Lavery-Madruga v. CVS Pharmacy, Inc.

• Court: District Court, S.D. California
• Decided: October 17, 2022
• Docket: 3:22-cv-00995
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 BRENDA LAVERY-MADRUGA and Case No.: 22-CV-995 JLS (AHG) JAMES MADRUGA, 12 ORDER (1) DENYING PLAINTIFFS’ Plaintiffs, 13 MOTION TO REMAND TO STATE v. COURT AND (2) DENYING 14 WITHOUT PREJUDICE CVS PHARMACY INC.; LONGS DRUG 15 PLAINTIFFS’ MOTION TO STORES CALIFORNIA, L.L.C.; and AMEND THE PLEADINGS 16 DOES 1 to 20,

17 Defendants. (ECF No. 7) 18 19 Presently before the Court is Plaintiffs Brenda Lavery-Madruga (“Ms. Lavery- 20 Madruga”) and James Madruga’s (“Mr. Madruga”) (collectively, “Plaintiffs”) Motion to 21 Remand to State Court, and Motion to Amend the Pleadings (“Mot.,” ECF No. 7). Also 22 before the Court are Defendants CVS Pharmacy Inc. (“CVS”) and Longs Drugs Stores 23 California, LLC’s (“Longs LLC”) (collectively, “Defendants”) Opposition thereto 24 (“Opp’n,” ECF No. 11) and Plaintiffs’ Reply in support thereof (“Reply,” ECF No. 14). 25 The Court vacated the hearing on these matters and took them under submission on the 26 papers without oral argument pursuant to Civil Local Rule 7.1(d)(1). See ECF No. 8. 27 Having carefully considered the Parties’ briefing, Defendants’ Notice of Removal 28 (“Notice,” ECF No. 1), Plaintiffs’ Complaint (“Compl.,” ECF No. 1-2), the facts and 1 evidence in the record, and the law, the Court DENIES Plaintiffs’ Motion to Remand and 2 DENIES WITHOUT PREJUDICE Plaintiffs’ Motion to Amend the Pleadings. 3 BACKGROUND 4 On January 8, 2020, at approximately 3:50 p.m. and while working in the course and 5 scope of her employment as a Regional Director with Golden Glove Trading Company, 6 Ms. Lavery-Madruga was required to enter the stockroom of the CVS Pharmacy located at 7 4445 Mission Boulevard, San Diego, California 92109 (the “Store”), which is owned and 8 operated by Defendants. See Compl. at 8.1 While in the stockroom performing her usual 9 and customary duties, Plaintiff slipped and fell on an oil spill on the floor, causing her to 10 sustain “serious orthopedic and neurological injuries.” Id. 11 On January 7, 2022, Plaintiffs initiated this action in the Superior Court of 12 California, County of San Diego, as an unlimited civil case. Id. at 5. The Complaint alleges 13 three causes of action for: (1) premises liability, brought by Ms. Lavery-Madruga; (2) 14 general negligence, also brought by Ms. Lavery-Madruga; and (3) loss of consortium, 15 brought by Mr. Madruga. See generally id. The claims are asserted against Defendants as 16 well as “Does 1-20.” Id. at 5. Specifically, Plaintiffs allege that Does 1 through 10 “were 17 the agents or employees of other named defendants and acted within the scope of that 18 agency or employment,” and that Does 11 through 20 “are persons whose capacities are 19 unknown to plaintiff.” Id. at 6. 20 On July 7, 2022, Defendants removed the action to this District on the basis of 21 diversity jurisdiction. See generally Notice. Specifically, Defendants noted that Plaintiffs 22 are citizens of the State of California, see id. ¶ 5, while both Longs LLC and CVS are 23 citizens of the State of Rhode Island, see id. ¶¶ 6–8.2 Defendants also noted that “Plaintiff’s 24 / / / 25

26 1 In citing to the relevant filings, the Court will reference the numbers printed in the upper righthand corner 27 of each page by the Court’s CM/ECF system. 28 1 counsel has represented that while the exact lien amounts are unknown at this time, 2 Plaintiffs’ damages total over $100,000.” Id. ¶ 8.3 3 On August 5, 2022, Plaintiffs filed the instant Motion. See generally Mot. 4 MOTION TO REMAND 5 Plaintiffs principally seek to remand this action back to the Superior Court for the 6 State of California for lack of subject-matter jurisdiction. See generally Mot. at 8–10. 7 I. Legal Standard 8 A defendant may remove an action “brought in a State court of which the district 9 courts of the United States have original jurisdiction” to federal court. 28 U.S.C. § 1441(a). 10 Section 1441 provides two general bases for removal: diversity jurisdiction and federal- 11 question jurisdiction. Here, Defendant asserts jurisdiction is based on diversity. See 12 generally Notice. Federal courts have diversity jurisdiction “where the amount in 13 controversy” exceeds $75,000.00 and the parties are of “diverse” state citizenship. 