1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 LUCINDA NIEVES, Case No. 3:22-cv-00977-JD
8 Plaintiff, ORDER RE REMAND v. 9
10 COSTCO WHOLESALE CORPORATION, et al., 11 Defendants.
12 13 Plaintiff Lucinda Nieves originally filed this lawsuit in the California Superior Court, 14 County of Alameda, for injuries from a slip-and-fall incident at a Costco store in Hayward, 15 California. Dkt. No. 1-1. The complaint alleges two California state law claims for negligence 16 and premises liability against defendants Costco Wholesale Corporation (“Costco”) and Costco 17 store manager Kari Shields. Costco removed the action to this Court on diversity grounds. Dkt. 18 No. 1. Nieves has asked for the case to be remanded to state court because she and Shields are 19 citizens of California. Dkt. No. 12. Costco says that Shields should be disregarded for diversity 20 purposes on fraudulent joinder grounds. Dkt. No. 13. 21 The motion is suitable for decision without oral argument. Dkt. No. 16. The case was 22 removed improvidently and without jurisdiction, and is remanded to the Superior Court. 28 23 U.S.C. § 1447(c). 24 DISCUSSION 25 I. STANDARDS 26 Costco removed this action to federal court invoking the Court’s diversity jurisdiction. 27 Dkt. No. 1 (notice of removal). Diversity jurisdiction arises when a plaintiff sues a citizen of a 1 of-state defendant may remove to federal court “any civil action brought in a State court of which 2 the district courts of the United States have original jurisdiction.” Id. § 1441(a). A plaintiff may 3 move to remand the action to state court if the case was improperly removed because of a lack of 4 subject-matter jurisdiction. Id. § 1447(c). The defendant always “bears the burden of overcoming 5 the strong presumption against removal jurisdiction,” Hansen v. Grp. Health Coop., 902 F.3d 6 1051, 1057 (9th Cir. 2018) (internal quotation and citation omitted), and any doubt about removal 7 weighs in favor of remand, see Hawaii ex rel. Louie v. HSBC Bank Nev., N.A., 761 F.3d 1027, 8 1034 (9th Cir. 2014). Principles of federalism, comity, and respect for the state courts also 9 counsel strongly in favor of scrupulously confining removal jurisdiction to the precise limits that 10 Congress has defined. See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941). 11 To exercise diversity-of-citizenship jurisdiction under Section 1332, complete diversity is 12 required. That means each plaintiff must have a different citizenship from each defendant. See 13 Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996). There is no dispute that Nieves and Shields are 14 both citizens of California and thus lack diversity.1 Dkt. No. 1-1 ¶¶ 1, 3; Dkt. No. 13 at 3; Dkt. 15 No. 21 at 1 (¶ 3). Consequently, Costco can remove under Section 1332 only if it establishes that 16 Shields was fraudulently joined. See Grancare, LLC v. Thrower by and Through Mills, 889 F.3d 17 543, 548 (9th Cir. 2018). If so, the presence of Shields as a non-diverse party can be disregarded 18 and not counted against diversity jurisdiction. See Morris v. Princess Cruises, Inc., 236 F.3d 19 1061, 1067 (9th Cir. 2001). 20 The Court extensively discussed fraudulent joinder in Geisse v. Bayer Healthcare 21 Pharmaceuticals, Inc., No. 17-cv-07026-JD, 2019 WL 1239854 (N.D. Cal. Mar. 18, 2019), and 22 the same principles fully apply here. In pertinent part, there is a “‘general presumption against 23 [finding] fraudulent joinder’” on top of the independent presumption against removal in all cases 24
