                 FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT


KRIS KENNY, on behalf of himself           No. 17-56809
and all others similarly situated,
                    Plaintiff-Appellee,       D.C. No.
                                           5:17-cv-00967-
                  v.                           R-KK

WAL-MART STORES, INC., a
Delaware Corporation; WAL-MART               OPINION
ASSOCIATES, INC., a Delaware
Corporation,
             Defendants-Appellants.



      Appeal from the United States District Court
         for the Central District of California
       Manuel L. Real, District Judge, Presiding

         Argued and Submitted January 9, 2018
                 Pasadena, California

                  Filed February 1, 2018
2                KENNY V. WAL-MART STORES

    Before: MILAN D. SMITH, JR. and MICHELLE T.
    FRIEDLAND, Circuit Judges, and JED S. RAKOFF, *
                   District Judge.

             Opinion by Judge Milan D. Smith, Jr.


                          SUMMARY **


                       Remand / Removal

    The panel vacated the district court’s order remanding a
putative class action to California state court because the
district court exceeded its statutory authority in remanding
sua sponte based on a non-jurisdictional defect, and because
Wal-Mart did not waive its right to remove the action to
federal court; and remanded to the district court for further
proceedings.

    Plaintiff filed the putative class action in California state
court, challenging Wal-Mart’s policy requiring employees
who have suffered workplace-related injuries to submit to
drug and/or urine testing. Wal-Mart removed the case to
federal court based on jurisdiction under the Class Action
Fairness Act (“CAFA”). The district court sua sponte
remanded the action to state court, concluding that Wal-Mart
had waived its right to remove the case by filing a demurrer


    *
      The Honorable Jed S. Rakoff, Senior United States District Judge
for the Southern District of New York, sitting by designation.
    **
       This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
               KENNY V. WAL-MART STORES                     3

in response to plaintiff’s First Amended Complaint (“FAC”)
in state court.

   The panel held that the district court lacked authority
under 28 U.S.C. § 1447(c) to remand sua sponte based on a
non-jurisdictional defect.

    The panel noted that a defendant “may waive the right to
remove to federal court where, after it is apparent that the
case is removable, the defendant takes actions in state court
that manifest his or her intent to have the matter adjudicated
there, and to abandon his or her right to a federal forum.”
Resolution Tr. Corp. v. Bayside Developers, 43 F.3d 1230,
1240 (9th Cir. 1994). The panel held that the district court
erred in concluding that Wal-Mart waived its right to remove
the case when the FAC did not reveal a basis for removal
pursuant to CAFA. The panel also held that Wal-Mart’s
choice to file a demurrer, rather than another form of
responsive pleading, to plaintiff’s indeterminate FAC did
not amount to a waiver of its right to remove. The panel
further held that where Wal-Mart removed the case before
plaintiff opposed the demurrer and before any hearing was
held, clearly Wal-Mart did not manifest an intent to litigate
in state court.
4              KENNY V. WAL-MART STORES

                        COUNSEL

Mark D. Kemple (argued) and Ashley Farrell-Picket,
Greenberg Traurig LLP, Los Angeles, California, for
Defendants-Appellants.

David M. deRubertis (argued) and Jeff D. Neiderman, The
deRubertis Law Firm APC, Studio City, California; Ellen R.
Serbin, Todd H. Harrison, and Brennan S. Kahn, Perona
Langer Beck Serbin Mendoza & Harrison APC, Long
Beach, California; for Plaintiff-Appellee.


                         OPINION

M. SMITH, Circuit Judge:

    Defendants Wal-Mart Stores, Inc. and Wal-Mart
Associates, Inc. (collectively, Wal-Mart) appeal from the
district court’s order remanding Plaintiff Kris Kenny’s
(Kenny) putative class action to California state court. In a
four-sentence minute order, the district court remanded the
case sua sponte, stating summarily that Wal-Mart waived its
right to remove by filing a demurrer in state court prior to
removal.

