and Submitted March 4, 2019 Seattle, Washington
from the United States District Court for the Western
District of Washington John C. Coughenour, District Judge,
Presiding D.C. No. 2:17-cv-00287-JCC
Joseph Gaudet Jr. (argued), Karin Gaudet-Asmus, Seattle,
Washington; Hardeep S. Rekhi and Gregory Wolk, Seattle,
Washington; for Plaintiff-Appellant.
Ashley Commons (argued), Sidley Austin LLP, Los Angeles,
California; Aaron Paul Riensche (argued) and Jeffrey D.
Dunbar, Seattle, Washington; Bruce Hamlin, Lane Powell PC,
Seattle, Washington; Michael C. Andolina, Sidley Austin LLP,
Chicago, Illinois; for Defendant-Appellee.
Before: Ronald M. Gould and Richard A. Paez, Circuit Judges,
and Cynthia A. Bashant, [*] District Judge.
Action Fairness Act
panel affirmed the district court's grant of summary
judgment to defendants in a putative class action against the
American Honda Finance Corporation and various car
dealerships alleging defendants failed to provide plaintiff
with add-ons that were promised in the Dealer Addendum when
plaintiff bought his new Honda Accord.
brought a putative class action in Washington state superior
court, and defendant American Honda Finance Corporation
removed the case to federal court under the Class Action
Fairness Act. Plaintiff moved to remand, but the district
court denied that motion. Plaintiff then amended his
complaint to assert a federal claim under the Truth in
Lending Act. After further motion practice and discovery, the
district court granted summary judgment for defendants and
dismissed plaintiff's claims.
panel first held that plaintiff preserved his objection that
removal was improper because he timely moved to remand the
case to state court following removal. The panel held that
the district court did not have subject-matter jurisdiction
over this action at the time of removal because the Class
Action Fairness Act's home state exception barred the
exercise of jurisdiction. The home state exception applied
because the dealership defendants were the primary defendants
responsible for the direct harm to consumers and two-thirds
or more of the members of the proposed plaintiff classes in
the aggregate were citizens of Washington State. The panel
nevertheless held that the district court had subject-matter
jurisdiction at the time it rendered a final decision on the
merits, because plaintiff voluntarily amended his complaint
to assert a federal Truth in Lending Act claim.
merits, the panel held that the district court properly
granted summary judgment to the dealership defendants and the
American Honda Finance Corporation. The panel concluded that
considering all the extrinsic evidence offered, plaintiff had
not demonstrated a genuine issue of material fact as to
whether he was promised an addon that he did not receive. The
panel also determined that the district court did not abuse
its discretion in denying plaintiff's request for more
time for discovery.
Harvinder Singh purchased a new Honda Accord from
Hinshaw's Honda in Auburn, Washington. To finance his
purchase, Singh obtained financing from Defendant-Appellee
American Honda Finance Corporation
("AHFC"). Singh later brought this suit as a
putative class action in Washington state superior court
against AHFC and the Dealership Defendants. AHFC removed the
case to federal court under the Class Action Fairness Act
("CAFA"). Singh moved to remand, but the district
court denied that motion. Singh then amended his complaint to
assert a federal claim under the Truth in Lending Act
("TILA"), 15 U.S.C. §§ 1601-1667f. After
further motion practice and discovery, the district court
granted summary judgment for the Dealership Defendants and
AHFC and dismissed Singh's claims.
appeal, Singh contends that the district court lacked
subject-matter jurisdiction at the time of removal and, for
that reason, erred when it denied his motion to remand. Singh
also contends that the district court erred in granting
summary judgment against him. Finally, Singh contends that
the district court did not permit him sufficient discovery
before granting summary judgment.
that the district court did not have subject-matter
jurisdiction over this action at the time of removal because
CAFA's home state exception barred the exercise of
jurisdiction. However, the district court had subject-matter
jurisdiction at the time it rendered a final decision on the
merits, because Singh voluntarily amended his complaint to
assert a federal TILA claim. "To wipe out the
adjudication postjudgment, and return to state court a case
now satisfying all federal jurisdictional requirements, would
impose an exorbitant cost on our dual court system, a cost
incompatible with the fair and unprotracted administration of
justice." Caterpillar Inc. v. Lewis, 519 U.S.
