Gas Transmission Northwest LLC v. Cochrane Extraction Partnership ( 2023 )

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 EASTERN DISTRICT OF CALIFORNIA 9 10 GAS TRANSMISSION NORTHWEST LLC No. 2:21-cv-01513-JAM-AC AND TUSCARORA GAS TRANSMISSION 11 COMPANY, 12 Plaintiffs, ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ 13 v. MOTION TO DISMISS 14 COCHRANE EXTRACTION PARTNERSHIP, COCHRANE EXTRACTION PLANT LTD., 15 INTER PIPELINE EXTRACTION LTD., AND INTER PIPELINE LTD., 16 Defendants. 17 18 Gas Transmission Northwest LLC (“GTN”) and Tuscarora Gas 19 Transmission Company (“Tuscarora”), collectively (“Plaintiffs”), 20 sued Cochrane Extraction Partnership, Cochrane Extraction Plant 21 LTD., Inter Pipeline Extraction LTD., and Inter Pipeline LTD, 22 collectively (“Defendants”), alleging nuisance, negligence, 23 negligent misrepresentation, and trespass. See Complaint 24 (“Compl.”), ECF No. 14. 25 Defendants move to dismiss Plaintiffs’ complaint for lack of 26 personal jurisdiction, lack of subject matter jurisdiction, and 27 failure to state a claim for which relief may be granted. See 28 Mot. to Dismiss (“Mot.”), ECF No. 27. Plaintiffs oppose the 1 motion. See Opp’n, ECF No. 33. Defendants replied. See Reply, 2 ECF No. 35. For the reasons set forth below, the Court GRANTS in 3 part and DENIES in part Defendants’ motion to dismiss.1 4 I. BACKGROUND 5 Plaintiffs allege that Defendants operate a gas processing 6 facility known as the Cochrane Extraction Plant (“CEP”) in 7 Alberta, Canada. Compl. ¶ 2. Plaintiffs allege that Defendants’ 8 gas processing operations produce a harmful chemical byproduct, 9 Dithiazine (“DTZ”), which Defendants negligently failed to 10 recover from its gas products before releasing them into Canadian 11 pipe systems that connect to pipelines owned by Plaintiffs in the 12 United States. Id. ¶¶ 2-4. Plaintiffs allege that their 13 pipeline systems have suffered loss and damage as a result of 14 Defendants’ negligence. Id. ¶ 5. Plaintiffs further allege that 15 Defendants knew that they were releasing DTZ but failed to 16 disclose this information to Plaintiffs, causing Plaintiffs to 17 undertake costly testing to ascertain the source of the chemical. 18 Id. ¶¶ 6-7. Plaintiffs brought suit on August 23, 2021. See 19 Compl. 20 II. OPINION 21 A. Judicial Notice 22 Federal Rule of Evidence 201 allows the Court to notice a 23 fact if it is “not subject to reasonable dispute,” such that it 24 is “generally known” or “can be accurately and readily 25 determined from sources whose accuracy cannot reasonably be 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 May 3, 2022. 1 questioned.” Fed. R. Evid. 201(b). The Court may take judicial 2 notice of court records, including “opinions, complaints, 3 briefs, and evidence filed in other actions.” BP W. Coast Prod. 4 LLC v. Greene, 318 F.Supp.2d 987, 994 (E.D. Cal. 2004). 5 However, a court “may not take judicial notice of proceedings or 6 records in another case so as to supply, without formal 7 introduction of evidence, facts essential to support a 8 contention in the cause then before it.” See M/V Am. Queen v. 9 San Diego Marine Constr. Corp., 708 F.2d 1483, 1491 (9th Cir. 10 1983). 11 Defendants ask the Court to take judicial notice of a 12 certificate of conversion filed with the Secretary of State for 13 the State of California (Exh. 1 at ECF No. 27-5), search results 14 from the website “California Business Search” run by the 15 California Secretary of State (Exhs. 2-5 at ECF Nos. 27-6 to 27- 16 9), and a complaint filed with the Court of Queen’s Bench of 17 Alberta, Canada (Exh. 6 at ECF No. 27-10). See Def.’s Request 18 for Judicial Notice (“DRJN”), ECF No. 27-4). The Court takes 19 judicial notice of Exhibits 1-6 as public records. However, as 20 to Exhibit 6, “it is well settled that allegations in pleadings 21 are not evidence.” Juniper Networks Inc., v. SSL Services, LLC, 22 No. C08-5758 SBA, 2009 WL 3837266, at *3 (N.D. Cal. Nov 16, 23 2009). For this reason, the Court takes notice of the fact that 24 a certain complaint was filed in Albert, Canada, but the Court 25 declines to take notice of any allegations contained within the 26 complaint for the truth of the facts asserted. 