1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 JAYSON G. MIRANDA, No. 2:20-cv-00803 WBS EFB 13 Plaintiff, 14 v. MEMORANDUM AND ORDER RE: MOTION TO REMAND 15 FCA US, LLC; SACRAMENTO CHRYSLER DODGE JEEP RAM; and DOES 1 16 through 10, inclusive, 17 Defendants. 18 19 ----oo0oo---- 20 Plaintiff Jayson G. Miranda filed this action against 21 defendants FCA US, LLC, Sacramento Chrysler Dodge Jeep Ram 22 (“SCDJR”), and Does 1 through 10, alleging various warranty and 23 negligence claims arising from the sale of a defective Dodge 24 vehicle. Before the court is plaintiff’s motion to remand. 25 (Docket No. 10.) 26 I. Relevant Factual and Procedural Background 27 Plaintiff purchased a 2015 Dodge Ram 2500 (the 28 “vehicle”). (Compl. ¶ 8 (Docket No. 1).) In connection with the 1 purchase of the vehicle, plaintiff received an express written 2 warranty which provided, in relevant part, that in the event the 3 vehicle developed a defect during the warranty period, plaintiff 4 could deliver the vehicle for repair services to defendant FCA 5 US’s “representative,” defendant SCDJR, and the vehicle would be 6 repaired. (Id. ¶ 9.) During the warranty period, plaintiff’s 7 vehicle developed defects various defects. (Id. ¶ 10.) As a 8 result, the use, value, or safety of the vehicle was 9 substantially impaired. (Id.) Defendants were unable to repair 10 the vehicle to conform to the applicable express warranties after 11 a reasonable number of opportunities. (Id. ¶ 11.) 12 Plaintiff filed suit in state court alleging seven 13 causes of action. Against defendant FCA only, the complaint 14 alleged (1) violation of Civil Code Section 1793.2(d); (2) 15 violation of Civil Code Section 1793.2(b); violation of Civil 16 Code Section 1793.2(a)(3); (4) breach of express written 17 warranty, Civ. Code § 1791.2(a); (5) breach of implied warranty 18 of merchantability, Civ. Code §§ 1791.1, 1794, & 1795.5; (6) and 19 fraud by omission. (See generally Compl.) Against defendant 20 SCDJR only, the complaint alleged a claim for negligent repair 21 (Count Seven). (Id.) 22 Defendants subsequently removed the action to federal 23 court under diversity jurisdiction. (Notice of Removal (Docket 24 No. 1).) Defendants allege that, although SCDJR is a citizen of 25 California, such that its involvement in this action would 26 destroy complete diversity, plaintiff’s joinder of SCDJR was 27 fraudulent and therefore does not defeat diversity. (Id. at 8- 28 9.) Plaintiff now moves to remand alleging in turn that the 1 court does not have original jurisdiction over this action. 2 (Mot. to Remand at 1.) 3 II. Discussion 4 A. Motion to Remand 5 A defendant may remove “any civil action brought in a 6 State court of which the district courts . . . have original 7 jurisdiction.” 28 U.S.C. § 1441. Original jurisdiction in the 8 form of diversity jurisdiction exists where there is complete 9 diversity and the amount-in-controversy exceeds $75,000. 28 10 U.S.C. § 1332(a); Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 11 (1996). “In determining whether there is complete diversity, 12 district courts may disregard the citizenship of a non-diverse 13 defendant who has been fraudulently joined.” Grancare, LLC v. 14 Thrower by & through Mills, 889 F.3d 543, 548 (9th Cir. 2018). 15 “There are two ways to establish fraudulent joinder: ‘(1) actual 16 fraud in the pleading of jurisdictional facts, or (2) inability 17 of the plaintiff to establish a cause of action against the non- 18 diverse party in state court.’” Id. (quoting Hunter v. Philip 19 Morris USA, 582 F.3d 1039, 1044 (9th Cir. 2009)). 