period thus ended on Monday, April 4, 2016. Plaintiff’s motion therefore is timely. 

 C. Capacity to Remove

 Plaintiff challenges Defendant’s capacity to remove the instant action. Plaintiff 

argues that Defendant was subject to forfeiture of its corporate powers, not only at the time 

of removal, but also for the entirety of the removal period. See 28 U.S.C. § 1446(b) 

(providing 30 days for removal). Defendant does not dispute that it forfeited its corporate 

powers at the time of removal, or that such forfeiture continued beyond the removal period. 

Defendant argues, however, that revival of its corporate powers serves to ratify removal.3

 3 Because Defendant has obtained a certificate of revivor, the Court need not address 

Defendant’s alternative arguments that 1) remand is contrary to the purposes underlying 

section 22301 and 2) substantial compliance with the revivor statute precludes remand. 

Likewise, the Court need not address Plaintiff’s argument regarding the failure to revive. 

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 California Revenue and Taxation Code (“Rev. & Tax. Code”) section 23301 

authorizes the forfeiture of a foreign taxpayer’s “corporate powers, rights and privileges” 

for the nonpayment of certain taxes and penalties. The purpose of section 23301 is to 

compel a delinquent corporation to pay its taxes. Bourhis v. Lord, 56 Cal.4th 320, 325 

(2013). A corporation that forfeits its corporate powers may apply to the Franchise Tax 

Board for reinstatement after paying any tax, penalty, interest, or other amount owed. Rev. 

& Tax. Code, § 22305. If all obligations are satisfied, the Franchise Tax Board issues a 

“certificate of revivor.” Id. “Upon the issuance of the certificate by the Franchise Tax 

Board the taxpayer therein named shall become reinstated but the reinstatement shall be 

without prejudice to any action, defense or right which has accrued by reason of the 

original suspension or forfeiture . . . .” Id. § 23305a. 

 In general, a corporation whose powers have been suspended or forfeited lacks the 

capacity to prosecute or defend an action, or appeal from an adverse judgment. Bourhis v. 

Lord, 56 Cal. 4th 320, 324 (2013) (citing Reed v. Norman, 48 Cal.2d 338, 343 (1957)). 

Suspension or forfeiture prohibits a corporation from taking any litigation action, including 

the filing of a responsive pleading or notice of removal. It is therefore undisputed that 

Defendant’s notice of removal was invalid when filed. The pertinent question is whether 

revival of Defendant’s corporate powers retroactively validates the removal; established 

case law teaches that it does. 

 Revival of corporate powers retroactively validates procedural steps taken on behalf 

of a corporation while under forfeiture. Bourhis, 56 Cal. 4th at 326 (citing Rooney v. 

Vermont Inv. Corp., 10 Cal.3d 351, 359 (1973)); cf. id. at 328 (noting that expiration of a 

statute of limitations is a substantive defense, the accrual of which cannot be prejudiced by 

the later revival of corporate powers). As this Court has previously held, the filing of a 

notice of removal constitutes a procedural act capable of retroactive validation upon 

revival. Page v. Children’s Council, No. C 06-3268 SBA, 2006 WL 2595946, at *4 (N.D. 

Cal. Sept. 11, 2006) (citing Maniar v. FDIC, 979 F.2d 782, 785 (9th Cir. 1992) (untimely 

removal is a procedural, not jurisdictional, defect)). 

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 Furthermore, revival retroactively validates procedural acts even if the deadline for 

such action expired before the corporation succeeded in reviving its corporate powers. See 

Bourhis, 56 Cal. 4th at 323, 327 (holding that revival of a corporation’s powers 

retroactively validated a notice of appeal that the corporation filed while its powers were 

suspended, even though the revival occurred after the time to appeal expired). Revival of 

Defendant’s corporate powers thus serves to validate its prior notice of removal, even 

though the time to remove the action had already expired when Defendant obtained its 

certificate of revivor. See Page, 2006 WL 2595946, at *4 (noting that California courts 

permit retroactive validation of a range of litigation activities typically subject to a 

deadline, such as defending an action, undertaking discovery, and filing an appeal). 

 In support of remand, Plaintiff does not refute the case law that provides for 

retroactive validation of procedural acts upon the revival of a corporation’s powers. 

Relying on Rev. & Tax. Code § 19719, however, Plaintiff argues that remand is required 

because Defendant’s “very appearance” in this action, including the filing of the notice of 

removal, is “not only invalid but unlawful.” Reply at 4, Dkt. 11. Section 19719 makes it a 

misdemeanor punishable by a fine and/or imprisonment for any person to attempt to 

exercise the powers of a suspended or forfeited corporation. 

 The Court finds that any purported misdemeanor offense arising out of Defendant’s 

appearance in this action is irrelevant to the issues presented. As a threshold matter, 

individual corporate directors, officers, and/or attorneys would be subject to such criminal 

liability, not the corporation. See Rev. & Tax. Code § 19719(a) (providing for the 

punishment of “any person” who attempts to exercise suspended or forfeited corporate 

powers) (emphasis added); see also In re W. Coast Interventional Pain Med., Inc., 435 B.R. 

569, 577 (Bankr. N.D. Ind. 2010) (describing individual liability). Moreover, although 

section 19719 clearly seeks to discourage the exercise of suspended corporate powers, 

California courts have consistently held that revival retroactively validates such actions, 

notwithstanding the fact that they were invalid and potentially unlawful when taken. See 

generally Kaufman & Broad Cmtys., Inc. v. Performance Plastering, Inc., 136 Cal. App. 4th 

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212, 217 (2006). The matter of any criminal liability is therefore a collateral issue that is 

not pertinent to whether the Court should remand the action. The Court therefore DENIES 

Plaintiff’s remand motion. 

D. The Need for a Stay

 Defendant moved for a brief stay of the proceedings in order to permit revival of its 

corporate powers before the Court undertook to resolve Plaintiff’s remand motion. 

 The Court notes that Defendant was entitled to the benefit of a short continuance in 

order to pursue the revival of its corporate powers and oppose remand. See Cadle Co. v. 

World Wide Hosp. Furniture, Inc., 144 Cal. App. 4th 504, 512-513 (2006) (“normal 

practice” is to permit a short continuance to enable a suspended corporation to effect 

reinstatement); see also Intercontinental Travel Mktg., Inc. v. F.D.I.C., 45 F.3d 1278, 1282 

(9th Cir. 1994) (declining to dismiss the appeal of a suspended corporation that obtained 

revival prior to oral argument) (citing United States v. 2.61 Acres of Land, More or Less, 

791 F.2d 666, 668-69 (9th Cir. 1985) (holding that the district court abused its discretion by 

failing to grant a brief continuance to allow a corporate party to obtain revivor)). 

 Nevertheless, a stay of proceedings is now unnecessary given that its purpose--

obtaining a certificate or revivor--has already been achieved. The Court therefore DENIES 

Defendant’s motion for a stay of proceedings as moot. 

IV. CONCLUSION 

For the reasons stated above, IT IS HEREBY ORDERED THAT: 

1. Defendant’s administrative motion to supplement the record, Dkt. 30, is 

GRANTED. 

2. Plaintiff’s motion for remand, Dkt. 6, is DENIED. 

3. Defendant’s motion for a stay of proceedings, Dkt. 9, is DENIED as moot. 

4. This Order terminates Docket Nos. 6, 9, and 30. 

IT IS SO ORDERED. 

Dated: 6/30/16 ______________________________ 

SAUNDRA BROWN ARMSTRONG 

Senior United States District Judge

Case 4:16-cv-01081-SBA Document 31 Filed 06/30/16 Page 7 of 7