61, 77 (1996). We decline to impose such a cost.
merits, we hold that the district court properly granted
summary judgment to the Dealership Defendants and AHFC. We
also hold that the district court did not abuse its
discretion in denying Singh's request for more time for
discovery. We affirm the district court's judgment in
February 2016, Singh bought a new Honda Accord from
Hinshaw's Honda in Auburn, Washington. The Accord had two
stickers. The first sticker listed the car's standard
features and a Manufacturer's Suggested Retail Price
("MSRP") of $28, 670.00.
other sticker listed a "dealer price" of $29,
505.00, as well as individual costs for three dealer add-ons:
"3M," "Pro Pak," and "New Car Detail
& Dealer Prep" ("Dealer
Prep").With the add-ons, the listed price of the
car was $30, 632.00.
negotiated the price of his new Accord down to $27, 356.97,
before taxes and fees. Singh did not know what the add-ons
were when he purchased the car, nor did anyone at
Hinshaw's explain them to him. Singh nonetheless thought
he was paying for the add-ons because they were listed on the
Dealer Addendum and he was not given the chance to decline
them. To finance his purchase, Singh obtained financing from
signed three documents when he purchased his Accord: (1) a
Purchase Order, (2) a Sales Contract, and (3) a Retail
Installment Sale Contract ("RISC"). Singh also
initialed a mandatory disclosure form. The Purchase Order
listed the base price of the car as $27, 356.97-the price
Singh negotiated. Under the heading "ACCESSORIES,"
it stated, "sold w/ prep" and "pro pkg (muds,
tray, locks)." The Sales Contract listed the "Base
Price of Vehicle and Options" as $27, 356.97. It did not
list any items under the "Dealer Added or Deleted
Options" heading. The RISC provided the terms of
Singh's financing agreement with AHFC and listed the
total vehicle price of the Accord, including taxes,
licensing, and other fees. The RISC did not list any add-ons.
Finally, on the "Mandatory Disclosure Statement,"
Singh declined additional services and protections, including
"Rock Guard Chip Protect."
brought this putative class action in Washington state
superior court. Singh claimed that Hinshaw's did not
provide him the three add-ons it promised on the Dealer
Addendum-3M, Pro Pak, and Dealer Prep-and, if he had known
what the add-ons were, he would have declined them and paid a
lower price for his Accord. Singh claimed that the other
Dealership Defendants engaged in similar unlawful practices.
Singh further alleged that AHFC profits from the Dealership
Defendants' nondisclosures because the nondisclosures
lead to higher car prices, which lead to higher interest
payments to AHFC from financing agreements with vehicle
purchasers. Singh asserted four causes of action against the
Dealership Defendants and AHFC: (1) breach of contract; (2)
violation of the duty of good faith and fair dealing; (3)
negligent supervision; and (4) violation of the Washington
Consumer Protection Act ("WCPA").
removed the case to federal court under CAFA. Singh moved to
remand, contending that either the home state or the local
controversy exception to CAFA barred the exercise of federal
subject-matter jurisdiction. The district court rejected
those arguments and denied Singh's motion. Singh then
amended his complaint to assert a federal TILA claim.
Dealership Defendants moved for summary judgment and the
district court granted that motion. On Singh's breach of
contract claim, the district court explained that the
contract between Singh and Hinshaw's consisted of
"the Sales Contract . . . RISC . . . and possibly the
Vehicle Purchase Order"-the documents Singh had signed.
Because none of those documents mentions 3M, Pro Pak, or
Dealer Prep, the district court held that those add-ons were
not part of the bargain between Hinshaw's and Singh and,
for that reason, Hinshaw's did not breach its contract
with Singh even if it did not provide the
add-ons. The district court granted summary
judgment against Singh on his WCPA claim because (1)
Hinshaw's did not violate Washington's Auto
Dealer's Practices Act and (2) Singh did not demonstrate
injury insofar as he paid less than the MSRP of the car.
Finally, the district court granted summary judgment against
Singh on his TILA claim because the contract did not include
any add-ons and therefore their costs did not need to be
itemized in the RISC.
AHFC moved to dismiss Singh's claims against it under
Federal Rule of Civil Procedure 12(b)(6). As part of its
motion, AHFC included a copy of the RISC. Singh had not
attached the RISC to his complaint, so he objected to its
consideration at the motion-to-dismiss stage. But Singh's
response included ninety-one pages of declarations and
exhibits, which likewise were not attached to his complaint.
Because each party cited materials outside the complaint, the
district court converted AHFC's motion to dismiss into a
motion for summary judgment and "deferred consideration
of the motion to allow Singh a reasonable opportunity to
present all material that would be pertinent."
further discovery, Singh objected that he had not received
adequate time for discovery. The district court declined to
permit Singh more time because Singh had propounded discovery
requests on the defendants for two months, he attached a slew
of documents obtained in discovery to his responses to the
motions for summary judgment, and he did not point to any
facts that he lacked.
merits, the district court granted summary judgment against
Singh on his breach of contract claim because Singh could not
show that AHFC violated any financing terms of the RISC, the
only contract between AHFC and Singh. The district court granted
summary judgment for AHFC on Singh's WCPA claim because
AHFC was not directly involved in the allegedly deceptive
practice of displaying the Dealer Addendum on
vehicles.Finally, the district court noted that
Singh had abandoned his TILA claim against AHFC, although he
reserved the right to seek reinstatement.
filed timely notices of appeal. He contends that the district
court lacked subject-matter jurisdiction over this action at
the time of removal and therefore erred when it denied his
motion to remand. He asks that this case be remanded to
Washington state court. In the alternative, Singh contends
that the district court erred in granting summary judgment to
the defendants, or that it erred in granting summary judgment
without permitting him sufficient discovery.
review de novo whether the district court had subject-matter
jurisdiction. Chapman v. Deutsche Bank Nat'l Tr.
