1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7

DERRICK MONET,

8 Case No. 5:22-cv-00681-EJD Plaintiff, 9 ORDER DENYING MOTION TO v. REMAND 10

TESLA, INC.,

11 Defendant. Re: Dkt. No. 10 12

13 Plaintiff Derrick Monet, Individually and as the Personal Representative of the Estate of 14 Jenna Monet, deceased (“Plaintiff”), originally filed this case against Defendant Tesla, Inc. in the 15 Superior Court for the County of Santa Clara on November 16, 2021. See Original Compl. For 16 Damages For Personal Injury and Wrongful Death, Dkt. No. 1-1 (“Compl.”). On February 2, 17 2022, Defendant removed the case to federal court pursuant to 28 U.S.C. § 1441(a) based on 18 diversity of citizenship. Before the Court is Plaintiff’s Motion to Remand for lack of subject 19 matter jurisdiction. Pl. Derrick Monet’s Mot. to Remand, Dkt. No. 10 (“Mot.”). The matter is 20 fully briefed and suitable for decision without oral argument pursuant to Civil Local Rule 7-1(b). 21 For the reasons discussed below, Plaintiff’s motion will be denied. 22 I. Background 23 On December 29, 2019, Plaintiff was driving his 2019 Tesla Model 3 using the vehicle’s 24 autosteer and traffic aware cruise control features, what Tesla calls its “Autopilot” system, while 25 traveling with his wife Jenna from Arizona to Maryland. Compl. ¶ 1. While driving through 26 Indiana, the couple crashed into the rear of a fire truck that was stopped at the scene of an earlier 27 accident on the I-70 interstate freeway. Id. ¶ 2. Plaintiff’s wife died in the crash and Plaintiff 1 suffered substantial injuries. Id. ¶ 3. As a result, Plaintiff brought the present case with nine 2 causes of action including strict product liability, negligence, breach of warranty, and others. Id. 3 ¶¶ 57–119. 4 Plaintiff is a resident and citizen of Arizona. Id. ¶ 38; see also 28 U.S.C. § 1332(c)(2). 5 When the complaint was filed in state court, Defendant was a corporation incorporated in 6 Delaware with its principal place of business in Palo Alto, Santa Clara County, California, and 7 therefore was a citizen of Delaware and California. Mot. at 2; Def. Tesla, Inc.’s Resp. Opposing 8 Pl.’s Mot. to Remand, Dkt. No. 18 (“Opp’n”) at 2. On December 1, 2021, Defendant moved its 9 principal place of business to Austin, Travis County, Texas, and became a citizen of Delaware and 10 Texas. Mot. at 3; Opp’n at 3. On January 4, 2022, after Defendant had already moved its 11 headquarters to Texas, Plaintiff served its complaint on Defendant’s registered agent in California. 12 Opp’n at 3. On February 2, 2022, Defendant removed the action to this Court. 13 II. Legal Standard 14 A case may be removed from state court to federal court “only if the federal court would 15 have had subject matter jurisdiction over the case.” Glob. Indus. Inv. v. Chung, No. 19-CV- 16 07670-LHK, 2020 WL 2027374, at *2–3 (N.D. Cal. Apr. 28, 2020) (citing 28 U.S.C. § 1441(a) 17 and Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987) (“Only state-court actions that 18 originally could have been filed in federal court may be removed to federal court by the 19 defendant.”)). Plaintiff may move to remand a case to state court “on the basis of any defect other 20 than lack of subject matter jurisdiction” within 30 days of the notice of removal. Id. (citing 28 21 U.S.C. § 1447(c)). 22 In general, diversity jurisdiction “is determined (and must exist) as of the time the 23 complaint is filed, and removal is effected.” Stuto v. GE Healthcare, Inc., No. 19-CV-02093-PJH, 24 2019 WL 2423512, at *1 (N.D. Cal. June 10, 2019) (citing Strotek Corp. v. Air Transp. Ass’n. of 25 Am., 300 F.3d 1129, 1131–32 (9th Cir. 2002) (citing Morongo Band of Mission Indians v. 26 California State Bd. of Equalization, 858 F.2d 1376, 1380 (9th Cir. 1988) (diversity is determined 27 by citizenship of parties as of filing of the original complaint)); Newcombe v. Adolf Coors Co., 1 157 F.3d 686, 690 (9th Cir. 1998) (diversity must exist when the action is removed)). 