1 JS-6 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 ) 11 ADRIANA ARIAS, ) Case No.: CV 20-02100-CJC (JDEx) ) 12 ) ) Plaintiff, 13 ) ) v. 14 ) ORDER SUA SPONTE REMANDING ) CASE TO LOS ANGELES COUNTY 15 FCA US LLC, et al., ) SUPERIOR COURT ) 16 ) ) Defendants. 17 ) ) 18 ) ) 19 20 I. INTRODUCTION & BACKGROUND 21 22 On January 24, 2020, Plaintiff Adriana Arias filed this action in Los Angeles 23 County Superior Court against Defendants FCA US, LLC (“FCA”) and Crown Dodge. 24 (Dkt. 1-1 [Complaint, hereinafter “Compl.”].) Plaintiff alleges that she purchased a 2017 25 Dodge Ram from Crown Dodge with on April 5, 2018 that contained numerous defects. 26 (Id. ¶¶ 9–10.) FCA manufactured the vehicle, and Crown Dodge sold it to Plaintiff. (Id.) 27 After discovering the defects, Plaintiff unsuccessfully brought her vehicle in for repair so 1 that Defendants could bring it into compliance with her warranty agreements. (Id. ¶¶ 15– 2 16 .) Plaintiff now asserts a claim against Defendants for breach of implied and express 3 warranties under the Song-Beverly Consumer Warranty Act. (Id. ¶¶ 15–17.) 4 5 For purposes of diversity jurisdiction, Plaintiff appears to be a California citizen. 6 (Id. ¶ 2.) FCA is a limited liability company organized under Delaware law with its 7 principal place of business in Michigan. (Dkt. 1 [Notice of Removal, hereinafter “NOR”] 8 ¶ 12.) Crown Dodge is a California corporation. (Id. ¶ 16.) On March 4, 2020, FCA 9 removed the action to this Court, invoking diversity jurisdiction. 10 11 II. LEGAL STANDARD 12 13 A defendant may remove a civil action filed in state court to a federal district court 14 only if the federal court would have had original jurisdiction over it. 28 U.S.C. § 1441. 15 Federal courts have diversity jurisdiction over cases between completely diverse parties 16 that involve an amount in controversy exceeding $75,000. 28 U.S.C. § 1332. Principles 17 of federalism and judicial economy require courts to “scrupulously confine their 18 [removal] jurisdiction to the precise limits which [Congress] has defined.” See Shamrock 19 Oil & Gas Corp. v. Sheets, 313 U.S. 100, 109 (1941). Indeed, “[n]othing is to be more 20 jealously guarded by a court than its jurisdiction.” See United States v. Ceja-Prado, 333 21 F.3d 1046, 1051 (9th Cir. 2003) (internal quotations omitted). The defendant removing 22 the action to federal court bears the burden of establishing that the district court has 23 subject matter jurisdiction over the action, and the removal statute is strictly construed 24 against removal jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). 25 26 Federal courts have a duty to examine their subject matter jurisdiction whether or 27 not the parties raise the issue. See United Investors Life Ins. Co. v. Waddell & Reed, 1 matter jurisdiction is not contingent upon the parties’ arguments.”). “The court may— 2 indeed must—remand an action sua sponte if it determines that it lacks subject matter 3 jurisdiction.” GFD, LLC v. Carter, 2012 WL 5830079, at *2 (C.D. Cal. Nov. 15, 2012). 4 5 III. ANALYSIS 6 7 FCA contends that Crown Dodge was fraudulently joined and cannot be used to 8 destroy complete diversity. (NOR ¶¶ 16–18.) The Court disagrees. When there is a 9 sufficient showing of fraudulent joinder, a court will not consider the citizenship of the 10 fraudulently-joined party in determining whether there is complete diversity. See 11 Grancare, LLC v. Thrower by and through Mills, 889 F.3d 543, 548 (9th Cir. 2018). 12 However, “a defendant invoking federal court diversity jurisdiction on the basis of 13 fraudulent joinder bears a heavy burden since there is a general presumption against 14 [finding] fraudulent joinder.” Id. (internal quotations omitted). To establish fraudulent 15 joinder, a defendant must show that the defendant who purportedly destroys complete 16 diversity “cannot be liable on any theory.” See Ritchey v. Upjohn Drug Co., 139 F.3d 17 1313, 1318 (9th Cir. 1998). This is an exacting standard—if there is any possibility a 18 state court would find that the complaint states a cause of action against the resident 19 defendant, “the federal court must find that the joinder was proper and remand the case to 20 the state court.” Hunter v. Philip Morris USA, 582 F.3d 1039, 1046 (9th Cir. 2009). In 21 other words, for joinder to be fraudulent, the plaintiff must fail to state a cause of action 22 against the resident defendant, and the failure must be “obvious according to the settled 23 rules of the state.” Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2001). 24 Before finding fraudulent joinder, a court must also determine “whether a deficiency in 25 the complaint can possibly be cured by granting the plaintiff leave to amend.” Grancare, 26 889 F.3d at 549. 27 1 FCA has not shown that Crown Dodge “cannot be liable on any theory” on 2 Plaintiff’s warranty claims. See Ritchey, 139 F.3d at 1318. The Court need only examine 3 Plaintiff’s implied warranty claim to reach this conclusion. California Civil Code 4 § 1791.1(a) states an implied warranty of merchantability, including that goods must be 5 “fit for the ordinary purposes for which goods are used.” Plaintiff alleges that the car she 6 purchased from Crown Dodge had numerous defects and was unfit for the its ordinary 7 purpose. (Compl. ¶ 16.) Because a manufacturer, seller, or lessor of a product can be 8 liable for breach of an implied warranty, Plaintiff has asserted a facially valid claim 9 against Crown Dodge. See Rodrigues v. Campbell Industries, 87 Cal. App. 3d 494, 500 10 (1978); see also Avellanet v. FCA US LLC, 2019 WL 5448199, at *3 (C.D. Cal. Oct. 24, 11 2019) (finding that “[a] claim against a dealership for breach of the implied warranty of 12 merchantability is a facially valid claim”). 13 14 FCA does not explain how Plaintiff’s claims against Crown Dodge are so 15 obviously deficient that remand is necessary. Rather, it alleges that Plaintiff fraudulently 16 joined Crown Dodge solely to defeat diversity jurisdiction based on the fact that the 17 Complaint’s allegations are “bare-boned” and “non-specific” as to Crown Dodge. (NOR 18 ¶ 17.) These conclusory assertions do not come close to meeting FCA’s heavy burden of 19 establishing fraudulent joinder. Simply put, FCA has failed to identify why Plaintiff’s 20 claims against Crown Dodge are deficient. Although the facts underlying Plaintiff’s 21 claim are not highly detailed, this potential deficiency—if there is one at all—could 22 easily be cured by granting Plaintiff leave to amend. See Grancare, 889 F.3d at 549 23 (explaining that before finding fraudulent joinder, a court must also determine “whether a 24 deficiency in the complaint can possibly be cured by granting the plaintiff leave to 25 amend”). 26 27 Particularly interesting is the statement in the Notice of Removal that “FCA’s 1 individual dealerships have not been regularly sued.” (NOR ¶ 18.) First, FCA’s 2 counsel’s “vast litigation experience” in other cases says nothing of Plaintiff’s ability to 3 state a cognizable claim in this case.
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1 JS-6 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 ) 11 ADRIANA ARIAS, ) Case No.: CV 20-02100-CJC (JDEx) ) 12 ) ) Plaintiff, 13 ) ) v. 14 ) ORDER SUA SPONTE REMANDING ) CASE TO LOS ANGELES COUNTY 15 FCA US LLC, et al., ) SUPERIOR COURT ) 16 ) ) Defendants. 17 ) ) 18 ) ) 19 20 I. INTRODUCTION & BACKGROUND 21 22 On January 24, 2020, Plaintiff Adriana Arias filed this action in Los Angeles 23 County Superior Court against Defendants FCA US, LLC (“FCA”) and Crown Dodge. 24 (Dkt. 1-1 [Complaint, hereinafter “Compl.”].) Plaintiff alleges that she purchased a 2017 25 Dodge Ram from Crown Dodge with on April 5, 2018 that contained numerous defects. 26 (Id. ¶¶ 9–10.) FCA manufactured the vehicle, and Crown Dodge sold it to Plaintiff. (Id.) 27 After discovering the defects, Plaintiff unsuccessfully brought her vehicle in for repair so 1 that Defendants could bring it into compliance with her warranty agreements. (Id. ¶¶ 15– 2 16 .) Plaintiff now asserts a claim against Defendants for breach of implied and express 3 warranties under the Song-Beverly Consumer Warranty Act. (Id. ¶¶ 15–17.) 4 5 For purposes of diversity jurisdiction, Plaintiff appears to be a California citizen. 6 (Id. ¶ 2.) FCA is a limited liability company organized under Delaware law with its 7 principal place of business in Michigan. (Dkt. 1 [Notice of Removal, hereinafter “NOR”] 8 ¶ 12.) Crown Dodge is a California corporation. (Id. ¶ 16.) On March 4, 2020, FCA 9 removed the action to this Court, invoking diversity jurisdiction. 