28 14 U.S.C. § 1332. 15 For purposes of diversity jurisdiction, a limited liability company (“LLC”) “is a 16 citizen of every state of which its owners/members are citizens.” Johnson v. Columbia 17 Properties Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006). Meanwhile, “a corporation 18 shall be deemed to be a citizen of every State and foreign state by which it has been 19 incorporated and of the State or foreign state where it has its principal place of 20 business . . . .” 28 U.S.C. § 1332(c)(1). “Under the ‘nerve center’ test, a corporation’s 21 principal place of business ‘should normally be the place where the corporation maintains 22 its headquarters—provided that the headquarters is the actual center of direction, control, 23 and coordination.’” 3123 SMB LLC v. Horn, 880 F.3d 461, 465 (9th Cir. 2018) (citation 24 omitted). 25 The party invoking the removal statute bears the burden of establishing that federal 26 subject-matter jurisdiction exists by a preponderance of the evidence. McNutt v. Gen. 27

28 1 Motors Acceptance Corp. of Ind., Inc., 298 U.S. 178, 189 (1936); In re Haw. Fed. Asbestos 2 Cases, 960 F.2d 806, 810 (9th Cir. 1992); Emrich v. Touche Ross & Co., 846 F.2d 1190, 3 1195 (9th Cir. 1988). Moreover, courts “strictly construe the removal statute against 4 removal jurisdiction.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (citing Boggs 5 v. Lewis, 863 F.2d 662, 663 (9th Cir. 1988)); Takeda v. Nw. Nat’l Life Ins. Co., 765 F.2d 6 815, 818 (9th Cir. 1985)). Therefore, “[f]ederal jurisdiction must be rejected if there is any 7 doubt as to the right of removal in the first instance.” Gaus, 980 F.2d at 566 (citing Libhart 8 v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979)). 9 II. Analysis 10 Plaintiffs contend that Defendants fail to adequately establish their citizenship 11 because the only support provided for their alleged Rhode Island citizenship is the 12 Declaration of Andrei V. Dumitrescu (“Dumitrescu Decl.,” ECF No. 1 at 4–5). See Mot. 13 at 8–9. Plaintiffs urge that, in light of the lack of any documentary evidence, Plaintiffs 14 cannot “determine whether Defendants are companies or LLCs,” and “[i]t is unclear where 15 each business headquarters is located” or where “officers of each business live and/or 16 direct, control, and coordinate business activities, so it is impossible to identify the 17 principal place of business where each business resides.” Id. Plaintiffs contend that Longs 18 LLC is a citizen of the State of California because “[i]t is registered with the California 19 Secretary of State, it owns and operates stores in California, and California is even in the 20 title of its name.” Id. at 10. Plaintiffs also argue that CVS is a citizen of California because 21 CVS “has corporate offices in [Los Angeles,] California,” from which “the corporation’s 22 officers direct, control, and coordinate the corporations [sic] activities because California 23 makes up such a substantial part of the Defendant’s business operations in terms of number 24 of stores and percentage of the company”; accordingly, Plaintiffs claim that CVS’s 25 principal place of business is located in California as well. Id. 26 Defendants respond that, “[o]n October 30, 2008, Longs Drug Stores California, Inc. 27 was converted to Longs Drug Stores California, L.L.C. as evidenced by its Articles of 28 Organization.” Opp’n at 11 (citing id. Ex. 1). The sole member of the company is Longs 1 Drug Stores, L.L.C. Id. (citing id. Ex. 3). “Because the sole member of Longs Drug Stores 2 California, L.L.C. is also a limited liability company, the question of citizenship will turn 3 on the members of Longs Drug Stores, L.L.C.” Id. at 12. The sole member of Longs Drug 4 Stores, L.L.C. is CVS Pharmacy, Inc. Id. (citing id. Ex. 5). Accordingly, “the issue of 5 remand will turn on the citizenship of CVS Pharmacy, Inc.” Id. CVS’s Statement and 6 Designation by Foreign Corporation, filed with the California Secretary of State on July 2, 7 2003, indicates that CVS is a corporation organized under the laws of the State of Rhode 8 Island, “with its principal executive office