2 The “no local defendant rule” codified in 28 U.S.C. § 1441(b)(2), provides that “[a] civil 3 action otherwise removable solely on the basis of the jurisdiction under section 1332(a) of this title 4 may not be removed if any of the parties in interest properly joined and served as defendants is a 5 citizen of the State in which such action is brought” (emphasis added). 6 III. Discussion 7 There is no dispute that there is complete diversity between Plaintiff and Defendant, and 8 that the jurisdictional minimum of $75,000 has been satisfied. Nonetheless, Plaintiff contends that 9 at the time the lawsuit was filed in state court, Defendant was a citizen of California, and therefore 10 the “no local defendant” rule embodied in § 1141(b) bars removal. Mot. at 2. Defendant contends 11 that the “no local defendant rule” applies when the complaint is served, not when it is filed, and 12 that by the time Plaintiff effected service, Defendant was no longer a citizen of California. 13 The “no local defendant rule” codified in 28 U.S.C. § 1441(b)(2) “is only applicable at the 14 time a notice of removal is filed.” Spencer v. U.S. Dist. Ct. for N. Dist. of Ca., 393 F.3d 867, 871 15 (9th Cir. 2004) (affirming denial of motion to remand because no local defendant was a party to 16 the action at the time of removal). Under this binding Ninth Circuit authority, the Court finds that 17 “no local defendant rule” does not bar removal in this case because Defendant was no longer a 18 citizen of California at the time of removal. Furthermore, the plain language of § 1441(b)(2) bars 19 removal only when a defendant “properly joined and served” is a resident of the forum. 28 U.S.C. 20 § 1441(b)(2) (emphasis added). Here, Defendant was no longer a local defendant by the time it 21 was served. 22 Plaintiff relies on Stuto, 2019 WL 2423512, in which the court held remand was not proper 23 when a California corporation moved its headquarters to Texas because, although complete 24 diversity existed when the case was removed, “complete diversity did not exist at the time the 25 complaint was filed.” Mot. at 4–5 (citing Stuto, 2019 WL 2423512, at *5). Here, there has always 26 been complete diversity between the parties. Plaintiff is a citizen of Arizona. Defendant was a 27 citizen of California and Delaware at the time suit was filed, and Defendant is now a citizen of 1 Texas and Delaware. Thus, Stuto is not applicable and does not bar removal of the present case to 2 || this Court. 3 Plaintiff also relies on the “time of filing” rule (1.e., a court’s jurisdiction depends on the 4 circumstances when the case was filed), citing Pullman Co. v. Jenkins, 305 U.S. 534, 537-38 5 || (1939). Pl. Derrick Monet’s Reply to Def.’s Resp. to Pl.’s Mot. to Remand, Dkt. No. 21 (“Reply”) 6 || at 3-4. Plaintiff is correct that the time of filing rule requires complete diversity to be present 7 when the complaint is filed and that subject matter jurisdiction must exist at the time the complaint 8 was filed. However, Plaintiff's argument is misplaced because the time of filing rule is separate 9 and distinct from the no local defendant rule codified in § 1441(b)(2). As stated previously, the 10 || plain language of § 1441(b)(2) bars removal only when a defendant “properly joined and served” ll is a resident of the forum. 28 U.S.C. § 1441(b)(2) (emphasis added). 12 IV. Conclusion 13 For the reasons stated above, Plaintiff's Motion to Remand is DENIED.

IT IS SO ORDERED.

3 15 Dated: July 13, 2022 16

EDWARD J. DAVILA

17 United States District Judge 18 19 20 21 22 23 24 25 26 27 8 case No.522-cv-0068-EID