25 1 The complaint alleges that Nieves and Shields both reside in California. Dkt. No. 1-1 ¶¶ 1, 3. While “residency and domicile for citizenship are not, strictly speaking, always the same,” the 26 Court applies the “‘longstanding principle’ that ‘the place where a person lives is taken to be his domicile until facts adduced establish the contrary.’” Boone v. FCA US LLC, No. 21-cv-01591- 27 JD, 2021 WL 5331440, at *2 (N.D. Cal. Nov. 16, 2021) (quoting NewGen, LLC v. Safe Cig, LLC, 1 under Section 1332, which imposes a particularly heavy burden on the defendant to prove. Id. at 2 *2 (quoting Grancare, 889 F.3d at 548) (alteration in Grancare) (internal citation omitted). A 3 defendant may establish fraudulent joinder by showing actual fraud in pleading jurisdictional 4 facts, or that the plaintiff failed to state a claim against the non-diverse defendant. See id. Under 5 the claim test, the action must be remanded if there is any possibility that a state court would find 6 that the plaintiff stated a cause of action against any non-diverse defendant. See id. 7 Our circuit has emphasized that a “possibility” means just that -- whether “there is a 8 ‘possibility that a state court would find that the complaint states a cause of action against any of 9 the [non-diverse] defendants.’” Id. (quoting Grancare, 889 F.3d at 549) (alteration and emphasis 10 in Grancare) (internal citation omitted). This is a lower standard than plausibility under Rule 11 12(b)(6) for failure to state a claim, and so the joinder of a non-diverse party will not necessarily 12 be deemed fraudulent even if the claim could be dismissed. See id. In effect, the “possibility” 13 standard is akin to the “‘wholly insubstantial and frivolous standard for dismissing claims under 14 Rule 12(b)(1).’” Id. (quoting Grancare, 889 F.3d at 549-50). If there is any possibility above the 15 trivial or frivolous that the plaintiff can state a claim against the non-diverse defendant, “‘the 16 federal court must find that the joinder was proper and remand the case to state court.’” Id. 17 (quoting Hunter v. Philip Morris, USA, 582 F.3d 1039, 1046 (9th Cir. 2009)). 18 “The defendant has some leeway to present facts outside the complaint, but the complaint 19 is usually the best guide in determining whether joinder was fraudulent, and in any event the 20 defendant must prove fraudulent joinder by clear and convincing evidence.” Id.; see also 21 Hamilton Materials, Inc. v. Dow Chem. Corp., 494 F.3d 1203, 1206 (9th Cir. 2007). 22 II. REMAND IS WARRANTED 23 As these standards make clear, the question of a remand turns on the plausibility of 24 Nieves’s state-law claims against Shields. In California, “‘[t]he elements of a cause of action for 25 premises liability are the same as those for negligence.’” Jones v. Awad, 39 Cal. App. 5th 1200, 26 1207 (2019) (quoting Castellon v. U.S. Bancorp, 220 Cal. App. 4th 994, 998 (2013)). “The 27 essential elements for both negligence and premises liability are duty, breach, causation, and 1 Ortega v. Kmart Corp., 26 Cal. 4th 1200, 1205 (2001)). A premises liability claim requires that 2 the defendant have owned, possessed, or controlled the subject premises. See Sabetian v. Exxon 3 Mobil Corp., 57 Cal. App. 5th 1054, 1071 (2020). “When it comes to property, control is defined 4 as the power to prevent, remedy or guard against the dangerous condition.” Colonial Van & 5 Storage, Inc. v. Super. Ct., 76 Cal. App. 5th 487, 497 (2022) (internal quotations and citations 6 omitted). 7 Costco says that Shields cannot be liable because she was on vacation on the day of the 8 incident and thus lacked control over the store at that time. Dkt. No. 13-3 ¶¶ 5-6 (Shields Decl.).
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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 LUCINDA NIEVES, Case No. 3:22-cv-00977-JD