at 1 CVS Drive, Woonsocket, RI 02895.” Id. 9 (citing id. Ex. 6). CVS’s latest Statement of Information, filed on August 10, 2022, again 10 indicates that CVS’s principal office is located in Woonsocket, Rhode Island, and that 11 every officer of the corporation also is located in the State of Rhode Island. Id. at 12–13 12 (citing id. Ex. 7). Accordingly, “CVS Pharmacy, Inc. is clearly a citizen of Rhode Island 13 as that is both the state of its incorporation as well as the location of its principal place of 14 business.” Id. at 13. “Conversely, the only member of Longs Drug Stores California, 15 L.L.C. is a holding company whose only member is also CVS Pharmacy, Inc., making 16 Longs Drug Stores California, L.L.C. a citizen of Rhode Island.” Id. Defendants assert 17 that Plaintiffs’ arguments concerning Longs LLC’s name and registration are irrelevant to 18 the issue of Longs LLC’s citizenship. Id. 19 Plaintiff does not contest Defendants’ arguments in her Reply, effectively conceding 20 the issue of Defendants’ citizenship. See generally Reply; see also In re Xyrem (Sodium 21 Oxybate) Antitrust Litig., 555 F. Supp. 3d 829, 877 (N.D. Cal. 2021) (citing Maciel v. Cate, 22 731 F.3d 928, 932 n.4 (9th Cir. 2013) (holding that “failing to address [an argument] in [] 23 reply brief” forfeits the argument)). Even were that not the case, however, the Court agrees 24 with Defendants’ analysis of their citizenship and finds, on the evidence before it,4 that 25

26 4 The Court finds it appropriate, in its discretion, to judicially notice the public records submitted by both 27 Parties. See Mot. Ex. A; Opp’n Exs. 1–7; L’Garde, Inc. v. Raytheon Space & Airborne Sys., 805 F. Supp. 28 2d 932, 938 (C.D. Cal. 2011) (noting that “the accuracy of the results of records searches from the 1 complete diversity exists among the present Parties to this action. Because Defendants 2 have established, by a preponderance of the evidence, that the requirements for diversity 3 jurisdiction are satisfied, the Court finds no basis to grant Plaintiff’s Motion to Remand. 4 III. Conclusion 5 In light of the foregoing, the Court DENIES Plaintiffs’ Motion to Remand.5 6 MOTION TO AMEND TO JOIN ADDITIONAL DEFENDANTS 7 In the alternative, Plaintiffs seek leave to amend to add one or more diversity- 8 destroying parties. See generally Mot. at 10–11; Reply at 5–6. 9 I. Legal Standard 10 If, after removal, a party seeks to add any diversity-destroying parties, 28 U.S.C. 11 § 1447(e) explicitly grants the district court the discretion to either deny the joinder or 12 permit joinder and remand. Newcombe v. Adolf Coors Co., 157 F.3d 686, 691 (9th Cir. 13 1998) (reviewing the district court’s decision whether to permit joinder of a nondiverse 14 party under § 1447(e) for abuse of discretion). This discretion extends to a party’s 15 amendment to substitute nondiverse “doe defendants.” Casas Office Mach. Inc. v. Mita 16 Copystar Am., Inc., 42 F.3d 668, 674 (1st Cir. 1994) (explaining that the legislative history 17 of § 1447(e) clearly indicates the provision applies not only to joinder but also to the 18 identification of fictitious defendants after removal). 19 A district court’s discretion here is quite broad. Establishing a flexible 20 approach, § 1447(e) does not define what constitutes proper joinder. Scholars and courts 21 alike have concluded that § 1447(e) permits courts to look beyond the joinder framework 22 set forth in the Federal Rules of Civil Procedure and does not bind courts to consider solely 23 whether joinder is “permissible” under Rules 15 and 20 or whether the party to be joined 24 is “indispensable” under Rule 19(a). See Lisa Combs Foster, Note, Section 1447(e)’s 25 26 accessible resources whose accuracy cannot reasonably be questioned” and are therefore subject to judicial notice). 27

