Duran v. FCA US LLC ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 MARTINA DURAN DURAN, No. 1:19-cv-01763-DAD-EPG 12 Plaintiff, 13 v. ORDER REMANDING ACTION FOR LACK OF SUBJECT MATTER JURISDICTION 14 FCA US LLC, a Delaware Limited Liability Company, and TURLOCK 15 CHRYSLER DODGE JEEP RAM, 16 Defendants. 17 18 On December 27, 2019, the court issued an order to show cause requiring defendants to 19 provide additional information to allow the court to determine whether it has subject matter 20 jurisdiction over this action. (Doc. No. 10.) Defendant FCA US LLC (“FCA”) responded to the 21 order to show cause on January 10, 2020. Plaintiff Martina Duran Duran filed an opposition on 22 January 24, 2020, (Doc. No. 12), and defendant FCA replied on January 31, 2020. (Doc. No. 14.) 23 For the reasons set forth below, the court concludes that defendants have failed to establish this 24 court’s subject matter jurisdiction and the court will therefore remand this case back to state 25 court. 26 Defendants removed this action to this federal court alleging diversity of citizenship. 27 (Doc. No. 1 at 1.) Under 28 U.S.C. § 1332, federal courts have jurisdiction on the basis of 28 diversity of citizenship if the matter is between citizens of different states and the amount in 1 controversy exceeds $75,000. In its order to show cause, the court specifically noted that 2 defendant FCA must show by clear and convincing evidence that defendant Turlock Chrysler 3 Dodge Jeep Ram (“Turlock Chrysler”) was fraudulently joined to this action by plaintiff in order 4 to defeat diversity jurisdiction. (Doc. No. 10 at 1, 3); see also Hamilton Materials, Inc. v. Dow 5 Chem. Corp., 494 F.3d 1203, 1206 (9th Cir.2007) (“Fraudulent joinder must be proven by clear 6 and convincing evidence.”). The court went on to specifically direct defendant FCA to show that 7 individual dealerships cannot be properly named as defendants in actions brought under 8 California’s Song-Beverly Consumer Warranty Act. (Doc. No. 10 at 2–3.) 9 Defendant FCA has yet to satisfy its burden of proof. Rather, defendant FCA primarily 10 challenges the sufficiency of plaintiff’s allegations.1 (See generally Doc. Nos. 11, 14.) The Ninth 11 Circuit has acknowledged that the analysis under Rule 12(b)(6) shares some similarities with the 12 fraudulent joinder standard, and that “the complaint will be the most helpful guide in determining 13 whether a defendant has been fraudulently joined.” Grancare, LLC v. Thrower by and through 14 Mills, 889 F.3d 543, 549 (9th Cir. 2018). The two tests should not, however, be conflated. Id. 15 If a plaintiff’s complaint can withstand a Rule 12(b)(6) motion with respect to a particular defendant, it necessarily follows that the 16 defendant has not been fraudulently joined. But the reverse is not true. If a defendant cannot withstand a Rule 12(b)(6) motion, the 17 fraudulent inquiry does not end there. For example, the district court must consider, as it did in this case, whether a deficiency in the 18 complaint can possibly be cured by granting the plaintiff leave to amend. 19 20 1 Defendant FCA correctly notes that the Ninth Circuit allows the district court to “pierce the 21 pleadings” and “consider[] summary judgment-type evidence such as affidavits and deposition testimony.” (Doc. No. 14 at 8) (citing Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1068 (9th 22 Cir. 2001) (internal citations omitted). However, while defendant FCA argues that plaintiff’s lack 23 of evidence “speaks volumes,” (id.), plaintiff’s failure to present evidence does not satisfy defendant’s burden. The only evidence presented by defendant in opposition to remand is a 24 declaration from defense counsel Spencer P. Hugret. (Doc. No. 1-3.) Therein, defense counsel attests that in his experience of representing defendant FCA in over 1,000 lawsuits of this nature, 25 “individual dealerships have not been sued as a matter of course” and “[i]t is [his] belief that the 26 instant Plaintiff only sued the named TCDJR dealership in Stanislaus County, in an attempt to defeat diversity and to prevent the matter from being removed to federal court.” (Id. at ¶¶ 4, 7.) 27 As the court noted in its order to show cause, however, defense counsel’s subjective belief is insufficient to demonstrate that defendant Turlock Chrysler cannot be properly named in this 28 action. (Doc. No. 10 at 3.) 