Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_10-cv-01788/USCOURTS-cand-3_10-cv-01788-0/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 28:1332 Diversity-Employment Discrimination

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United States District Court

For the Northern District of California

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 The parties have consented to the jurisdiction of a United States Magistrate Judge pursuant to

28 U.S.C. § 636(c). 

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

WILLIAM SVOBODA, 

Plaintiff,

v.

DEUTSCHE BANK SECURITIES, INC., 

Defendant.

___________________________________/

No. C-10-01788 JCS

ORDER DENYING PLAINTIFF’S

MOTION TO REMAND THE CASE TO

STATE COURT UNDER 28 U.S.C.

SECTION 1447(c) [Docket No. 12], VACATING MOTION HEARING AND

MOVING CASE MANAGEMENT

CONFERENCE FROM 9:30 a.m. TO 1:30

p.m. ON AUGUST 13, 2010

I. INTRODUCTION

This action arises out of the employment termination of Plaintiff William Svoboda by

Defendant Deutsche Bank Securities, Inc. Defendant removed the case from state to federal court

pursuant to 28 U.S.C. §§ 1332, 1441, and 1446. Presently before the Court is Plaintiff’s Motion to

Remand the Case to State Court Under 28 U.S.C. § 1447(c) (“the Motion”). In the Motion, Plaintiff

seeks remand on the basis that Defendant’s removal was untimely under 28 U.S.C. § 1446(b). The

Court finds that the Motion is suitable for determination without oral argument, pursuant to Civil

Local Rule 7-1(b), and therefore vacates the August 13, 2010 Motion hearing. The Case

Management Conference scheduled for the same date shall remain on calendar but will be

conducted at 1:30 p.m. on August 13, 2010 rather than 9:30 a.m., as previously scheduled. For

the reasons stated below, the Motion is DENIED.1

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II. PROCEDURAL BACKGROUND

In approximately September 2007, Deutsche Bank Securities, Inc. (“Deutsche Bank”) hired

William Svoboda to fill the position of Regional Executive of its San Francisco office. Compl. ¶ 6. 

Svoboda alleges that although he performed his job well and did not receive substantive negative

feedback, he was terminated from this position on April 21, 2009. Id. at ¶ 7. On May 27, 2009,

Plaintiff’s former counsel, James Dunbar, sent Defendant a letter stating that it was apparent

Plaintiff’s termination was not performance-based, but rather an age-based decision. Declaration of

Cliff Palefsky in Support of Plaintiff’s Motion to Remand the Case to State Court Under 28 U.S.C. §

1447(c) (“Palefsky Decl.”), Ex. 1. In the letter, Dunbar asserted that Svoboda had “lost his income

stream from Deutsche Bank, where his compensation for 2008 amounted to $800,000,” and suffered

damage to his reputation. Id. Dunbar further stated that Svoboda was interested in “resolv[ing the

dispute] fairly if there [was] a way to do so before litigation.” Id. In a follow-up letter, dated June

11, 2009 (“the June 2009 Settlement Letter”), Dunbar demanded $600,000.00 on Svoboda’s behalf,

that is, an amount equal to three-quarters of Svoboda’s 2008 pay, to resolve the dispute. Palefsky

Decl., Ex. 2. 

The matter was not resolved informally and Svoboda sued Deutsche Bank in the Superior

Court for the State of California, County of San Francisco, on January 14, 2010. Declaration of

Robert B. Martin III In Support of Deutsche Bank Securities, Inc.’s Notice of Removal Action

(“Martin Decl.”), Ex. A (Complaint). The Complaint was served on Deutsche Bank on January 27,

2010. Id., Ex. B. In the Complaint, Plaintiff asserts claims for age discrimination in violation of

California Government Code Section 12940(a) and for wrongful termination in violation of public

policy. Compl. ¶¶ 12, 16. While Plaintiff alleges in the Complaint that his damages include “loss of

income and benefits,” nowhere does he allege a specific dollar amount in damages. Id. at 1.

On March 16, 2010, Deutsche Bank served form interrogatories on Plaintiff requesting

information about Plaintiff’s claimed damages. Martin Decl. ¶ 6 & Ex. C. Svoboda served

responses on Deutsche Bank on March 25, 2010. Martin Decl. ¶ 7 & Ex. D. In the responses,

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Plaintiff does not dispute that the requirements for diversity jurisdiction under 28 U.S.C. §

1332(a) are satisfied.

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Svoboda stated that his total lost income as of March 2010 resulting from his termination was

$902,568.00. Id. 

On April 26, 2010, Defendant filed a Notice of Removal of Action Under 28 U.S.C. §§ 1332,

1441, and 1446 (Diversity) [Docket No. 1] (“Notice of Removal”) asserting that the Court has

original jurisdiction pursuant to 28 U.S.C. § 1332(a)(1) because complete diversity exists between

Plaintiff and Defendant and the amount in controversy exceeds $75,000.00. Notice of Removal ¶¶

4, 14. Defendant stated that the removal was timely because the amount in controversy was not

evident from the face of the Complaint and therefore, Defendant could not ascertain whether the

case was removable until it was served with Plaintiff’s interrogatory responses. Notice of Removal

¶ 17 (citing Harris v. Bankers Life & Cas. Co, 425 F.3d 689 (9th Cir. 2005)( “If no ground for

removal is evident in [the complaint] . . . , the notice of removal may be filed within thirty days after

the defendant receives ‘an amended pleading, motion, order or other paper’ from which it can be

ascertained from the face of the document that removal is proper”)). At that point, Defendant

asserted, the thirty-day time period for removal began to run under 28 U.S.C. § 1446(b).