28 5 Given this disposition, the Court also DENIES Plaintiffs’ passing request for attorneys’ fees and costs 1 Discretionary Joinder and Remand: Speedy Justice or Docket Clearing?, 1990 Duke L.J. 2 118, 122–23, 133. As long as joinder is not fraudulent, courts have permitted joinder and 3 remanded cases for a variety of reasons, including “no” reason. Id. at 123; see also Righetti 4 v. Shell Oil Co., 711 F. Supp. 531, 533 (N.D. Cal. 1989) (“[N]either the language of section 5 1447(e) nor its accompanying policy statements suggest that Rules 19 and 20 control the 6 court’s decision to deny joinder, or to permit joinder and remand. As is clear from the 7 permissive language of section 1447(e), Congress gave the court broad discretion . . . .”). 8 Nonetheless, district courts within the Ninth Circuit, in assessing a request to add 9 defendants after removal, have considered a variety of factors, including: (1) whether 10 the defendants to be joined are necessary for just adjudication of the controversy, (2) 11 whether the plaintiff could still bring the claims asserted against the putative defendants in 12 state court; (3) whether there has been unexplained delay in seeking joinder; (4) whether 13 plaintiff seeks joinder for the purpose of defeating federal jurisdiction; (5) whether the 14 claims to be added appear valid; and (6) whether denial of joinder will prejudice the 15 plaintiff. Palestani v. General Dynamics, 193 F.R.D. 654, 658 (S.D. Cal. 2000) (citing 16 William Schwarzer et al., California Practice Guide: Federal Civil Procedure Before Trial 17 § 2:1078, at 2D–202 (1999)); Bonner v. Fuji Photo Film, 461 F. Supp. 2d 1112, 1119–20 18 (N.D. Cal. 2008) (citing Palestani’s list of factors). 19 Where, as here, fraudulent joinder is alleged, the party seeking to establish or retain 20 federal jurisdiction may show that the claim against the non-diverse parties to be joined is 21 not bona fide—either by showing that these parties cannot be liable under any theory 22 asserted or that they have “no real connection with the controversy”—in an attempt to 23 defeat joinder. Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1318 (9th Cir. 1998) (internal 24 citation omitted). Although this fraudulent joinder analysis is clearly warranted under 25 Rules 19 and 20, courts have held it is neither necessary nor dispositive under a § 1447(e) 26 analysis, where the non-diverse party is to be joined after removal. See Boon v. Allstate 27 Ins. Co., 229 F. Supp. 2d 1016, 1019 n.2 (C.D. Cal. 2002); Gunn v. Wild, No. C-01-4320 28 VRW, 2002 WL 356642, at *4–5 (N.D. Cal. Feb. 26, 2002). Consequently, although 1 motive is unquestionably relevant in assessing a request under § 1447(e), see Clinco v. 2 Roberts, 41 F. Supp. 2d 1080, 1083 (C.D. Cal. 1999) (citing Desert Empire Bank v. Ins. 3 Co. of N. Am., 623 F.2d 1371, 1376 (9th Cir. 1980)), it is not dispositive and is properly 4 treated as one among several factors a district court may consider under § 1447(e), as 5 Palestani and other cases demonstrate. 6 Nonetheless, the Civil Local Rules for the Southern District of California impose an 7 additional requirement upon a party seeking to amend her pleading, namely: “Any motion 8 to amend a pleading must be accompanied by: (1) a copy of the proposed amended 9 pleading, and (2) a version of the proposed amended pleading that shows---through 10 redlining, underlining, strikeouts, or other similarly effective typographic methods---how 11 the proposed amended pleading differs from the operative pleading.” S.D. Cal. CivLR 12 15.1(b). 13 II. Analysis 14 Here, Plaintiffs seek leave to join several nondiverse defendants who were unknown 15 by name to Plaintiffs at the time they filed their Complaint. Mot. at 10. Specifically, 16 Plaintiffs contend that the Store’s manager6 is a citizen of California, and they ask the Court 17 to permit them to join him as a defendant “because it will materially affect the diversity of 18 the parties.” Id. at 10–11. Plaintiffs further assert that two additional parties “have an 19 interest in the litigation and . . . are necessary to a full adjudication of all issues”: Hyundai 20 Forklift of Southern California (“Hyundai”) and Industrial Battery Engineering Inc. 21 (“Industrial”), both of which Plaintiffs believe to be citizens of the State of California7 such 22 that the requirement of complete diversity would not be met should they be joined. Reply 23 24 25 6 Plaintiffs name the Store’s manager as Jose Dominguez but subsequently refer to a “Mr. Vasquez.” Mot. at 10. The Court assumes, for purposes of its analysis, that the reference to “Mr. Vasquez” is a 26 typographical error and that Plaintiffs are referring to the same individual.