8 Plaintiff, ORDER RE REMAND v. 9
10 COSTCO WHOLESALE CORPORATION, et al., 11 Defendants.
12 13 Plaintiff Lucinda Nieves originally filed this lawsuit in the California Superior Court, 14 County of Alameda, for injuries from a slip-and-fall incident at a Costco store in Hayward, 15 California. Dkt. No. 1-1. The complaint alleges two California state law claims for negligence 16 and premises liability against defendants Costco Wholesale Corporation (“Costco”) and Costco 17 store manager Kari Shields. Costco removed the action to this Court on diversity grounds. Dkt. 18 No. 1. Nieves has asked for the case to be remanded to state court because she and Shields are 19 citizens of California. Dkt. No. 12. Costco says that Shields should be disregarded for diversity 20 purposes on fraudulent joinder grounds. Dkt. No. 13. 21 The motion is suitable for decision without oral argument. Dkt. No. 16. The case was 22 removed improvidently and without jurisdiction, and is remanded to the Superior Court. 28 23 U.S.C. § 1447(c). 24 DISCUSSION 25 I. STANDARDS 26 Costco removed this action to federal court invoking the Court’s diversity jurisdiction. 27 Dkt. No. 1 (notice of removal). Diversity jurisdiction arises when a plaintiff sues a citizen of a 1 of-state defendant may remove to federal court “any civil action brought in a State court of which 2 the district courts of the United States have original jurisdiction.” Id. § 1441(a). A plaintiff may 3 move to remand the action to state court if the case was improperly removed because of a lack of 4 subject-matter jurisdiction. Id. § 1447(c). The defendant always “bears the burden of overcoming 5 the strong presumption against removal jurisdiction,” Hansen v. Grp. Health Coop., 902 F.3d 6 1051, 1057 (9th Cir. 2018) (internal quotation and citation omitted), and any doubt about removal 7 weighs in favor of remand, see Hawaii ex rel. Louie v. HSBC Bank Nev., N.A., 761 F.3d 1027, 8 1034 (9th Cir. 2014). Principles of federalism, comity, and respect for the state courts also 9 counsel strongly in favor of scrupulously confining removal jurisdiction to the precise limits that 10 Congress has defined. See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941). 11 To exercise diversity-of-citizenship jurisdiction under Section 1332, complete diversity is 12 required. That means each plaintiff must have a different citizenship from each defendant. See 13 Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996). There is no dispute that Nieves and Shields are 14 both citizens of California and thus lack diversity.1 Dkt. No. 1-1 ¶¶ 1, 3; Dkt. No. 13 at 3; Dkt. 15 No. 21 at 1 (¶ 3). Consequently, Costco can remove under Section 1332 only if it establishes that 16 Shields was fraudulently joined. See Grancare, LLC v. Thrower by and Through Mills, 889 F.3d 17 543, 548 (9th Cir. 2018). If so, the presence of Shields as a non-diverse party can be disregarded 18 and not counted against diversity jurisdiction. See Morris v. Princess Cruises, Inc., 236 F.3d 19 1061, 1067 (9th Cir. 2001). 20 The Court extensively discussed fraudulent joinder in Geisse v. Bayer Healthcare 21 Pharmaceuticals, Inc., No. 17-cv-07026-JD, 2019 WL 1239854 (N.D. Cal. Mar. 18, 2019), and 22 the same principles fully apply here. In pertinent part, there is a “‘general presumption against 23 [finding] fraudulent joinder’” on top of the independent presumption against removal in all cases 24
25 1 The complaint alleges that Nieves and Shields both reside in California. Dkt. No. 1-1 ¶¶ 1, 3. While “residency and domicile for citizenship are not, strictly speaking, always the same,” the 26 Court applies the “‘longstanding principle’ that ‘the place where a person lives is taken to be his domicile until facts adduced establish the contrary.’” Boone v. FCA US LLC, No. 21-cv-01591- 27 JD, 2021 WL 5331440, at *2 (N.D. Cal. Nov. 16, 2021) (quoting NewGen, LLC v. Safe Cig, LLC, 1 under Section 1332, which imposes a particularly heavy burden on the defendant to prove. Id. at 2 *2 (quoting Grancare, 889 F.3d at 548) (alteration in Grancare) (internal citation omitted). A 3 defendant may establish fraudulent joinder by showing actual fraud in pleading jurisdictional 4 facts, or that the plaintiff failed to state a claim against the non-diverse defendant. See id. Under 5 the claim test, the action must be remanded if there is any possibility that a state court would find 6 that the plaintiff stated a cause of action against any non-diverse defendant. See id. 7 Our circuit has emphasized that a “possibility” means just that -- whether “there is a 8 ‘possibility that a state court would find that the complaint states a cause of action against any of 9 the [non-diverse] defendants.’” Id. (quoting