Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-06058/USCOURTS-cand-3_07-cv-06058-0/pdf.json

Parties Involved:
American Civil Rights Foundation
Plaintiff
City of Oakland
Defendant
Port of Oakland
Defendant

Document Text:

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

AMERICAN CIVIL RIGHTS

FOUNDATION,

Plaintiff,

 v.

CITY OF OAKLAND, PORT OF

OAKLAND,

Defendants. /

No. C 07-06058 CRB

ORDER GRANTING MOTION TO

REMAND

This case concerns a challenge brought under article I, § 31 of the California

Constitution to Defendants’ race- and sex-based Port of Oakland Airport Concession

Disadvantaged Business Enterprise Program (ACDBE Program). Plaintiff originally filed

this action in state court, but Defendants removed on the basis of federal question

jurisdiction. Even assuming that Plaintiff’s complaint is removable, the Court nevertheless

finds that Defendants’ notice of removal was untimely. See 28 U.S.C. § 1446(b). 

Accordingly, the plaintiff’s motion to remand is GRANTED. The accompanying motion for

attorney’s fees is DENIED. Because the Court lacks jurisdiction, it declines to reach the

issues presented by the defendants’ motion to dismiss. The hearing scheduled for January

25, 2008 is VACATED.

Case 3:07-cv-06058-CRB Document 41 Filed 01/23/08 Page 1 of 5
United States District Court

For the Northern District of California

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BACKGROUND

On July 6, 2007, the American Civil Rights Foundation filed a complaint against the

City of Oakland and the Port of Oakland in California Superior Court, challenging Oakland

International Airport’s ACDBE Program, which establishes goals for the percentage of

contract awards that should be directed to minority-owned and women-owned business

enterprises. See Compl. ¶ 24. Plaintiff alleged that the ACDBE Program violates article I, §

31 of the California Constitution by granting preferential treatment to individuals on the basis

of race and sex. See id. ¶ 25. In the complaint, Plaintiff recognized that § 31 contains an

exception authorizing race-based governmental action “which must be taken to establish or

maintain eligibility for any federal program, where ineligibility would result in a loss of

federal funds to the State.” Id. ¶ 9 (quoting Cal. Const. art I, § 31(e)).

Defendants filed a demurrer on September 24, 2007, moving to dismiss the action on

numerous grounds. Defendants’ primary argument in support of its demurrer was that the

ACDBE Program is saved by § 31(e)’s exception for actions taken to maintain eligibility for

a federal program. See Demurrer 11-14. Plaintiff responded to Defendants’ demurrer on

November 26, 2007, arguing that the Program does not fall under the § 31(e) exception

because Defendants lacked substantial evidence of past discrimination and failed to narrowly

tailor the Program to federal requirements in the least discriminatory manner. See

Opposition to Demurrer at 8 (citing C & C Const., Inc. v. Sacramento Mun. Utility Dist., 144

Cal. App. 4th 284, 298 (2004)). 

Four days later, Defendants filed their notice of removal to this Court pursuant to 28

U.S.C. § 1441(b). Defendants then filed a motion to dismiss, and Plaintiff filed a motion to

remand.

STANDARD OF REVIEW

There exists a “strong presumption” against removal jurisdiction. St. Paul Mercury

Indem. Co. v. Red Cab Co., 303 U.S. 283, 290 (1938). Hence, defendants bear the burden of

establishing that removal is proper, see Gaus v. Miles, 980 F.2d 564, 566 (9th Cir. 1992), and

Case 3:07-cv-06058-CRB Document 41 Filed 01/23/08 Page 2 of 5
United States District Court

For the Northern District of California

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federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first

instance, see Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979).

DISCUSSION

 To properly remove a case from state to federal court, the defendant is obligated to

file a notice of removal within thirty days of receiving either “a copy of the initial pleading

setting forth the claim for relief upon which such action or proceeding is based” or the

service of summons if the initial pleading need not be served on the defendant. 28 U.S.C. §

1446(b). An exception to the thirty-day limit exists when “the initial pleading is not

removable.” Id. In that event, the thirty-day time limitation begins to run upon “receipt 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.” Id.

