Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_07-cv-02101/USCOURTS-cand-5_07-cv-02101-4/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 28:1441 - Petition for Removal: Securities Fraud

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 This disposition is not designated for publication and may not be cited. 1

Case No. C 07-2101 JF PVT

ORDER GRANTING MOTION TO REMAND

(JFLC3)

**E-Filed 10/12/07**

NOT FOR CITATION

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

FINISAR CORP.,

 Plaintiff,

 v.

U.S. BANK TRUST NATIONAL ASSOCIATION,

 Defendant.

Case Number C 07-2101 JF PVT

ORDER GRANTING MOTION TO 1

REMAND

[re: docket no. 16]

Plaintiff, Finisar Corporation (“Finisar”), moves to remand the instant action to the Santa

Clara Superior Court. Defendant, U.S. Bank Trust National Association (“U.S. Bank”), opposes

the motion. For the reasons discussed below, the motion will be granted.

I. BACKGROUND

Finisar is a Delaware corporation in the business of performing performance tests on fiber

optic subsystems and networks. U.S. Bank is a national banking association with its

headquarters in Delaware. U.S. Bank is the designated trustee pursuant to a series of three trust

indentures (“Indentures”) under which Finisar issued three series of convertible notes (“Notes”). 

Case 5:07-cv-02101-JF Document 38 Filed 10/12/07 Page 1 of 5
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2

Case No. C 07-2101 JF PVT

ORDER GRANTING MOTION TO REMAND

(JFLC3)

On January 4, 2007, U.S. Bank sent three Notices of Default (“Notices”) to Finisar. The

Notices stated that Finisar’s delay in filing certain Securities and Exchange Commission (“SEC”)

reports, including Form 10-Q, would ripen into an “Event of Default” under the Indentures if not

remedied within sixty days of Finisar’s receipt of the Notices. 

On March 2, 2007, Finisar filed suit in the Santa Clara Superior Court, seeking a judicial

declaration that it was not in default and the remedy of acceleration would be improper. Finisar’s

complaint alleges that it is not in default because of its delayed filings and that U.S. Bank is not

entitled to accelerate Finisar’s repayment of principal under Section 6.02 of the Indentures.

On March 5, 2007, the Summons and Complaint were personally served on a

representative of U.S. Bank at the bank’s corporate headquarters in Wilmington, Delaware. On

March 6, 2007, Finisar sent a letter to Thomas E. Tabor at U.S. Bank’s New York office. The

letter included a copy of the Summons and the Complaint and notified Mr. Tabor that the

Complaint previously had been served on the Bank in Wilmington, Delaware. The letter also

contained two copies of a Notice and Acknowledgment of Service form and a request that this

form be executed and returned. The letter stated that if the forms were not executed and returned

as requested, service would be deemed to have been accomplished ten days after the mailing of

the letter.

On April 13, 2007, U.S. Bank filed its notice of removal in this Court. On July 13, 2007,

Finisar filed the instant motion for remand. The Court heard oral argument on September 7,

2007.

II. LEGAL STANDARD

Pursuant to 28 U.S.C. § 1441(a), often referred to as “the removal statute,” a defendant

may remove an action to federal court if the plaintiff could have filed the action in federal court

initially. 28 U.S.C. § 1441(a); see also Ethridge v. Harbor House Restaurant, 861 F.2d 1389,

1393 (9th Cir.1988). A party may file an action in federal court if there is diversity of citizenship

among the parties or if the action raises a substantial federal question. Ethridge at 1393. The

party invoking the removal statute bears the burden of establishing federal jurisdiction. Id. The

Case 5:07-cv-02101-JF Document 38 Filed 10/12/07 Page 2 of 5
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

Case No. C 07-2101 JF PVT

ORDER GRANTING MOTION TO REMAND

(JFLC3)

removal statute is strictly construed against removal. Id. The matter therefore should be

remanded if there is any doubt as to the existence of federal jurisdiction. Gaus v. Miles, Inc., 980

F.2d 564, 565 (9th Cir. 1992). 

III. DISCUSSION

Finisar seeks to remand the instant case to the Santa Clara Superior Court on two separate

grounds. First, it argues that the removal was untimely. Second, it asserts that the action does

not present a federal question. Because it appears that the removal was untimely, the Court will

not reach the latter issue.

Pursuant to 28 U.S.C. §1446(b), a party’s notice of removal must be filed in the district

court within thirty days after receipt of the first pleading in the state action that sets forth a

removable claim. The removal period is triggered by service of process. Murphy Bros., Inc. v.

Michetti Pipe Stringing, Inc., 526 U.S. 344, 354 (1999). 

In the instant case, U.S. Bank was served with a copy of the Summons and Complaint on

March 5, 2007. The following day, Finisar sent a copy of the Summons and the Complaint by

first-class mail to U.S. Bank’s New York office and expressly advised the addressee, Mr. Tabor,

that it already had served copies of these documents on a U.S. Bank representative in

Wilmington. Finisar states that it delivered the additional copies to the New York office

pursuant to the notice provision in the Indentures. In any event, it is undisputed that U.S. Bank

received copies of the Summons and Complaint both at its Wilmington headquarters on March 5,

2007 and at its New York office on March 6, 2007.

U.S. Bank argues that service of the Wilmington headquarters was ineffective because the

notice provision in the Indentures required that all notices related to the Indentures be delivered

to the New York office, and that the letter delivered to the New York office by Finisar on March

6, 2007 expressly provided that service would be deemed effective ten days later. However, the

thirty-day period for removal under 28 U.S.C. § 1446(b) is determined not by the running of a

contractual notice period but by the date of receipt of the first pleading in the state court that sets

forth a removable claim. U.S. Bank received the Summons and Complaint at its Wilmington

headquarters March 5, 2007 and was notified of this fact by the letter to Mr. Tabor dated March

Case 5:07-cv-02101-JF Document 38 Filed 10/12/07 Page 3 of 5
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4

Case No. C 07-2101 JF PVT

ORDER GRANTING MOTION TO REMAND

(JFLC3)

6, 2007. The statutory time runs not from the effective date of a particular method of service but

from the defendant’s receipt of the complaint. Because it did not file its notice of removal within

thirty days of the relevant date, the removal was untimely.

IV. ORDER

Good cause therefor appearing, Plaintiff’s motion for remand is GRANTED. The action

is hereby remanded to the Santa Clara Superior Court. The Clerk of the Court shall close the file.

DATED: October 12, 2007

__________________________________

JEREMY FOGEL

United States District Judge

Case 5:07-cv-02101-JF Document 38 Filed 10/12/07 Page 4 of 5
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

5

Case No. C 07-2101 JF PVT

ORDER GRANTING MOTION TO REMAND

(JFLC3)

This Order was served on the following persons:

Sterling A. Brennan

Workman Nydegger

1000 Eagle Gate Tower

60 East South Temple

Salt Lake City, UT 84111

D. Anthony Rodriquez

Morrison & Foerster LLP

425 Market Street

San Francisco, California 94105

Case 5:07-cv-02101-JF Document 38 Filed 10/12/07 Page 5 of 5