FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ROBERT DESTFINO; ILA DESTFINO;
BONNIE BOONE; MARK HARPER;
MICHAEL TAVAREZ; SHAWN
TAVAREZ; PETER CHIS, individuals,
Plaintiffs-Appellants,
v.
EFFIE REISWIG, individually, DBA
The Silver Trumpets; RITA I.
JOHNSON, individually, AKA Rita
A. Johnson, DBA Her Copyright;
GLEN BERTEAU; DEBBIE BERTEAU; No. 09-16214
DARRYL TURNER; MICHAEL D.C. No.
WILLIAMS; ROBERT JONES, AKA
Rob Jones; ROBERT ONA, AKA
1:08-cv-01269-LJO-
DLB
Bob Ona; JEREMY JOHNSON;
ASSEMBLIES OF GOD CHURCH, DBA OPINION
Calvary Temple Worship Center;
KENNETH L. REISWIG, individually,
AKA Kenny L. Reiswig; JUDITH
RODERICK, individual; COURTESY
OLDSMOBILE-CADILLAC, INC., DBA
Courtesy Automotive Center, DBA
Courtesy Chevrolet Cadillac
Suzuki; BENJAMIN WELLS,
Defendants-Appellees,
and
1263
1264 DESTFINO v. KENNEDY
WILLIAM J. KENNEDY, AKA Bill
Kennedy, DBA American Legal
Services, DBA The Ear of
Malchus, AKA The Lost Sheep;
THE EAR OF MALCHUS, a
Washington corporation; LYLE E.
DAVIES, DBA Financial Wellbeing
Solutions; THE LOST SHEEP, a
Washington corporation; DANNY
V. SESE, individually, DBA Gentry
Group; GENTRY GROUP, a Texas
corporation; JEROME WEBB,
individual; TONY SCARLOTTA, AKA
Toni Scorlotta; JOHN GROUP; KURT
F. JOHNSON; D. SCOTT HEINEMANN,
AKA Dale Scott Heinemann; NEW
CENTURY MORTGAGE CORPORATION;
RICHARD LALONDE, AKA Rick
Lalonde; INDYMAC BANK, a
California corporation; FINANCIAL
TITLE COMPANY, a California
corporation; JEFF AULT, AKA
Jeffrey Ault; VICK SINGH;
INTERNATIONAL ASSOCIATION OF
CORPORATION SOLE; PETER KIM,
DBA SKM Debt Services; SUSAN
W. KIM, DBA SKM Debt
Services; JERRY COOK, AKA
Jerome Cook; DARRYL LABARTHE;
WB FINANCIAL; FEDERAL DEPOSIT
INSURANCE CORPORATION AS
RECEIVER FOR INDYMAC BANK;
NICHOLE KLAUSNER,
Defendants.
DESTFINO v. KENNEDY 1265
Appeal from the United States District Court
for the Eastern District of California
Lawrence J. O’Neill, District Judge, Presiding
Argued and Submitted
April 15, 2010—San Francisco, California
Filed January 21, 2011
Before: Alex Kozinski, Chief Judge, Glenn L. Archer, Jr.,*
and Consuelo M. Callahan, Circuit Judges.
Opinion by Chief Judge Kozinski
*The Honorable Glenn L. Archer, Jr., Senior United States Circuit
Judge for the Federal Circuit, sitting by designation.
1268 DESTFINO v. KENNEDY
COUNSEL
Leonard Comden (argued) and I. Donald Weissman, Wasser-
man, Comden & Casselman, LLP, Tarzana, California, for the
plaintiffs-appellants.
John T. Williams (argued), Sarah H. Dearing and Jason H.
Nash, Hinkhouse Williams Walsh LLP, Chicago, Illinois;
Jerome M. Varanini, Trimble, Sherinian & Varanini, Sacra-
mento, California; Donald K. Lupul, McFall, Burnett & Brin-
ton, Manteca, California; Michael A. Fluetsch, Kristina L.
Fluetsch, Fluetsch & Fluetsch, Lodi, California; Montie S.
Day, Day Law Offices, Shoshone, Idaho, for the defendants-
appellees.
DESTFINO v. KENNEDY 1269
OPINION
KOZINSKI, Chief Judge:
Plaintiffs sued twenty-nine individuals, ten businesses and
a church in state court, alleging that defendants used a bogus
debt elimination and tax avoidance scheme to bilk them out
of tens of thousands of dollars. One of the defendants, Cour-
tesy Oldsmobile-Cadillac (“Courtesy”), removed the case to
federal court. Plaintiffs moved to remand to state court, argu-
ing that Courtesy’s removal was procedurally defective.