20 Here, defendants allege that SCDJR was fraudulently 21 joined because plaintiff cannot establish a cause of action 22 against SCDJR. (Opp’n at 18 (Docket No. 11).) To establish 23 fraudulent joinder, defendants must therefore show that SCDJR 24 “cannot be liable on any theory.” Id. (quoting Ritchey v. Upjohn 25 Drug Co., 139 F.3d 1313, 1318 (9th Cir. 1998)). The failure to 26 state a cause of action must be “obvious according to the settled 27 rules of the state.” Morris v. Princess Cruises, Inc., 236 F.3d 28 1061, 1067 (9th Cir. 2001). “[I]f there is a possibility that a 1 state court would find that the complaint states a cause of 2 action against any of the resident defendants, the federal court 3 must find that the joinder was proper and remand the case to the 4 state court.” Grancare, 889 F.3d at 549 (quoting Hunter, 582 5 F.3d at 1046); see also Madison v. Ford Motor Co., No. 2:19-CV- 6 00853 WBS DB, 2019 WL 3562386, at *2 (E.D. Cal. Aug. 6, 2019). 7 Defendants bear “a ‘heavy burden’ since there is a ‘general 8 presumption against [finding] fraudulent joinder.’” Id. (quoting 9 Hunter, 582 F.3d at 1046). 10 Here, plaintiff pleads only a state law claim for 11 negligent repair against defendant SCDJR. Defendants contend 12 that plaintiff cannot plead such a claim because the economic 13 loss rule bars recovery. (Opp’n at 19-21.) But “California law 14 is not so settled that a plaintiff could not possibly recover 15 against a dealership for negligent repair of a vehicle.” Lytle 16 v. Ford Motor Co., No. 2:18-CV-1628 WBS EFB, 2018 WL 4793800, at 17 *2 (E.D. Cal. Oct. 2, 2018) (citing Forward-Rossi v. Jaguar Land 18 Rover N. Am., LLC, No. 216CV00949CASKSX, 2016 WL 3396925, at *4 19 (C.D. Cal. June 13, 2016)). Indeed, as this court recently 20 noted, “every district court to consider this issue has found 21 that such a claim is at least possible, regardless of the 22 economic loss rule.” Ram v. FCA US LLC, No. 2:20-CV-00319 WBS 23 CKD, 2020 WL 3178388, at *2 (E.D. Cal. June 15, 2020) (citing 24 Sabicer v. Ford Motor Co., 362 F. Supp. 3d 837, 841 (C.D. Cal. 25 2019); Viramontes v. FCA US LLC, No. 20-cv-2046-MWF (JCX), 2020 26 WL 2318203, at *4 (C.D. Cal. May 11, 2020); Simmons v. Ford Motor 27 Co., No. 19-CV-04802-EJD, 2020 WL 1151197, at *2 (N.D. Cal. Mar. 28 10, 2020); Krasner v. Ford Motor Co., No. 18-cv-01602 TLN KJN, 1 2019 WL 1428116, at *4 (E.D. Cal. Mar. 29, 2019); Madison, 2019 2 WL 3562386, at *2). Because it is possible that SCDJR could be 3 liable for negligent repair, SCDJR was properly joined. See 4 Grancare, 889 F.3d at 548. 5 Defendants rely on In re Ford Motor Co. DPS6 Powershift 6 Transmission Products Liability Litigation, No. 18-ML-02814 AB 7 (FFMX), 2018 WL 5905942 (C.D. Cal. Sept. 10, 2018), where the 8 court found that joinder was fraudulent. This court declines to 9 follow the In re Ford reasoning. First, the In re Ford 10 plaintiffs’ negligent repair claims against the dealers included 11 allegations that the defects were “irreparable.” Id. at *6. As 12 a result, the court reasoned that “[i]f Plaintiffs’ vehicles were 13 plagued by defects that were irreparable, that would break any 14 causal connection between the Dealers and the Plaintiffs’ alleged 15 arm.” Id. Given those allegations, the court found that 16 plaintiffs could not state a claim against the dealers. Id. By 17 contrast, no such allegations are present here. 18 Second, the In re Ford court relied on the 19 insufficiency of the allegations in the complaint to determine 20 that a claim against the dealers was not possible. Id. at *6. 21 The sufficiency of the governing complaint, however, does not 22 determine whether a defendant was fraudulently joined.
