Andrew Smith v. Mylan Inc.

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

ANDREW SMITH, individually and as No. 12-56028

successor-in-interest to Jennifer

Roberts (deceased); A. S., by and D.C. No.

through her Guardian Ad Litem, 5:12-cv-00216-

Tera Harden Esq.; individually and ODW-SP

as successor-in-interest to Jennifer

Roberts (deceased); S. N., by and

through her Guardian Ad Litem, OPINION

Sherry Kinnison; individually and as

successor-in-interest to Jennifer

Roberts (deceased),

Plaintiffs-Appellees,

v.

MYLAN INC.; MYLAN

PHARMACEUTICALS, INC.; MYLAN

TECHNOLOGIES INC.; MYLAN

INSTITUTIONAL INC.,

Defendants-Appellants.

Appeal from the United States District Court

for the Central District of California

Otis D. Wright II, District Judge, Presiding

2 SMITH V. MYLAN, INC.

Submitted February 10, 2014*

Pasadena, California

Filed August 4, 2014

Before: Dorothy W. Nelson, Richard A. Paez,

and Jacqueline H. Nguyen, Circuit Judges.

Opinion by Judge Nguyen

SUMMARY**

Diversity Jurisdiction / Removal

The panel vacated the district court’s dismissal based on

lack of subject matter jurisdiction of a wrongful death case,

and remanded to the district court.

Defendants invoked diversity jurisdiction and filed a

notice of removal fourteen months after the lawsuit was filed

in state court. The district court sua sponte remanded on the

ground that Defendants had removed the case too late, and

pursuant to 28 U.S.C. § 1447(c) found that it lacked subject

matter jurisdiction.

*

The panel unanimously concludes this case is suitable for decision

without oral argument. See Fed. R. App. P. 34(a)(2).

**

This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

SMITH V. MYLAN, INC. 3

The panel held that it had jurisdiction to review the

district court’s remand order. The panel also held that the

district court acted in excess of its statutory authority because

the one-year time limitation for removal of diversity cases

under 28 U.S.C. § 1446(b) (current version at 28 U.S.C.

§ 1446(c)) was a procedural requirement rather than

jurisdictional. The panel held that the district court could not

remand sua sponte based on a non-jurisdictional defect

because procedural deficiencies were waivable. The panel

concluded that Plaintiffs’ failure to object constituted a

waiver of any right to contest the removal.

COUNSEL

Clem C. Trischler and Jason M. Reefer, Pietragallo Gordon

Alfano, Pittsburgh, Pennsylvania; Julian G. Senior, Spencer

LLP, Manhattan Beach, California, for Defendants-

Appellants.

Patricia A. Law, Law Offices of Patricia A. Law, Riverside,

California, for Plaintiffs-Appellees.

OPINION

NGUYEN, Circuit Judge:

A state court action may not be removed to federal court

on the basis of diversity jurisdiction more than one year after

the action was filed. See 28 U.S.C. § 1446(b) (current

version at 28 U.S.C. § 1446(c)). Defendants in this wrongful

death case invoked diversity jurisdiction and filed a notice of

removal fourteen months after the lawsuit was filed in state

4 SMITH V. MYLAN, INC.

court. The district court sua sponte remanded on the ground

that Defendants had removed the case too late. The court,

relying on 28 U.S.C. § 1447(c), found that it lacked subject

matter jurisdiction.

We hold that the district court acted in excess of its

statutory authority because the one-year time limitation for

removal of diversity cases under § 1446(b) is a procedural

requirement rather than jurisdictional. While the district

court may remand at any time prior to final judgment for lack

of subject matter jurisdiction, it cannot remand sua sponte

based on a non-jurisdictional defect because procedural

deficiencies are waivable. Here, Plaintiffs’ failure to object

constitutes a waiver of any right to contest the removal. We

therefore vacate and remand.

