Tran v. Costco Wholesale Corporation

• Court: District Court, S.D. California
• Decided: January 27, 2025
• Docket: 3:23-cv-02057
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 VANKIET TRAN, an individual, Case No.: 23cv2057-GPC(BLM)

12 Plaintiff, ORDER (1) GRANTING 13 v. PLAINTIFF’S MOTION TO AMEND THE COMPLAINT; AND (2) 14 COSTCO WHOLESALE GRANTING PLAINTIFF’S MOTION CORPORATION, a Washington 15 TO REMAND THE CASE TO STATE Corporation; TIM DOES, an individual COURT 16 and DOES 1 to 50, inclusive,

17 Defendants. [Dkt. No. 27.] 18 19 Before the Court is Plaintiff’s motion to amend the complaint to join a defendant 20 and to remand the action to state court for lack of subject matter jurisdiction. (Dkt. No. 21 27.) Defendant filed an opposition and Plaintiff replied. (Dkt. Nos. 31, 34.) Based on 22 the reasoning below, the Court GRANTS Plaintiff’s motion to amend the complaint and 23 remands the case to state court. 24 Background 25 On April 4, 2023, Plaintiff Vankiet Tran (“Plaintiff’) filed a complaint against 26 Defendant Costco Wholesale Corporation (“Defendant” or “Costco”) in San Diego 27 County Superior Court alleging causes of action for negligence and premises liability for 28 a slip-and-fall incident at Costco’s 2345 Fenton Parkway store, in San Diego, CA on 1 April 21, 2021. (Dkt. No. 1, Not. of Removal, Ex. A, Compl. ¶¶ 5, 8.) The case was 2 removed to this Court on November 7, 2023 pursuant to diversity jurisdiction, 28 U.S.C. 3 § 1332.1 (Id., Not. of Removal ¶ 2.) Plaintiff is a citizen of California and Defendant is a 4 citizen of Washington. (Id. ¶¶ 3, 4; see id., Ex. A, Compl. ¶¶ 1, 2.) Plaintiff seeks 5 damages in excess of $1,000,000. (Id., Ex. B, Statement of Damages.) Therefore, the 6 Court has subject matter jurisdiction over the case. See 28 U.S.C. § 1332. 7 In the motion, Plaintiff seeks to add Tim Coyle (“Mr. Coyle”), Costco’s 8 Warehouse Manager at the Fenton Parkway store, as a defendant in this case. (Dkt. No. 9 27.) Because Mr. Coyle’s joinder would defeat diversity jurisdiction, Plaintiff also 10 moves to remand the case to state court. (Id.) In response, Defendant argues that 11 fraudulent joinder should bar the amendment in this case. (Dkt. No. 31.) 12 Discussion 13 A. Legal Standard 14 Federal Rule of Civil Procedure (“Rule”) 15(a)(2) provides that leave to amend 15 “shall be freely given when justice so requires”, Fed. R. Civ. P. 15(a)(2), and is applied 16 with “extreme liberality.” See Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 17 1051 (9th Cir. 2003). However, after a case has been removed, a proposed amendment to 18 join a diversity-destroying defendant is governed by 28 U.S.C. § 1447(e), which states: 19 “[i]f after removal the plaintiff seeks to join additional defendants whose joinder would 20 destroy subject matter jurisdiction, the court may deny joinder, or permit joinder and 21 remand the action to the State court.” 2 28 U.S.C. § 1447(e); Newcombe v. Adolf Coors 22

