Wilson v. FCA US LLC ( 2020 )

1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 EASTERN DISTRICT OF CALIFORNIA 8 9 PATRICK LEE WILSON and CASEY No. 2:20-cv-00720-JAM-EFB LEIGH WILSON, 10 Plaintiffs, 11 ORDER GRANTING PLAINTIFFS’ v. MOTION TO REMAND 12 FCA US, LLC; CHRYSLER DODGE 13 JEEP RAM; and DOES 1 through 10, inclusive 14 Defendants. 15 16 This matter is before the Court on Patrick and Casey 17 Wilson’s (“Plaintiffs”) Motion to Remand. Mot. to Remand 18 (“Mot.”), ECF No. 9. FCA US, LLC and Sacramento Chrysler Dodge 19 Jeep Ram (collectively “Defendants”) filed an opposition to 20 Plaintiffs’ motion, Opp’n, ECF No. 12, to which Plaintiffs 21 replied, Reply, ECF No. 13. After consideration of the parties’ 22 briefing on the motion and relevant legal authority, the Court 23 GRANTS Plaintiffs’ Motion to Remand.1 24 I. BACKGROUND 25 On January 16, 2017, Plaintiffs bought a 2017 Chrysler 26 27 1 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was 28 scheduled for July 28, 2020. 1 Pacifica. Compl. ¶ 8, ECF No. 1-1. FCA US, LLC, a corporation 2 incorporated in Delaware with a principal place of business in 3 Michigan, manufactured and/or distributed the Chrysler Pacifica. 4 Compl. ¶ 8; Notice of Removal ¶ 28. Sacramento Chrysler, an LLC 5 organized under Delaware law, see Exs. F–G to Mayo Decl., ECF No. 6 1–1, with a principal place of business in Sacramento, 7 California, see Mot. at 15, owns, operates, and maintains 8 automobile dealerships around Sacramento County. Compl. ¶ 5. 9 Plaintiffs’ newly-purchased minivan came with an express written 10 warranty. Compl. ¶ 9. During the warranty period, Plaintiffs’ 11 minivan displayed several defects. Compl. ¶ 10. Defendants have 12 failed to conform the minivan to the applicable express 13 warranties, replace the minivan, or provide restitution. Compl. 14 ¶¶ 27, 34, 42, 59. 15 On March 2, 2020, Plaintiffs filed a lawsuit against 16 Defendants in Sacramento Superior Court. Plaintiffs claimed 17 Defendants committed fraud, negligently repaired their vehicle, 18 and violated several provisions of California’s “Song-Beverly 19 Act,” Cal. Civ. Code § 1790, et seq. See generally Compl. 20 Defendants received a copy of Plaintiffs’ complaint on March 9, 21 2020 and filed a timely notice of removal on April 7, 2020. See 22 Notice of Removal, ECF No. 1. See also 28 U.S.C. § 1446(b); Fed. 23 R. Civ. Proc. 6(a). The notice invoked the Court’s diversity 24 jurisdiction, arguing (1) the Court should dismiss Sacramento 25 Chrysler as fraudulently joined; and (2) the amount in 26 controversy exceeds $ 75,000. Notice of Removal ¶¶ 11-36. In 27 response, Plaintiffs filed this motion to remand. See Mot. 28 As explained below, the Court finds that Defendants failed 1 to show Plaintiffs fraudulently joined Sacramento Chrysler. As a 2 result, Defendants’ claim of diversity jurisdiction under 28 3 U.S.C. § 1332(a) fails and prevents removal under 28 U.S.C. 4 § 1441(b)(2). Because Defendants did not satisfy Section 1332’s 5 diversity requirement, the Court need not address the amount-in- 6 controversy issue. Plaintiffs’ motion to remand is granted. 7 II. OPINION 8 A. Timeliness 9 As an initial matter, Defendants argue Plaintiffs’ motion 10 is untimely. See Opp’n at 8. The Court disagrees. A motion to 11 remand must be filed within 30 days of the notice of removal if 12 it is based on any defect other than lack of subject matter 13 jurisdiction. See 28 U.S.C. § 1447(c). Plaintiffs’ motion 14 challenges the Court’s subject matter jurisdiction. See Mot. at 15 3–15. Thus, the 30-day rule does not apply, and Plaintiffs’ 16 motion is timely. Henderson ex rel. Henderson v. Shinseki, 562 17 U.S. 428, 434 (2011) (“Objections to subject-matter jurisdiction 18 [] may be raised at any time.”). 19 B. Fraudulent Joinder 20 1. Legal Standard 21 For a defendant to remove a civil case from state court, he 22 must prove the federal court has original jurisdiction over the 23 suit. 28 U.S.C. § 1441. A federal court may exercise 24 jurisdiction over a case involving purely state law claims when 25 there is complete diversity between the parties and an amount in 26 controversy exceeding $ 75,000. 