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 JAYSON G. MIRANDA, No. 2:20-cv-00803 WBS EFB 13 Plaintiff, 14 v. MEMORANDUM AND ORDER RE: MOTION TO REMAND 15 FCA US, LLC; SACRAMENTO CHRYSLER DODGE JEEP RAM; and DOES 1 16 through 10, inclusive, 17 Defendants. 18 19 ----oo0oo---- 20 Plaintiff Jayson G. Miranda filed this action against 21 defendants FCA US, LLC, Sacramento Chrysler Dodge Jeep Ram 22 (“SCDJR”), and Does 1 through 10, alleging various warranty and 23 negligence claims arising from the sale of a defective Dodge 24 vehicle. Before the court is plaintiff’s motion to remand. 25 (Docket No. 10.) 26 I. Relevant Factual and Procedural Background 27 Plaintiff purchased a 2015 Dodge Ram 2500 (the 28 “vehicle”). (Compl. ¶ 8 (Docket No. 1).) In connection with the 1 purchase of the vehicle, plaintiff received an express written 2 warranty which provided, in relevant part, that in the event the 3 vehicle developed a defect during the warranty period, plaintiff 4 could deliver the vehicle for repair services to defendant FCA 5 US’s “representative,” defendant SCDJR, and the vehicle would be 6 repaired. (Id. ¶ 9.) During the warranty period, plaintiff’s 7 vehicle developed defects various defects. (Id. ¶ 10.) As a 8 result, the use, value, or safety of the vehicle was 9 substantially impaired. (Id.) Defendants were unable to repair 10 the vehicle to conform to the applicable express warranties after 11 a reasonable number of opportunities. (Id. ¶ 11.) 12 Plaintiff filed suit in state court alleging seven 13 causes of action. Against defendant FCA only, the complaint 14 alleged (1) violation of Civil Code Section 1793.2(d); (2) 15 violation of Civil Code Section 1793.2(b); violation of Civil 16 Code Section 1793.2(a)(3); (4) breach of express written 17 warranty, Civ. Code § 1791.2(a); (5) breach of implied warranty 18 of merchantability, Civ. Code §§ 1791.1, 1794, & 1795.5; (6) and 19 fraud by omission. (See generally Compl.) Against defendant 20 SCDJR only, the complaint alleged a claim for negligent repair 21 (Count Seven). (Id.) 22 Defendants subsequently removed the action to federal 23 court under diversity jurisdiction. (Notice of Removal (Docket 24 No. 1).) Defendants allege that, although SCDJR is a citizen of 25 California, such that its involvement in this action would 26 destroy complete diversity, plaintiff’s joinder of SCDJR was 27 fraudulent and therefore does not defeat diversity. (Id. at 8- 28 9.) Plaintiff now moves to remand alleging in turn that the 1 court does not have original jurisdiction over this action. 2 (Mot. to Remand at 1.) 3 II. Discussion 4 A. Motion to Remand 5 A defendant may remove “any civil action brought in a 6 State court of which the district courts . . . have original 7 jurisdiction.” 28 U.S.C. § 1441. Original jurisdiction in the 8 form of diversity jurisdiction exists where there is complete 9 diversity and the amount-in-controversy exceeds $75,000. 28 10 U.S.C. § 1332(a); Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 11 (1996). “In determining whether there is complete diversity, 12 district courts may disregard the citizenship of a non-diverse 13 defendant who has been fraudulently joined.” Grancare, LLC v. 14 Thrower by & through Mills, 889 F.3d 543, 548 (9th Cir. 2018). 15 “There are two ways to establish fraudulent joinder: ‘(1) actual 16 fraud in the pleading of jurisdictional facts, or (2) inability 17 of the plaintiff to establish a cause of action against the non- 18 diverse party in state court.’” Id. (quoting Hunter v. Philip 19 Morris USA, 582 F.3d 1039, 1044 (9th Cir. 2009)). 