Anheuser-Busch v. Pabst

Background

Anheuser-Busch, LLC filed the original complaint against Christina Pabst in Contra Costa County Superior Court in May 2024. Pabst later filed a cross-complaint against Anheuser-Busch that also named Anheuser-Busch InBev Services, LLC. Anheuser-Busch and InBev then filed a notice removing the case to the U.S. District Court for the Northern District of California.

Pabst moved to remand, meaning to return the case to state court, and requested attorney fees. The federal court decided the motion without oral argument and vacated the scheduled hearing.

Removal ruling

The court held that Anheuser-Busch could not remove the case because it was the original plaintiff. The removal statute permits removal by “the defendant or the defendants.” The court explained that being named as a defendant in a cross-complaint did not change Anheuser-Busch’s status for purposes of removal. It also held that adding a third-party defendant to the cross-complaint did not authorize removal.

The court rejected Anheuser-Busch’s argument that this rule applied only to cases removed on federal-question grounds. The court noted that the removal here was based on diversity jurisdiction and that the cited Supreme Court decision also involved diversity jurisdiction.

The court also rejected Anheuser-Busch’s reliance on “realignment.” Realignment is a jurisdictional concept under which a court may place a party on the side of the case matching that party’s actual litigation interests. The court found no basis for realignment because no party was alleged to have interests that actually matched the opposing side. Simply switching the labels of the existing plaintiffs and defendants was not realignment.

Disposition

The motion to remand the case to Contra Costa County Superior Court was granted. The court stated that Anheuser-Busch’s basis for removal bordered on objectively unreasonable, but because the question was close, Pabst’s request for attorney fees was denied.

The court further stated that, because removal was improper and federal jurisdiction was lacking, there was no basis to reach the motion by Anheuser-Busch and InBev to compel arbitration and to dismiss or stay the case. That motion was denied for lack of jurisdiction, without prejudice to the state court’s [the provided opinion text is incomplete at this point]. The order was signed by Chief United States District Judge Richard Seeborg.