28 U.S.C. § 1332(a). To 27 satisfy Section 1332’s diversity requirement, no plaintiff may 28 be a citizen of the same state as any defendant. Id. When a 1 case is removed on the basis diversity jurisdiction, no 2 defendant may be a citizen of the state where Plaintiff brought 3 the suit. 28 U.S.C. § 1441(b)(2). 4 A court will dismiss a fraudulently-joined defendant and 5 disregard its citizenship when determining whether the parties 6 are diverse. McCabe v. General Foods Corp., 811 F.2d 1336, 1339 7 (9th Cir. 1986). A joinder is fraudulent when (1) there is 8 actual fraud in the pleading of jurisdictional facts; or (2) a 9 plaintiff cannot establish a cause of action against the non- 10 diverse party in state court. Id. Courts do not often find 11 joinder fraudulent—the burden of persuasion is high and rests 12 squarely on defendants’ shoulders. Grancare, LLC v. Thrower by 13 and through Mills, 889 F.3d 543, 548 (9th Cir. 2018). A court 14 resolves “all disputed questions of fact and all ambiguities in 15 the controlling state law . . . in the plaintiff’s favor.” 16 Warner v. Select Portfolio Servicint, et al., 193 F. Supp. 3d 17 1132, 1135 (C.D. Cal. 2016). After which, it must “appear to 18 near certainty” that joinder was fraudulent. Diaz v. Allstate 19 Insur. Group, 185 F.R.D. 581, 586 (C.D. Cal. 1998). 20 When a defendant adopts the second approach to showing 21 fraudulent joinder, he must prove plaintiff “fail[ed] to state a 22 cause of action against a resident defendant . . . [that] is 23 obvious according to the settled rules of the state.” Hunter v. 24 Philip Morris USA, 582 F.3d 1039, 1043-44 (9th Cir. 2008). 25 Courts do not take this obviousness requirement lightly. If 26 there is even a “possibility” that a state court would find that 27 the complaint states a cause of action against any of the [non- 28 diverse] defendants,” a federal court “must find the defendant 1 properly joined and remand the case to state court.” Grancare, 2 LLC, 889 F.3d at 549 (emphasis and modification in original). 3 In this sense, the test for fraudulent joinder differs from the 4 test that governs a Rule 12(b)(6) motion to dismiss. Id. The 5 Ninth Circuit recently highlighted this difference: 6 If a plaintiff’s complaint can withstand a Rule 12(b)(6) motion with respect to a particular 7 defendant, it necessarily follows that the defendant has not been fraudulently joined. But the reverse is 8 not true. If a defendant cannot withstand a Rule 12(b)(6) motion, the fraudulent inquiry does not end 9 there . . . . [T]he district court must consider . . . whether a deficiency in the complaint can possibly be 10 cured by granting the plaintiff leave to amend. 11 Id. 12 2. Analysis 13 Plaintiffs’ only claims against Sacramento Chrysler are for 14 breach of an implied warranty of merchantability and negligent 15 repair. Compl. ¶¶ 45-49, 58–62. Defendants contend these 16 claims obviously fail because: (1) the breach of implied 17 warranty claim is non-specific and only alleges facts against 18 FCA US; and (2) the negligent repair claim is meritless because 19 of California’s economic loss rule. Notice of Removal ¶¶ 32-34, 20 38–43. However, with regard to the breach of implied warranty 21 claim, Defendants only raise it as an issue in their notice of 22 removal. Id. Although Plaintiffs refute this argument in their 23 opening brief, see Mot. at 8–10, Defendants do not respond to it 24 in their opposition brief. Therefore, Defendants have arguably 25 conceded the issue by silence. See Ardente, Inc. v. Shanley, 26 Case No. 07-CV-4479-MHP, 2010 WL 546485 at *6 (N.D. Cal. 2010) 27 (“Plaintiff fails to respond to this argument and therefore 28 concedes it through silence.”); see also E.D. Cal. L.R. 230(c). 1 Accordingly, the Court need not further address this argument. 