Grancare, 889 F.3d at 549) (alteration and emphasis 10 in Grancare) (internal citation omitted). This is a lower standard than plausibility under Rule 11 12(b)(6) for failure to state a claim, and so the joinder of a non-diverse party will not necessarily 12 be deemed fraudulent even if the claim could be dismissed. See id. In effect, the “possibility” 13 standard is akin to the “‘wholly insubstantial and frivolous standard for dismissing claims under 14 Rule 12(b)(1).’” Id. (quoting Grancare, 889 F.3d at 549-50). If there is any possibility above the 15 trivial or frivolous that the plaintiff can state a claim against the non-diverse defendant, “‘the 16 federal court must find that the joinder was proper and remand the case to state court.’” Id. 17 (quoting Hunter v. Philip Morris, USA, 582 F.3d 1039, 1046 (9th Cir. 2009)). 18 “The defendant has some leeway to present facts outside the complaint, but the complaint 19 is usually the best guide in determining whether joinder was fraudulent, and in any event the 20 defendant must prove fraudulent joinder by clear and convincing evidence.” Id.; see also 21 Hamilton Materials, Inc. v. Dow Chem. Corp., 494 F.3d 1203, 1206 (9th Cir. 2007). 22 II. REMAND IS WARRANTED 23 As these standards make clear, the question of a remand turns on the plausibility of 24 Nieves’s state-law claims against Shields. In California, “‘[t]he elements of a cause of action for 25 premises liability are the same as those for negligence.’” Jones v. Awad, 39 Cal. App. 5th 1200, 26 1207 (2019) (quoting Castellon v. U.S. Bancorp, 220 Cal. App. 4th 994, 998 (2013)). “The 27 essential elements for both negligence and premises liability are duty, breach, causation, and 1 Ortega v. Kmart Corp., 26 Cal. 4th 1200, 1205 (2001)). A premises liability claim requires that 2 the defendant have owned, possessed, or controlled the subject premises. See Sabetian v. Exxon 3 Mobil Corp., 57 Cal. App. 5th 1054, 1071 (2020). “When it comes to property, control is defined 4 as the power to prevent, remedy or guard against the dangerous condition.” Colonial Van & 5 Storage, Inc. v. Super. Ct., 76 Cal. App. 5th 487, 497 (2022) (internal quotations and citations 6 omitted). 7 Costco says that Shields cannot be liable because she was on vacation on the day of the 8 incident and thus lacked control over the store at that time. Dkt. No. 13-3 ¶¶ 5-6 (Shields Decl.). 9 Costco cites a decision from the Central District of California for the proposition that “[s]tore 10 manager liability applies only where the manager ‘sufficiently controlled the property the day 11 Plaintiff was injured.’” Dkt. No. 13 at 7 (quoting Sell v. Cabral, No. 20-cv-01008, 2020 WL 12 3577874, at *3 (C.D. Cal. June 30, 2020)) (emphasis omitted). But Sell did not discuss whether 13 the defendant store manager was present on the day of the incident there, let alone hold that the 14 manager’s presence would be required for her to have exercised sufficient control. 15 It is not self-evident that the “acting general manager” of the store, Dkt. No. 13-3 ¶ 4, 16 would have no control over the premises while on vacation. In fact, Shield’s answer to the 17 complaint admits Nieves’s allegations that she (i) operated and managed the Costco store “at all 18 times mentioned” in the complaint, Dkt. No. 1-1 ¶ 4; (ii) owed Nieves a duty to exercise 19 reasonable care to discover any unsafe conditions on the premises, id. ¶ 16; and (iii) operated, 20 maintained, and “otherwise controlled” the premises, id. ¶ 23. Dkt. No. 21 at 1-2 (¶¶ 4, 16, 23). 21 These admissions indicate that Shields’s vacation did not necessarily relieve her of all duties and 22 responsibilities with respect to maintaining the store. See Norcia v. Samsung Telecomms. Am., 23 LLC, No. 14-cv-00582-JD, 2014 WL 4652332, at *9 (N.D. Cal. Sept. 18, 2014) (“‘Factual 24 assertions in pleadings and pretrial orders, unless amended, are considered judicial admissions 25 conclusively binding on the party who made them.’”) (quoting Am. Title Ins. Co. v. Lacelaw 26 Corp., 861 F.2d 224, 226 (9th Cir. 1988)) (emphasis omitted). 27 On this record, the Court cannot conclude that there is no possibility that Shields may be 1 would categorically foreclose store-manager liability under the circumstances presented here. 2 || Consequently, Costco has not met its heavy burden to show that Shields was fraudulently joined 3 as a defendant. 4 CONCLUSION 5 The complaint was removed improvidently and without jurisdiction, and is remanded to 6 || the Superior Court of California for the County of Alameda. 28 U.S.C. § 1447(c). 7 IT IS SO ORDERED. 8 Dated: October 5, 2022 9 10 JAMES/PONATO I United fftates District Judge 12
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