While this motion was pending, the Federal Deposit Insurance
Corporation (FDIC) took over IndyMac Bank, another defen-
dant, and filed an assertion of removal jurisdiction under 12
U.S.C. § 1819(b)(2)(B). The district court denied plaintiffs’
motion to remand because removal by the FDIC provided an
independent basis for jurisdiction. Plaintiffs then dismissed
IndyMac and the FDIC from the action. The district court
held that dismissing the parties post-removal didn’t divest it
of jurisdiction and, in any event, it would have jurisdiction
pursuant to the initial removal by Courtesy once it cured the
procedural defect. The district court continued to retain juris-
diction after plaintiffs dismissed their sole federal claim. Hav-
ing allowed plaintiffs to amend twice, the district judge
dismissed the complaint as to several defendants for failure to
plead properly. The court entered final judgment in favor of
those defendants pursuant to Federal Rule of Civil Procedure
(FRCP or “Rule”) 54(b). Plaintiffs appeal, arguing that the
district court lacked jurisdiction and should have remanded to
state court. We review de novo. See United Computer Sys.
Inc. v. AT&T Corp., 298 F.3d 756, 760 (9th Cir. 2002).
I
[1] It’s undisputed that the case originally fell within the
subject matter jurisdiction of the district court, as plaintiffs
alleged a violation of federal law. But plaintiffs claim the
petition for removal was defective because (1) it was
1270 DESTFINO v. KENNEDY
untimely, (2) it was not joined by all of the defendants and (3)
plaintiffs ultimately dismissed all federal claims and parties.
[2] A. Untimeliness. A defendant seeking to remove
from state to federal court must file a notice of removal within
thirty days of receiving a copy of the initial pleading. 28
U.S.C. § 1446(b). Courtesy filed a petition for removal
twenty-five days after it was served with the complaint. Plain-
tiffs argue the removal notice was untimely because Courtesy
didn’t file it within thirty days of when the first defendant was
served in the action. We must determine whether Courtesy
was subject to the first-served defendant’s removal deadline.
Doing so requires us to decide: Does the first-served defen-
dant’s thirty-day clock run for all subsequently served defen-
dants (the first-served rule), or does each defendant get his
own thirty days to remove after being served (the later-served
rule)?
[3] We have never addressed this issue and our district
courts have split. Compare McAnally Enters., Inc. v. McA-
nally, 107 F. Supp. 2d 1223, 1230 (C.D. Cal. 2000) (first-
served), with Bonner v. Fuji Photo Film, 461 F. Supp. 2d
1112, 1117-18 (N.D. Cal. 2006) (later-served). The circuits
that have decided the question have disagreed as well. Com-
pare Brown v. Demco, Inc., 792 F.2d 478, 481-82 (5th Cir.
1986) (first), with Brierly v. Alusuisse Flexible Packaging,
Inc., 184 F.3d 527, 533 (6th Cir. 1999) (later).
[4] Courts that have adopted the later-served defendant
rule have done so for reasons grounded in statutory construc-
tion, equity and common sense. Congress has provided that a
notice of removal must be filed “within thirty days after the
receipt by the defendant . . . of a copy of the initial pleading.”
28 U.S.C. § 1446(b). The removal statute speaks of “the
defendant”—not “first defendant” or “initial defendant”—and
its most straightforward meaning is that each defendant has
thirty days to remove after being brought into the case. See
Brierly, 184 F.3d at 533 (observing that adopting the first-
DESTFINO v. KENNEDY 1271
served rule “would require us to insert ‘first’ before ‘defen-
dant’ ” and that “[w]e are naturally reluctant to read additional
words into the statute”). This is also the fairest reading of the
statute, as it treats all defendants equally, regardless of when
they happen to be served. See 28 U.S.C. § 1441(a) (permitting
removal by “the defendant or the defendants”). A contrary
rule could deprive some defendants of their right to a federal
forum because they were served too late to exercise that right,
and encourage plaintiffs to engage in unfair manipulation by
delaying service on defendants most likely to remove. See
United Computer Sys. Inc., 298 F.3d at 762. The trend in
recent case law favors the later-served defendant rule. See
Bailey v. Janssen Pharmaceutica, Inc., 536 F.3d 1202, 1206
(11th Cir. 2008) (citing Marano Enters. of Kan. v. Z-Teca
Rests., L.P., 254 F.3d 753, 755 (8th Cir. 2001); and Brierly,
184 F.3d at 533).
Courts that have adopted the contrary position have argued
that the first-served rule is more consistent with the require-
ment that defendants unanimously join in a removal petition.