FACTUAL BACKGROUND

Plaintiffs Andrew Smith, Alexandra Smith, and Sarah

Nevitt (collectively, “Plaintiffs”), individually and as

successors-in-interest to their mother, filed a wrongful death

action in state court on December 22, 2010. In October 2011,

Plaintiffs served Defendants Mylan Inc., Mylan

Pharmaceuticals, Inc., Mylan Technologies, Inc., and Mylan

Institutional, Inc. (collectively, “Defendants”) with an

amended complaint. At that point, however, Defendants

could not have removed the case because there was no federal

question jurisdiction and the parties were not completely

diverse. See 28 U.S.C. §§ 1331, 1332, 1441. On January 30,

2012, more than one year after the filing of the case, the state

court dismissed the last remaining non-diverse defendant.

Two weeks later, on February 9, 2012, Defendants removed

the matter to federal court, invoking diversity jurisdiction.

SMITH V. MYLAN, INC. 5

Plaintiffs did not file a motion to remand or otherwise

object to removal. To the contrary, shortly after removal, the

parties filed a joint report pursuant to Rule 26(f) of the

Federal Rules of Civil Procedure in preparation for a

scheduling conference with the court. Nonetheless, a few

weeks later, on May 3, 2012, the district court sua sponte

remanded the case pursuant to § 1447(c) for lack of subject

matter jurisdiction, finding that the case was improperly

removed more than one year after it commenced in state

court. Defendants timely appealed.

DISCUSSION

A.

As a threshold matter, we must decide whether we have

jurisdiction to review the district court’s remand order. Aside

from certain exceptions not relevant here, § 1447(d) states

that a remand order “is not reviewable on appeal or

otherwise.” Despite this broad language, § 1447(d) does not

preclude review if the district court lacked authority to

remand under § 1447(c) in the first instance. Kelton Arms

Condo. Owners Ass’n v. Homestead Ins. Co., 346 F.3d 1190,

1191 (9th Cir. 2003). “If, on the other hand, the district court

had the power to remand sua sponte under section 1447(c),

section 1447(d) would apply, and we would have no

jurisdiction to review even if the remand was erroneous.” Id.

Thus, our resolution of the merits here determines

whether we have jurisdiction. As discussed below, the

district court lacked authority under § 1447(c) to remand sua

sponte based on Defendants’ failure to remove within the

one-year time limitation prescribed in § 1446(b). We

6 SMITH V. MYLAN, INC.

therefore conclude that we have jurisdiction to review the

district court’s remand order.

B.

We now turn to the merits. Under § 1447(c), the district

court must remand “[i]f at any time before final judgment it

appears that the district court lacks subject matter

jurisdiction[.]” However, the court may remand for defects

other than lack of subject matter jurisdiction only upon a

timely motion to remand. See § 1447(c) (“A motion to

remand the case on the basis of any defect other than lack of

subject matter jurisdiction must be made within 30 days after

the filing of the notice of removal under section 1446(a).”);

Kelton, 346 F.3d at 1193 (holding that “the district court

cannot remand sua sponte for defects in removal procedure”).

Therefore, the question that we must decide is whether

§ 1446(b)’s one-year time limitation for removal of diversity

cases is jurisdictional, rather than procedural in nature.

Section 1446(b) provides in relevant part:

The notice of removal of a civil action or

proceeding shall be filed within thirty days

after the receipt by the defendant . . . of a copy

of the initial pleading setting forth the claim

for relief upon which such action or

proceeding is based . . . .

If the case stated by the initial pleading is not

removable, a notice of removal may be filed

within thirty days after receipt by the

defendant . . . of a copy of an amended

pleading . . . from which it may first be

SMITH V. MYLAN, INC. 7

ascertained that the case is one which is or has

become removable, except that a case may not

be removed on the basis of jurisdiction

conferred by section 1332 of this title more

than 1 year after commencement of the action.

