Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_15-cv-00258/USCOURTS-casd-3_15-cv-00258-0/pdf.json

Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 28:1332pr Diversity-Petition for Removal

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

STACY LUCAS, an individual, et 

al., on behalf of themselves and all 

other similarly situated consumers,

Plaintiffs,

Case No. 15-cv-258 BAS (KSC)

ORDER: 

(1) DENYING PLAINTIFFS’

MOTION TO REMAND; 

AND

(2) GRANTING 

DEFENDANTS’ MOTION 

TO STRIKE THE 

DECLARATION OF MARC 

STERN

[ECFs 7, 12]

v.

BREG, INC., a California 

corporation, et al.,

Defendants.

INTRODUCTION

Under the Federal Class Action Fairness Act (“CAFA”), a district court may 

exercise jurisdiction over a class action if there is minimal diversity of citizenship 

between the parties, the proposed plaintiff class has at least 100 members, and the 

amount in controversy exceeds $5,000,000. 28 U.S.C. §1332. The parties agree 

that federal jurisdiction is proper in this case. However, the plaintiffs move to 

remand to state court, arguing that the defendants’ notice of removal to federal 

court was not timely. ECF 7.

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Although this Court shares the plaintiffs’ concern that the defendants may 

well be forum shopping—choosing to remove after adverse rulings appear to be 

forthcoming from the state court judge—this is the cost the plaintiffs have assumed 

by filing an indeterminate pleading. Under Ninth Circuit law, the defendants’ 

notice of removal was timely, and therefore the plaintiffs’ motion to remand and 

for attorney’s fees is DENIED.

STATEMENT OF FACTS

A. The Declaration of Marc Stern

The plaintiffs’ attorney, Marc Stern, filed a Declaration in support of the

motion to remand indicating that he has developed a “considerable body of 

information” about the defendants from his work as litigation counsel and offered

his declaration “regarding Defendants and their relationships; the history of the 

development of Breg’s PC500; the injuries associated with the product; and Breg’s 

concealment of the considerable risk of injury associated with continuous use of 

the PC500 as recommended by Breg.” Stern Decl. ¶ 2, ECF 7-1. The defendants 

move to strike this Declaration, correctly recognizing that it violates the advocatewitness rule. ECF 12. “The advocate-witness rule generally admits of only one 

solution to avoid the improprieties inherent in advocate testimony. Attorneys must 

elect in which capacity they intend to proceed, either as counsel or as a witness and 

promptly withdraw from the conflicting role.” See United States v. Prantil, 764 

F.2d 548, 553 (9th Cir. 1985).

Because the information detailed in Stern’s Declarations is both irrelevant to 

the motion to remand and violates the advocate-witness rule, this Court GRANTS

Defendants’ Motion to Strike the Declaration of Marc Stern. ECF 12. However, 

this Court will take judicial notice of the documents filed in San Diego Superior 

Court in this case, in Engler v. Chao, Oasis, Breg, Inc., et al., and in Theriot v 

Breg, Inc., et al., as reflected in ECF 7, Exhibits 8, 14–23, and 25–31. 

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B. The Complaints

On June 13, 2011, the plaintiffs filed a putative class action in San Diego 

Superior Court on behalf of “all consumers [in California] and/or their insurers 

who purchased and/or rented BREG Polar Care products pursuant to a physician’s 

prescription” from 1992 to the present. Compl. ¶¶ 2, 59, ECF 1-3. Those who 

suffered physical injury were excluded from the class. The complaint contains no 

mention of the potential number of class members or the potential damage 

requested per member.

On March 20, 2012, the plaintiffs filed their First Amended Complaint 

(“FAC”) in state court, again on behalf of all consumers in California who 

purchased and/or rented BREG Polar Care products, excluding those who were 

physically injured. FAC ¶ 53, ECF 1-5. This time the plaintiffs specified that they 

were requesting replacement of each unit, which were valued between $70–$350.

Id. at ¶ 19, ECF 1-5. Again, the complaint did not mention the potential number of 

class members.

