Ramirez v. Estes Express Lines ( 2023 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 HECTOR RAMIREZ, Case No. 2:22-cv-01047-JDP 12 Plaintiff, ORDER GRANTING PLAINTIFF’S MOTION FOR LEAVE TO AMEND AND TO 13 v. REMAND 14 ESTES EXPRESS LINES, ECF No. 5 15 Defendant. 16 17 Plaintiff filed this action against defendant Estes Express Lines in the Yolo County 18 Superior Court.1 Defendant removed the case to this court in June 2022 under 28 U.S.C. 19 § 1441(b) on the basis that there is diversity in citizenship—plaintiff is a citizen of California and 20 Estes Express Lines is a Virginia corporation—and that the amount in controversy is more than 21 75,000 dollars. ECF No. 1 at 1-3; see 28 U.S.C. § 1332(a). On July 18, 2022, plaintiff filed a 22 motion to amend, seeking to add two new defendants: Estes Terminals of California LLC and GI 23 Trucking Co. dba Estes West. ECF No. 5 at 5-6. These new defendants are alleged to be citizens 24 of California, and plaintiff argues that remand is appropriate based on this newfound lack of 25 complete diversity. Id. at 12. Defendant Estes Express Lines opposes this motion and argues that 26 plaintiff is fraudulently joining these defendants solely for the purpose of defeating diversity. 27 1 This case is before the undersigned pursuant to the parties’ consent. ECF Nos. 9, 11, & 28 13; see 28 U.S.C. § 636(c). 1 ECF No. 7 at 3-4. In the alternative, it argues that, even if these defendants are joined, they 2 would not destroy diversity. Id. at 6-7. After review of the pleadings, I will grant plaintiff’s 3 motion and remand this case to state court. 4 Plaintiff argues that both Estes Terminals of California LLC (“Estes Terminals”) and GI 5 Trucking Co. dba Estes West (“GI Trucking”) are citizens of California and thus that their 6 addition, if permitted, would destroy diversity. Defendant, in addition to arguing that the joinder 7 of these parties is fraudulent, contends that neither new defendant destroys diversity. It contends 8 that Estes Terminals is a Virginia corporation, ECF No. 7 at 6, and that the status of GI Trucking 9 is unknown, id. at 7. 10 The court declines to find fraudulent joinder. Fraudulent joinder is shown where there is: 11 “(1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish 12 a cause of action against the non-diverse party in state court.” Hunter v. Phillip Morris USA, 582 13 F.3d 1039, 1044 (9th Cir. 2009) (quoting Smallwood v. Illinois Cent. RR. Co., 385 F.3d 568, 573 14 (5th Cir. 2004)). There has been no argument as to the first prong. As to the second, defendant 15 argues that plaintiff cannot establish a cause of action against the parties it seeks to add because 16 they did not own the property where the incident occurred, did not own the trailer in which 17 plaintiff was injured, and were not responsible for loading the trailer. ECF No. 7 at 4. 18 In his reply, plaintiff argues that his independent investigation indicates that “[GI 19 Trucking] and [Estes Terminals] owned, managed, controlled, and/or possessed the GI West 20 Sacramento terminal where the ESTES’ trailer was negligently loaded, inspected, or secured, and 21 then delivered to Plaintiff’s employer.” ECF No. 10 at 7. Based on plaintiff’s assertions, there is 22 at least a possibility that a state court could find that the complaint states a cause of action against 23 GI Trucking and Estes Terminals. See Hunter v. Phillip Morris USA, 582 F.3d 1039, 1046 (9th 24 Cir. 2009) (quoting Tillman v. R.J. Reynolds Tobacco, 340 F.3d 1277, 1279 (11th Cir. 2003)) 25 (“[I]f there is a possibility that a state court would find that the complaint states a cause of action 26 against any of the resident defendants, the federal court must find that the joinder was proper and 27 remand the case to the state court.”) (emphasis in original). In so finding, I note that the Ninth 28 Circuit has cautioned against delving into the merits of a plaintiff’s case in considering the 1 possibility of fraudulent joinder. GranCare, LLC v. Thrower, 889 F.3d 543, 548-49 (9th Cir. 2 2018) (“We have declined to uphold fraudulent joinder rulings where a defendant raises a defense 3 that requires a searching inquiry into the merits of the plaintiff’s case, even if that defense, if 4 successful, would prove fatal.”). 5 Although plaintiff is the movant, it remains defendant’s burden to establish that removal is 6 proper. See Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (“The ‘strong presumption’ 7 against removal jurisdiction means that the defendant always has the burden of establishing that 8 removal is proper.”). Here, defendant has not shown that diversity is preserved even with the 9 joinder of the two new defendants. Defendant argues that neither GI Trucking nor Estes 10 Terminals is, for diversity purposes, a citizen of California. ECF No. 7 at 6. Plaintiff has 11 presented evidence and argument to the contrary. ECF No. 10 at 6. As to GI Trucking in 12 particular, the court notes that the California Secretary of State’s records2 indicate that, despite 13 being currently headquartered in Virginia, it was formed as a stock corporation in California.3 14 Thus, the record before the court reflects that GI Trucking is a citizen of California. See 28 15 U.S.C. § 1332(c)(1) (“[A] corporation shall be deemed to be a citizen of every State and foreign 16 state by which it has been incorporated and of the State or foreign state where it has its principal 17 place of business . . . .”). 18 Based on the foregoing, it is hereby ORDERED that: 19 1. Plaintiff’s motion to amend complaint and for remand, ECF No. 5, is GRANTED. 20 2. The Clerk of Court shall docket the complaint contained in ECF No. 5-1 at 62-66 as 21 the First Amended Complaint. 22 3. This case is hereby REMANDED to the Superior Court of California for the County of 23 Yolo. 24 2 The court takes judicial notice of these records. Judicial notice is appropriate where the 25 fact at issue “can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b)(2); see Nat’l Grange of the Ord. of Patrons of 26 Husbandry v. Cal. State Grange, 182 F. Supp. 3d 1065, 1075 n.3 (E.D. Cal. 2016) (taking judicial 27 notice of public filings on the California Secretary of State’s website). 3 https://bizfileonline.sos.ca.gov/search/business, search business number 0824623 (last 28 accessed 3/13/2023). 1 4. The Clerk of Court is directed to send a certified copy of this order to Superior Court 2 | of California for the County of Yolo and to close the case. 3 4 IT IS SO ORDERED. Dated: _ March 14, 2023 q——— 6 JEREMY D. PETERSON 7 UNITED STATES MAGISTRATE JUDGE 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28