    We disagree, and hold that the district court erred on two
grounds. First, the district court exceeded its statutory
authority in remanding sua sponte based on a non-
jurisdictional defect. Second, Wal-Mart did not waive its
right to remove by filing a demurrer in state court, when its
right to remove pursuant to the Class Action Fairness Act
(CAFA), 28 U.S.C. § 1332(d), was not ascertainable from
Kenny’s pleading. We therefore vacate the district court’s
remand order, and remand to that court for further
proceedings.
                 KENNY V. WAL-MART STORES                            5

  FACTUAL AND PROCEDURAL BACKGROUND

    On January 13, 2017, Plaintiff Kris Kenny filed a
putative class action Complaint against Defendants Wal-
Mart Stores, Inc., Wal-Mart Associates, Inc., and U.S.
Healthworks Medical Group, 1 in California state court,
challenging Wal-Mart’s policy requiring employees who
have suffered workplace-related injuries to submit to drug
and/or urine testing. Kenny did not serve the Complaint on
any of the Defendants.

    On February 17, 2017, Kenny filed a First Amended
Complaint (FAC), and served the FAC on Wal-Mart.
Generally, a defendant in a California state court must
respond to the complaint within thirty days after service, or
risk default. See Cal. Civ. Proc. Code § 471.5. Wal-Mart
obtained a fifteen-day extension to respond to the FAC,
resulting in a deadline of April 4, 2017.

   On April 4, 2017, Wal-Mart filed a demurrer and a
motion to strike the FAC. Wal-Mart set the hearing on the
demurrer for June 15, 2017. Kenny’s deadline to oppose the
demurrer was June 2, 2017, nine court days before the
hearing. See id. § 1005(b).

    On May 17, 2017, nearly a month before the hearing,
Wal-Mart removed the case to federal court, asserting that
the district court had jurisdiction over the case pursuant to
CAFA. At the time of removal, Kenny had not yet opposed




    1
       U.S. Healthworks Medical Group (U.S. Healthworks) is not a party
to this appeal. U.S. Healthworks is alleged to have performed the drug
and urine tests at issue in the lawsuit.
6                   KENNY V. WAL-MART STORES

the demurrer, discovery had not begun, and the state court
had issued no rulings.

    On June 8, 2017, the district court, acting sua sponte,
issued a four-sentence minute order remanding the action to
state court.      The district court concluded, without
explanation, that Wal-Mart had waived its right to remove
the case by filing a demurrer in response to Kenny’s FAC in
state court.

    Wal-Mart timely petitioned this court for permission to
appeal the district court’s remand order. We granted the
petition on December 4, 2017.

    JURISDICTION AND STANDARD OF REVIEW

    We have jurisdiction to review the district court’s sua
sponte remand order pursuant to 28 U.S.C. § 1453(c)(1). See
Watkins v. Vital Pharm., Inc., 720 F.3d 1179, 1180–81 (9th
Cir. 2013) (per curiam). We review the district court’s
remand order de novo. Brinkley v. Monterey Fin. Servs.,
Inc., 873 F.3d 1118, 1121 (9th Cir. 2017).

                              ANALYSIS

I. The District Court Erred in Remanding Sua Sponte
   Based on a Non-Jurisdictional Defect.

    A district court lacks authority under 28 U.S.C.
§ 1447(c) to remand sua sponte based on a non-jurisdictional
defect. 2 Corona-Contreras v. Gruel, 857 F.3d 1025, 1030

    2
        Section 1447(c) provides, in pertinent part:

           A motion to remand the case on the basis of any defect
           other than lack of subject matter jurisdiction must be
                  KENNY V. WAL-MART STORES                            7

(9th Cir. 2017); see Smith v. Mylan Inc., 761 F.3d 1042, 1044
(9th Cir. 2014). Whereas a “district court must remand ‘if at
any time before final judgment it appears that the district
court lacks subject matter jurisdiction,’” it “may remand for
defects other than lack of subject matter jurisdiction only
upon a timely motion to remand.” Smith, 761 F.3d at 1044
(alteration omitted) (quoting 28 U.S.C. § 1447(c)). In
essence, subject matter jurisdiction is the touchstone for a
district court’s authority to remand sua sponte.