27 Plaintiffs ask the Court to take judicial notice of Inter 28 Pipeline LTD.’s 2019 “Annual Information Form” (Exh. A at ECF 1 No. 34-1) and filings with the Secretary of State for the State 2 of California (Exhs. B-C at ECF Nos. 34-2 to 34-3). See Pl.’s 3 Req. for Judicial Notice, ECF No. 34. Exhibit A is a document 4 referenced in the complaint. See Compl. ¶ 56; United States v. 5 Corinthian Colleges, 655 F.3d 984, 998-99 (9th Cir. 2011) 6 (taking judicial notice of a document referenced in the 7 complaint). Exhibits B and C are matters of public record. 8 Accordingly, the Court takes judicial notice of Exhibits A-C to 9 the extent that the contents of the documents are not factually 10 disputed. 11 B. Personal Jurisdiction 12 Defendants move to dismiss Plaintiffs’ complaint for lack 13 of personal jurisdiction under Federal Rule of Civil 14 Procedure 12(b)(2). Mot. at 4. 15 1. Legal Standard 16 A party may move to dismiss a suit for lack of personal 17 jurisdiction under Rule 12(b)(2). To defeat a Rule 12(b)(2) 18 motion, the plaintiff must make a prima facie showing of 19 jurisdictional facts sufficient to establish that jurisdiction 20 is proper. Mavrix Photo, Inc. v. Brand Tech., Inc. 647 F.3d 21 1218, 1223 (9th Cir. 2011). Here, where there is no applicable 22 federal statute governing personal jurisdiction, the Court 23 applies the law of California. Id. Because California’s long- 24 arm statute is coextensive with federal due process 25 requirements, the jurisdictional analysis under state law and 26 federal due process are the same. Id. (citing Cal. Civ. Proc. 27 Code § 410.10). For this Court to exercise personal 28 jurisdiction consistent with due process, the defendant must 1 have “minimum contacts” with this forum “such that the 2 maintenance of the suit does not offend ‘traditional notions of 3 fair play and substantial justice.’” Int’l Shoe Co. v. 4 Washington, 326 U.S. 310, 316 (1945) (internal citations 5 omitted). A court may exercise either general or specific 6 jurisdiction over a defendant. Goodyear Dunlop Tires 7 Operations, S.A. v. Brown, 564 U.S. 915, 919-20 (2011). 8 When parties offer conflicting factual allegations, the 9 matter may be determined by reference to the burden of proof on 10 each party. Data Disc, Inc. v. Systems Technology Associates, 11 Inc., 557 F.2d 1280, 1285 (9th Cir. 1977). The party seeking to 12 invoke the jurisdiction of the federal court has the burden of 13 establishing that jurisdiction exists. KVOS, Inc. v. Associated 14 Press, 299 U.S. 269, 278 (1936). The quantum of proof required 15 to meet that burden varies depending on how the trial court 16 decides to resolve a motion for dismissal. Data Disc, Inc., 557 17 F.2d at 1285. If, as here, the court decides to resolve the 18 matter based on written materials and affidavits rather than an 19 evidentiary hearing, “a plaintiff must make only a prima facie 20 showing of jurisdictional facts through the submitted materials 21 in order to avoid a defendant’s motion to dismiss.” Martinez v. 22 Aero Caribbean, 764 F.3d 1062, 1066 (9th Cir. 2014). In 23 determining whether a plaintiff has met its burden, the Court 24 must take uncontroverted allegations in the complaint as true 25 and “[c]onflicts between parties over statements contained in 26 the affidavits must be resolved in the plaintiff’s favor.” Dole 27 Food Co. v. Watts, 303 F.3d 1104, 1108 (9th Cir. 2002). 28 Plaintiff’s argument must rest on more than “bare bones’ 1 assertions of minimum contacts with the forum or legal 2 conclusions unsupported by specific factual allegations.” 