On October 17, 2014, the plaintiffs filed a Second Amended Complaint

(“SAC”) in state court expanding the class to include “thousands of consumers 

throughout the United States and in California who specifically purchased and/or 

rented for personal use and not for resale, pursuant to a physician’s prescription ...

cold therapy treatment.” SAC ¶ 4, ECF 1-19. Again, those who suffered physical 

injury were excluded, and the plaintiffs alleged that “BREG is currently aware of 

more than 300 injuries.” Id. at ¶¶ 9, 67. The plaintiffs sought reimbursement of the 

full amount of expenditures from the purchase and/or rental of the cold therapy 

treatment. Id. at ¶ 120.

Finally, on December 16, 2014, the plaintiffs filed and served a Third 

Amended Complaint (“TAC”) in state court on behalf of:

All consumers in the United States, who any at any [sic] time 

during the period 1992 through the present, purchased and/or rented a 

BREG Polar Care 500 for personal use, and not for resale, pursuant to 

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a licensed physician’s prescription, and who, prior to purchasing 

and/or renting said product, were exposed to a statement and/or 

instruction from BREG, or a health care provider, that BREG’s Polar 

Care 500 was safe and effective for continuous use and were not told 

there was a material risk of bodily injury if said product was used 

continuously (for more than 20 minutes).”

TAC ¶ 10, ECF 1-24. The class specifically excluded any person who has suffered 

bodily injury or has filed a non-class legal action against the defendants for similar 

claims. Id. The TAC alleges that “[t]housands of consumers throughout the United 

States and in California ... purchased and/or rented for personal use and not for 

resale, pursuant to a physician’s prescription what BREG [falsely] advertised and 

promoted as safe and effective cold therapy treatment.” Id. at ¶ 4. The TAC also 

alleges that “[a]s a result, thousands of consumers suffered serious injury. 

Hundreds of personal injury actions have been filed against BREG....” Id. Without 

specifying amounts, the Prayer for Relief seeks restitution for the purchase and/or 

rental of BREG’s Polar Care-500, disgorgement of the defendants’ ill-gotten gains, 

as well as actual and punitive damages.

C. The State Court Litigation

On April 26, 2012, the defendants filed a notice of related case, notifying the 

state court that this case was related to another case filed against the defendants: 

Engler v. Chao, Oasis, Breg, Inc., et al., S.D. Superior Court Case No. GI0870982.

ECF 7-23. On April 28, 2012, the Engler trial began before Judge Prager in the 

San Diego Superior Court. During the course of the Engler trial, the defendants 

admitted that millions of BREG Polar Care 500s had been sold and that sale of the 

Polar Care 500s had generated close to $100 million in revenue. ECFs 7-16, 7-17, 

7-18, 7-20. In July 2012, the jury reached a verdict of $5.196 million in 

compensatory and $7 million punitives against Breg in the Engler case. ECF 7-22.

On September 25, 2012, all parties signed a stipulation and order that the 

present case could be transferred to Judge Prager, the trial judge in the Engler case,

“for all purposes.” ECF 7-23. On February 26, 2013, Judge Prager denied all postCase 3:15-cv-00258-BAS-NLS Document 15 Filed 04/22/15 Page 4 of 9
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trial motions in Engler. In May, 2013, Judge Prager denied all demurrers to the 

FAC in this case. ECF 7-33.

Judge Prager set a briefing schedule for discovery and class certification in 

this case and scheduled a class certification motion for May 5, 2015. ECF 7-27. On 

December 16, 2014, Judge Prager ordered depositions to go forward over the 

defendants’ objections and, again over the defendants’ objections, allowed the 

plaintiffs to file a TAC. ECF 7-29. On February 2, 2015, the defendants received a 

response to admissions from the plaintiffs confirming that they were seeking in 

excess of $5 million in this case. On February 3, 2015, Judge Prager granted the 

plaintiffs’ Motion to compel depositions and set a hearing on March 3, 2015 for 

remaining discovery issues. ECF 7-32. On February 6, 2015, the defendants 

removed this case to federal court. ECF 1.

