Gary Bryant v. Ford Motor Co. , 844 F.2d 602 ( 1988 )

CYNTHIA HOLCOMB HALL, Circuit Judge:

Plaintiff-appellant Gary Bryant appeals from the decision of the district court granting summary judgment in favor of defendant-appellee Ford Motor Company. We conclude that the district court lacked jurisdiction over this action because of the presence of Doe defendants at the time of removal from state court.

I.

Bryant initiated this action for negligence, breach of warranty, and strict liability in California state court against Ford and Does 1 through 50. Ford removed the action to the United States District Court for the Central District of California based upon diversity of citizenship.¹ o Bryant did not object to removal. The district court took no action with respect to the Doe defendants.

Bryant seeks recovery for injuries he sustained in an accident while driving a Ford van for United Parcel Service on March 1, 1983. Bryant contends that the passive restraint system in the van was defective because it did not include a shoulder harness. Bryant’s complaint alleges that Does 1 through 50 are related to each other and to Ford as “agents, servants, employees and/or joint venturers.” Bryant claims that Ford and each of the Doe defendants were involved in the design, production, inspection, and distribution of the van which Bryant was driving at the time of the accident.

A joint inspection of the van by the parties on May 10, 1984 revealed that Ford had manufactured only the chassis of the van. The body and other components, including the passive restraint system, were produced by other companies as part of a joint venture. The companies responsible for producing the component parts could not be identified at the time of removal or the time of inspection because the van was produced in 1968 and Ford destroyed records containing this information after ten years.

Ford moved for summary judgment. In opposing Ford’s motion, Bryant noted that he planned to name Doe defendants as soon as he discovered their identities. The district court nonetheless granted summary judgment in favor of Ford, concluding that there were no material facts supporting Ford’s liability because of the inspection evidence that Ford was not involved in the production of the passive restraint system.² Bryant then moved the court to add City Ford Company, the seller of the van, General Seating and Sash Company, the producer of the seats, and Grumman-Olson Company, the producer of the body, to the action and to remand the case to state court. City Ford and Grumman-Olson are California corporations. The district court denied Bryant’s motion, finding that the presence of non-diverse parties was not new evidence justifying relief from judgment under Fed.R.Civ.P. 60(b) (1982).

Bryant appealed the grant of summary judgment. We granted a limited remand at Bryant’s request for the district court to again reconsider its previous rulings. The district court again refused to join the additional parties, and this appeal of the district court’s rulings followed.

Applying Ninth Circuit law, a panel of this court then held that because the Doe defendants in the complaint were real but unidentified people or entities, the district court could not determine whether they would defeat diversity jurisdiction once identified. Bryant v. Ford Motor Co., 794 F.2d 450, 453 (9th Cir.1986). The panel remanded the case to the district court with instructions to remand to the appropriate state court. Id. After a petition for rehearing was filed, the panel requested en banc consideration of this case in order to clarify Doe defendant law in the Ninth Circuit. For the reasons set forth below, we now remand this case to the district court with instructions to remand to the appropriate state court.

II.

California law allows a plaintiff to sue any potential defendant whose name is unknown under a fictitious name (commonly as a Doe defendant). Cal.Civ.Proc.Code § 474 (West 1979).³ A plaintiff who names a Doe defendant in his complaint and alleges that the defendant’s true name is unknown has three years from the commencement of the action in which to discover the identity of the Doe defendant, to amend the complaint accordingly, and to effect service of the complaint. Cal.Civ.Proc.Code § 581a (West 1976).⁴

Up to this point, the general rule in the Ninth Circuit has been that the naming of Doe defendants defeats diversity jurisdiction and, therefore, that district courts should remand cases containing allegations against Doe defendants to state court. See, e.g., Othman v. Globe Indem. Co., 759 F.2d 1458, 1462-63 (9th Cir.1985). This general rule has become riddled with exceptions, however. Under our cases, an action need not be remanded to state court in at least five situations: (1) when named defendants prove that the Doe defendants as described in the complaint are wholly fictitious, see, e.g., Grigg v. Southern Pacific Co., 246 F.2d 613, 619 (9th Cir.1957); (2) when the complaint contains no charging allegations against the Doe defendants, see, e.g., Chism v. National Heritage Life Ins. Co., 637 F.2d 1328, 1330 (9th Cir.1981); (3) when plaintiffs unequivocally abandon their claims against the Doe defendants, see, e.g., Southern Pac. Co. v. Haight, 126 F.2d 900, 905 (9th Cir.), cert. denied, 317 U.S. 676, 63 S.Ct. 154, 87 L.Ed. 542 (1942); (4) when the complaint does not identify the Doe defendants with sufficient specificity, see, e.g., Hartwell Corp. v. Boeing Co., 678 F.2d 842, 843 (9th Cir.1982); and (5) when the Doe defendants are not indispensable parties, see, e.g., Othman, 759 F.2d at 1463.