3 Swartz v. KPMG LLP, 476 F.3d 756, 766 (9th Cir. 2007). 4 2. General Jurisdiction Analysis 5 A court has general jurisdiction over a party whose 6 “continuous operations within a state [are] so substantial and 7 of such a nature as to justify a suit against it on causes of 8 action arising from dealings entirely distinct from those 9 activities.” Int’l Shoe Co., 326 U.S. at 318. This is an 10 exacting standard that requires Defendants’ activities in 11 California be “so continuous and systematic as to render [it] 12 essentially at home” in the state. Goodyear Dunlop Tires, 564 13 U.S. at 919. Generally, a corporate defendant is “at home” in 14 California in three situations: (1) It is incorporated in the 15 state; (2) it has its principal place of business in the state; 16 or (3) it has “continuous and systematic contacts” with the 17 state. Daimler AG v. Bauman, 571 U.S. 117, 137 (2014). 18 Defendants argue that they are not subject to general 19 jurisdiction in California. Mot. at 4-5. It is undisputed that 20 Defendants are “foreign, alien citizens of Alberta, Canada.” 21 Id. at 5; Compl. ¶ 13. Defendants are entities (one partnership 22 and two corporations) organized under the laws of Alberta, 23 Canada. Mot at 4-5; Compl. ¶¶ 10-12. Plaintiffs do not respond 24 to Defendants’ general jurisdiction argument in their 25 opposition, choosing instead to cabin their response to specific 26 jurisdiction arguments. Opp’n at 3. Because Plaintiffs do not 27 oppose Defendants’ argument that the Court lacks general 28 jurisdiction, Plaintiffs waive this argument. See Resnick v. 1 Hyundai Motor America, Inc., No. CV 16-00593-BRO (PJWx), 2017 WL 2 1531192 at *22, (C.D. Cal. Apr. 13, 2017) (“Failure to oppose an 3 argument raised in a motion to dismiss constitutes waiver of 4 that argument”). Accordingly, the Court does not find general 5 jurisdiction exists over Defendants. 6 3. Specific Jurisdiction Analysis 7 Specific jurisdiction “depends on an affiliation between 8 the forum and the underlying controversy, principally, activity 9 or an occurrence that takes place in the forum State and is 10 therefore subject to the State’s regulation.” Goodyear Dunlop 11 Tires, 564 U.S. at 919. For specific jurisdiction to attach, 12 the relationship between the defendant and the forum “must arise 13 out of contacts that the ‘defendant himself’ creates with the 14 forum State.” Walden v. Fiore, 134 S. Ct. 1115, 1122 (2014) 15 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 16 (1985)). The Court’s analysis “looks to the defendant’s 17 contacts with the forum State itself, not the defendant’s 18 contacts with persons who reside there.” Walden, 134 S. Ct. at 19 1122. 20 The Ninth Circuit prescribes a three-prong test for 21 analyzing claims of specific jurisdiction: (1) The nonresident 22 defendant must purposefully direct its activities or consummate 23 some transaction with the forum or resident thereof; or perform 24 some act by which it purposefully avails itself of the privilege 25 of conducting activities in the forum, thereby invoking the 26 benefits and protections of its laws; (2) the claim must be one 27 which arises out of or relates to the defendant’s forum-related 28 activities; and (3) the exercise of jurisdiction must comport 1 with fair play and substantial justice such that it is 2 reasonable. See Schwarzenegger v. Fred Martin Motor Co., 374 3 F.3d 797, 802 (9th Cir. 2004). The plaintiff bears the burden 4 of satisfying the first two prongs of the test. Sher v. 5 Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990). If the plaintiff 6 makes a sufficient showing on the first two prongs, the burden 7 shifts to the defendant to prove that jurisdiction would be 8 unreasonable in light of traditional consideration of fair play 9 and substantial justice. Dole Food Co., 303 F.3d at 1114. 