Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_05-cv-04822/USCOURTS-cand-3_05-cv-04822-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

MARK KOZELEK,

Plaintiff,

v

JETSET RECORDS, a DBA designation

for SHELLEY MAPLE, et al,

Defendants.

 /

No C-05-4822 VRW

ORDER

On February 8, 2005, plaintiff Mark Kozelek filed suit in

San Francisco county superior court against Jetset Records

(“Jetset”), Ryko Distribution (“Ryko”) and various Doe defendants

seeking declaratory relief, injunctive relief and “[c]ompensatory

damages in an amount in excess of $25,000, plus interest thereon,

together with punitive damages” arising out of defendants’ alleged

breach of a music recording and sales contract. Doc #1-2 (Not of

Rem), Ex A, ¶¶ 1, 5-8 and at 7. After filing an amended complaint

on August 4, 2005, that sought essentially the same monetary

relief, plaintiff filed a statement of damages on October 28, 2005,

claiming and reserving the right to seek $175,000 in damages and

$50,000 in attorneys’ fees and costs. Not of Rem, Ex C (FAC) at

10; id, Ex H. 

Case 3:05-cv-04822-VRW Document 28 Filed 06/05/06 Page 1 of 5
United States District Court

For the Northern District of California

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On November 4, 2005, plaintiff filed a stipulation signed

by all parties that required Ryko to deposit $21,128.03 with the

San Francisco county clerk and compelled plaintiff to dismiss Ryko

with prejudice within two business days of payment. Not of Rem, Ex

I, § 6. The state court adopted the stipulation on November 18,

2005, and four days later, Ryko informed Jetset that it would

deposit the money by November 28, 2005. Not of Rem, ¶ 10.

Jetset (which asserts it is a DBA designation for Easy

Prey, LLC) and Shelley Maple (collectively, the “removing

defendants”) filed a notice of removal on November 23, 2005. Id. 

Ryko did not join in the removal and was later dismissed by the

court after Ryko deposited payment on November 28, 2005. Doc #11

at 2. On December 7, 2005, plaintiff timely moved to remand and

argued, inter alia, that this case should be remanded because

defendant Ryko “was a party to this action at the time of removal,

but did not join in the removal.” Doc #4 at 3 n1.

“[F]ederal courts are courts of limited jurisdiction,”

Lanza v Ashcroft, 389 F3d 917, 930 (9th Cir 2004), and they must

“strictly construe the removal statute against removal

jurisdiction,” Gaus v Miles, Inc, 980 F2d 564, 566 (9th Cir 1992). 

“Federal jurisdiction must be rejected if there is any doubt as to

the right of removal in the first instance.” Id. And “[t]he

‘strong presumption’ against removal jurisdiction means that the

defendant always has the burden of establishing that removal is

proper.” Id. Moreover, “[a]s a general rule, all defendants who

may properly join in the removal petition must join.” Ely Valley

Mines, Inc v Hartford Accident & Indemnity Co, 644 F2d 1310, 1314

(9th Cir 1981). See also 28 USC § 1446(a).

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United States District Court

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Because Ryko was still a defendant when this case was

removed, its non-joinder caused the removal here to be procedurally

defective. Nonetheless, the removing defendants contend that

Ryko’s joinder was not necessary because Ryko was soon to be

dismissed from the case pursuant to the stipulation. Defendants

read Prize Frize, Inc v Matrix (US) Inc, 167 F3d 1261, 1266 (9th

Cir 1999), to hold that a subset of defendants can remove without a

co-defendant’s consent if the removing defendants can explain the

co-defendant’s absence. Doc #22 at 12. But Prize Frize only

states that “the removing party has the burden under section

1446(a) to explain affirmatively the absence of any co-defendants

in the notice for removal,” Prize Frize, 167 F3d at 1266; the case

does not suggest that the court must accept any explanation as

sufficient. Rather, the Ninth Circuit has delineated specific

exceptions to the unanimous joinder rule, none of which is alleged

to apply here. See Emrich v Touche Ross & Co, 846 F2d 1190, 1193

(9th Cir 1988) (“Ordinarily, under 28 USC § 1446(a), all defendants

in a state action must join in the petition for removal, except for

nominal, unknown or fraudulently joined parties.”). Moreover, even

if Ryko’s subsequent dismissal could correct the defective removal,

the cure would be untimely because Ryko was dismissed more than 30

days after the removing defendants allege that this case became

removable. See Prize Frize, 167 F3d at 1266 (cure must be within

30-day statutory period under the removal statute, 28 USC §

1446(b)); Doc #22 at 1 (removing defendants contend that service of

plaintiff’s statement of damages on October 28, 2005, triggered

start of 30-day clock).

//

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United States District Court

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The court notes that some district courts have found that

a settlement agreement, such as the stipulation between plaintiff

and Ryko, excused a defendant from joining in a notice of removal

even before that defendant was formally dismissed. See Erdey v

American Honda Co, 96 FRD 593, 599 (MD La 1983) (“Where plaintiff,

by his voluntary act has definitely indicated his intention to

discontinue the action as to the non-diverse defendant * * * the

case then becomes removable under 28 USC § 1446(b). The

technicality of how plaintiff’s intention is expressed is of no

moment * * *.” (citation omitted)); Lesher v Andreozzi, 647 F Supp

920, 921-22 (MD Pa 1986) (same); Hessler v Armstrong World

Industries, Inc, 684 F Supp 393, 395 (D Del 1988) (“[I]n cases

involving settlement with non-diverse defendants, formal dismissal

is not a prerequisite for removability.”); DiNatale v Subaru of

America, 624 F Supp 340, 342-44 (ED Mich 1985) (same); Adams v

Estate of Keck, 210 F Supp 2d 863, 865 (WD Ky 2002) (settlement

extinguished claim against non-diverse defendant and permitted

removal even though damages under the settlement agreement were

still in dispute); Heniford v American Motors Sales Corp, 471 F

Supp 328, 338 (D SC 1979) (Even without formal dismissal,

plaintiffs’ counsel’s admonishment to the jury not to return a

verdict against the non-diverse defendant enabled removal).

Nevertheless, these non-binding cases can be

distinguished because they turned upon whether complete diversity

was present at the time of removal. The defendants in those cases

were jurisdictionally barred from removing until the plaintiff

dismissed a non-diverse defendant, which a plaintiff who sought to

avoid removal might be loathe to do. E g, DiNatale, 624 F Supp at

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344 (noting “that the sole purpose of the form of settlement with

[the non-diverse defendant] was to defeat [the diverse defendant’s]

right to remove”). By contrast, the removing defendants here

simply had to secure Ryko’s approval to remove this case. Without

any allegation that plaintiff acted in some way to prevent removal,

this court sees no reason to depart from the general principle that

“all defendants who may properly join in the removal petition must

join.” Ely Valley Mines, 644 F2d at 1314.

In sum, the court GRANTS plaintiff’s motion to remand

(Doc #4) and REMANDS the case to San Francisco county superior

court. The court DENIES AS MOOT the removing defendants’ motion to

transfer. Doc #14. The clerk is DIRECTED to close the file and

TERMINATE all motions.

IT IS SO ORDERED.

 

VAUGHN R WALKER

United States District Chief Judge

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