The numerous exceptions to the general principle that the naming of Doe defendants defeats diversity jurisdiction have led to considerable confusion as we ourselves have recognized. In Othman, 759 F.2d at 1462 & n. 7, we noted that “the circumstances under which an action including ‘Doe’ defendants may be removed to federal court [are] not entirely clear in this circuit.” See also Pelleport Investors, Inc. v. Budco Quality Theatres, Inc., 741 F.2d 273, 279 n. 2 (9th Cir.1984) (describing “the vague contours of when Doe pleading is specific enough to defeat diversity”). District court judges and commentators have also noted the doctrinal disarray in our decisions. See, e.g., Goldberg v. CPC Int’l, Inc., 495 F.Supp. 233, 236 (N.D.Cal.1980) (circumstances under which the presence of Doe defendants destroys diversity “unfortunately remain shrouded in mystery and confusion”); Note, Doe Defendants and Other State Relations Back Doctrines in Federal Diversity Cases, 35 Stan.L.Rev. 297, 308 n. 38 (1982) (noting inconsistency in Ninth Circuit case law).

At the request of the three-judge panel, this court agreed to hear this case en banc in order to develop a coherent standard in the Doe defendant area. We now hold that the presence of Doe defendants under California Doe defendant law destroys diversity and, thus, precludes removal. The nature of the allegations against such Doe defendants is irrelevant for federal removal purposes. See CTS Printex, Inc. v. American Motorists Ins. Co., 639 F.Supp. 1272, 1277 (N.D.Cal.1986). We overrule all of our cases creating exceptions to this general rule. See, e.g., Grigg, 246 F.2d at 619; Chism, 637 F.2d at 1330; Hartwell, 678 F.2d at 843; Othman, 759 F.2d at 1463. Under our new rule district courts will no longer have to make the near-impossible determination of when the allegations against Doe defendants are “specific” enough to defeat diversity. Instead, the 30-day time limit for removal contained in 28 U.S.C. § 1446(b) will not commence until all Doe defendants are either named, unequivocally abandoned by the plaintiff,⁵ or dismissed by the state court.⁶ If a defendant attempts to remove a case prior to this time, the district court must remand the case to state court.⁷ This new rule accommodates both a plaintiff’s right under California law to a three-year extension of the statute of limitations and a defendant’s statutory right to removal under 28 U.S.C. § 1441.⁸

III.

Because the complaint in this case contained Doe defendants as parties, removal was premature. We REMAND to the district court with instructions to remand to the appropriate state court. Each party shall bear its own costs on this appeal.⁹

1 . 28 U.S.C. § 1441 (1982) provides, in relevant part, as follows:

(a) Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.

(b) Any civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties or laws of the United States shall be removable without regard to the citizenship or residence of the parties. Any other such action shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.

2 . The district court did not enter judgment against the Doe defendants. Despite the fact that the Doe defendants were not formally dismissed, this case is properly before this court. See Patchick v. Kensington Publishing Corp., 743 F.2d 675, 677 (9th Cir.1984) ("If an action is dismissed as to all of the defendants who have been served and only unserved defendants remain, the district court’s order may be considered final under [28 U.S.C. § 1291] for the purpose of perfecting an appeal.”).

3 . Cal.Civ.Proc.Code § 474 (West 1979) provides, in relevant part, as follows:

When the plaintiff is ignorant of the name of a defendant, he must state that fact in the complaint, or the affidavit if the action is commenced by affidavit, and such defendant may be designated in any pleading or proceeding by any name, and when his true name is discovered, the pleading or proceeding must be amended accordingly; provided, that no default or default judgment shall be entered against a defendant so designated, unless it appears that the copy of the summons or other process, or, if there be no summons or process, the copy of the first pleading or notice served upon such defendant bore on the face thereof a notice stating in substance: "To the person served: You are hereby served in the within action (or proceedings) as (or on behalf of) the person sued under the fictitious name of (designating it)."

4 . When Bryant commenced this action in state court, the relevant provision was Cal.Civ.Proc. Code § 581a(a), 1982 Cal.Stat. 2574-75 (repealed 1984), which provided as follows:

(a) No action heretofore or hereafter commenced by complaint shall be further prosecuted, and no further proceedings shall be had therein, and all actions heretofore or hereafter commenced shall be dismissed by the court in which the action shall have been commenced, on its own motion, or on the motion of any party interested therein, whether named as a party or not, unless the summons on the complaint is served and return made within three years after the commencement of the action, except where the parties have filed a stipulation in writing that the time may be extended or the party against whom the action is prosecuted has made a general appearance in the action.

