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Bad Kitty Inc. v. Guotai USA Co. Ltd.

United States District Court, D. Arizona

April 5, 2019

Bad Kitty Incorporated, Plaintiff,
v.
Guotai USA Company Limited, et al., Defendants.

          ORDER

          G. MURRAY SNOW CHIEF UNITED STATES DISTRICT JUDGE.

         Pending before the Court is Plaintiff Bad Kitty Incorporated's Motion to Remand to State Court (Doc. 15). For the following reasons the motion is granted.

         BACKGROUND

         Plaintiff Bad Kitty Inc., an Arizona corporation, filed this suit against Guotai USA Company, Ltd. (“Guotai”) and Jiangsu Guotai Litian Enterprises, Co. (“Guotai China”). The suit was originally filed in the Superior Court for Maricopa County on October 9, 2018. Guotai removed the case to this Court on February 11, 2019. (Doc. 1). Bad Kitty now petitions for remand to state court.

         DISCUSSION

         I. Legal Standards

         Under 28 U.S.C. § 1332, federal district courts have jurisdiction over actions between citizens of different states where the amount in controversy exceeds $75, 000. If an action meeting those qualifications is filed in state court, the defendant(s) in the case may remove the action “to the district court of the United States for the district and division embracing the place where such action is pending.” 28 U.S.C. § 1441(a).

         II. Analysis

         A. Guotai's removal was untimely.

         “The notice of removal of a civil action or proceeding shall be filed within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based.” 28 U.S.C. § 1446(b)(1). “[A] named defendant's time to remove is triggered by simultaneous service of the summons and complaint, or receipt of the complaint, ‘through service or otherwise,' after and apart from the service of the summons, but not by mere receipt of the complaint unattended by any formal service.” Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 347-48 (1999).

         Here, “[t]he parties agree on how to count to thirty, but they disagree over when to begin counting.” Anderson v. State Farm Mut. Auto. Ins. Co., 917 F.3d 1126, 1128 (9th Cir. 2019). The nub of the dispute here centers on whether Bad Kitty validly served Guotai on January 2, 2019. If that service was valid, then Guotai's removal on February 11, 2019 was untimely under § 1446(b)(1) and the case must be remanded. Under Arizona law, a corporation located outside of the state but within the United States may be served by:

delivering a copy of the summons and the pleading being served to a partner, an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive the service of process and-if the agent is one authorized by statute and the statute so requires-by also mailing a copy of each to the defendant.

Ariz. R. Civ. P. 4.2(h). The statute thus provides multiple options for service and only requires an additional mailing a copy of the summons and pleading if the person served is an agent “authorized by statute and the statute so requires.” Id. See also Mid-Nebraska Tractor Co. v. Teel, No. CV-16-00537-TUC-CKJ, 2017 U.S. Dist. LEXIS 15602, at *5 (D. Ariz. Feb. 2, 2017). In Arizona, “the rules are to be liberally construed as to service of process on foreign corporations.” Schering Corp. v. Cotlow, 94 Ariz. 365, 368, 385 P.2d 234, 237 (1963).

         On January 2, 2019, a process server delivered a copy of the Summons, Complaint, Certificate on Compulsory Arbitration, and various exhibits to Guotai's offices. The documents were served on a woman who identified herself as “Bertha, ” the “person in charge” at the office. (Doc. 1-3 at 45). The documents were then placed on the desk of Joseph Cohen, Guotai's CEO. (Doc. 17 at 3). The proof of service form also states that the process server ...


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