In Blaker v. Credit One Bank, 2018 WL 5307470, at *3–4 (S.D.Cal., 2018), Magistrate Judge Adler found remanded a removed action to a state court that had been arbitrated and Plaintiff attempted to confirm.  The facts were as follows:
Plaintiffs Richard and Samantha Blaker initiated this lawsuit by filing a complaint in San Diego County Superior Court on March 25, 2016. [Doc. No. 1-2.] The original complaint alleged that Plaintiffs had paid off the balances of credit cards from Credit One and closed their account over the phone and in writing. [Doc. No. 1-2 at 5.]1 After they closed the account, Credit One charged them a fee for their cards and then charged them a late fee for not paying the fee. [Id.] Credit One then engaged in harassing collection practices concerning these fees and reported false information on Plaintiffs’ credit reports. [Id.] Based on these allegations, the complaint asserted three state law claims: (1) violation of California’s Rosenthal Act; (2) violation of California’s Consumer Credit Reporting Agencies Act; and (3) invasion of privacy—intrusion into private affairs. [Id. at 6-8.] The complaint sought actual, statutory and punitive damages, along with costs and reasonable attorney’s fees. [Id. at 8.]   On May 25, 2016, Credit One filed a motion to compel arbitration, which the state court granted on July 18, 2016. [Doc. Nos. 1-3, 1-4.] The state court stayed the case pending completion of the arbitration. [Doc. No. 1-4 at 2.] On August 1, 2016, Plaintiffs filed a claim with the American Arbitration Association (“AAA”) that was virtually identical to the state court complaint. [Doc. No. 1-5.] On January 9, 2017, Plaintiffs filed an amended claim with the AAA that added a cause of action for violations of the federal Telephone Consumer Protection Act (“TCPA”). [Doc. No. 1-6.] On July 27, 2017, Plaintiffs filed a brief with the AAA asking for an award of $387,000 for TCPA violations in addition to damages for the other claims. [Doc. No. 2-3 at 13.]  Following a hearing on August 3 and 4, 2017, the AAA arbitrator found for Plaintiffs and awarded them in excess of $75,000. [Doc. No. 2-2 at ¶ 8.] Credit One appealed this award to a three-person AAA tribunal, which unanimously found in Plaintiffs’ favor after a hearing on April 18 and 19, 2018, and entered a final award of $411,757.45 on July 19, 2018. [Doc. No. 2-4.]  On August 10, 2018, Plaintiffs filed a petition in state court to confirm the arbitration award, and a hearing was set for September 21, 2018. [Doc. No. 1-7.] The petition was served on Credit One by mail on August 9, 2018. On September 10, 2018, Credit One removed the case to this court. The notice of removal contends that subject matter jurisdiction exists both under 28 U.S.C. § 1331 (federal question jurisdiction) and 28 U.S.C. § 1332 (diversity jurisdiction). Two days later, Plaintiffs filed the instant motion to remand on the grounds that the removal was untimely pursuant to 28 U.S.C. § 1446.
The District Court remanded the case to state court.
There is no question that these requirements are satisfied here as the parties are diverse and the amount in controversy equals at least the amount of the arbitration award, which was over $75,000. Accordingly, the Court can turn to Plaintiffs’ arguments about the timeliness of Credit One’s removal. Plaintiffs argue that the complaint was removable on its face based on diversity jurisdiction. The Court need not address this argument, however, because even if the complaint was not initially removable, Credit One’s removal based on diversity jurisdiction was untimely under the second thirty-day removal period. Plaintiffs argue that this second period was triggered when Plaintiffs’ July 27, 2017, arbitration brief sought in excess of $387,000 in damages or at a minimum when the AAA appeal panel entered a final award of $411,757.45 on July 19, 2018. Credit One, meanwhile, argues that the lawsuit did not become removable until Plaintiffs filed their petition to confirm the arbitration award in state court.  “When the defendant receives enough facts to remove on any basis under section 1441, the case is removable, and section 1446’s thirty-day clock starts ticking.” Durham v. Lockheed Martin Corp., 445 F.3d 1247, 1253 (9th Cir. 2006). Here, there is no dispute that Credit One had enough facts to remove this case at least as early as July 27, 2017, when Plaintiffs specified in their arbitration brief that they sought in excess of $75,000 in damages. Considering that this lawsuit was stayed pending the outcome of the arbitration, facts about Plaintiffs’ damages claims in the arbitration necessarily impact the amount in controversy in the stayed lawsuit. Credit One cites to no authority for the proposition that the state court stay operates to toll the thirty-day clock for removal or the one year deadline for removal on the basis of diversity jurisdiction, and the cases it cites involving bankruptcy stays are inapposite. See Three Pirates, LLC v. Shelton Bros., Inc., No. 3:16-CV-01054-JE, 2016 WL 6534523, at *4 (D. Or. Sept. 27, 2016) (rejecting removing party’s argument that a state court stay tolled the thirty-day clock and concluding that “the tolling effect of an automatic bankruptcy stay is wholly distinct from and inapplicable…”), report and recommendation adopted, No. 3:16-CV-01054-JE, 2016 WL 6561557 (D. Or. Nov. 1, 2016). Accordingly, because Credit One did not notice the removal of this case within 30 days of July 27, 2017, or within one year of the date the lawsuit was filed in state court, the removal based on diversity jurisdiction was untimely.