10 Under the first prong of the specific-jurisdiction inquiry, 11 Plaintiffs must make a prima facie showing that Defendants 12 purposely availed or directed their activities at the forum. 13 Schwarzenegger, 374 F.3d at 802. Purposeful availment and 14 direction represent “two distinct concepts,” with availment 15 analysis used for suits sounding in contract and direction 16 analysis for suits sounding in tort. Id. Here, where 17 Plaintiffs’ claims are for negligence and trespass, purposeful 18 direction analysis is appropriate. 19 Under purposeful direction analysis, the Ninth Circuit 20 deploys the three-part test from Calder. Schwarzenegger, 374 21 F.3d at 803, (citing Calder v. Jones, 465 U.S. 783 (1984)). 22 This test requires that the defendant “(1) committed an 23 intentional act, (2) expressly aimed at the forum state, 24 (3) causing harm that the defendant knows is likely to be 25 suffered in the forum state.” Dole Food, 303 F.3d at 1111 26 (internal citations omitted). As noted, Plaintiffs have the 27 burden to prove purposeful direction. Sher, 911 F.2d at 1361. 28 Plaintiffs argue that specific jurisdiction should be found 1 under the Calder test because “Defendants intentionally market 2 and process natural gas exported to the U.S. and California.” 3 Opp’n at 4. Further, Plaintiffs contend that Defendants have 4 placed their gas product into the stream of commerce in such a 5 way that they should be subject to jurisdiction for injuries 6 caused by their product under the standard set by World-Wide 7 Volkswagen Corp. v. Woodson, 444 U.S. 286, 298 (1980) (finding 8 specific jurisdiction may attach by placing goods into the 9 stream of commerce “with the expectation that they will be 10 purchased by consumers in the forum State”). 11 Defendants counter that the only statement supporting 12 Plaintiffs’ allegation that Defendants market and process gas 13 for export to the U.S. and California is a single citation to 14 Defendant Inter Pipeline LTD.’s public disclosure from 2019. 15 See Ex. A. Defendants, however, do not disavow the public 16 disclosure or its contents. See Opp’n; see Reply. Since 17 uncontroverted allegations in the Plaintiffs’ complaint must be 18 taken as true, the Court finds that Defendants intentionally 19 market and process gas for export to the U.S. and California for 20 the purpose of the present jurisdictional analysis. Dole, 303 21 F.3d at 1108. However, the Court notes that Plaintiffs did not 22 specify the target or recipient of Defendants’ marketing or gas 23 processing. It is therefore ambiguous whether Defendants sell 24 gas in California or market their goods to California consumers. 25 This ambiguity undermines Plaintiffs’ stream of commerce 26 argument. As Defendants rebut, “[m]ere placement into the 27 stream of commerce, even with the awareness that the product may 28 or will enter the forum state, ‘does not convert the mere act of 1 placing the product into the stream of commerce into an act 2 purposefully directed toward the forum state.’” Reply at 2, 3 citing Holland Am. Line, Inc. v. Wartsila N. Am., Inc., 485 F.3d 4 450, 459 (9th Cir. 2007). There must be something more than 5 merely placing a commodity into the stream of commerce, 6 especially here, where it is unclear exactly how or when 7 Defendants’ gas product enters the market and the extent to 8 which that market is present in the forum state. 9 In order to determine whether personal jurisdiction 10 attaches here, the Court centers its analysis on the one 11 allegation that both parties concede is within the scope of the 12 complaint, namely, that Defendants negligently allowed DTZ to 13 enter Plaintiffs’ pipeline through their actions in Canada. 14 Compl. ¶ 55; Reply at 1. This allegation bears great 15 resemblance to an analogous Ninth Circuit case. 16 In Pakootas v. Teck Cominco Metals, Ltd., the Ninth Circuit 17 held that Teck’s intentional dumping of toxic waste into the 18 Columbia River upstream of the U.S.