ANALYSIS

The notice of removal in a civil action must be filed within 30 days of:

(1)... [R]eceipt by the defendant ... of a copy of the initial pleading 

setting forth [the basis for removability; or] ...

(3)... [R]eceipt by the defendant ... of a copy of an amended pleading, 

motion, order or other paper from which it may first be ascertained 

that the case is one which is or has become removable.

28 U.S.C. §1446(b). The Eleventh Circuit has held that the wording of § 1446(b)

suggests the second ground of removability “requires a greater level of certainty or 

that facts supporting removability be stated unequivocally.” Pretka v. Kolter City 

Plaza II, Inc., 608 F.3d 744, 760 (11th Cir. 2010) (comparing the first ground 

requiring pleadings to “set forth” a claim to the second ground’s heightened 

requirement that removability be “ascertainable”).

“[D]efendants need not make extrapolations or engage in guesswork; yet the 

statute requires a defendant to apply a reasonable amount of intelligence in 

ascertaining removability... Multiplying figures clearly stated in a complaint is an 

aspect of that duty.” Kuxhausen v. BMW Financial Services NA LLC, 707 F.3d 

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1136, 1140 (9th Cir. 2013) (quotations omitted). Defendants are not obligated to 

look through their own files to ascertain the amount in controversy to determine 

removability. Id. The grounds for removability must be within the four corners of 

the paper served on a defendant. Lest the determination of removability degenerate 

into a mini-trial as to whom knew what when, a defendant’s subjective knowledge 

that a case is removable is irrelevant. Harris v. Bankers Life and Cas.Co., 425 F.3d 

689, 697 (9th Cir. 2005).

Plaintiffs who fail to make the amount in controversy clear in the initial 

pleadings “assume the costs [of leaving the window for removal open] associated 

with their own indeterminate pleadings.” Kuxhausen, 707 F.3d at 1141. As a 

footnote in the Kuxhausen case makes clear, “whether a defendant can establish 

that federal jurisdiction exists and the question of when the 30-day time period 

begins are not two sides of the same coin.” Id. at 1141, fn. 3. Just because a 

defendant “could have ventured beyond the pleadings to demonstrate removal” 

does not mean “it was therefore obligated to do so.” Id. (original emphasis). See 

also Roth v. CHA Hollywood Medical Center, L.P., 720 F.3d 1121, 1125 (9th Cir. 

2013) (Thirty day windows limit when a defendant must remove but does not 

affect time when a defendant may remove. If defendants never had actual notice 

triggering a 30-day window, they still may remove when they learn of 

removability). 

“Any document received prior to the receipt of the initial pleading cannot 

trigger the second 30-day removal period.” Carvalho v. Equifax Information 

Services, LLC, 629 F.3d 876, 885 (9th Cir. 2014). “We also reject [plaintiff’s] 

suggestion that a pre-complaint document containing a jurisdictional clue can 

operate in tandem with an indeterminate initial pleading to trigger some kind of 

hybrid of the first and second removal periods.” Id. 

This Court turns first to the requirement that the notice of removal be filed 

within 30 days of receipt of the initial pleading if it sets out the basis of 

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removability. The initial complaint and FAC in this case were limited to California 

consumers and thus were not removable since they failed to establish diversity of 

citizenship. The SAC expanded the class to include “thousands of consumers” 

throughout the United States. This appeared to meet the diversity of citizenship 

requirement, but it left open whether the amount in controversy exceeded $5 

million. Excluded were individuals who had suffered physical injuries, and the 

plaintiffs reference “more than 300 injuries.” Similarly, the TAC references 

“thousands of consumers” who are part of the class but then references the

“thousands of consumers suffered serious injury” who are excluded from the class

definition. Referencing the FAC, which is the only Complaint that values the 

replacement cost of each unit, and using a replacement cost of $70–$350, the four 

corners of either the SAC or the TAC fall far short of the $5 million required for 

removal.