Svoboda now brings a Motion to Remand, asserting that the case should be remanded to state

court because removal was untimely.2

 In support of this position, Svoboda cites to the June 2009

Settlement Letter, in which it was expressly stated that Svoboda was seeking $600,000.00, that is,

three quarters of the amount of his previous year’s salary, to settle his claims. Motion at 5-6. 

Plaintiff argues that because of this letter, Defendant knew at the time the complaint was filed that

the amount-in-controversy requirement for diversity jurisdiction was satisfied and therefore, the

thirty-day period for removal began to run when the complaint was served. Id. Plaintiff challenges

Defendant’s reliance on Harris to show that removal was timely, arguing that the bright-line rule set

forth in Harris does not apply when a defendant has objective information in its possession at the

time the complaint is filed which, when considered in tandem with the allegations of the complaint,

makes clear that the action is removable. Id. at 7-9 (citing Molina v. Lexmark Int’l, Inc., No. 08-

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04796, 2008 WL 4447678 (C.D. Cal. Sept. 30, 2008); Kohan Prods. Ltd. v. Comerica Bank, No. 10-

0034, 2010 WL 956402 (C.D. Cal. Mar. 11, 2010); KDY, Inc. v. Hydroslotter Corp., No. 08-4074,

2008 WL 4938281 (N.D. Cal. Nov. 17, 2008)). Svoboda also cites to Cohn v. Petsmart, 281 F.3d

837 (9th Cir. 2002), and Babasa v. LensCrafters, Inc., 498 F.3d 972 (9th Cir. 2007), in which the

Ninth Circuit held that settlement letters were sufficient to establish the amount in controversy for

the purposes of removal. Id. at 5. 

III. ANALYSIS

The time periods for removal of a state court action to federal court are set forth in 28 U.S.C.

§ 1446(b), which provides as follows:

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.

If the case stated by the initial pleading is not removable, a notice of removal may

be filed within thirty days after receipt by the defendant, through service or

otherwise, 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, except that a case may not be removed on the basis of jurisdiction

conferred by section 1332 of this title more than 1 year after commencement of

the action.

28 U.S.C. § 1446(b). In other words, there are “two thirty-day windows during which a case may be

removed – during the first thirty days after the defendant receives the initial pleading [hereinafter,

“the first thirty-day window”] or during the first thirty days after the defendant receives a paper

‘from which it may first be ascertained that the case is one which is or has become removable’ if

‘the case stated by the initial pleading is not removable [hereinafter, “the second thirty-day

window].’” Harris v. Bankers Life and Casualty Co., 425 F.3d 689, 692 (9th Cir. 2005) (quoting 28

U.S.C. § 1446(b)).

In Harris, the Ninth Circuit joined a number of other circuits in establishing a bright-line rule

for determining whether the first thirty-day window is triggered by receipt of the initial pleading,

holding that “notice of removability under § 1446(b) is determined through examination of the four

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At the time of the removal in Chapman, the amount-in-controversy requirement under 28 U.S.C.

§ 1332(a) was $50,000.00.

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corners of the applicable pleadings, not through subjective knowledge or a duty to make further

inquiry.” Harris, 425 F.3d at 694. Thus, the “first thirty-day requirement is triggered by

defendant’s receipt of an ‘initial pleading’ that reveals a basis for removal,” and “if no ground for

removal is evident in the pleading, the case is ‘not removable’ at that stage.” Id. The court cited a

number of “jurisdictional and procedural interests served by a bright-line approach.” Id. at 697. 

First, the court found that objective analysis of the pleadings allows for certainty and predictability,

without delving into “whether the pleadings contain[] a sufficient ‘clue,’ whether defendant had

subjective knowledge, or whether defendant conducted sufficient inquiry.” Id. Second, the court

found that this approach would protect judicial resources by avoiding the need for courts to conduct

mini-trials to determine what a defendant knew at the time it received the initial state-court

complaint. Id. Third, the court reasoned that an approach that looks only to the four corners of the

complaint would reduce the likelihood of premature removal on the part of defendants who are

uncertain whether the requirements of removal are satisfied and do not want to risk waiving their

right to remove on the basis of untimeliness. Id. Finally, the court concluded that an objective

approach was consistent with the rule that removal statutes should be construed narrowly in order to

protect state court jurisdiction. Id. at 698. 

The Ninth Circuit in Harris expressly approved the Fifth Circuit’s decision in Chapman v.