-Canadian border was 19 sufficient under Calder for personal jurisdiction to attach to 20 Teck in the State of Washington, despite Teck being a Canadian 21 defendant. 905 F.3d 565, 577-8 (9th Cir. 2018). “It is no 22 defense,” the Circuit Court wrote, “that Teck's wastewater 23 outfalls were aimed only at the Columbia River, which in turn 24 was aimed at Washington. Rivers are nature's conveyor belts.” 25 Pakootas, 905 F.3d at 578. The pipelines connecting the 26 Defendants’ gas processing facility in Alberta, Canada, to 27 Plaintiffs’ pipeline systems in the U.S. and California work the 28 same way. Defendants’ gas processing facility takes, processes, 1 and returns gas to two Canadian pipeline systems, the NGTL 2 System and the Foothills BC System, which flow into Plaintiff 3 GTN’s GTN System at the U.S.-Canadian border before feeding into 4 Plaintiff Tuscarora’s Tuscarora System in California. Compl. 5 ¶¶ 22-27. As discussed above, it is uncontroverted that 6 Defendants knew their gas product would reach the U.S. and 7 California. Therefore, just as Teck’s intentional release of 8 toxic waste into the Columbia River in Canada was sufficient for 9 personal jurisdiction to attach in Washington, Defendants’ 10 intentional act of releasing gas products, which negligently 11 contain DTZ, is sufficient under Calder for personal 12 jurisdiction to attach downstream in California, where DTZ’s 13 tortious effects are felt. Pakootas, 905 F.3d at 578. 14 As to the second prong of the specific-jurisdiction 15 inquiry, the Court finds that Plaintiffs’ claims arise out of 16 Defendants’ actions in Canada, which, under the above analysis, 17 are directed at the forum state. The second prong is satisfied. 18 Dole Food, 303 F.3d at 1111. Thus, Court finds that Plaintiffs 19 have made a prima facie showing that Defendants purposefully 20 directed their activities to the forum state. 21 Because Plaintiffs have made this prima facie showing, the 22 burden shifts to Defendants to present “a compelling case that 23 the exercise of jurisdiction would not be reasonable.” Burger 24 King, 471 U.S. at 478. The Court considers the following seven 25 factors: “(1) the extent of purposeful interjection; (2) the 26 burden on the defendant to defend the suit in the chosen forum; 27 (3) the extent of conflict with the sovereignty of the 28 defendant’s state; (4) the forum state’s interest in the 1 dispute; (5) the most efficient forum for judicial resolution of 2 the dispute; (6) the importance of the chosen forum to the 3 plaintiff’s interest in convenient and effective relief; and 4 (7) the existence of an alternative forum.” Gray & Co. v. 5 Firstenberg Mach. Co., 913 F.2d 758, 761 (9th Cir. 1990). 6 Defendants suggest that traveling to California and 7 securing witnesses from out-of-state would be a burden, but 8 “[m]odern advances in communications and transportation have 9 significantly reduced the burden of litigating in another 10 country.” Sinatra v. Nat'l Enquirer, Inc., 854 F.2d 1191, 1199 11 (9th Cir. 1988). This factor weighs in Defendants’ favor but 12 does not carry the day, especially when Defendants have not 13 meaningfully addressed any of the other factors. Mot. at 8-9; 14 Reply at 3-4. Accordingly, the Court finds that Defendants have 15 failed to present a compelling argument that personal 16 jurisdiction would be unreasonable based on the above factors. 17 The Court concludes it may exercise personal jurisdiction 18 over Defendants. 19 C. Standing 20 Defendants move to dismiss Plaintiffs’ claims for failure 21 to state a claim for which relief may be granted on the ground 22 that Plaintiffs failed to establish standing. Defendants rely 23 on California Corporations Code § 2105(a), which provides that 24 “[a] foreign corporation shall not transact intrastate business 25 without having first obtained from the Secretary of State a 26 certificate of qualification.” Cal. Corp. Code § 2105. 