10 11 II. LEGAL STANDARD 12 13 A defendant may remove a civil action filed in state court to a federal district court 14 only if the federal court would have had original jurisdiction over it. 28 U.S.C. § 1441. 15 Federal courts have diversity jurisdiction over cases between completely diverse parties 16 that involve an amount in controversy exceeding $75,000. 28 U.S.C. § 1332. Principles 17 of federalism and judicial economy require courts to “scrupulously confine their 18 [removal] jurisdiction to the precise limits which [Congress] has defined.” See Shamrock 19 Oil & Gas Corp. v. Sheets, 313 U.S. 100, 109 (1941). Indeed, “[n]othing is to be more 20 jealously guarded by a court than its jurisdiction.” See United States v. Ceja-Prado, 333 21 F.3d 1046, 1051 (9th Cir. 2003) (internal quotations omitted). The defendant removing 22 the action to federal court bears the burden of establishing that the district court has 23 subject matter jurisdiction over the action, and the removal statute is strictly construed 24 against removal jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). 25 26 Federal courts have a duty to examine their subject matter jurisdiction whether or 27 not the parties raise the issue. See United Investors Life Ins. Co. v. Waddell & Reed, 1 matter jurisdiction is not contingent upon the parties’ arguments.”). “The court may— 2 indeed must—remand an action sua sponte if it determines that it lacks subject matter 3 jurisdiction.” GFD, LLC v. Carter, 2012 WL 5830079, at *2 (C.D. Cal. Nov. 15, 2012). 4 5 III. ANALYSIS 6 7 FCA contends that Crown Dodge was fraudulently joined and cannot be used to 8 destroy complete diversity. (NOR ¶¶ 16–18.) The Court disagrees. When there is a 9 sufficient showing of fraudulent joinder, a court will not consider the citizenship of the 10 fraudulently-joined party in determining whether there is complete diversity. See 11 Grancare, LLC v. Thrower by and through Mills, 889 F.3d 543, 548 (9th Cir. 2018). 12 However, “a defendant invoking federal court diversity jurisdiction on the basis of 13 fraudulent joinder bears a heavy burden since there is a general presumption against 14 [finding] fraudulent joinder.” Id. (internal quotations omitted). To establish fraudulent 15 joinder, a defendant must show that the defendant who purportedly destroys complete 16 diversity “cannot be liable on any theory.” See Ritchey v. Upjohn Drug Co., 139 F.3d 17 1313, 1318 (9th Cir. 1998). This is an exacting standard—if there is any possibility a 18 state court would find that the complaint states a cause of action against the resident 19 defendant, “the federal court must find that the joinder was proper and remand the case to 20 the state court.” Hunter v. Philip Morris USA, 582 F.3d 1039, 1046 (9th Cir. 2009). In 21 other words, for joinder to be fraudulent, the plaintiff must fail to state a cause of action 22 against the resident defendant, and the failure must be “obvious according to the settled 23 rules of the state.” Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2001). 24 Before finding fraudulent joinder, a court must also determine “whether a deficiency in 25 the complaint can possibly be cured by granting the plaintiff leave to amend.” Grancare, 26 889 F.3d at 549. 27 1 FCA has not shown that Crown Dodge “cannot be liable on any theory” on 2 Plaintiff’s warranty claims. See Ritchey, 139 F.3d at 1318. The Court need only examine 3 Plaintiff’s implied warranty claim to reach this conclusion. California Civil Code 4 § 1791.1(a) states an implied warranty of merchantability, including that goods must be 5 “fit for the ordinary purposes for which goods are used.” Plaintiff alleges that the car she 6 purchased from Crown Dodge had numerous defects and was unfit for the its ordinary 7 purpose. (Compl. ¶ 16.) Because a manufacturer, seller, or lessor of a product can be 8 liable for breach of an implied warranty, Plaintiff has asserted a facially valid claim 9 against Crown Dodge. See Rodrigues v. Campbell Industries, 87 Cal. App. 3d 494, 500 10 (1978); see also Avellanet v. FCA US LLC, 2019 WL 5448199, at *3 (C.D. Cal. Oct. 24, 11 2019) (finding that “[a] claim against a dealership for breach of the implied warranty of 12 merchantability is a facially valid claim”). 