Background
Plaintiff Simon Benhaim sued State Farm General Insurance Company in California state court. Before the lawsuit was filed, Benhaim had asserted a repair demand approaching $75,000 and an additional-living-expense demand of approximately $200,000, and State Farm knew those amounts were disputed. After the case was filed, State Farm pursued and obtained a motion to strike in state court. Only later did State Farm remove the action to the U.S. District Court for the Central District of California.
Benhaim moved to remand, arguing that State Farm had waived its right to remove by seeking and obtaining substantive relief in state court despite knowing the case was removable. State Farm did not dispute that its motion to strike constituted the kind of state-court conduct that could support waiver, nor did it dispute that common-law waiver could apply even before the statutory removal period began. The dispute narrowed to whether State Farm knew, at the time it pursued the state-court motion, that the amount in controversy exceeded the $75,000 federal threshold.
The Court’s Holding
The court granted the motion to remand. It explained that the statutory removal deadline under 28 U.S.C. § 1446(b) and the common-law waiver doctrine are analytically distinct. The statute generally requires removal within 30 days after a defendant receives a pleading or other paper from which removability can be ascertained. Common-law waiver, by contrast, asks whether the defendant, after it becomes apparent that the case is removable, takes action in state court that manifests an intent to have the matter decided there and to abandon the federal forum. The court emphasized that the two rules are not coextensive: the right to remove may be apparent—and waived—before the statutory clock begins.
At the hearing, State Farm acknowledged that before suit it knew of Benhaim's repair demand approaching $75,000 and an additional-living-expense demand of approximately $200,000, and that those amounts were disputed. When the court observed that such repeated demands would have provided a strong basis for establishing an amount in controversy exceeding $75,000 in a notice of removal, State Farm agreed. State Farm's explanation for waiting—that it wanted formal confirmation through discovery in the form of an 'other paper' sufficient to trigger the statutory removal period—addressed when the 30-day clock began, not whether removability was already apparent for waiver purposes.
Based on this record, the court found that State Farm waived its right to remove, granted the motion, and remanded the action to the Superior Court of California for the County of Los Angeles.
Key Takeaways
- A defendant can waive the right to remove a case to federal court by litigating substantive motions in state court after learning the case is removable, even if the statutory 30-day removal period has not yet begun.
- The statutory removal deadline under 28 U.S.C. § 1446(b) and the common-law waiver doctrine are separate rules: waiver can occur before the statutory clock starts running.
- Pre-suit demand letters that collectively exceed $75,000 can make removability apparent for waiver purposes, even if the defendant prefers to wait for formal discovery responses before removing.
- Seeking and obtaining a motion to strike in state court constitutes the kind of substantive state-court conduct that can support a finding of waiver.
- A defendant's desire to wait for an 'other paper' that would trigger the statutory removal period does not excuse delay once the defendant knows the case is removable.
Why It Matters
This decision reinforces that defendants cannot safely litigate in state court while waiting for the statutory removal clock to begin if they already have enough information to know the case is removable. The ruling underscores the practical risk that pursuing merits-based relief in state court—such as a motion to strike—can forfeit the federal forum, even when the defendant believes the statutory removal period has not yet been triggered.
The case also illustrates how pre-suit communications, including demand letters, can establish that a defendant knew the amount in controversy exceeded the federal threshold. Defendants who receive such demands and then choose to engage in state-court litigation do so at the risk of waiving removal, regardless of whether they have received a formal pleading or discovery response that would start the 30-day statutory clock.
Read the full opinion (PDF) · Court docket