“Moreover, it is well established that a court may raise the question of subject matter jurisdiction, sua sponte, at any time during the pendency of the action.”
How later courts described this case
- “Moreover, it is well established that a court may raise the question of subject matter jurisdiction, sua sponte, at any time during the pendency of the action.”
- “The 13 burden of establishing federal subject matter jurisdiction falls on the party invoking removal.”
- “Allstate argues that a bad faith action by the 22 insured against an insurer under the provisions of a liability insurance policy does not constitute a direct action for the purposes of § 1332(c)(1
- “On a plaintiff's motion to 11 remand, it is a defendant’s burden to establish jurisdiction by a preponderance of the evidence.”
Written by the judges who cited it.
The opinion
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UNITED STATES DISTRICT COURT
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EASTERN DISTRICT OF CALIFORNIA
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10 CAROLYN BROWN, Case No. 1:20-cv-00186-SAB
11 Plaintiff, ORDER REQUIRING DEFENDANT TO
FILE OPPOSITION TO PLAINTIFF’S
12 v. MOTION TO REMAND THAT
SPECIFICALLY ADDRESSES 28 U.S.C. §
13 PROPERTY AND CASUALTY 1332(c)(1)(A)
INSURANCE COMPANY OF HARTFORD,
14 (ECF No. 7)
Defendant.
15 DEADLINE: APRIL 8, 2020
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17 On January 9, 2020, Plaintiff Carolyn Brown (“Plaintiff”), appearing pro se, filed this
18 action in the Superior Court of California, County of Madera, with the action bearing case
19 number MCV082926. (ECF Nos. 1 at 2; 1-1.) On February 5, 2020, pursuant to 28 U.S.C. §§
20 1441 and 1446, Defendant Property and Casualty Insurance Company of Hartford (“Defendant”
21 or “Hartford”), removed the action to the U.S. District Court for the Eastern District of
22 California. (ECF No. 1.) On March 18, 2020, Plaintiff filed a document that the Court shall
23 construe as motion to remand this action to state court.1 (ECF No. 7.)
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1 Plaintiff’s filing is not identified as a motion to remand in the caption. The filing only states that Plaintiff would
25 “like to remain in Madera Civil Court instead of [f]ederal [c]ourt[,] myself and my Daughter . . . are on the
[i]nsurance policy: I would like to . . . resolve the matter before court.” (ECF No. 7.) Given Plaintiff’s pro se status,
the Court shall construe the filing as a motion to remand. See, e.g., Ross v. Williams, 950 F.3d 1160, 1173 n.19 (9th
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Cir. 2020) (“The obligation to construe pro se filings liberally means courts must frequently look to the contents of a
pro se filing rather than its form.”); Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1988) (“This
27 court recognizes that it has a duty to ensure that pro se litigants do not lose their right to a hearing on the merits of
their claim due to ignorance of technical procedural requirements.”); but see McNeil v. United States, 508 U.S. 106,
1 Defendant’s notice of removal specifies that: (1) Plaintiff is a natural person residing in
2 Madera County, California, and is a citizen of California for diversity jurisdiction purposes; and
3 (2) Defendant Hartford is an Indiana corporation with its principal place of business in
4 Connecticut, and is a citizen of both Indiana and Connecticut for diversity jurisdiction purposes.
5 (ECF No. 1 at 2.) Defendant also proffers that the amount in controversy exceeds $75,000.00
6 exclusive of costs and interest because Plaintiff alleges the Defendant assessed only $38,000.00
7 in damages to Plaintiff’s home, while Plaintiff claims the damages total $120,000.00, a
8 difference of $82,000.00. (Id.)
9 While it appears this action meets the amount in controversy requirement of the diversity
10 jurisdiction statute, 28 U.S.C. § 1332(c)(1) assigns the citizenship of an insured person to the
11 insurer for purposes of federal diversity jurisdiction in certain insurance actions:
12 [A] corporation shall be deemed to be a citizen of every State and foreign state by
which it has been incorporated and of the State or foreign state where it has its
13 principal place of business, except that in any direct action against the insurer of a
policy or contract of liability insurance, whether incorporated or unincorporated,
14 to which action the insured is not joined as a party-defendant, such insurer shall
be deemed a citizen of—
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(A) every State and foreign state of which the insured is a citizen;
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17 28 U.S.C. § 1332(c)(1)(A). In regards to the meaning of the term “direct action,” the Ninth
18 Circuit has stated:
19 Courts have uniformly defined the term ‘direct action’ as used in this section as
those cases in which a party suffering injuries or damage for which another is
20 legally responsible is entitled to bring suit against the other’s liability insurer
without joining the insured or first obtaining a judgment against him . . . Thus,
21 unless the cause of action urged against the insurance company is of such a nature
that the liability sought to be imposed could be imposed against the insured, the
22 action is not a direct action . . . The present suit is clearly not a direct action since
Beckham is not seeking to impose liability on Safeco for the negligence of
23 Safeco’s insured, Mankin. Rather, she is seeking to impose liability on Safeco for
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should be interpreted so as to excuse mistakes by those who proceed without counsel . . . in the long run, experience
25 teaches that strict adherence to the procedural requirements specified by the legislature is the best guarantee of
evenhanded administration of the law.”) (internal quotation marks and citations omitted). Additionally, the Court
may raise the issue of subject matter jurisdiction sua sponte. Nevada v. Bank of Am. Corp., 672 F.3d 661, 673 (9th
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Cir. 2012) (“Moreover, it is well established that a court may raise the question of subject matter jurisdiction, sua
sponte, at any time during the pendency of the action.”) (internal citation and quotation marks omitted); Naegele v.