Co., 651 F.3d 1039, 1043 (9th Cir. 2011) (per curiam).
We review any factual findings relevant to jurisdiction for
clear error. Id.
review de novo whether the district court properly granted
summary judgment to the Dealership Defendants and AHFC.
Hunt v. City of L.A., 638 F.3d 703, 709 (9th Cir.
2011). We review the district court's denial of
Singh's "request for a continuance of summary
judgment pending further discovery . . . for an abuse of
discretion." Michelman v. Lincoln Nat. Life Ins.
Co., 685 F.3d 887, 892 (9th Cir. 2012). We may affirm on
"any ground supported by the record." Canyon
Cty. v. Syngenta Seeds, Inc., 519 F.3d 969, 975 (9th
initial matter, the parties disagree whether the district
court had subject-matter jurisdiction to render a decision on
the merits. Singh contends that jurisdiction did not exist at
the time of removal because two CAFA exceptions-the local
controversy exception and home state exception-barred the
exercise of federal subject-matter jurisdiction. The
defendants contend that those exceptions are inapplicable.
They alternatively contend, relying on Caterpillar Inc.
v. Lewis, 519 U.S. 61 (1996), and Retail Property
Trust v. United Board of Carpenters and Joiners of
America, 768 F.3d 938 (9th Cir. 2014), that this case
should not be remanded to state court-even if subject-matter
jurisdiction did not exist when AFHC removed the case-
because Singh voluntarily amended his complaint after he was
in federal court to assert a federal TILA claim, thereby
establishing federal-question jurisdiction. Singh, relying on
Grupo Dataflux v. Atlas Global Group, L.P., 541 U.S.
567 (2004), responds that jurisdiction must be determined as
of the time of removal.
better understand the parties' dispute and the relevant
law that frames our inquiry, we start with the Supreme
Court's decision in Grubbs v. General Electric Credit
Corporation, 405 U.S. 699 (1972). In Grubbs,
General Electric Credit Corporation ("GECC") sued
Grubbs in state court. Id. at 700. In response,
Grubbs initiated a cross-action against the United States
government. Id. The government removed the case to
federal court. Id. GECC did not object to removal,
and the case was eventually tried. Id. at 701. On
appeal, the Court of Appeals raised the issue of jurisdiction
sua sponte and dismissed. Id. at 702. The
Supreme Court reversed. The Court explained that in
situations where a removed case is tried and decided on the
merits without objection, "the issue in subsequent
proceedings on appeal is not whether the case was properly
removed, but whether the federal district court would have
had original jurisdiction of the case had it been filed in
that court." Id. at 703. Applying that
principle, the Court held that jurisdiction existed when the
district court rendered its judgment and, for that reason,
the Court of Appeals should not have dismissed the case.
Id. at 704.
wake of Grubbs, we held that a party challenging the
propriety of removal had to preserve any such objection by
timely moving to remand and then appealing any adverse remand
determination. See, e.g., Gould v. Mut. Life
Ins. Co. of N.Y., 790 F.2d 769, 774 (9th Cir. 1986);
Lewis v. Time, Inc., 710 F.2d 549, 552 (9th Cir.
1983); Sheeran v. Gen. Elec. Co., 593 F.2d 93, 97-98
(9th Cir. 1979). "[W]hen there [was] no appeal of a
denial of a remand motion and the case [was] tried on the
merits, the issue on appeal [was] whether the federal court
would have had jurisdiction had the case been filed in
federal court in the posture it had at the time of the entry
of the final judgment." Lewis, 710 F.2d at 552;
accord Carpenters Health & Welfare Tr. Fund for Cal.
v. Tri Capital Corp., 25 F.3d 849, 852 (9th Cir. 1994),
overruled on other grounds by S. Cal. IBEW-NECA Tr. Funds
v. Standard Indus. Elec. Co., 247 F.3d 920 (9th Cir.
2001). At least one other circuit applied a similar rule.
See, e.g., Kidd v. Sw. Airlines, Co., 891
F.2d 540, 546 (5th Cir. 1990).
came Caterpillar Inc. v. Lewis, 519 U.S. 61, the
case on which the defendants rely. The plaintiff there had
filed suit in state court on personal injury claims.
