1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 CV 21-6959-RSWL-MAR x 12 ALBERT IBARRA and DUSTIN

WALL,

ORDER re: MOTION TO REMAND 13 [7, 10] Plaintiff, 14 v. 15 16 SMG HOLDINGS INC. dba GREEK THEATRE, a Delaware 17 Corporation; UTP PRODUCTIONS, INC., a Utah 18 Corporation; and Does 1 to 19 100, 20 Defendants. 21 22 Currently before the Court is the Motion to Remand 23 (the “Motion”) [7, 10] filed by Plaintiffs Albert Ibarra 24 and Dustin Wall (“Plaintiffs”). Having reviewed all 25 papers submitted pertaining to this Motion, the Court 26 NOW FINDS AND RULES AS FOLLOWS: the Court DENIES the 27 Motion. 28 1 I. BACKGROUND

2 Plaintiffs are residents of Los Angeles,

3 California. SAC ¶ 3. Defendant SMG is a corporation, 4 incorporated under the laws of Delaware with its 5 principal place of business in Pennsylvania. Notice of 6 Removal (“Removal”) ¶ 12, ECF No. 1. Defendant UTP is 7 also a corporation, incorporated under the laws of Utah 8 with its principal place of business in Utah. Id. ¶ 13. 9 Plaintiffs allege that Defendants “jointly own, manage, 10 and/or operate” Plaintiffs’ place of employment. SAC 11 ¶ 4. 12 Plaintiffs filed their Complaint [1-1] against 13 Defendants, L.A. Arena, and C&C on November 17, 2020, 14 alleging various wage and hour violations, harassment, 15 discrimination, retaliation, unfair business practices, 16 and wrongful termination. Plaintiffs filed a First 17 Amended Complaint [1-2], in which no parties or 18 allegations were changed. Defendant SMG then filed a 19 demurrer [1-3] to Plaintiffs’ FAC, which the Superior 20 Court sustained [1-4] on July 2, 2021, with 30 days’ 21 leave to amend. Plaintiffs then filed a Second Amended 22 Complaint [1-5] on July 26, 2021, which named only 23 Defendant SMG and Defendant UTP as defendants in the 24 Action. Defendant UTP filed its Answer [1-6] to the SAC 25 in state court on August 26, 2021. 26 Defendant SMG requested a statement of damages from 27 each Plaintiff, and Defendant SMG was served with 28 Plaintiffs’ responses [1-10, 1-11] on August 20, 2021. 1 Each Plaintiff asserted $2,490,046.51 in damages.

2 Defendant SMG then removed [1] the Action to this Court

3 on August 27, 2021, stating that removal was proper 4 under 28 U.S.C. §§ 1332 and 1441 because it was within 5 30 days of their receipt of Plaintiffs’ statements of 6 damages, which were the first papers from which it was 7 ascertainable that the amount in controversy exceeded 8 $75,000. Moreover, Defendant SMG asserted that the 9 Action was not removable until L.A. Arena and C&C, which 10 both had principal places of business in California, 11 were no longer defendants in the Action. Removal ¶ 17 12 n.1. 13 Plaintiffs filed the instant Motion to Remand [7] 14 on September 17, 2021. Defendant SMG filed its 15 Opposition [8] on September 28, 2021, and Plaintiffs 16 replied [9] on October 4, 2021. 17 II. DISCUSSION 18 A. Legal Standard 19 To establish removal jurisdiction over a diversity 20 action, the removing defendant must file a notice of 21 removal in the proper district court demonstrating that 22 (1) the amount in controversy exceeds $75,000, and (2) 23 the suit is between citizens of different states. See 24 28 U.S.C. § 1332. A corporation is “deemed to be a 25 citizen of any State by which it has been incorporated 26 and of the State where it has its principal place of 27 business.” 28 U.S.C. § 1332(c)(1). On the other hand, 28 a limited liability company (“LLC”) is a citizen of 1 every state of which its owners or members are citizens

2 for purposes of diversity jurisdiction. Johnson v.

