Caraballo v. The Gillette Company LLC

Background

Denise Caraballo brought a civil action in the Supreme Court of the State of New York, County of Bronx. The Gillette Company LLC, The Procter & Gamble Manufacturing Company, and Costco Wholesale Corporation removed that action to the U.S. District Court for the Southern District of New York based on diversity jurisdiction under 28 U.S.C. § 1332(a)(1).

The defendants had been served with the complaint on February 8, 2019, more than 30 days before they filed their notice of removal. They argued that removal was timely under 28 U.S.C. § 1446(b)(3), which permits removal within 30 days after a defendant receives an amended pleading, motion, order, or other paper showing for the first time that the case is removable. The defendants represented that Caraballo had previously stipulated in writing in state court that the amount in controversy did not exceed $75,000, but that her counsel stated in February 2021 that the amount exceeded $75,000.

Legal standard

Under 28 U.S.C. § 1446(c)(1), a diversity case generally may not be removed more than one year after the action began unless the district court finds that the plaintiff acted in bad faith to prevent removal. The opinion explains that bad faith can include deliberately failing to disclose the actual amount in controversy for that purpose. Courts may decline to find bad faith when the plaintiff’s actions do not show a specific desire to prevent removal, even if the plaintiff’s conduct contributed to delay.

Ruling

The court stated that the defendants did not identify, and their submissions did not show, evidence from which to infer that Caraballo sought to prevent removal in bad faith. The court therefore ordered that removal was improper under 28 U.S.C. § 1446(c)(1). Judge Lorna G. Schofield remanded the case to the Supreme Court of the State of New York, County of Bronx.