Frivolous or Duplicative Notice of Removal of State Court Action to Federal Court Does Not Deprive State Court of Jurisdiction

In ClipperJet v, Tyson, decided on August 7, 2019, the California Court of Appeal decided that the filing of a frivolous or duplicative Notice of Removal of a state court action to federal court does not deprive the state court of jurisdiction over the case.

By way of background, federal courts are courts of limited jurisdiction. Unlike state courts, they have no inherent or general subject matter jurisdiction. They can adjudicate only those cases that the Constitution and Congress authorize them to adjudicate. By contrast, California Superior Courts are courts of general, unlimited jurisdiction. They can render enforceable judgments in practically any kind of case. The only real exception is cases involving matters within the exclusive jurisdiction of federal courts.

Generally, federal courts have jurisdiction over cases involving a federal question (i.e. those claims arising under the U.S. Constitution, treaties, federal statutes, administrative regulations or common law) and claims where there is diversity of citizenship (i.e. where the litigants are citizens of different states and the amount in controversy is over $75,000).

When a plaintiff files an action in state court that is subject to federal court jurisdiction, the defendant may opt to “remove” the action to federal court. In general, the defendant must file in the district court a notice of removal 30 days after receipt of the first pleading in the state action that sets forth a removable claim. Once a case is properly removed to federal court, the state court generally loses jurisdiction over the case unless and until the case is remanded back to the state court.

In ClipperJet v, Tyson, ClipperJet filed a complaint against Tyson, codefendant Hill, and their alleged companies for breach of a contract, fraud, negligent misrepresentation, conspiracy and aiding and abetting fraud. Tyson removed the case to federal court. The federal court subsequently remanded the case to state court because the federal court lacked jurisdiction over the case. Thereafter, co-defendant Hill filed a second notice of removal, which was identical to the first. During second removal period, the state court denied Tyson’s motion to strike ClipperJet’s complaint. The federal court again remanded the case to state court. Tyson failed to file a response to the complaint or appear at a case management conference. Accordingly, the state court entered a default against Tyson. Tyson took no further action until 8 months after the remand, when he moved to set as ide the default. The state court denied the motion and entered a default judgment against Tyson.

Tyson appealed from the default judgment claiming that the court did not have jurisdiction to rule on his motion to strike while the case was removed to federal court; accordingly, his time to respond to the complaint had not expired. The Court of Appeal concluded that the second notice of removal was untimely, frivolous and duplicative. Under these circumstances, the Court of Appeal concluded that the state court retained jurisdiction to rule on the motion to strike. As such, the Court of Appeal affirmed the judgment.

For further information, please contact Wallace, Richardson, Sontag & Le, LLP at (949) 748-3600.

The law firm of Wallace, Richardson, Sontag & Le, LLP represents landlords, property management companies, institutional and private lenders, employers and insurance companies throughout the State of California in real estate, business and employment litigation. The information provided herein is for general interest only and should not be relied upon or construed as legal advice