Defendants received a copy of Plaintiff’s complaint on August 6, 2007. Nevertheless,

Defendants did not file a notice of removal until November 30, 2007, after filing a demurrer

and well after the expiration of § 1446(b)’s thirty-day time limit. Defendants concede that a

removal notice was not filed within thirty days of receipt of Plaintiff’s complaint, but argue

that removal was timely because federal-question jurisdiction under 28 U.S.C. § 1331 could

not be ascertained from the complaint. Rather, only after receiving Plaintiff’s Opposition to

the demurrer did Defendants realize that Plaintiff’s state law claim “turn[s] on substantial

questions of federal law,” Grable & Sons Metal Products, Inc. v. Darue Engineering & Mfg.,

545 U.S. 308, 312 (2005), because resolution of the action turns on whether elimination of

the ACDBE Program would result in loss of federal funding. 

Assuming arguendo that federal question jurisdiction exists because Plaintiff’s claim

turns on a substantial question of federal law, remand is still appropriate because an

“examination of the four corners” of Plaintiff’s complaint, Harris v. Bankers Life & Casualty

Co., 425 F.3d 689, 694 (9th Cir. 2005), should have revealed the existence of the “contested

and substantial federal question,” Grable, 545 U.S. at 313, and removal was therefore

untimely. Plaintiff’s complaint alleged that the ACDBE Program violates the California

Constitution’s prohibition on preferential treatment on the basis of race and sex. See Compl.

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United States District Court

For the Northern District of California

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¶ 24. But the complaint acknowledged that the California Constitution includes an

exception, which authorizes race-based governmental action that must be taken to establish

or maintain eligibility for any federal program, where ineligibility would result in loss of

federal funds to the State. See id. at 9. It should have been immediately apparent to the

defendants that unless they intended to argue that the ACDBE Program does not

discriminate, the case would turn on whether elimination of the program would result in the

loss of federal funds.

Indeed, in its Demurrer, Defendants’ principal argument was that the ACDBE

Program is not prohibited by the California Constitution because “the federal government

requires the Port to implement the ACDBE Program in order to remain eligible for federal

funding for Okaland International Airport development projects.” Demurrer at 12. 

Defendants’ argument that they were not aware of the existence of a federal question until

after submission of the Demurrer cannot be squared with the Demurrer itself, which

identified that the case turned on a contested question involving federal law.

Defendants’ assertion that Plaintiff’s Opposition to the demurrer was the first pleading

from which removability could be ascertained is not credible. Plaintiff’s Opposition merely

responded to the arguments in Defendants’ Demurrer, explaining, inter alia, that Defendants

had not carried their evidentiary burden of proving that the loss of federal funds exception

applied. The Opposition did not set forth any novel arguments, previously concealed, giving

rise to federal question jurisdiction. 

The thirty-day time limit imposed by § 1446(b) plays an integral role in preventing

defendants from gaining unfair advantage by forum-shopping after testing the waters of state

court. See Brown v. Demco, 792 F.2d 478, 482 (5th Cir. 1986). Whatever the motivation

for removing this case more than four months after Plaintiff’s complaint was filed,

Defendants cannot seriously argue that removal was effected less than thirty days after the

existence of federal jurisdiction could first be ascertained. Defendants “lost their opportunity

to remove the case when they failed to file a petition for removal within thirty days of the

filing of the original complaint”; accordingly, Plaintiff’s motion to remand is GRANTED

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United States District Court

For the Northern District of California

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G:\CRBALL\2007\6058\Order Granting Motion to Remand.wpd 5

and the case is ordered remanded to state court. Cantrell v. Great Republic Ins. Co., 873 F.2d

1249, 1256 (9th Cir. 1989).

Plaintiff requests attorney’s fees pursuant to 28 U.S.C. § 1447(c) for fees incurred in

resisting Defendants’ removal. Because the Court does not believe that the standard for

awarding attorney’s fees as set forth in Martin v. Franklin Capital Corp., 546 U.S. 132, 141

(2005), has been satisfied, the motion for fees is DENIED.

IT IS SO ORDERED.

Dated: January 23, 2008 

CHARLES R. BREYER

UNITED STATES DISTRICT JUDGE

Case 3:07-cv-06058-CRB Document 41 Filed 01/23/08 Page 5 of 5