27 Tonius, 320 F. App'x 550, 551 (9th Cir. 2009); but see Kelton Arms Condo. Owners Ass’n, Inc. v. Homestead Ins.
Co., 346 F.3d 1190, 1193 (9th Cir. 2003) (holding that district courts cannot remand sua sponte for only procedural
1 its own tortious conduct, i.e., Safeco’s bad faith refusal to settle her claim against
Mankin. Such liability could not be imposed against Mankin, nor could Mankin
2 even be joined as a defendant in this suit . . . The district court thus did not err in
concluding that diversity jurisdiction existed in this case.
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4 Beckham v. Safeco Ins. Co. of Am., 691 F.2d 898, 901–02 (9th Cir. 1982) (internal citations and
5 quotation marks omitted). Thus, in an insurance bad faith action, an insured’s citizenship is
6 largely held to not be imputed to the insurance company.2
7 However, on a motion to remand, the “defendant bears the burden of establishing proper
8 removal and federal jurisdiction.” Karaeiga, LLC v. Yoostar Entm't Grp., Inc., No.
9 SACV120273AGRNBX, 2012 WL 12893991, at *1 (C.D. Cal. May 2, 2012); see also Dobbs v.
10 Wood Grp. PSN, Inc., 201 F. Supp. 3d 1184, 1188 (E.D. Cal. 2016) (“On a plaintiff's motion to
11 remand, it is a defendant’s burden to establish jurisdiction by a preponderance of the evidence.”);
12 Marin Gen. Hosp. v. Modesto & Empire Traction Co., 581 F.3d 941, 944 (9th Cir. 2009) (“The
13 burden of establishing federal subject matter jurisdiction falls on the party invoking removal.”).
14 Therefore, while it appears the action may only encompass an insurance bad faith claim, the
15 Court cannot discern all of the underlying facts of the dispute, and given the law discussed herein
16 and the Plaintiff’s pro se status, the Court shall require Defendant to file an opposition to
17 Plaintiff’s motion to remand that specifically addresses the facts and claims underlying
18 Plaintiff’s complaint in relation to 28 U.S.C. § 1332(c)(1).
19 ///
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21 2 In Chavarria, the district court declined to extend Beckham following a subsequent Supreme Court decision.
Chavarria v. Allstate Ins. Co., 749 F. Supp. 220, 222 (C.D. Cal. 1990) (“Allstate argues that a bad faith action by the
22 insured against an insurer under the provisions of a liability insurance policy does not constitute a direct action for
the purposes of § 1332(c)(1), citing [Beckham] in support of this contention . . . [h]owever, due to a recent Supreme
23 Court opinion discussing § 1332(c)(1) and basic principles of statutory construction, this Court cannot agree with
Allstate’s interpretation of 28 U.S.C. § 1332(c)(1).”). However, the Ninth Circuit has specifically addressed the
24 holding of Chavarria. See Searles v. Cincinnati Ins. Co., 998 F.2d 728, 729-30 (9th Cir. 1993) (“In Chavarria, the
court held that Beckham was no longer good law after the Supreme Court’s decision in Northbrook . . . In Beckham,
25 we held that a bad faith action brought by an insured against the insurer is not a ‘direct action’ within the meaning of
28 U.S.C. § 1332(c)(1). Rather, a direct action is one in which a plaintiff is entitled to bring suit against the
tortfeasor’s liability insurer without joining the insured. The Supreme Court’s decision in Northbrook did not
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address the meaning of a ‘direct action,’ and thus does not dictate a contrary result.”). More recently in an
unpublished decision, the Ninth Circuit entertained the argument that the Beckham discussion was dicta. Nantes v.
27 New London Cty. Mut. Ins. Co., 441 F. App’x 517, 518 (9th Cir. 2011) (unpublished) (“Even assuming that the
definition is dicta, the Beckham court appears to be correct that federal courts interpret Section 1332(c)(1)
1 Accordingly, IT IS HEREBY ORDERED that:
2 1. On or before April 8, 2020, Defendant shall file an opposition to Plaintiff's
3 motion to remand that specifically addresses 28 U.S.C. § 1332(c)(1);
4 2. Defendant shall serve the opposition on Plaintiff via postal mail or other
5 appropriate method; and
6 3. Plaintiff may file a reply to Defendant’s opposition within seven (7) days of
7 service of Defendant’s opposition on Plaintiff.
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9 IT IS SO ORDERED. OF. a Se
10 | Dated: _March 24, 2020 _ _
UNITED STATES MAGISTRATE JUDGE
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