27 Transacting intrastate business means entering into repeated and 28 successive transactions of its business in California, other 1 than interstate or foreign commerce. Mot. at 10. Defendants 2 argue that “[b]ecause this action arises out of Plaintiffs’ 3 pipeline businesses within the State of California, Defendants 4 have established that this action arose out of Plaintiffs’ 5 transaction of intrastate business.” Mot. 11. 6 Plaintiffs respond that California Corporations Code § 2105 7 is irrelevant because Plaintiffs’ business activities related to 8 this suit arise from interstate business and not intrastate 9 business. Opp’n at 11. Plaintiffs’ complaint establishes the 10 interstate nature of this lawsuit and includes Plaintiffs’ 11 international pipeline system. 12 Defendants do not respond to Plaintiffs’ arguments in their 13 reply. The Court treats this omission as a concession. See 14 Resnick, No. CV 16-00593-BRO (PJWx), 2017 WL 1531192 at *22, 15 (C.D. Cal. Apr. 13, 2017). Accordingly, the Court finds 16 California Corporations Code § 2105 does not apply and that 17 Plaintiffs have standing to pursue their suit. 18 D. Subject Matter Jurisdiction 19 Federal district courts have subject matter jurisdiction 20 over civil actions between parties with diverse citizenship 21 where “the amount in controversy exceeds the sum of or value of 22 $75,000, exclusive of interests and costs.” 28 U.S.C. 23 § 1332(a). When the jurisdiction of the Court is challenged, as 24 it is here, the party invoking federal jurisdiction has the 25 burden of proving by a preponderance of the evidence that 26 removal is proper. Geographic Expeditions, Inc. v. Estate of 27 Lhotka, 599 F.3d 1102, 1106-07 (9th Cir. 2010). The parties may 28 submit evidence outside the complaint including affidavits, 1 declarations, or “summary-judgment-type evidence relevant to the 2 amount in controversy at the time of removal.” Singer v. State 3 Farm Mut. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997) (internal 4 citation omitted). The district court “must [then] make 5 findings of jurisdictional fact to which the preponderance 6 standard applies.” Dart Cherokee, 574 U.S. at 89 (internal 7 citation omitted). 8 Defendants move to dismiss all claims by Plaintiff 9 Tuscarora for lack of subject matter jurisdiction under Federal 10 Rule of Civil Procedure 12(b)(1). Defendants argue that 11 Plaintiff Tuscarora has failed to allege the jurisdictional 12 amount because it may not aggregate its claims with Plaintiff 13 GNT. Defendants contend that “[s]ince each Plaintiff owns a 14 distinct pipeline and has its own separate and distinct claims 15 against Defendants, Tuscarora cannot aggregate its claimed 16 damages with those of [GNT] in an attempt to create subject 17 matter jurisdiction.” Mot. at 13. 18 Plaintiff Tuscarora rebuts that it has individually pled 19 damages in excess of $75,000. Opp’n at 12. Plaintiff Tuscarora 20 alleged damages of at least $48,516 for its nuisance claim. 21 Compl. ¶ 69. Plaintiff Tuscarora further alleges that it 22 incurred costs associated with testing for DTZ. Opp’n at 12. 23 Although the complaint does not specify the costs incurred by 24 each Plaintiff separately, Plaintiffs collectively alleged that 25 they installed multiple sample panels in their pipeline systems 26 to ascertain the source of DTZ in their pipes and that each 27 panel costs “between $10,000 to $20,000” to test in a lab. 28 Compl. ¶¶ 42-44. Based on these allegations, the Court surmises 1 that Plaintiff Tuscarora has incurred the cost of at least one 2 sample panel, bringing the amount in controversy to a range of 3 $58,516 to $68,516, still below the jurisdictional amount. 