     Here, the district court erred by remanding sua sponte on
a non-jurisdictional ground. Neither the district court nor
Kenny questioned the court’s subject matter jurisdiction
under CAFA. 3 Instead, the district court stated, without
explanation, that Wal-Mart waived its right to remove by
filing a demurrer to Kenny’s FAC in state court. Plainly,
waiver, a common-law doctrine, does not implicate the
court’s original jurisdiction over the action. See City of
Albuquerque v. Soto Enters., Inc., 864 F.3d 1089, 1093 (10th

         made within 30 days after the filing of the notice of
         removal under section 1446(a). If at any time before
         final judgment it appears that the district court lacks
         subject matter jurisdiction, the case shall be remanded.

28 U.S.C. § 1447(c). “The first sentence of § 1447(c) ‘consigns
procedural formalities to the care of the parties,’” while “[t]he second
sentence ‘assigns to the court concern for its jurisdictional
prerequisites.’” Corona-Contreras v. Gruel, 857 F.3d 1025, 1028 (9th
Cir. 2017) (quoting Kelton Arms Condo. Owners Ass’n, Inc. v.
Homestead Ins. Co., 346 F.3d 1190, 1192 (9th Cir. 2003)). Whereas the
former may be waived, the latter may not. See id. at 1028–29.
    3
       Nor is there any indication at this juncture that subject matter
jurisdiction is lacking. Wal-Mart’s notice of removal alleges compliance
with the requisite elements for CAFA jurisdiction.
8                 KENNY V. WAL-MART STORES

Cir. 2017); cf. Resolution Tr. Corp. v. Bayside Developers,
43 F.3d 1230, 1239 (9th Cir. 1994) (“[T]he jurisdiction
exercised by the district court on removal is ‘original’
jurisdiction, without regard to the status of the proceedings
in state court prior to removal.”). 4 Thus, the district court
exceeded its statutory authority in remanding sua sponte on
a non-jurisdictional ground, and its order warrants reversal
for this reason alone.

II. The District Court Erred in Concluding that Wal-
    Mart Waived its Right to Remove the Action.

    We have observed that a defendant “may waive the right
to remove to federal court where, after it is apparent that the
case is removable, the defendant takes actions in state court
that manifest his or her intent to have the matter adjudicated
there, and to abandon his or her right to a federal forum.”
Resolution Tr., 43 F.3d at 1240. Such a waiver “must be
clear and unequivocal,” however. Id. (quoting Beighley v.
FDIC, 868 F.2d 776, 782 (5th Cir. 1989)). For example,
when “a party takes necessary defensive action to avoid a
judgment being entered automatically against him, such
action does not manifest an intent to litigate in state court,
and accordingly, does not waive the right to remove.” Id.
Generally speaking, “the right of removal is not lost by
action in the state court short of proceeding to an



    4
      Kenny’s reliance on Soto Enterprises is misplaced. The district
court’s authority to remand sua sponte was not at issue in Soto
Enterprises. See 864 F.3d at 1091 (noting that the plaintiff filed a motion
to remand). Furthermore, Soto Enterprises does not conclude that
waiver is a jurisdictional defect—indeed, it concludes to the contrary.
See id. at 1092–94.
                  KENNY V. WAL-MART STORES                              9

adjudication on the merits.” Id. (quoting Beighley, 868 F.2d
at 782).

    The district court erred in concluding that Wal-Mart
waived its right to remove this case when the FAC did not
reveal a basis for removal pursuant to CAFA. It is
undisputed that the FAC is indeterminate as to the amount in
controversy. 5 Thus, Wal-Mart could not have waived its
right to remove by taking actions in state court “after it [was]
apparent that the case [was] removable,” id. (emphasis
added), when its right to remove was not apparent from the
FAC.

    A finding of waiver on the facts of this case would run
contrary to our case law on removal. We have made clear
that we will not “charge defendants with notice of
removability until [they have] received a paper that gives
them enough information to remove.” Kuxhausen v. BMW
Fin. Servs. NA LLC, 707 F.3d 1136, 1141 (9th Cir. 2013)
(quoting Durham v. Lockheed Martin Corp., 445 F.3d 1247,
1251 (9th Cir. 2006)). “[A]s long as the complaint or ‘an
amended pleading, motion, order or other paper’ does not
reveal that the case is removable,” a defendant, in effect,
“may remove at any time.” Rea v. Michaels Stores Inc.,
742 F.3d 1234, 1238 (9th Cir. 2014) (per curiam) (quoting
28 U.S.C. § 1446(b)(3)).



