Kelton Arms Condominium Owners Association, Inc. v. Homestead Insurance Company

We are asked to decide whether the federal removal statute, 28 U.S.C. § 1447 (c), allows the district court to remand a case sua sponte for a non-jurisdictional defect in procedure. We hold that it does not.

I.

Kelton Arms Condominium Association, Inc. (Kelton), filed an action on December 28, 2001, in the Superior Court of California against Homestead Insurance (Homestead), alleging breach of contract and bad faith. Kelton served its complaint on Homestead on March 8, 2002. Homestead removed the case on March 28th. Homestead did not identify the service date in the removal papers.

The district court remanded the case sua sponte on April 4th, stating only that the case had been “improperly removed.” Homestead filed a motion to reconsider asking the district court to state the basis of its order. It suspected that the district court might have remanded based upon abstention. Homestead later supplemented its motion, fearing that the district court might have remanded because it erroneously believed that removal was untimely under 28 U.S.C. § 1446 (b). Homestead submitted a declaration stating that service had been made on March 8th, and therefore removal was timely under section…