3 Columbia Props. Anchorage, LP, 437 F.3d 894, 899 (9th 4 Cir. 2006). 5 Typically, a defendant must file the notice of 6 removal within 30 days after service of the complaint. 7 28 U.S.C. § 1446(b)(1). Where the case is not initially 8 removable, however, a defendant may file a notice of 9 removal within 30 days after receipt of “an amended 10 pleading, motion, order or other paper from which it may 11 first be ascertained that the case is one which is or 12 has become removable.” Id. § 1446(b)(3). 13 A motion for remand is the proper procedure for 14 challenging removal and may be ordered for either lack 15 of subject matter jurisdiction or any procedural defect 16 in removal. See 28 U.S.C. § 1447(c). Courts strictly 17 construe the removal statutes against removal 18 jurisdiction, and jurisdiction must be rejected if there 19 is any doubt as to the right of removal. See Gaus v. 20 Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). 21 B. Discussion 22 Plaintiffs do not dispute that diversity of 23 citizenship exists between Plaintiffs and Defendants, 24 nor that the amount in controversy is met. See 25 generally Pls.’ Mot. to Remand (“Mot.”), ECF No. 7. 26 Rather, Plaintiffs argue that removal was untimely 27 because the case was removable since the Original 28 Complaint (“OC”) was filed on October 5, 2020, yet 1 Defendant SMG filed its Notice of Removal on August 27,

2 2021. Id. at 5:4-16. Defendant SMG argues that the

3 Motion should be denied both because removal was timely 4 and for procedural defects under Rule 11 of the Federal 5 Rules of Civil Procedure and Local Rule 7-3. See 6 generally Def.’s Opp’n to Mot. to Remand (“Opp’n”), ECF 7 No. 8. 8 1. Rule 11 9 Defendant SMG argues that Plaintiffs’ Motion must 10 be stricken because the Notice of Motion is not signed. 11 Opp’n 4:15-25. Rule 11(a) of the Federal Rules of Civil 12 Procedure requires all papers filed with the Court to 13 “be signed by at least one attorney of record in the 14 attorney’s name.” Further, courts “must strike an 15 unsigned paper unless the omission is promptly corrected 16 after being called to the attorney’s or party’s 17 attention.” Fed. R. Civ. P. 11(a). 18 Here, Plaintiffs’ original Notice of Motion, filed 19 on September 17, 2021, was not signed by their attorney. 20 See Mot. 2:20. However, on October 4, 2021, Plaintiffs 21 filed a Corrected Motion that included a signed Notice 22 of Motion. See Pls.’ Corrected Mot. to Remand 2:18-19, 23 ECF No. 10. Because the Rule 11 violation was promptly 24 corrected through the Corrected Motion, the Court 25 declines to strike Plaintiffs’ Motion. See Townsend v. 26 Akami Techs., Inc., No. CV 08–05534 MMM (SSx), 2008 WL 27 11338205, at *1 (C.D. Cal. Oct. 24, 2008) (declining to 28 strike plaintiff’s complaint for being improperly signed 1 because plaintiff’s filing of a properly signed

2 opposition to the motion to strike operated as “an

3 adoption and certification of the allegations and claims 4 in the complaint pursuant to Rule 11”). 5 2. Local Rule 7-3 6 Defendant SMG additionally argues that Plaintiffs’ 7 Motion should be denied for failure to comply with Local 8 Rule 7-3. Opp’n 5:18-6:4. Local Rule 7-3 provides, in 9 relevant part, that “counsel contemplating the filing of 10 any motion shall first contact opposing counsel to 11 discuss thoroughly, preferably in person, the substance 12 of the contemplated motion and any potential resolution. 13 The conference shall take place at least seven (7) days 14 prior to the filing of the motion.” L.R. 7-3. “Failure 15 to comply with the Local Rules does not automatically 16 require the denial of a party’s motion, however, 17 particularly where the non-moving party has suffered no 18 apparent prejudice as a result of the failure to 19 comply.” CarMax Auto Superstores Cal. LLC v. Hernandez, 20 94 F. Supp. 3d 1078, 1088 (C.D. Cal. 2015). 21 Plaintiffs argue that they complied with Local Rule 22 7-3 because on September 8, 2021, their counsel “emailed 23 counsel for Defendant[,] Rosely George[,] and notified 24 her that Plaintiffs intended to . . . file a motion to 25 remand this action.” Pls.’ Reply in Supp. of Mot. 26 (“Reply”) 3:4-6, ECF No. 9. However, Rosely George 27 appears to be counsel only for Defendant UTP and not for 28 Defendant SMG. See Notice of Removal Ex. 6 (“Defendant 1 UTP Answer”), ECF No. 1-6. Because Plaintiffs made no