4 Although Plaintiff Tuscarora urges the Court to consider 5 other possible damages, such as lost profits and damages, 6 punitive damages, or attorney’s fees, Plaintiff has neither 7 specified any such amounts in its complaint nor submitted any 8 supporting documents for the Court’s consideration. Plaintiff 9 Tuscarora’s only evidence in support of including attorney’s 10 fees in its amount-in-controversy calculation is a footnote 11 stating that “[a]lthough a complete accounting of Plaintiffs’ 12 Counsel’s fees to date is not required, Plaintiffs can confirm 13 that their fees to date exceed the jurisdictional amount.” 14 Opp’n at 13, fn. 13. This statement is insufficient because it 15 fails to state an estimate of the attorney’s fees and because, 16 as discussed further below, it improperly seeks to aggregate 17 Tuscarora’s attorney’s fees with its co-Plaintiff’s. As such, 18 Plaintiff Tuscarora has failed to prove by a preponderance of 19 the evidence that it has individually pled the amount in 20 controversy necessary for diversity jurisdiction. 21 Plaintiff Tuscarora next argues that it may aggregate its 22 damages with co-Plaintiff GTN, because its claims are “common 23 and undivided” from GTN’s claims. Opp’n at 13. The Court 24 disagrees. Claims are “common and undivided” only when they are 25 “derived from rights that [the plaintiffs] hold in group 26 status.” Eagle v. Am. Tel. & Tel. Co., 769 F.2d 541, 546 (9th 27 Cir. 1985). The fact that “claims may have questions of fact 28 and law common to the group does not mean they have a common and 1 undivided interest.” Urbino v. Orkin Servs. of Cal., 726 F.3d 2 1118, 1122 (9th Cir. 2013) (internal citation omitted). This is 3 the case here. Plaintiffs have not alleged any shared interests 4 in their respective gas pipeline systems. See Compl. Rather, 5 Plaintiffs have carefully set out that GTN owns one pipeline 6 system, the “GTN System,” and that Tuscarora owns another 7 pipeline system, the “Tuscarora System.” Compl. ¶¶ 8-9. The 8 mere allegation that Plaintiffs have had “collective dealings 9 with Defendants” does not transmute separate property interests 10 to a common and undivided interest for the purpose of 11 calculating the jurisdictional amount in controversy. For these 12 reasons, the Court will not aggregate Plaintiff Tuscarora’s 13 claims with co-Plaintiff GTN’s claims. It follows that 14 Plaintiff Tuscarora has failed to establish by a preponderance 15 of the evidence that it may invoke the Court’s subject matter 16 jurisdiction. 17 E. Supplemental Jurisdiction 18 In an action involving multiple plaintiffs, a federal court 19 may exercise supplemental jurisdiction over a co-plaintiff's 20 claims that fail to meet the jurisdictional amount in 21 controversy if (1) at least one plaintiff satisfies the amount 22 in controversy, (2) the other elements of diversity jurisdiction 23 are satisfied, and (3) the plaintiff's claims are part of the 24 same "case or controversy." See Exxon Mobil Corp. v. Allapattah 25 Servs., Inc., 545 U.S. 546, 549 (2005) ("We hold that, where the 26 other elements of jurisdiction are present and at least one 27 named plaintiff in the action satisfies the amount-in- 28 controversy requirement, § 1367 does authorize supplemental 1 jurisdiction over the claims of other plaintiffs in the same 2 Article III case or controversy, even if those claims are for 3 less than the jurisdictional amount specified in the statute 4 setting forth the requirements for diversity jurisdiction."). 5 For claims to be part of the same case or controversy, the 6 claims must involve a "common nucleus of operative fact." See 7 United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 725 (1966) 8 (requiring a "common nucleus of operative fact" to confer 9 supplemental jurisdiction over pendant state law claims). 