Powermatic, Inc., 969 F.2d 160 (5th Cir. 1992), a case that is factually on point with the facts in this

case. Id. at 695 n. 5. In Chapman, the plaintiff was a high school student who was injured in a

woodworking shop while using a wood planer. 969 F.2d at 160-161. In March 1990, three months

prior to initiating a state court action against the manufacturer of the wood planer, the plaintiff’s

attorney sent a letter to the manufacturer stating that the plaintiff had incurred medical expenses in

the amount of $67,196.48.3

 Id. at 161. The subsequent month, the plaintiff provided the defendant’s

investigator with copies of the plaintiff’s medical bills. Id. The plaintiff’s state court complaint,

however, which was filed in June 1990, did not plead a specific amount of damages. Id. On August

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17, 1990, the plaintiff provided interrogatory responses stating that he had suffered damages in

excess of $800,000.00 and the defendant removed to federal court on August 27, 1990. Id. The

plaintiff brought a motion to remand, arguing, like Plaintiff in this case, that the filing of the

complaint triggered the first thirty-day period because the defendant knew, based on the pre-suit

demand letters, that the amount in controversy exceeded $50.000.00. Id.

In rejecting the plaintiff’s position, the court in Chapman addressed both the first and the

second thirty-day windows referenced in § 1446(b). With respect to the first thirty-day window,

which begins to run when an initial pleading is filed, the Chapman court adopted the bright-line rule

discussed above in reference to Harris, reasoning that such an approach promotes certainty and

judicial efficiency. Id. at 163. The court went on to reason that the second thirty-day window could

not apply because the plain language of § 1446(b) makes clear that an “other paper” can only refer

to a document that a defendant receives after it receives the initial pleading. Id. at 164. Thus, even

though the defendant “tacitly concede[d] that it knew that the amount in controversy exceeded the . .

. jurisdictional limit of the federal court when it received the initial pleading,” id. at 162 n. 4, the

court concluded that the removal was timely because the thirty-day period for removal did not begin

to run until the defendant received the interrogatory responses clearly stating the amount of damages

being sought by the plaintiff. Id. at 164.

This Court finds that the reasoning of Chapman is persuasive and further, that the specific

holding in that case with respect to pre-suit settlement letters is consistent with Harris. Were the

Court to consider the June 2009 Settlement Letter, it would undermine the certainty that the Harris

rule was intended to provide, opening up an inquiry regarding what Deutsche Bank knew or

reasonably believed as to Svoboda’s damages and whether the letter was reliable evidence of the

amount of damages sought by Svoboda in his complaint. See, e.g., Nawab v. Markel Insurance

Company, No. 08-05750, 2009 WL 3517605, * 1-2 (N.D. Cal. Oct. 26, 2009) (holding that where

complaint did not expressly state amount sought on claim, pre-suit settlement sent 10 months before

complaint was filed, when plaintiff was represented by different counsel, did not give rise to

obligation on part of defendant to remove within thirty days of receipt of complaint because letter

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was not reliable evidence of amount sought on claim when complaint was filed). The Court declines

to engage in such an inquiry. Rather, the Court concludes that the initial state court pleading in this

action did not trigger the first thirty-day window for removal, even if Deutsche Bank may have

actually been aware of the amount in controversy based on the June 2009 Settlement Letter. 

Further, the Court agrees with the Chapman court that a pre-suit settlement letter cannot qualify as

an “other paper” that starts the second thirty-day window running because the plain language of the

statute limits “other paper[s]” to those that are filed after the initial pleading. Therefore, the Court

finds that the interrogatory responses received by Deutsche Bank on March 25, 2009 were the first

document from which it could ascertain, on the face of the document, that the amount-in-controversy

requirement is satisfied in this case.

Neither Cohn nor Babasa, cited by Plaintiff in the Motion, stand for a contrary result. Both

cases recognize the general proposition that a settlement letter may put a defendant on notice of the

amount in controversy; however, in Babasa the letter was sent subsequent to the filing of the

lawsuit, and in Cohn, there is no discussion of when the settlement letter was received. Babasa, 498

F.3d at 976; Cohn, 281 F.3d at 840. Neither case addresses whether a settlement letter received

before an action is initiated may be considered in determining whether removal was timely. 

Finally, the Court rejects Plaintiff’s reliance on a line of cases holding that the existence of

federal diversity jurisdiction may be clear on the face of the complaint, for the purposes of §

1446(b), even where the defendant’s citizenship is not expressly alleged. See, e.g., Cretian v.

Job1USA, Inc., 2009 WL 4841039 (D. Or. Dec. 11, 2009); KDY, Inc. v. Hydroslotter Corp., 2008

WL 4938281 (N.D. Cal. Nov. 17, 2008). These cases merely stand for the unremarkable proposition

that a defendant may be presumed to know certain basic personal facts about itself, such as its own

citizenship, without invoking the concerns at issue in Harris. The Court finds no basis for

expanding this very limited exception to facts relating to the amount in controversy.

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IV. CONCLUSION

For the reasons stated above, Plaintiff’s Motion is DENIED.

IT IS SO ORDERED.

Dated: August 6, 2010

 

JOSEPH C. SPERO

United States Magistrate Judge

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