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Terrell v. Costco Wholesale Corp.

United States District Court, W.D. Washington

May 16, 2017



          JAMES L. ROB ART United States District Judge.


         Before the court is Plaintiff Julius Terrell's and Defendant Costco Wholesale Corporation's ("Costco") responsive briefing to the court's order directing briefing on Mr. Terrell's Article III standing. (See 4/12/17 Order (Dkt. # 52); Costco Op. Br. (Dkt. # 54); Terrell Op. Br. (Dkt. # 55); Costco Resp. (Dkt. # 57); Terrell Resp. (Dkt. # 58).) Having considered the parties' briefing, the relevant portions of the record, and the applicable law, the court REMANDS this case to King County Superior Court for lack of subj ect matter jurisdiction.


         This is a putative class action in which Mr. Terrell alleges that Costco violated the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 etseq., by providing noncompliant disclosures to job applicants. (See generally Compl. (Dkt. # 5-1).) On September 6, 2016, Costco removed this case from King County Superior Court. (See Not. of Removal (Dkt. #1).) Costco then moved to dismiss the case for lack of Article III standing based on Spokeo, Inc. v. Robins, - U.S. -, 136 S.Ct. 1540 (2016). (MTD (Dkt. #19).) Mr. Terrell responded that his allegations supported standing and, at any rate, the case should be remanded-not dismissed-if the court concluded that he lacked standing. (See MTD Resp. (Dkt. # 28).)

         Relying in large part on the Ninth Circuit's initial opinion in Syed v. M-I, LLC, 846 F.3d 1034 (9th Cir. 2017) ("Syed i"), amended and superseded on denial of rehearing en banc by Syed v. M-I, LLC, 853 F.3d 492 (9th Cir. Mar. 20, 2017) ("Syed IF), the court concluded that Mr. Terrell had adequately alleged facts to support his Article III standing and denied Costco's motion to dismiss. (3/10/17 Order (Dkt. # 44).) Following the court's order, however, the Ninth Circuit issued SyedII, which amended and superseded Syedl. See Syed II, 853 F.3d at 499-500. This court reviewed Syed II, determined that the amendments to Syed I arguably alter the conclusion the court reached in its initial order denying Costco's motion to dismiss, and ordered the parties to brief the impact of Syed II on Mr. Terrell's Article III standing. (4/12/17 Order at 2-5.)

         In response, neither party argues that Mr. Terrell's allegations sufficiently support his Article III standing.[1] Courts lack subject matter jurisdiction over actions in which the plaintiff lacks Article III standing. See Bernhardt v. Cty. of L.A., 279 F.3d 862, 868 (9th Cir. 2002); (cf. Costco Resp. at 3 ("The Court should not muddle Article III standards with the question of whether a matter can be removed under 28 U.S.C. § 1441.").) Because the federal courts are courts of limited jurisdiction, the court presumes that a given cause lies outside its jurisdiction. See Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994). Costco, as the removing party, bears the burden of establishing the court's subject matter jurisdiction.[2] See Id. Instead, Costco argues that Mr. Terrell lacks standing and that this court therefore lacks subject matter jurisdiction. (Costco Op. Br. at 1-5.) Accordingly, the court concludes that Costco has failed to rebut the presumption against federal juris diction.[3]

         The parties also dispute whether the court's lack of subject matter jurisdiction warrants remand or dismissal. (Terrell Op. Br. at 2-5; Costco Op. Br. at 5-8; Terrell Resp. at 1-3; Costco Resp. at 3-4.) In a case removed from state court, "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447(c). Remand is generally compulsory, not discretionary. See Polo v. Innoventions Int'l, LLC, 833 F.3d 1193, 1196 (9th Cir. 2016) (citing ASARCO Inc. v. Kadish, 490 U.S. 605, 617 (1989)) ("Remand is the correct remedy because a failure of federal subject-matter jurisdiction means only that the federal courts have no power to adjudicate the matter. State courts are not bound by the constraints of Article III.").

         Costco argues a futility exception to the compulsory language of Section 1447(c) applies here. (Costco Op. Br. at 5-7 (citing Bell v. City of Kellogg, 922 F.2d 1418, 1424-25 (9th Cir. 1991)); Costco Resp. at 3-4 (same).) Even assuming that the futility exception embraced in Bell remains good law, cf. Int'l Primate Prot. League v. Adm 'rs of Tulane Educ. Fund, 500 U.S. 72, 88-89 (1991); Polo 833 F.3d at 1197, Costco has not shown that it is "certain that a remand to state court would be futile, " Bell, 922 F.2d at

1425; see also Polo, 833 F.3d at 1198-99. Costco shows only that when analyzing a plaintiffs standing, Washington state courts tend to follow federal Article III jurisprudence. (See Costco Op. Br. at 5-6; Costco Resp. at 3-4.) The Washington appellate courts have not yet determined whether Spokeo's clarifications to the injury-in-fact prong extend to Washington law on standing, and it is therefore unclear whether remand would be futile. See Polo, 833 F.3d at 1198-99. The comity interests embodied by Section 1447(c)'s mandatory language therefore operate strongly here. Cf. Bell, 922 F.2d at 1425 ("Because we are certain that a remand to state court would be futile, no comity concerns are involved."). Accordingly, the court remands this case for lack of subj ect matter jurisdiction.


         Based on the foregoing analysis, the court ORDERS that:

1. Pursuant to 28 U.S.C. ยง 1447(c), all further proceedings in this case are REMANDED to the King ...

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