13 14 FCA does not explain how Plaintiff’s claims against Crown Dodge are so 15 obviously deficient that remand is necessary. Rather, it alleges that Plaintiff fraudulently 16 joined Crown Dodge solely to defeat diversity jurisdiction based on the fact that the 17 Complaint’s allegations are “bare-boned” and “non-specific” as to Crown Dodge. (NOR 18 ¶ 17.) These conclusory assertions do not come close to meeting FCA’s heavy burden of 19 establishing fraudulent joinder. Simply put, FCA has failed to identify why Plaintiff’s 20 claims against Crown Dodge are deficient. Although the facts underlying Plaintiff’s 21 claim are not highly detailed, this potential deficiency—if there is one at all—could 22 easily be cured by granting Plaintiff leave to amend. See Grancare, 889 F.3d at 549 23 (explaining that before finding fraudulent joinder, a court must also determine “whether a 24 deficiency in the complaint can possibly be cured by granting the plaintiff leave to 25 amend”). 26 27 Particularly interesting is the statement in the Notice of Removal that “FCA’s 1 individual dealerships have not been regularly sued.” (NOR ¶ 18.) First, FCA’s 2 counsel’s “vast litigation experience” in other cases says nothing of Plaintiff’s ability to 3 state a cognizable claim in this case. And second, this statement is surprising given that 4 this experience includes at least nine cases in the last year alone where courts in this 5 district have remanded cases because FCA failed to meet its burden to show that a local 6 dealership was fraudulently joined. See, e.g., Gallardo v. FCA US, LLC, 2020 WL 7 1650754, at *2 (C.D. Cal. Apr. 3, 2020) (remanding because FCA failed to meet its 8 burden to show a local dealership was fraudulently joined); Dun Xie v. FCA US, LLC, 9 2020 WL 1676372, at *1 (C.D. Cal. Apr. 3, 2020) (remanding because FCA’s argument 10 did “not come close to convincing the Court that Plaintiff fails to state a claim against 11 [the local dealership], let alone that the failure is obvious and cannot be cured by 12 amendment”); Raul Duenas v. FCA US LLC, et al., 2020 WL 1546424, at *4 (C.D. Cal. 13 Apr. 1, 2020) (permitting amendment to add local dealership and remanding); Magana v. 14 FCA US, LLC, 2020 WL 1502608, at *1 (C.D. Cal. Mar. 26, 2020) (remanding because 15 FCA’s argument fell “far short of convincing the Court that the claim against [the local 16 dealership] is even deficient, let alone obviously deficient and not capable of being cured 17 by amendment”); Bennett v. FCA US LLC, 2020 WL 635478, at *3 (C.D. Cal. Feb. 11, 18 2020) (remanding because FCA failed to meet its burden of showing that the local 19 dealership was fraudulently joined); Saldivar v. FCA US LLC, 2019 WL 5310188, at *3 20 (C.D. Cal. Oct. 21, 2019) (same); Barillas v. FCA US LLC, 2019 WL 2865925, at *2 21 (C.D. Cal. July 2, 2019); Ruiz v. FCA US LLC, 2019 WL 4137613, at *3 (C.D. Cal. May 22 31, 2019) (same); Gorelick v. FCA US LLC, 2019 WL 2123570, at *3 (C.D. Cal. May 15, 23 2019) (same). 24 25 FCA has fallen far short of meeting its burden of showing that Crown Dodge was 26 fraudulently joined. Accordingly, this action must be remanded for lack of subject matter 27 jurisdiction. The Court notes that this is the fourth case in the last week that it has had to 1 joinder. The Court must remind FCA’s counsel of the obligation of an attorney under 2 |}Rule 11 of the Federal Rules of Civil Procedure not to remove a case to federal court 3 |/unless it has a factual and legal basis for doing so. Counsel is hereby advised that the 4 Court will consider imposing sanctions if another similar case is wrongfully removed to 5 federal court after the filing of this order. 6 7 CONCLUSION 8 9 ‘Federal jurisdiction must be rejected if there is any doubt as to the right of 10 |}removal in the first instance.” Gaus, 980 F.2d at 566. Because FCA has failed to carry 11 burden to establish the elements of diversity jurisdiction, the Court sua sponte 12 |} REMANDS this action to Los Angeles County Superior Court. 13 4 DATED: April 9, 2020 Ko f Le fa To 16 CORMAC J. CARNEY 17 UNITED STATES DISTRICT JUDGE 18 19 20 21 22 23 24 25 26 27 28