Sandi Rush v. Sport Chalet, Inc. , 779 F.3d 973 ( 2015 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
SANDI RUSH, No. 12-57253
Plaintiff-Appellant,
D.C. No.
v. 2:12-cv-04139-
ODW-DTB
SPORT CHALET, INC., DBA Sport
Chalet No. 0038; FOOTHILL RANCH,
LLC, OPINION
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
Otis D. Wright II, District Judge, Presiding
Argued and Submitted
February 4, 2015—Pasadena, California
Filed March 3, 2015
Before: Stephen Reinhardt and Ronald M. Gould, Circuit
Judges, and J. Frederick Motz, Senior District Judge.*
Opinion by Judge Motz
*
The Honorable J. Frederick Motz, Senior District Judge for the U.S.
District Court for the District of Maryland, sitting by designation.
2 RUSH V. SPORT CHALET
SUMMARY**
Joinder
The panel reversed the district court’s order dismissing
three defendants after holding that they were improperly
joined in an action under the Americans with Disabilities Act.
The panel held that, as originally filed, two defendants
were properly joined under Federal Rule of Civil Procedure
20(a)(2) because they shared the common transaction or
occurrence of a landlord-tenant relationship. The plaintiff
settled with the tenant, but the plaintiff retained viable claims
against the landlord. Accordingly, the panel reversed the
district court’s dismissal of the landlord defendant.
The panel held that the district court abused its discretion
by dismissing rather than severing the plaintiff’s complaint
against two other defendants without evaluating the prejudice
to the plaintiff. Following other circuits, the panel held that
district courts that dismiss rather than sever must conduct a
prejudice analysis, including loss of otherwise timely claims
if new suits are blocked by statutes of limitations.
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
RUSH V. SPORT CHALET 3
COUNSEL
Scottlynn J. Hubbard, IV (argued), Law Offices of Lynn
Hubbard, Chico, California; Anthony M. Bettencourt
(argued), Disabled Advocacy Group, Chico, California, for
Plaintiff-Appellant.
Henry A. Platt and Robert L. Duston, Saul Ewing LLP,
Washington, D.C., for Defendant-Appellee Foothill Ranch.
OPINION
MOTZ, Senior District Judge:
Plaintiff Sandi Rush appeals the district court’s sua sponte
order that dismissed Defendants Petsmart, Inc.; Sport Chalet,
Inc.; and Foothill Ranch, LLC (collectively “defendants”)
after holding that they were improperly joined. We reverse
the district court’s legal conclusion under Rule 20 as to
Foothill Ranch. We also vacate its decision to dismiss rather
than sever the retail defendants and remand with instructions.
I.
Rush is wheelchair-bound and “physically disabled”
under applicable federal and California law. She alleges she
encountered physical barriers that interfered with her access
at three retail stores located in a shopping mall at 26532
Towne Center Drive in Foothill Ranch, CA (“Towne
Center”). Although not pleaded, the district court below
found that defendant Foothill Ranch is “likely the landlord
. . . and has a landlord-tenant relationship with each of the
other Defendants.” The barriers complained of by Rush
4 RUSH V. SPORT CHALET
include various obstructions in each of the retailers’
restrooms, and also inside the dressing room at Sport Chalet.
Rush filed her complaint on May 14, 2012. After settling
her claims with Babies “R” Us, Rush filed a notice of
dismissal under Rule 41(a)(1) on October 3, 2012 as to that
defendant only. Six days later, on October 9, the district
court below sua sponte issued an order that held “the various
Defendants are improperly joined” because Rush’s complaint
did not allege that her injuries arose “out of the same
transaction, occurrence, or series of transactions or
occurrences.” Pursuant to its discretion under Rule 21, the
court severed and dismissed Rush’s claims against Petsmart,
Sport Chalet, and Foothill Ranch without prejudice. The
district court denied Rush’s motion for reconsideration, and
Rush filed this timely appeal.1
II.
We review de novo the district court’s holding that the co-
defendants were improperly joined under Rule 20(a)(2). See,
e.g., EEOC v. Peabody Western Coal Co., 610 F.3d 1070,
1076 (9th Cir. 2010). We review the district court’s decision
to sever and dismiss the co-defendants under Rule 21 for
abuse of discretion. See id.III.
As originally filed, Foothill Ranch and Babies “R” Us
were properly joined under Rule 20(a)(2). Permissive joinder
1
Rush’s appeal is unopposed. Only Foothill Ranch filed a brief for the
limited purpose of contesting various factual allegations made by Rush.
Foothill Ranch took no formal position on the legal issues in the case.
RUSH V. SPORT CHALET 5
is appropriate if a plaintiff’s “right to relief is asserted against
[the defendants] . . . with respect to or arising out of the same
transaction, occurrence, or series of transactions or
occurrences,” and also if there is a “question of law or fact
common to” the defendants. Fed. R. Civ. P. 20(a)(2). Here,
the common transaction or occurrence as to Foothill Ranch
and Babies “R” Us is their landlord-tenant relationship. See
Botosan v. Paul McNally Realty, 216 F.3d 827, 834 (9th Cir.
2000) (“[T]he landlord is a necessary party in an ADA action,
regardless of what the lease provides.”). The Botosan court
established that a landlord and tenant are jointly liable for
ADA violations in the tenant’s establishment regardless of
any contractual provisions that shift liability. Either co-
defendant is free to seek indemnification from the other, but
that does not affect an ADA plaintiff’s right to recovery. Id.Here, Foothill Ranch would be liable for any unlawful
barriers and obstructions encountered by Rush at Babies “R”
Us, and the facts and applicable law are common to both
defendants. Accordingly, Foothill Ranch and Babies “R” Us
were properly joined under Rule 20. Moreover, after Rush
settled with Babies “R” Us, she retained viable claims against
Foothill Ranch. We reverse, therefore, the district court’s
dismissal of Foothill Ranch because it was properly joined
under Rule 20.
IV.
As for Sport Chalet and Petsmart, the district court may
have been correct in holding that they were misjoined.
Rush’s injuries at each are distinct and independent from one
another, and she has not alleged any legal relationship
between them. The district court abused its discretion,
however, by dismissing rather than severing Rush’s
6 RUSH V. SPORT CHALET
complaint against Sport Chalet and Petsmart without
evaluating the prejudice to Rush. Many of our fellow circuits
have held that district courts who dismiss rather than sever
must conduct a prejudice analysis, including “loss of
otherwise timely claims if new suits are blocked by statutes
of limitations.” DirecTV, Inc. v. Leto, 467 F.3d 842, 846–47
(3d Cir. 2006); see also Elmore v. Henderson, 227 F.3d 1009,
1011–13 (7th Cir. 2000) (“The judge could and should have
allowed [plaintiff’s] claims against [a co-defendant] to
continue as a separate suit so that it would not be time-
barred.”). We adopt that rule as well. Here, because the
district court below conducted no such analysis, we vacate
and remand. The judge should reevaluate whether allowing
two severed complaints to remain against Sport Chalet and
Petsmart, each with Foothill Ranch as a named co-defendant,
is necessary to avoid prejudice to Rush.
REVERSED and REMANDED with instructions.