See McAnally Enters., Inc., 107 F. Supp. 2d at 1227. These
courts construe a defendant’s failure to remove within thirty
days as an affirmative decision not to remove. Id. But the fact
that a defendant hasn’t taken the initiative to seek removal
doesn’t necessarily mean he will object when another defen-
dant does. Failure to file a petition may be based on a lack of
resources, trusting a lawyer’s advice or inertia. There is no
reason to lock an earlier-served defendant out of the federal
forum, if he later chooses to consent.
Other courts that have adopted the first-served rule have
relied on the “axiom that the removal statutes are to be strictly
construed against removal.” Brown, 792 F.2d at 482. But the
Supreme Court has recently relaxed its presumption against
removal by allowing a defendant to remove even though he
didn’t do so within thirty days of receiving a faxed courtesy
copy of the complaint. See Murphy Bros., Inc. v. Michetti
Pipe Stringing, Inc., 526 U.S. 344, 347 (1999). The Court
1272 DESTFINO v. KENNEDY
held that “a defendant is not obliged to engage in litigation
unless notified of the action, and brought under a court’s
authority, by formal process.” Id. This emphasis on when a
defendant is formally brought into a case cuts against binding
later-served defendants to decisions made before they were
joined. The Eighth and Eleventh Circuits have also read Mur-
phy Brothers as endorsing the later-served rule, noting that
prior to that case “the issue of which rule to endorse would
be a closer call than it is now.” Bailey, 536 F.3d at 1207; see
also Marano Enters, 254 F.3d at 756.
Finally, some courts have favored the first-served rule
because it promotes determining the forum early in litigation,
see, e.g., Brown, 792 F.2d at 482, a policy consistent with the
short period for filing a removal petition. But plaintiffs can
bring about quick determination of the forum by serving all
defendants promptly. And, where they don’t do so, the mar-
ginal efficiency benefits of selecting a forum early don’t out-
weigh the manifest unfairness of depriving later-served
defendants of a federal forum.
[5] We adopt the later-served rule as the wiser and more
equitable approach. This rule doesn’t go so far as to give
already-served defendants a new thirty-day period to remove
whenever a new defendant is served, as that could give a
defendant more than the statutorily prescribed thirty days to
remove. See 28 U.S.C. § 1446(b). Rather, we hold that each
defendant is entitled to thirty days to exercise his removal
rights after being served. Because Courtesy removed the case
within thirty days from when it was served, the removal was
timely.
[6] B. All defendants. All defendants who have been
“properly . . . served in the action” must join a petition for
removal. Emrich v. Touche Ross & Co., 846 F.2d 1190, 1193
n.1 (9th Cir. 1988) (citing 28 U.S.C. § 1446(a)); see Hewitt v.
City of Stanton, 798 F.2d 1230, 1232 (9th Cir. 1986) (per
curiam). If this is not true when the notice of removal is filed,
DESTFINO v. KENNEDY 1273
the district court may allow the removing defendants to cure
the defect by obtaining joinder of all defendants prior to the
entry of judgment. See Soliman v. Philip Morris Inc., 311
F.3d 966, 970 (9th Cir. 2002) (“[A] procedural defect existing
at the time of removal but cured prior to entry of judgment
does not warrant reversal and remand of the matter to state
court.” (alteration in original and internal quotation marks
omitted)). Courtesy’s original notice of removal suffered from
this defect, but the district court allowed Courtesy to cure it
before entering judgment.
[7] Plaintiffs argue that five properly served defendants
never consented to the removal. One of these, Darryl Labar-
the, joined in the notice of removal before the district court’s
judgment. Two others, Peter and Susan Kim, doing business
as SKM Debt Services, were served at the wrong address.
Plaintiffs’ attempts to serve the Kims and their corporation by
substituted service didn’t comply with California Code of
Civil Procedure § 415.20(b), which requires that “a copy of
the summons and complaint [be left at] the person’s dwelling
house, usual place of abode, usual place of business, or usual
mailing address . . . in the presence of a competent member
of the household or a person apparently in charge.” Because
service on the Kim defendants was defective, their joinder in
the petition wasn’t required.