20 Here, defendants allege that SCDJR was fraudulently 21 joined because plaintiff cannot establish a cause of action 22 against SCDJR. (Opp’n at 18 (Docket No. 11).) To establish 23 fraudulent joinder, defendants must therefore show that SCDJR 24 “cannot be liable on any theory.” Id. (quoting Ritchey v. Upjohn 25 Drug Co., 139 F.3d 1313, 1318 (9th Cir. 1998)). The failure to 26 state a cause of action must be “obvious according to the settled 27 rules of the state.” Morris v. Princess Cruises, Inc., 236 F.3d 28 1061, 1067 (9th Cir. 2001). “[I]f there is a possibility that a 1 state court would find that the complaint states a cause of 2 action against any of the resident defendants, the federal court 3 must find that the joinder was proper and remand the case to the 4 state court.” Grancare, 889 F.3d at 549 (quoting Hunter, 582 5 F.3d at 1046); see also Madison v. Ford Motor Co., No. 2:19-CV- 6 00853 WBS DB, 2019 WL 3562386, at *2 (E.D. Cal. Aug. 6, 2019). 7 Defendants bear “a ‘heavy burden’ since there is a ‘general 8 presumption against [finding] fraudulent joinder.’” Id. (quoting 9 Hunter, 582 F.3d at 1046). 10 Here, plaintiff pleads only a state law claim for 11 negligent repair against defendant SCDJR. Defendants contend 12 that plaintiff cannot plead such a claim because the economic 13 loss rule bars recovery. (Opp’n at 19-21.) But “California law 14 is not so settled that a plaintiff could not possibly recover 15 against a dealership for negligent repair of a vehicle.” Lytle 16 v. Ford Motor Co., No. 2:18-CV-1628 WBS EFB, 2018 WL 4793800, at 17 *2 (E.D. Cal. Oct. 2, 2018) (citing Forward-Rossi v. Jaguar Land 18 Rover N. Am., LLC, No. 216CV00949CASKSX, 2016 WL 3396925, at *4 19 (C.D. Cal. June 13, 2016)). Indeed, as this court recently 20 noted, “every district court to consider this issue has found 21 that such a claim is at least possible, regardless of the 22 economic loss rule.” Ram v. FCA US LLC, No. 2:20-CV-00319 WBS 23 CKD, 2020 WL 3178388, at *2 (E.D. Cal. June 15, 2020) (citing 24 Sabicer v. Ford Motor Co., 362 F. Supp. 3d 837, 841 (C.D. Cal. 25 2019); Viramontes v. FCA US LLC, No. 20-cv-2046-MWF (JCX), 2020 26 WL 2318203, at *4 (C.D. Cal. May 11, 2020); Simmons v. Ford Motor 27 Co., No. 19-CV-04802-EJD, 2020 WL 1151197, at *2 (N.D. Cal. Mar. 28 10, 2020); Krasner v. Ford Motor Co., No. 18-cv-01602 TLN KJN, 1 2019 WL 1428116, at *4 (E.D. Cal. Mar. 29, 2019); Madison, 2019 2 WL 3562386, at *2). Because it is possible that SCDJR could be 3 liable for negligent repair, SCDJR was properly joined. See 4 Grancare, 889 F.3d at 548. 5 Defendants rely on In re Ford Motor Co. DPS6 Powershift 6 Transmission Products Liability Litigation, No. 18-ML-02814 AB 7 (FFMX), 2018 WL 5905942 (C.D. Cal. Sept. 10, 2018), where the 8 court found that joinder was fraudulent. This court declines to 9 follow the In re Ford reasoning. First, the In re Ford 10 plaintiffs’ negligent repair claims against the dealers included 11 allegations that the defects were “irreparable.” Id. at *6. As 12 a result, the court reasoned that “[i]f Plaintiffs’ vehicles were 13 plagued by defects that were irreparable, that would break any 14 causal connection between the Dealers and the Plaintiffs’ alleged 15 arm.” Id. Given those allegations, the court found that 16 plaintiffs could not state a claim against the dealers. Id. By 17 contrast, no such allegations are present here. 18 Second, the In re Ford court relied on the 19 insufficiency of the allegations in the complaint to determine 20 that a claim against the dealers was not possible. Id. at *6. 