WRS Motion Picture & Video Laboratory v. Post Modern Edit, Inc.

MEMORANDUM ON REMAND TO STATE COURT

Where a local defendant removes on diversity grounds in violation of the 28 U.S.C. § 1441 (b) “no-local-defendant” rule, a jurisdictional defect exists and remand may be ordered unless the matter has proceeded to judgment on the merits, and the federal court would have had jurisdiction had the ease been filed in federal court in the posture it had at the time of judgment.

I. BACKGROUND

Plaintiff, a Pennsylvania corporation, sued Defendants in California state court for contract breach and injunctive relief. Defendant Warren, a California citizen,- removed the case to this Court under 28 U.S.C. § 1441 , et seq., claiming diversity jurisdiction.

More than 30 days after notice of removal was filed, the Court held a status conference and noted jurisdiction was questionable due to Warren’s California citizenship.

The Court observed that, under the “no-local-defendant” limitation of 28 U.S.C. § 1441 (b), diversity removal was apparently not available when there is a local defendant. Both parties opposed remand to state court arguing that, although not yet decided in the Ninth Circuit, other Circuits have held the no-local-defendant limitation may…