(emphasis added).1

We have never specifically considered whether

§ 1446(b)’s one-year time limitation is procedural or

jurisdictional. However, we have examined § 1446(b)’s

thirty-day time limit within which the defendant must file a

notice of removal after receipt of the complaint, and we have

found it to be merely procedural. In Fristoe v. Reynolds

Metals Co., we observed that “the [thirty-day] statutory time

limit for removal petitions is merely a formal and modal

requirement and is not jurisdictional.” 615 F.2d 1209, 1212

(9th Cir. 1980). We further explained that “[a]lthough the

time limit is mandatory and a timely objection to a late

petition will defeat removal, a party may waive the defect or

be estopped from objecting to the untimeliness by sitting on

his rights.” Id.; see also Maniar v. FDIC, 979 F.2d 782, 784

(9th Cir. 1992) (holding that “untimely removal is a

1

On December 7, 2011, Congress enacted the Federal Courts

Jurisdiction and Venue Clarification Act of 2011, Pub. L. No. 112-63, 125

Stat. 758 (2011) (“the Act”), which amended certain portions of Title 28

of the United States Code, including § 1446(b). The Act’s amendments

took effect on January 6, 2012 and applied only to: (1) cases that were

commenced in a district court on or after the Act’s effective date and

(2) cases that were removed from a state court to a district court and that

had been commenced on or after the Act’s effective date. See Pub. L.

112-63. Because this case was commenced in December 2010, before the

Act’s effective date, the version of § 1446(b) that is cited herein is the one

in effect at the time this case was removed.

8 SMITH V. MYLAN, INC.

procedural defect and not jurisdictional”); Kelton, 346 F.3d

at 1192–93 (same).

We see no reason to construe § 1446(b)’s one-year time

limitation any differently from its thirty-day requirement.

Accordingly, we hold that the one-year time limitation for

removal of diversity cases is a procedural, non-jurisdictional

requirement rather than jurisdictional. Because procedural

defects are waivable, a district court lacks authority to

remand based on the defendant’s violation of § 1446(b)’s one

year-time limitation absent a timely filed motion to remand.

See Kelton, 346 F.3d at 1192 (stating that procedural

requirements, like personal jurisdiction, may be waived).

Our conclusion is consistent with those of our sister

circuits that have addressed the one-year time limit in

§ 1446(b). See Music v. Arrowood Indem. Co., 632 F.3d 284,

288 (6th Cir. 2011) (“[W]e hold that the one-year time

limitation rule for removal, 28 U.S.C. § 1446(b), is

procedural, not jurisdictional, and therefore subject to

forfeiture.”); Ariel Land Owners, Inc. v. Dring, 351 F.3d 611,

616 (3d Cir. 2003) (“Because failure to remove within the

one-year time limit established by § 1446(b) is not a

jurisdictional defect, a district court has no authority to order

remand on that basis without a timely filed motion.”); In re

Uniroyal Goodrich Tire Co., 104 F.3d 322, 324 (11th Cir.

1997) (“The untimeliness of a removal is a procedural,

instead of a jurisdictional, defect.”); Barnes v. Westinghouse

Electric Corp., 962 F.2d 513, 516 (5th Cir. 1992) (“We are

not persuaded by [the plaintiff’s] arguments that section

1446(b) is jurisdictional in nature . . . .”).

Further, as the Third Circuit observed, a finding that the

time limit requirements in § 1446(b) are procedural is

SMITH V. MYLAN, INC. 9

supported by both the language of the statute and its

legislative history. “First, nothing in the text of the statute

suggests that the one-year limit operates differently from the

30-day limit. Neither provision expressly purports to limit

federal jurisdiction[.]” Ariel, 351 F.3d at 614. And, the

legislative history indicates that Congress passed the one-year

time limit “simply to close a procedural gap that had arisen in

the application of the 30-day time limit[.]” Id. at 615.

C.

Plaintiffs in this case did not file a motion to remand. “A

plaintiff may wish to remain in federal court even though he

or she originally filed in state court. For example, a plaintiff

might do this simply to expedite the litigation.” Kelton,

346 F.3d at 1192. That may have been the case here, since

Plaintiffs raised no objection to removal and instead joined

Defendants in filing a Rule 26 report in anticipation of a

scheduling conference with the court. Therefore, Plaintiffs

have implicitly waived any procedural defect in removal. By

remanding sua sponte on the basis of Defendants’ violation

of the one-year time limitation in § 1446(b), the district court

acted in excess of its statutory authority.

The parties shall bear their own costs on appeal.

VACATED AND REMANDED.