2 effort to contact counsel for Defendant SMG, they are in

3 violation of Local Rule 7-3. Nevertheless, Defendant 4 SMG does not seem to have been prejudiced by the 5 violation because it was fully able to respond to 6 Plaintiffs’ motion. See generally Opp’n. Moreover, it 7 is unlikely that further meet and confer efforts between 8 Plaintiffs and Defendant SMG will help to resolve this 9 Motion because the parties dispute a single issue: 10 whether removal was timely. Thus, the Court elects to 11 consider the merits of the Motion. See CarMax Auto 12 Superstores Cal. LLC, 94 F. Supp. 3d at 1088 (electing 13 to consider the merits of motion despite a violation of 14 Local Rule 7-3); De Walshe v. Togo's Eateries, Inc., 567 15 F. Supp. 2d 1198, 1205 (C.D. Cal. 2008) (same). 16 3. Timeliness of Removal 17 Plaintiffs argue that Defendant SMG’s removal was 18 untimely because this Action was always removable, as 19 Plaintiffs reside in California and all Defendants were 20 foreign entities. Mot. 8:5-12. Defendant SMG counters 21 that the case was not initially removable because L.A. 22 Arena and C&C are LLCs with principal places of business 23 in California. Opp’n 8:1-10. Moreover, Defendant SMG 24 argues its removal was timely because it was within 30 25 days of its receipt of Plaintiffs’ statements of 26 damages, which were the first papers upon which it was 27 ascertainable that the amount in controversy requirement 28 for removal was satisfied. Id. at 8:22-9:1. 1 The federal removal statute “provides two thirty-

2 day windows during which a case may be removed — during

3 the first thirty days after the defendant receives the 4 initial pleading or during the first thirty days after 5 the defendant receives a paper ‘from which it may first 6 be ascertained that the case is one which is or has 7 become removable’ if ‘the case stated by the initial 8 pleading is not removable.’” Harris v. Bankers Life & 9 Cas. Co., 425 F.3d 689, 692 (9th Cir. 2005) (citing 28 10 U.S.C. § 1446(b)). The first thirty-day period applies 11 only if the face of the initial pleading affirmatively 12 reveals the grounds for removal. Id. at 695. 13 Otherwise, the removal clock only begins to run once the 14 defendant has actual notice of a case’s removability. 15 Id. at 697. 16 Here, the removal clock did not begin to run upon 17 Plaintiffs’ filing of the OC because the OC did not 18 affirmatively reveal the grounds for removal. While 19 Plaintiffs sought compensatory damages, statutory 20 penalties, attorneys’ fees, and punitive damages in the 21 OC, the OC fails to provide information that is 22 necessary for calculating actual damages. For example, 23 Plaintiffs stated that they “are entitled to one and one 24 half (1 1/2) times and/or double their regular rate of 25 pay for overtime work” and to compensation for “all 26 hours worked, but not paid,” for the “four (4) years 27 preceding the filing of this Complaint.” Original 28 Compl. (“OC”) ¶ 46, 54. However, Plaintiffs did not 1 allege what their rate of pay was, nor how many