10 Defendants do not contest that co-Plaintiff GTN satisfies 11 the jurisdictional amount in controversy, that Plaintiff 12 Tuscarora otherwise satisfies the elements for diversity 13 jurisdiction, or that Plaintiff Tuscarora’s claims are part of 14 the same case or controversy as co-Plaintiff GTN’s. See Reply 15 at 4-5. Defendants’ single objection to supplemental 16 jurisdiction is that co-Plaintiff GTN has “no ties to or injury 17 in California.” Id. at 5. Neither GTN’s ties to California nor 18 the location of its injuries has any bearing on its power to 19 invoke diversity jurisdiction and so this objection is 20 irrelevant to the Court’s present analysis. Because the 21 elements for supplemental jurisdiction are met, the Court 22 exercises supplemental jurisdiction over Plaintiff Tuscarora’s 23 claims as part of the same case or controversy as co-Plaintiff 24 GTN’s claims. 25 F. Statute of Limitations 26 Defendants move to dismiss Plaintiffs’ third claim for 27 negligent misrepresentation as untimely under the applicable 28 statute of limitations. Mot at 13. Defendants contend that the 1 statute of limitations for negligent misrepresentation is two 2 years and more than two years have expired. See E-Fab, Inc. v. 3 Accountants, Inc. Servs., 153 Cal. App. 4th 1308, 1316 (2007). 4 “Plaintiffs determined the source of the DTZ was the Cochrane 5 Plant in or around December of 2018, [therefore] they had until 6 in or around December of 2020 to file a claim. Because 7 Plaintiffs failed to file their Complaint until August 23, 2021, 8 the statute of limitations for this cause of action has expired 9 and dismissal is appropriate.” Mot. at 14. 10 Plaintiffs contend that their claim for negligent 11 misrepresentation is not untimely, because the applicable 12 statute of limitations is three years when the allegations are 13 based on deceit or fraud. Arnold v. MetLife Auto & Home Ins. 14 Agency, 2020 WL 1067002, at *7 n.5 (N.D. Cal. Mar. 5, 2020). 15 Plaintiffs argue that because they allege that Defendants 16 “falsely represented” facts (Compl. ¶ 79), their claim is based 17 in deceit or fraud, and the three-year statute of limitations 18 applies. Opp’n at 15. 19 “Negligent misrepresentation is born of the union of 20 negligence and fraud. If negligence is the 21 mother . . . misrepresentation [is] the father.” See Ventura 22 Cnty. Nat. Bank v. Macker, 49 Cal. App. 4th 1528, 1531 (1996). 23 Reviewing the complaint, the Court concludes that Plaintiffs’ 24 claims resemble more the mother in negligence than fraud. Under 25 California law, the elements of a fraud claim are (1) a false 26 representation; (2) knowledge of falsity; (3) intent to induce 27 reliance; (4) justifiable reliance; and (5) resulting damages. 28 See Robinson Helicopter Co. v. Dana Corp., 34 Cal. 4th 979, 22 eee REI IR OSE IRIE III EE IRE IIE INE NE OSE IEE EE 1 Cal. Retr. 3d 352 (Cal. 2004). Plaintiffs allege that 2 Defendants “knew or with reasonable diligence ought to have 3 known” that their gas contained DTZ but “omitt[ed]” to inform 4 Plaintiffs. Compl. @ 81. Plaintiffs’ complaint is silent as to 5 | whether Defendants made any representations to Plaintiffs about 6 the presence or lack thereof of DTZ in their gas products. The 7 complaint is likewise silent as to whether Defendants ever 8 sought to induce some action or abstention of action from 9 Plaintiffs based on their omissions. As such, Plaintiffs’ claim 10 for negligent misrepresentation boils down to the contention 11 that Defendants should have known better and should have 12 disclosed the presence of DTZ to Plaintiffs. Thus, Plaintiffs’ 13 allegations suggest that Defendants acted more negligently than 14 fraudulently. For this reason, the Court holds that the 15 applicable statute of limitations for negligent 16 | misrepresentation in this case is two years and not three years. 17 Plaintiffs’ third claim is dismissed with prejudice as untimely. 18 Til. ORDER 19 For the reasons set forth above, the Court GRANTS in part 20 and DENIES in part Defendants’ Motion to Dismiss. 21 IT IS SO ORDERED. 22 | Dated: July 19, 2022 23 opens JOHN A. MENDEZ 25 SENIOR UNITED*STATES DISTRICT JUDGE 26 27 28 19