This section has since been repealed, but a substantially similar provision has been enacted as Cal.Civ.Proc.Code § 583.210 (West Supp.1987).

5 . Unequivocal abandonment occurs in only two situations: (1) where the plaintiff drops the Doe defendants from the complaint or (2) where the trial commences without service of the Doe defendants. See Haight, 126 F.2d at 904-05.

6 . The voluntary-involuntary rule, which provides that only a voluntary act of the plaintiff can render a case removable to federal court, applies only to state court judgments on the merits against named defendants. See, e.g., Self v. General Motors, 588 F.2d 655 (9th Cir.1978). This rule is inapplicable to the dismissal by state courts of Doe defendants.

We recognize that our rule may lead to removal at a late stage in the proceedings. A defendant may be able to expedite removal, however, by seeking the plaintiff’s consent to drop the Doe defendants. We disagree with the dissent's assumption that plaintiffs will not facilitate removal by stipulating to dismiss the Doe defendants. Dissent at 611 n. 9. Plaintiffs have an incentive to make such a stipulation in order to expedite the litigation. This is especially true in cases where Doe defendants are "phantoms.” In such cases, plaintiffs will be reluctant to delay the inevitable removal of their cases, thereby delaying their day in court.

The dissent makes a number of other assumptions which we are unwilling to make. First, the dissent states that "every” civil case now filed in California contains allegations against Doe defendants and that the "vast majority” of these defendants are "procedural fictions" or "phantoms" invoked " 'superstitiously and without reason.’ ’’ See, e.g., Dissent at 608 (citation omitted), 609, 611, 611-12, 612, 613-14, 618. We disagree. The dissent cites no evidence for its assumption that every civil case now filed in California contains allegations against Doe defendants. Moreover, when Doe defendants are named, they are frequently named because a plaintiff is unable to discover who the additional defendants are prior to filing suit. For example, in this case, it was only after discovery that Bryant was able to determine the identities of City Ford, General Seating and Sash, and Grumman-Olson.

Second, the dissent assumes that our decision will allow states to foreclose removals altogether. Id. at 611 n. 10. On the contrary, there is no reason to believe that states will enact Doe defendant statutes in a bad faith attempt to defeat the federal removal statute.

Finally, the dissent assumes that our solution will delay removal in "virtually every" California diversity case for three years or more. Id. at 613 (emphasis in original). The waiting time for obtaining a trial date, however, is considerably less than three years in most California counties. It is preposterous to assume that "virtually every” removal will be delayed for three years or more.

7 . This new rule will apply retroactively. Federal courts should remand pending cases containing allegations against unnamed Doe defendants to state court unless both parties agree to dismiss the Doe defendants.

8 . The dissent states that its solution "would eliminate all the problems associated with the addition of Doe defendants." Id. at 619 (emphasis in original). As the dissent admits, however, its solution may lead to parallel litigation in state and federal court. Id. at 619. We simply are not convinced that the potential for duplication of effort under our solution is any greater than under the dissent’s solution.

Furthermore, the dissent claims that federal courts can accommodate a plaintiffs right to add Doe defendants by remanding the portion of the case alleging claims against the Doe defendants to state court. Absent from the dissent's analysis is any mention of what action a court should take when a plaintiff attempts to name a diverse Doe defendant after the 120 day time limit contained in Fed.R.Civ.P. 4(j) has expired. If such a case were remanded to state court, the diverse defendant could simply re-remove to federal court, resulting in an unwarranted ping-pong game between state and federal court. On the other hand, if the federal court were to deny the plaintiff the opportunity to name the diverse Doe defendant, it would be denying the plaintiff an important state law right.

9 . Ford also argues that in our earlier opinion we used the wrong test to determine whether the district court should have remanded the case. Ford correctly notes that Bryant did not challenge the removal before final judgment was entered. When removal is not challenged until after judgment has been entered, the standard is not whether removal was proper, but whether the district court would have had original jurisdiction if the case had been filed in that court in the posture it was in as of the time of trial or judgment. Grubbs v. General Electric Credit Corp., 405 U.S. 699, 705, 92 S.Ct. 1344, 1348, 31 L.Ed.2d 612 (1972); Gould v. Mutual Life Insurance Co., 790 F.2d 769, 773-74 (9th Cir.1986). Even under this standard, however, remand is required. The presence of Doe defendants destroys diversity of citizenship. Here, the Doe defendants were never dismissed. Accordingly, original jurisdiction would not have lain with the district court. See Garter-Bare Co. v. Munsingwear, Inc., 650 F.2d 975, 981 (9th Cir.1980); 14 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3642 (1985).