2 Turning to Defendants’ argument that Plaintiffs’ negligent 3 repair claim is meritless because of California’s economic loss 4 rule, the rule serves to broadly bar tort liability where only 5 economic losses are asserted. See Robinson Helicopter Co., Inc. 6 v. Dana Corp., 34 Cal.4th 979, 988 (2004). However, the rule 7 “does not necessarily bar recovery in tort for damage that a 8 defective product (e.g., a window) causes to other portions of a 9 larger product (e.g., a house) into which the former has been 10 incorporated.” Jimenez v. Superior Court, 29 Cal.4th 473, 483 11 (2002) (finding the manufacturer of a defective window installed 12 in a mass-produced home may be held strictly liable in tort for 13 damage the window’s defect caused to other parts of the home). 14 Plaintiffs have alleged defects to certain components of 15 the minivan. To name a few, Plaintiffs claim to have had 16 problems with the powertrain control module, the transmission 17 control module, and the steering control module. See Compl. 18 ¶¶ 10, 12–14. Plaintiffs also claim to have had problems with a 19 variety of subcomponents connected or related to the 20 transmission control module and powertrain control module. Id. 21 And Plaintiffs allege that Sacramento Chrysler failed to 22 properly store, prepare, and repair the vehicle in accordance 23 with industry standard. Compl. ¶ 61. It is not inconceivable 24 that problems with components and subcomponents of the minivan 25 may have caused damage to the minivan as a whole. Thus, 26 Defendants’ argument that the economic loss rule necessarily 27 bars recovery in tort is insufficient to establish that 28 Sacramento Chrysler cannot be liable on any theory. 1 The question of whether an economic loss rule exception 2 will ultimately apply in this case is not for the Court to 3 determine at this stage; rather, the Court is to assess only 4 whether there is a possibility that a state court would find 5 that the complaint does—or an amended complaint could—state a 6 viable claim against Sacramento Chrysler. The Court finds that 7 there is such a possibility, and, therefore, cannot dismiss this 8 defendant as fraudulently joined. 9 C. Rule 21 10 Federal Rule of Civil Procedure 21 allows the Court to “at 11 any time, on just terms, add or drop a party.” A Court may use 12 Rule 21 to perfect its diversity jurisdiction by dismissing a 13 non-diverse party, but only if the nondiverse party is 14 “dispensable” under Rule 19. Sams v. Beech Aircraft Corp., 625 15 F.2d 272, 277 (9th Cir. 1980). 16 Setting aside the question of whether Sacramento Chrysler 17 is a dispensable party, the Court finds it inappropriate here to 18 dismiss this party for the sole purpose of granting itself 19 jurisdiction. Judges in the Eastern District of California 20 carry among the heaviest caseloads in the nation. Defendants 21 have not presented any compelling reasons why the Court should 22 disrupt Plaintiffs’ choice of forum and further burden its 23 federal docket when not required to do so by law. See Opp’n at 24 20-21. Defendants request is denied. 25 D. Sanctions 26 Plaintiffs exceeded the Court’s 5-page limit on reply 27 memoranda. See Reply; see also Order re Filing Requirements 28 (Order), ECF No. 2-2. Violations of the Court’s standing order 2.4U UV VUE CU VANIVE LST WD MVUULIIOCIIL tv VOoreviey rPayet ovvid 1 require the offending counsel (not the client) to pay $50.00 per 2 | page over the page limit to the Clerk of the Court. Order at 1. 3 Moreover, the Court will not consider arguments made past the 4 page limit. Id. In total, Plaintiffs’ reply memorandum exceeded 5 the Court’s page limit by 5 pages. Plaintiffs’ counsel must 6 therefore send a check payable to the Clerk for the Eastern 7 District of California for $250.00 no later than seven days from 8 the date of this order. 9 Til. ORDER 10 The Court declines to dismiss Sacramento Chrysler as 11 fraudulently joined or under Rule 21. As a result, the Court 12 lacks subject-matter jurisdiction over this case. Plaintiffs’ 13 |} motion to remand this action to the Sacramento County Superior 14 Court is GRANTED. 15 IT IS SO ORDERED. 16 Dated: August 25, 2020 17 he Me 18 teiren staves odermacr 7008 19 20 21 22 23 24 25 26 27 28