Two other defendants that didn’t join in the removal peti-
tion are William Kennedy and The Lost Sheep, which the
complaint identifies as a “corporation sole created by Kenne-
dy.” Plaintiffs claim that Kennedy was served, or, alterna-
tively, that service was unnecessary because Kennedy made
a general appearance in state court by filing an answer and a
cross-complaint. The record contains no evidence of proper
service, and the evidence that Kennedy made a general
appearance is insufficient. Plaintiffs present a copy of an
answer that purports to be in Kennedy’s name, but the docu-
ment doesn’t bear a stamp or any other indication that it was
filed. Nor do plaintiffs authenticate the document. Plaintiffs
1274 DESTFINO v. KENNEDY
also include in their supplemental excerpts of record a docket
sheet that they claim to have obtained from the Stanislaus
County Superior Court website, but didn’t present below. On
appeal, reliance on materials that are not in the record is, of
course, improper. In any event, the document doesn’t estab-
lish that Kennedy answered the complaint. Plaintiffs brought
the unstamped answer to the district court’s attention, and the
court was not persuaded that it sufficed to excuse them from
properly serving Kennedy. We find no clear error in this.
As to The Lost Sheep, California law provides that a corpo-
ration sole is a corporation consisting of a single person, gen-
erally the head of a religious organization. See 55 Cal.
Jurisprudence 3d Religious Orgs. § 8. The proof of service
states that service on the corporation was made on Rita John-
son, not Kennedy, and Johnson is nowhere identified as an
officer or someone authorized to accept service for the corpo-
ration. The district court’s finding that The Lost Sheep was
not properly served, like all the district court’s other findings,
is supported by the record.
[8] Because none of the non-joining defendants was prop-
erly served, their absence from the removal notice did not ren-
der the removal defective.
[9] C. Post-removal dismissal. When the FDIC substi-
tuted IndyMac as a party, it filed a timely assertion of removal
jurisdiction under 12 U.S.C. § 1819(b)(2)(B), providing an
independent basis for federal jurisdiction. Plaintiffs argue that
remand was appropriate because they couldn’t have foreseen
the FDIC’s involvement, as “no reasonable person . . . could
have anticipated the pending banking industry collapse or the
possibility of a government takeover of a major nationwide
bank.” But jurisdiction under section 1819(b)(2) does not turn
on foreseeability. The FDIC has a right to remove a case to
federal court within ninety days of its substitution as a party,
which the FDIC did after it stepped into IndyMac’s shoes.
DESTFINO v. KENNEDY 1275
[10] Plaintiffs also argue that they divested the district
court of jurisdiction when they dismissed the FDIC from the
action. No court that has considered the effect of dismissing
the FDIC has found it to be jurisdiction-stripping. Instead, the
circuits are split as to the kind of subject matter jurisdiction
district courts retain after the FDIC (or its predecessor-in-
interest, the RTC) has been dismissed from the case. The Fifth
and Second Circuits have held that the entire suit remains
within the district court’s original federal jurisdiction, while
the Third Circuit has held that the district court retains supple-
mental jurisdiction over the state law claims. Compare Adair
v. Lease Partners, Inc., 587 F.3d 238, 245 (5th Cir. 2009)
(mandatory original jurisdiction); FDIC v. Four Star Holding
Co., 178 F.3d 97, 100-01 (2d Cir. 1999) (same), with New
Rock Asset Partners, LP v. Preferred Entity Advancements,
Inc., 101 F.3d 1492, 1494-95 (3d Cir. 1996) (discretionary
supplemental jurisdiction). The difference, of course, is that if
the claim is within the district court’s original jurisdiction,
then it has no authority to remand, while it has discretion to
remand if the claim falls within its supplemental jurisdiction.
[11] We need not take sides in this dispute because, even
if the district court had authority to remand, it did not abuse
its discretion in failing to do so. The district court here articu-
lated its ongoing interest in the supplemental state claims as
“ensuring compliance with its orders” because “the [c]ourt
had invested considerable time and effort to decide lengthy
motions on complicated pleadings.” See Harrell v. 20th Cen-
tury Ins. Co., 934 F.2d 203, 205 (9th Cir. 1991).