Pointing to admissions made during the Engler case, the plaintiffs argue that 

the defendants knew (1) that the class numbered in the millions and (2) that the 

defendants had made well over $5 million in ill-gotten gains, which the plaintiffs 

were requesting be disgorged as part of the Prayer for Relief. However, the Ninth 

Circuit has made clear that to implicate the time limits of 1446(b), the grounds for 

removability must be within the four corners of the paper served on the defendant. 

Like the plaintiffs in Carvalho, these plaintiffs cannot use the admissions in the 

Engler case as some sort of hybrid of the first and second removal periods. All four 

of the amended complaints in this case are indeterminate with respect to the 

amount in controversy. Therefore none triggered the first 30-day removal period.

Nor do the plaintiffs point to any “pleading, motion, order or other paper” 

that put the defendants on notice that the amount in controversy was $5 million. 

Instead, the plaintiffs argue again that the defendants were “well aware on or 

before” the SAC had been filed that the plaintiffs would be seeking more than $5 

million. The plaintiffs allege that the defendants’ discovery responses produced in 

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March of 2014 show that millions of Polar Care 500s were sold and that the sale of 

these Polar Care 500s generated over $80 million in revenue. However, none of 

these numbers specifies how many sales should be excluded because they resulted 

in injury to the user. The defendants were not required to extrapolate or engage in 

guesswork to determine what the size of the class truly was or how much Plaintiffs 

were seeking in this case.2

Since the only document received after the filing of the Complaint in this 

case putting the defendants on notice that the amount in controversy exceeded $5 

million was the plaintiffs’ response to interrogatories served on the defendants 

February 2, 2015, the defendants’ notice of removal filed on February 6, 2015 was 

timely.

Additionally, the plaintiffs argue that remand is proper because: (1) the 

defendants failed to file with the removal petition “a copy of all process, pleadings 

and orders” as required by 28 U.S.C. §1446(a); (2) the defendants stipulated to 

state court Judge Prager for all purposes, and this precludes removal to federal 

court; and (3) the defendants failed to notice the real party in interest as required by 

Civil Local Rule 40.2. None of these is sufficient reason to remand.

Assuming, without deciding, that the defendants were required to attach 

every pleading filed in the state court to their removal petition, the failure to do so 

does not require remand. See Kuxhausen, 707 F.3d at 1142 (failure to attach 

original complaint to its notice of removal is a “de minimis procedural defect” that 

was curable even after expiration of the 30-day period). And the defendants’

agreement to a transfer to Judge Prager in state court does not constitute a waiver 

of the right to removal. At the time of the stipulation, there were no grounds for 

removal to federal court and the stipulation did not clearly and unequivocally

 

2 Nor can the plaintiffs rely on earlier verdicts to establish that the amount in controversy in this 

case exceeds $5 million. Not only do these verdicts predate the filing of this complaint, they 

involve cases in which the plaintiffs were injured. These are clearly distinguishable and irrelevant 

in this case, in which the proposed class excludes injured individuals.

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waive the right to removal. See EIE Guam Corp. v. Long Term Credit Bank of 

Japan, Ltd., 322 F.3d 635, 649 (9th Cir. 2003) (Although a party may waive its 

right to remove by taking actions in state court manifesting its intent to have the 

case adjudicated there and abandoning its right to a federal forum, the waiver must 

be “clear and unequivocal” and cannot be made before the case was actually 

removable). Finally, the defendants complied with their obligations under Civil 

Local Rule 40.2 by identifying any parent corporation or any publicly held 

company that owns 10% or more of their stock. Even if they did not, this has no 

bearing on removal. Accordingly, because the defendant’s notice of removal was 

timely, the Court DENIES the plaintiffs’ motion to remand. ECF 7.

CONCLUSION

For the foregoing reasons, the Court GRANTS the defendants’ motion to 

strike Marc Stern’s Declaration and DENIES the plaintiffs’ motion to remand. 

ECFs 12, 7. The Court ORDERS Marc Stern’s Declaration STRICKEN from the 

record. ECF 7-1.

IT IS SO ORDERED.

April 21, 2015 Dated: April 22, 2015

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