Kuxhausen v. BMW Financial Services

Under 28 U.S.C. § 1446, the time limits for removal are not triggered where (1) the removability of the initial complaint cannot be determined without valuation information from the defendant and (2) no subsequent document filed with the court provides a basis for removal.

Kuxhausen et. al., brought a class actions suit in California state court against BMW financial services for alleged non-disclosure of hidden vehicle registration fees and an 'unconscionable' arbitration clause as part of the dealer's Retail Installment Sales Contract (RISC). The state court granted BMW's motion for removal to federal court on diversity grounds because that the amended complaint alleged more than $10 million in controversy. The district court held BMW's removal request was not timely and remanded the case to state court. BMW appealed. The Ninth Circuit noted, "[t]he mechanics and requirements for removal are governed by 28 U.S.C. § 1446," which provides for removal within 30 days of either (1) an initial pleading that is removable on its face or (2) if the initial pleading is not removable on its face, defendant receiving "a copy of an amended pleading, motion, order or other paper’ from which removability may first be ascertained.” The Court also noted that §1446 governs cases where federal jurisdiction arises under the Class Action Fairness Act. The Ninth Circuit determined that the original complaint's amount in controversy was not clear enough to reasonably infer that it was removable on its face and BMW was not obligated to supply valuation information to the plaintiff. The Court also determined that neither a demand letter nor a Case Management Conference Statement provided a basis for removability sufficient to trigger the second 30-day time period. The Ninth Circuit held that BMW's motion for removal was timely. REVERSED AND REMANDED.