27 7 The Court judicially notices the California Secretary of State’s Business Search for “Industrial Battery 28 Engineering, Inc.” indicates that the entity is a corporation formed in California with a principal address 1 at 6. With regard to Hyundai and Industrial, Plaintiff contends that the oil spill on which 2 she slipped was caused by a leaky forklift, Mot. at 5, and that one or both of these entities 3 repaired the forklift shortly before her slip and fall, Reply at 6. 4 Defendants argue that leave to amend should be denied because the Store’s manager 5 is a sham defendant Plaintiffs seek to add simply to destroy diversity. Opp’n at 7. 6 Specifically, Defendants argue that the Store’s manager is not a necessary party under Rule 7 19(a) and the claims against him are not valid, as “the putative defendant who is alleged to 8 be the store manager[] is being sued for the purported negligence in carrying out his 9 assigned tasks in the course and scope of his employment, which were carried out in his 10 official capacity as employee and store manager”; therefore, he cannot be personally liable. 11 Opp’n at 10. Defendants do not respond to the arguments concerning the additional two 12 defendants Plaintiffs have identified, as they were first named in Plaintiff’s Reply. 13 In reply, Plaintiffs argue that they believe that the Store’s manager “was acting 14 outside of the scope of reasonableness and that his actions contributed, at least in part, to 15 Plaintiffs’ injuries.” Reply at 5. Because “Defendants have not established . . . that there 16 is ‘no possibility that [Plaintiffs] will be able to establish a cause of action’” against the 17 Store’s manager, he is not a “sham defendant.” Id. (citation omitted). 18 Although it seems likely Plaintiffs could assert valid claims against one or more of 19 the proposed and allegedly diversity-destroying defendants they identify in their Motion 20 and Reply, ultimately, the Court is unable to engage in a full discussion of the Palestani 21 factors given Plaintiffs’ failure to comply with Civil Local Rule 15.1(b) by including a 22 proposed amended complaint and a redline of the proposed amendments against the 23 operative pleading. For example, Plaintiffs do not disclose what claims they intend to bring 24 against each proposed defendant, and accordingly the Court cannot assess whether those 25 claims appear to be valid. Plaintiffs’ failure to comply with Civil Local Rule 15.1(b) is 26 sufficient to warrant denial of the Motion. See, e.g., Kerns v. Wenner, No. 27 316CV02438WQHWVG, 2017 WL 3394383, at *2 (S.D. Cal. Aug. 7, 2017) (denying 28 motion to amend to include a defendant and increase requested monetary relief where party 1 || failed to comply with Civil Local Rule 15.1(b)); Ervin v. Cnty. of San Diego, No. 2 || 14CV1142 WQH BGS, 2015 WL 641244, at *2 (S.D. Cal. Feb. 13, 2015) (denying motion 3 ||to amend because “[t]he failure to attach a proposed amended pleading prevents the court 4 determining whether the proposed amended complaint would result in undue delay, 5 ||is made in bad faith, will cause prejudice to Defendant, or is a dilatory tactic’) (citation 6 || omitted); Nassiri v. Colvin, No. 15CV0583-WQH-NLS, 2015 WL 5098470, at *14 (S.D. 7 Aug. 31, 2015) (denying without prejudice motion to amend that was not accompanied 8 || by proposed amended complaint); Jn re Midland Credit Mgmt., Inc., Tel. Consumer Prot. 9 || Act Litig., No. 11-MD-2286-MMA (MDD), 2020 WL 6375823, at *2 (S.D. Cal. Oct. 30, 10 || 2020) (denying motion to amend that failed to identify “what claims, parties, or allegations 11 plaintiff] wishes to add” because, “without further information, Defendants cannot 12 || fairly raise a futility argument, and the Court cannot assess the propriety of her motion”). 13 ||Nonetheless, given that it seems possible, and even likely, that Plaintiffs can adduce 14 reasons why at least one of the identified nondiverse proposed defendants is properly joined 15 || to this action, the Court will permit Plaintiffs the opportunity to refile a motion to amend 16 || that makes the requisite showing. 17 Conclusion 18 For the reasons provided above, the Court DENIES WITHOUT PREJUDICE 19 || Plaintiffs’ Motion to Amend the Pleadings. 20 CONCLUSION 21 In light of the foregoing, the Court DENIES Plaintiffs’ Motion to Remand to State 22 || Court (ECF No. 7) and DENIES WITHOUT PREJUDICE Plaintiffs’ Motion to Amend 23 || the Pleadings (ECF No. 7). Plaintiffs may renew their request to amend to name additional 24 || defendants in a motion complying with the requirements of Civil Local Rule 15.1(b). 25 IT IS SO ORDERED. 26 ||Dated: October 17, 2022 . tt 27 pon Janis L. Sammartino 28 United States District Judge