II
[12] We next address whether the district court erred by
dismissing the second amended complaint for failure to plead
fraud with particularity. FRCP 9(b) applies where a plaintiff
alleges fraud. See Kearns v. Ford Motor Co., 567 F.3d 1120,
1125 (9th Cir. 2009). Rule 9(b) “does not allow a complaint
to . . . lump multiple defendants together but require[s] plain-
1276 DESTFINO v. KENNEDY
tiffs to differentiate their allegations when suing more than
one defendant.” Cisneros v. Instant Capital Funding Grp.,
Inc., 263 F.R.D. 595, 606-07 (E.D. Cal. 2009) (quoting
Swartz v. KPMG LLP, 476 F.3d 756, 764-65 (9th Cir. 2007)
(internal quotation marks omitted)). The order dismissing the
first amended complaint explained that the complaint grouped
multiple defendants together and failed to “set out which of
the defendants made which of the fraudulent state-
ments/conduct.” The district court made clear in this order
that plaintiffs must amend their “shotgun pleading” to
“state[ ] clearly how each and every defendant is alleged to
have violated plaintiffs’ legal rights.” The second amended
complaint was properly dismissed because it failed to do this,
continuing to make “everyone did everything” allegations.
Plaintiffs are entitled to only one amendment as a matter of
right, see FRCP 15(a), and they twice amended the complaint.
The district court dismissed with prejudice because it found
the pleadings would “lead to broad discovery and other pre-
trial problems,” and “create an undue burden on the Court.”
Plaintiffs had three bites at the apple, and the court acted well
within its discretion in disallowing a fourth. See Zucco Part-
ners, LLC v. Digimarc Corp., 552 F.3d 981, 1007 (9th Cir.
2009).
[13] Plaintiffs further claim that dismissal of their com-
plaint in its entirety wasn’t justified. Because only fraud alle-
gations needed to be pled with particularity, plaintiffs argue
that only these claims could properly have been dismissed for
failure to do so. See Vess v. Ciba-Geigy Corp. USA, 317 F.3d
1097, 1104 (9th Cir. 2003); compare Fed R. Civ. P. 9(b), with
FRCP 8(a)(2). They contend that several of their other claims
—including allegations of harassment, stalking and breach of
implied covenant of good faith and fair dealing—were prop-
erly pled because they didn’t rely on allegations of fraud. But
the district court explained in its orders that plaintiffs not only
failed to comply with Rule 9(b), but also with Rule 8(a)(2)’s
“short and plain statement” requirement. The district court’s
“decision to dismiss the [second] amended complaint with
DESTFINO v. KENNEDY 1277
prejudice was appropriate in light of [plaintiffs’] repeated fail-
ure to cure the deficiencies in [their] pleadings.” Neubronner
v. Milken, 6 F.3d 666, 672 (9th Cir. 1993). It is well-
established that a court may dismiss an entire complaint with
prejudice where plaintiffs have failed to plead properly after
“repeated opportunities.” Id.; see also Semegen v. Weidner,
780 F.2d 727, 730-31 (9th Cir. 1985). Here, the district court
gave plaintiffs several chances to amend, with detailed
instructions as to what they needed to do to fix the problems
with their complaint. Plaintiffs failed to comply with these
orders and it was therefore proper for the court to dismiss
their entire complaint without further leave to amend.
[14] Finally, plaintiffs argue that sanctioning them by dis-
missing the second amended complaint without leave to
amend was not within the district court’s authority. They mis-
read the court’s order dismissing the second amended com-
plaint as imposing a dismissal sanction under 28 U.S.C.
§ 1927, which only authorizes monetary sanctions. It’s true
that defendants moved for monetary sanctions, both pursuant
to 28 U.S.C. § 1927 and the court’s inherent power. But the
court declined to grant a monetary award to plaintiffs because
it didn’t have a “specific request for monetary sanctions
before it.” Instead, the court acted well within its inherent
power to control its docket by dismissing the complaint with
prejudice, finding this to be “sanction” enough. See Thompson
v. Hous. Auth., 782 F.2d 829, 831 (9th Cir. 1986) (per
curiam); see also Transamerica Corp. v. Transamerica Banc-
growth Corp., 627 F.2d 963, 966 (9th Cir. 1980). This dis-
missal can hardly be called a sanction anyway, since plaintiffs
had no right to any further amendment. See Zucco Partners,
552 F.3d at 1007 (“[W]here the plaintiff has previously been
granted leave to amend and has subsequently failed to add the
requisite particularity to its claims, [t]he district court’s dis-
cretion to deny leave to amend is particularly broad.” (internal
quotation marks omitted) (second alteration in original)).
AFFIRMED.