21 The sufficiency of the governing complaint, however, does not 22 determine whether a defendant was fraudulently joined. See 23 Robles v. FCA US LLC, No. 2:20-CV-02546-SVW-SK, 2020 WL 2318205, 24 at *2 (C.D. Cal. May 8, 2020) (declining to follow In re Ford 25 because the “appropriate fraudulent joinder analysis” requires 26 the court to consider whether leave to amend can cure the 27 deficiency); Carrillo v. FCA US LLC, No. EDCV 20-481 JGB SHKX, 28 2020 WL 2097743, at *3 (C.D. Cal. May 1, 2020) (same). Where the 1 complaint is deficient, “the district court must consider . . . 2 whether [the] deficiency . . . can possibly be cured by granting 3 the plaintiff leave to amend.” Id. at 550. “[A]ny possibility” 4 that the joined defendant could be liable suffices to find proper 5 joinder. Grancare, 889 F.3d at 549. 6 Although defendants may be correct that plaintiff fails 7 to allege facts surrounding the circumstances of the storage and 8 repair of the vehicle, or facts to support an exception to the 9 economic loss rule (Opp’n at 21), defendants offer no evidence or 10 argument to show that plaintiff could not include those 11 allegations in an amended complaint. Cf. Carrillo, 2020 WL 12 2097743 (“It is entirely plausible that Plaintiffs could amend 13 their complaint and include allegations regarding damage to their 14 property caused by the negligent repair.”); Arias v. FCA US LLC, 15 No. 20-CV-02100 CJC (JDEx), 2020 WL 1809666, at *2 (C.D. Cal. 16 Apr. 9, 2020) (“Although the facts underlying Plaintiff’s claim 17 are not highly detailed, this potential deficiency -- if there is 18 one at all -- could easily be cured by granting Plaintiff leave 19 to amend.”); see also Grancare, 889 F.3d at 548 (“We have also 20 upheld [rulings of fraudulent joinder] where a defendant presents 21 extraordinarily strong evidence or arguments that a plaintiff 22 could not possibly prevail on her claims against the allegedly 23 fraudulently joined defendant.”) (emphasis added) (citing McCabe 24 v. Gen. Foods Corp., 811 F.2d 1336, 1339 (9th Cir. 1987); United 25 Comput. Sys. Inc. v. AT&T Corp., 298 F.3d 756, 761 (9th Cir. 26 2002); Kruso v. Int’l Tel. & Tel. Corp., 872 F.2d 1416, 1426–27 27 (9th Cir. 1989)). Because defendants have not made such a 28 showing, they fail to carry their heavy burden of establishing WwAOe 2. OY UV YOO VE DYE BP MMVUUPTIOCIIL tor PHM Vite PAY
1 improper joinder. The court thus finds that joinder was proper. 2 See Grancare, 889 F.3d at 549. 3 Accordingly, because both SCDJR and plaintiff are 4 citizens of California, the parties are not completely diverse, 5 and this court does not have original jurisdiction over the 6 | action. The court will therefore remand this action. 7 B. Dismissal of SCDJR under Rule 21 8 A court “may cure jurisdictional defects by dismissing 9 dispensable nondiverse parties under Federal Rule of Civil 10 Procedure 21.” Madison, 2019 WL 3562386, at *4 (citing Newman- 11 Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 832-33 (1989)). 12 Defendants ask the court to exercise its discretion under Rule 21 13 and to dismiss SCDJR as a party to preserve complete diversity. 14 (Opp’n at 22.) The court declines to do so. As this court has 15 recently found in nearly identical circumstances, “severance 16 ‘would defeat the purpose of permissive joinder’ -- convenience 17 and efficiency.” See e.g., Ram, 2020 WL 3178388, at *2. Here, 18 “the claims against both defendants are sufficiently intertwined, 19 factually and legally, such that severance would be inconvenient 20 and inefficient.” See id. Accordingly, the court will not 21 dismiss SCJDR from this litigation. 22 IT IS THEREFORE ORDERED that plaintiff’s motion to 23 remand (Docket No. 10) be, and the same hereby is, GRANTED.! 24 Dated: July 16, 2020 L - ak. 29 WILLIAMB.SHUBB- 26 UNITED STATES DISTRICT JUDGE I] 1 Plaintiff has not requested attorney’s fees. The court 28 | therefore will not consider them.