1 Id. at 550. 2 Here, defendant FCA avers that plaintiff’s complaint demonstrates that she has no 3 intention of prosecuting her claims against defendant Turlock Chrysler because her express 4 warranty and implied warranty claims fail. (Doc. No. 14 at 3.) Turning to the breach of express 5 warranty claim, defendant notes that 6 [p]laintiff does not allege what problems she experienced with the engine, suspension, and electrical systems. Instead, Plaintiff relies 7 on a vague reference to “various” purported “defects” relating to three distinct vehicle components. Plaintiff also fails to allege the 8 terms of the express warranty, or how many repair attempts were made for the alleged nonconformity (or when the repairs were made), 9 and what happened each time she took the vehicle in for repairs. 10 (Doc. No. 11 at 5.) While these specific deficiencies could result in plaintiff’s complaint being 11 dismissed under Rule 12(b)(6), it is possible that each noted deficiency could be cured by 12 amendment. See Hall v. Kraft Heinz Food Co. (LLC), No. 1:19-cv-00565-LJO-BAM, 2019 WL 13 2598764, at *3 (E.D. Cal. June 25, 2019) (“Even where presently deficiently pled, where 14 Plaintiffs may amend that claim to cure any arguable defects, it may not be said that it is 15 impossible for them to state a claim against [a non-diverse defendant].”); Mireles v. Wells Fargo 16 Bank, N.A., 845 F. Supp. 2d 1034, 1063 (C.D. Cal. 2012) (“Defendants must show that the 17 relevant state law is so well settled that plaintiff ‘would not be afforded leave to amend his 18 complaint to cure th[e] purported deficiency.’”) 19 Defendant FCA also argues that, as a matter of law, plaintiff’s complaints and demands 20 for repurchase or replacement should be directed solely to the manufacturer and not defendant 21 Turlock Chrysler, the retailer. (Doc. No. 11 at 5.) Although defendant FCA does not specify that 22 this argument pertains solely to plaintiff’s breach of express warranty claim, defendant notes in its 23 reply that a buyer is allowed the “right of replacement or restitution for breach of an express 24 warranty,” and the right does not apply to breach of implied warranty. (Doc. No. 14 at 6) (citing 25 Victorino v. FCA US LLC, 326 F.R.D. 282, 302 (S.D. Cal. 2018), appeal withdrawn, No. 18- 26 80076, 2019 WL 7187392 (9th Cir. Nov. 21, 2019)). The court therefore assumes that defendant 27 FCA’s argument is that plaintiff’s breach of express warranty claim can only be brought against 28 the manufacturer. Assuming arguendo that this argument is true, this still does not foreclose the 1 | possibility of plaintiff bringing her breach of implied warranty claim against the retailer under the 2 || circumstances of this case. 3 Defendant FCA’s sole argument in support of its contention that plaintiff’ s implied 4 | warranty claim fails as a matter of law is that plaintiff has not alleged that she is entitled to 5 || damages for diminution of value, which is plaintiffs available remedy under California Civil 6 || Code § 1794(b)(2). (Doc. No. 14 at 7.) However, assuming that plaintiff's only available remedy 7 | for a breach of implied warranty claim is diminution of value, plaintiff does in fact pray for such 8 || relief in her complaint. (See Doc. No. 1, Ex. A at 10.) 9 As noted in the order to show cause, the undersigned does not interpret the law in this area 10 | as foreclosing the bringing of an action against both the manufacturer and the retailer. (Doc. No. 11 10 at 3.); see also Tanner v. Ford Motor Co., No. 5:19-cv-02495-EJD, 2019 WL 6269307, at *4 12 | (N.D. Cal. Nov. 25, 2019) (concluding that it was “not obvious that Plaintiffs [could not] state a 13 | claim [under Song-Beverly] against [an individual dealership], because it [was] possible their 14 | implied warranty claim [was] not time-barred”). Defendant has failed to show, and the court 15 || remains unconvinced, that “there is no possibility that the plaintiff could prevail on any cause of 16 || action it brought against the non-diverse defendant.” Hall, 2019 WL 2598764 at *3 (emphasis 17 || added). 18 Accordingly, the court hereby remands this action to the Madera County Superior Court 19 | for lack of subject matter jurisdiction. The Clerk of the Court is directed to close this case. 20 IT IS SO ORDERED. ~ Me 22 Dated: _ April 9, 2020 ee Fo aay UNITED STATES DISTRICT JUDGE 23 24 25 26 27 28