    5
      “CAFA gives federal district courts original jurisdiction over class
actions in which the class members number at least 100, at least one
plaintiff is diverse in citizenship from any defendant, and the aggregate
amount in controversy exceeds $5 million, exclusive of interest and
costs.” Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 1195 (9th Cir.
2015) (citing 28 U.S.C. § 1332(d)). Kenny did not specify an amount in
controversy in the FAC.
10             KENNY V. WAL-MART STORES

    We have also emphasized that “a defendant does not
have a duty of inquiry if the initial pleading or other
document is ‘indeterminate’ with respect to removability.”
Roth v. CHA Hollywood Med. Ctr., L.P., 720 F.3d 1121,
1125 (9th Cir. 2013) (citing Harris v. Bankers Life & Cas.
Co., 425 F.3d 689, 693–94 (9th Cir. 2005)). Accordingly,
“even if a defendant could have discovered grounds for
removability through investigation, it does not lose the right
to remove because it did not conduct such an investigation
and then file a notice of removal within thirty days of
receiving the indeterminate document.” Id.

    These general removal principles apply equally in the
context of removals premised upon CAFA. See, e.g., Jordan
v. Nationstar Mortg. LLC, 781 F.3d 1178, 1180 (9th Cir.
2015) (holding that “a defendant may remove a case from
state court within thirty days of ascertaining that the action
is removable under CAFA, even if an earlier pleading,
document, motion, order, or other paper revealed an
alternative basis for federal jurisdiction”). In line with these
principles, we held in Roth that “a defendant who has not
lost the right to remove because of a failure to timely file a
notice of removal under [28 U.S.C.] § 1446(b)(1) or (b)(3)
may remove to federal court when it discovers, based on its
own investigation, that a case is removable” pursuant to
CAFA. 720 F.3d at 1123. In short, “[a] CAFA case may be
removed at any time, provided that neither of the two thirty-
day periods under [28 U.S.C.] § 1446(b)(1) and (b)(3) has
been triggered.” Id. at 1126 (citing 28 U.S.C. § 1453(b)).

    Here, nothing on the face of the FAC put Wal-Mart on
notice of the case’s removability, and Kenny has not pointed
to any other paper that would have done so. Under these
circumstances, Wal-Mart could not have “clear[ly] and
unequivocal[ly]” waived its right to remove by responding
                 KENNY V. WAL-MART STORES                            11

to the FAC. Resolution Tr., 43 F.3d at 1240 (quoting
Beighley, 868 F.2d at 782). 6

    Two additional points lend further support for our
conclusion. First, Wal-Mart filed a demurrer on the last day
to respond to Kenny’s FAC. See Cal. Civ. Proc. Code
§ 471.5. While Kenny faults Wal-Mart for filing a response
addressing the merits of the FAC, Kenny cannot dispute the
fact that Wal-Mart had to respond in some manner to the
FAC, or risk entry of a default judgment. See id. Wal-Mart’s
choice to file a demurrer, rather than another form of
responsive pleading, to Kenny’s indeterminate FAC did not
amount to a waiver of its right to remove.

    Second, Wal-Mart removed the case before Kenny
opposed Wal-Mart’s demurrer, and before any hearing was
held, let alone any ruling issued. Clearly, Wal-Mart did not
“manifest an intent to litigate in state court,” much less an
intent to affirmatively “abandon [its] right to a federal
forum.” Resolution Tr., 43 F.3d at 1240.

    For the foregoing reasons, we hold that the district court
erred in concluding that Wal-Mart waived its right to
remove.




    6
       We need not decide whether “abusive gamesmanship” by a
defendant, Roth, 720 F.3d at 1126, may result in waiver of the right to
remove. This case does not present such a scenario. There is no
indication, for example, that Wal-Mart failed to “promptly investigate[]
to determine whether the case was removable,” or “promptly file[] a
notice of removal” upon learning, from its own investigation, that the
case was removable. Id.
12              KENNY V. WAL-MART STORES

                       CONCLUSION

    We vacate the district court’s order remanding this action
to California state court, and remand this action to the district
court for further proceedings.

     Appellee shall bear the costs on appeal.

     VACATED AND REMANDED.
