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Jose Gutierrez was injured while working for Green Team of San Jose, a waste disposal company. Gutierrez and his spouse initiated a personal injury suit in state court against Defendant McNeilus Truck & Manufacturing, Inc., the designer and manufacturer of the garbage trucks used by Green Team.

Defendant removed the action from California state court to federal court based on diversity of citizenship under 28 U.S.C. §1441(b).

Diversity jurisdiction in civil procedure provides that a United States district court in the federal judiciary has the power to hear a civil case when the amount in controversy exceeds $75,000 and where the persons that are parties are “diverse” in citizenship or state of incorporation, which generally indicates that they differ in state and/or nationality.

Mostly, in order for diversity jurisdiction to apply, complete diversity is required, where none of the plaintiffs can be from the same state as any of the defendants.

Once the case was in federal court, the Plaintiffs’ filed a motion to remand the case back to state court. A remand may be ordered either for lack of subject matter jurisdiction or for any defect in the removal procedure. 28 U.S.C. § 1447(c). Plaintiffs did not dispute that the parties are diverse and the amount in controversy exceeds the jurisdiction $75,000 minimum. Rather, Plaintiffs contend that this is a “nonremovable action” because Plaintiffs’ claims “aris[e] under” California’s worker compensation law.

28 U.S.C. § 1445(c) provides that “[a] civil action in any State court arising under the workmen’s compensation laws of such State may not be removed to any district court of the United States.” If section 1445(c) applies, a case is not removable even if it presents a federal question or there is diversity. Humphrey v. Sequentia, Inc., 58 F.3d 1238, 1244 (8th Cir. 1995).

However, the federal judge denied the motion for remand in the case of Gutierrez v McNeilus Truck & Manufacturing, Inc.

Plaintiffs contend that their claims “arise under” California’s workers’ compensation law not because their three claims for negligence, products liability and loss of consortium “arise under” California’s workers’ compensation law, but because California Labor Code section 3852 provides Gutierrez’s employer, Green Team, a right to subrogation.

A civil action ‘arises under’ a state’s workers’-compensation law when the worker’s-compensation law creates the plaintiff’s cause of action or is a necessary element of the claim. There is no question that an insurer’s suit under section 3852 to recover workers’ compensation benefits “arises under” California’s workers’ compensation law and is therefore nonremovable.

However, neither Green Team nor the workers’ compensation insurance carrier has sought to intervene. Neither is a party to this action. Plaintiffs anticipate that one or the other will assert their subrogation rights.

Only after a party lawfully intervenes in state court, the plaintiff’s otherwise removable claim can no longer be removed.