2 violations occurred during those four years. Without

3 this information, Defendant SMG had no means of 4 determining the amount of actual damages from the OC and 5 “had no further duty to estimate or investigate whether 6 the case was removable.” Sheppard v. Staffmark Inv., 7 LLC, No. 20-cv-05443-BLF, 2020 WL 5593232, at *3 (N.D. 8 Cal. Sept. 18, 2020) (finding that plaintiff’s complaint 9 did not facially allege an amount in controversy because 10 it provided “no specification of how many times the 11 listed Labor Code violation may have occurred”). 12 Moreover, Plaintiffs asserted claims under 13 California’s Fair Employment Practices Act for 14 harassment and discrimination, as well as claims for 15 retaliation and wrongful termination, but they failed to 16 state the dollar amount they are seeking to recover for 17 these claims. Nor do Plaintiffs seek damages for 18 emotional pain and suffering. See OC 40:4-16; cf. 19 Rodriguez v. Boeing Co., No. CV 14–04265–RSWL (AGRx), 20 2014 WL 3818108, at *5 (C.D. Cal. Aug. 1, 2014) (finding 21 that the complaint sufficiently triggered the first 30- 22 day period because plaintiff alleged a specific rate of 23 pay and was a long-term employee seeking lost income, 24 damages for emotional pain and suffering, punitive 25 damages, and attorneys’ fees, and it was “facially 26 apparent that the back-pay damages alone would come 27 close to the jurisdictional minimum”). Indeed, the only 28 dollar amount asserted by Plaintiffs in the OC is a 1 $10,000 civil penalty, OC ¶ 99, which is clearly

2 insufficient to satisfy the amount in controversy.

3 Without more certainty as to actual damages, Defendant 4 SMG was not required to assume that the case was 5 removable simply because Plaintiffs sought punitive 6 damages and attorneys’ fees in the OC. See Duran v. DHL 7 Express (USA), Inc., No. CV 15-09965-BRO (Ex), 2016 WL 8 742864, at *4 (C.D. Cal. Feb. 24, 2016) (stating that 9 unsubstantiated allegations seeking punitive damages and 10 attorneys’ fees do not affirmatively reveal that a case 11 is removable). 12 Plaintiffs further argue that Defendant SMG’s 13 support for removal “was based solely on the contents of 14 the Complaint itself.” Mot. 8:7-9. The Court 15 disagrees. Defendant SMG relied solely on Plaintiffs’ 16 statements of damages in determining that the amount in 17 controversy requirement was satisfied. Removal ¶ 14-16. 18 It was only upon receipt of these statements, on August 19 20, 2021, that Defendant SMG had actual notice that the 20 amount in controversy exceeded $75,000. Because 21 Defendant SMG removed only seven days thereafter, 22 removal was timely and the Court therefore DENIES the 23 Motion.1 24 1 Plaintiffs’ argument for untimeliness seems to be based 25 entirely on the notion that the OC “clearly stated on [its] face that the instant action was proper for removal[,] as all 26 Defendants were foreign entities.” Mot. 8:6-7. Plaintiffs offer 27 no further information as to the citizenship of either L.A. Arena or C&C, the parties who were dropped from the Action when 28 Plaintiffs filed their SAC on July 26, 2021. In their 1 III. CONCLUSION 2 Based on the foregoing, the Court DENIES

3 Plaintiffs’ Motion. 4 IT IS SO ORDERED. 5 6 7 DATED: October 22, 2021 ______/_s_/ _R_o_n_a_ld_ S__.W__. _Le_w_________

HONORABLE RONALD S.W. LEW

8 Senior U.S. District Judge 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 initially removable because both L.A. Arena and C&C are LLCs with principal places of business in California. Opp’n 7:1-10. 24 Neither party applies the proper standard for determining the 25 citizenship of an LLC, which is considered a citizen of every state of which its owners or members are citizens for purposes of 26 diversity jurisdiction. Johnson, 437 F.3d at 899. In any event, the citizenship of these entities does not affect the timeliness 27 of removal because, as explained above, it was not ascertainable that this Action was removable until Defendant SMG received the 28