Id. at 64. "The case was removed to a federal
court at a time when . . . complete diversity of citizenship
did not exist among the parties." Id. The
plaintiff moved to remand the case, but the district court
denied the motion. Id. Before trial, the nondiverse
defendants settled, and at the time of trial, complete
diversity existed between the parties. Id. The
defendant prevailed at trial, but "[t]he Court of
Appeals vacated the judgment, concluding that, absent
complete diversity at the time of removal, the District Court
lacked subject-matter jurisdiction." Id.
Supreme Court reversed. The Court first held that the
plaintiff, "by timely moving for remand, did all that
was required to preserve his objection to removal."
Id. at 74. The Court then explained that the flaw in
the case was a "statutory flaw-Caterpillar's failure
to meet the [28 U.S.C.] § 1441(a) requirement that the
case be fit for federal adjudication at the time the removal
petition is filed"-not a "jurisdictional
defect." Id. The jurisdictional defect, the
lack of complete diversity at the time of removal, was cured
when complete diversity was established before trial.
Id. at 73. The Court noted that if the
jurisdictional defect had remained through the time when the
judgment was entered, however, the judgment would have to be
vacated. Id. at 76- 77. But the Court concluded that
the district court properly exercised subject-matter
jurisdiction notwithstanding the initial statutory flaw. The
Court explained: "Once a diversity case has been tried
in federal court, with rules of decision supplied by state
law under the regime of Erie R. Co. v. Tompkins, 304
U.S. 64 (1938), considerations of finality, efficiency, and
economy become overwhelming." Id. at 75. It
went on: "To wipe out the adjudication postjudgment, and
return to state court a case now satisfying all federal
jurisdictional requirements, would impose an exorbitant cost
on our dual court system, a cost incompatible with the fair
and unprotracted administration of justice."
Id. at 77.
Supreme Court revisited this line of authority in Grupo
Dataflux v. Atlas Global Group, L.P., 541 U.S. 567, the
case on which Singh relies. There, the parties were
nondiverse when the plaintiff filed its complaint in federal
court because the plaintiff was a partnership with "two
partners who were Mexican citizens, " while the
defendant was a Mexican corporation. Id. at 569.
Despite the initial lack of diversity, complete diversity was
achieved just before trial when the two Mexican partners left
the partnership. Id. The case proceeded to a six-day
trial. Id. The Supreme Court framed the question
before it as "whether a party's post-filing change
in citizenship can cure a lack of subject-matter jurisdiction
that existed at the time of filing in an action premised upon
diversity of citizenship." Id.
that question negatively, the Court held that federal
subject-matter jurisdiction was lacking. Id. at 572-
76. The Court started with the proposition that "[i]t
has long been the case that 'the jurisdiction of the
court depends upon the state of things at the time of the
action brought.'" Id. at 570 (quoting
Mollan v. Torrance, 9 Wheat. 537, 539 (1824)). The
Court then distinguished Caterpillar, explaining
that "Caterpillar broke no new ground,"
the "jurisdictional defect [there] had been cured by the
dismissal of the party that destroyed diversity"-a
"method of curing a jurisdictional defect [that] had
long been an exception to the time-of-filing rule."
Id. at 572. The Court further explained that the
"holding of Caterpillar . . . is only that a
statutory defect-'Caterpillar's failure to meet the
§ 1441(a) requirement that the case be fit for federal
adjudication at the time the removal petition is
filed'-did not require dismissal once there was no longer
any jurisdictional defect," in light of
"considerations of finality, efficiency, and
economy." Id. at 574 (quoting
Caterpillar, 519 U.S. at 73, 75). Finally, the Court
noted that it had "never approved a deviation from the
rule . . . that where there is no change of party, a
jurisdiction depending on the condition of the party is
governed by that condition, as it was at the commencement of
the suit." Id. (quotation, emphasis, and
alteration omitted). Because the "[t]he purported
cure" to the jurisdictional defect in Grupo
Dataflux "arose not from a change in the parties to
the action, but from a change in the citizenship of a
continuing party"- a cure the Court had refused to
permit "for the past 175 years"-the Court held that
federal subject-matter jurisdiction did not exist.
Id. at 575-76.
Grubbs, Caterpillar, and Grupo
Dataflux, our inquiry is three-fold when, as here, it is
alleged that federal subject-matter jurisdiction did not
exist at the time of removal but existed at the time of final
judgment. First, has the party contesting jurisdiction
preserved the contention that removal was improper? Second,
was there a jurisdictional defect at the time of removal and,
if so, was it properly cured before the entry of final
judgment so that federal subject-matter jurisdiction existed
at the time of final judgment? Third, if no jurisdictional
defect remained at the time of final judgment, do
"considerations of finality, efficiency, and
economy," outweigh the statutory defect in the case-a
party's "failure to meet the [28 U.S.C.] §
1441(a) requirement that the case be fit for federal
adjudication at the time the removal ...