23 1 A district court has diversity jurisdiction over any civil action where complete diversity exists between 24 the parties and the amount in controversy exceeds $75,000. 28 U.S.C. § 1332(a). 25 2 Plaintiff moves to amend the complaint to add Tim Coyle as a defendant under Rule 15(a) and § 1447(e). (Dkt. No. 27.) The Court relies on its prior ruling in McGrath v. Home Depot USA, Inc., 298 26 F.R.D. 601, 606 (2014) where it adopted the line of cases applying section 1447(e) “to scrutinize the propriety of a diversity-destroying amendment pursuant to Rule 15(a).” Id. at 607; see also Clinco v. 27 Roberts, 41 F. Supp. 2d 1080, 1088 (C.D. Cal. 1999) (when a plaintiff seeks to add a diversity- destroying party following removal, “the amendment cannot be presumed appropriate and the logic and 28 1 Co., 157 F.3d 686, 691 & n.2 (9th Cir. 1998) (applying § 1447(e) in a motion to remand 2 where the plaintiff sought to add a defendant that would defeat diversity). 3 The decision whether to permit joinder of a party that will destroy diversity 4 remains in the sound discretion of the district court. See Newcombe, 157 F.3d at 691; 5 Walker v. Glob. Mail, Inc., No. CV 21-6546-DMG (SHKx), 2021 WL 4594024, at *2 6 (C.D. Cal. Oct. 6, 2021) (“District courts have broad discretion in considering whether to 7 permit a plaintiff to join a non-diverse party under section 1447(e).”). 8 In exercising this broad discretion, the Court may consider the following six 9 factors: 10 (1) whether the party sought to be joined is needed for just adjudication and would be joined under Federal Rule of Civil Procedure 19(a); (2) whether the 11 statute of limitations would preclude an original action against the new 12 defendants in state court; (3) whether there has been unexplained delay in requesting joinder; (4) whether joinder is intended solely to defeat federal 13 jurisdiction; (5) whether the claims against the new defendant appear valid; 14 and (6) whether the denial of joinder will prejudice the plaintiff.

15 IBC Aviation Servs., Inc. v. Compania Mexicana de Aviacion, S.A. de C.V., 125 F. Supp. 16 2d 1008, 1011 (N.D. Cal. 2000) (citations omitted); see also Palestini v. Gen. Dynamics 17 Corp., 193 F.R.D. 654, 658 (S.D. Cal. 2000). “A court need not consider all the issues, 18 as any factor can be decisive, and no one of them is a necessary condition for joinder.” 19 Leyba v. Walmart, Inc., No. 2:20-cv-07604-ODW (Ex), 2021 WL 8893640, at *2 (C.D. 20 Cal. Feb. 2, 2021). 21 B. Analysis 22 Plaintiff argues that all six factors support joinder of Mr. Coyle as a defendant. 23 (Dkt. No. 27 at 15-24.) In response, Defendant argues that fraudulent joinder bars 24 Plaintiff from amending the complaint. (Dkt. No. 31.) As a threshold matter, 25 26

27 destroying amendment to ensure that it is proper; in other words § 1447(e) applies.”). Therefore, the 28 1 Defendant’s reliance on fraudulent joinder is misplaced and applies the wrong standard. 2 Fraudulent joinder applies “only where nondiverse defendants are joined in the state court 3 action prior to removal in order to prevent removal.” Boon v. Allstate Ins. Co., 229 F. 4 Supp. 2d 1016, 1019 n.2 (C.D. Cal. 2022) (citing Ritchey v. Upjohn Drug Co., 139 F.3d 5 1313, 1315 (9th Cir. 1998); McCabe v. General Foods Corp., 811 F.2d 1336, 1339 (9th 6 Cir. 1987) (“The defendant seeking removal to the federal court is entitled to present the 7 facts showing the joinder to be fraudulent.”)). Here, because the case has already been 8 removed and where Plaintiff seeks to add a nondiverse party, the Court analyzes the 9 propriety of joinder under 28 U.S.C. § 1447(e). See id. (citing Newcombe, 157 F.3d at 10 691; Yniques v. Cabral, 985 F.2d 1031, 1035 (9th Cir. 1993); Clinco v. Roberts, 41 F. 11 Supp. 2d 1080, 1088 (C.D. Cal. 1999); Buttons v. Nat’l Broadcasting Co., 858 F. Supp. 12 1025, 1027 (C.D. Cal. 1994)). The Court will apply Defendant’s argument supporting 13 fraudulent joinder to the first factor under § 1147(e). 14 1. Joinder under Rule 19 15 Plaintiff maintains that adding Mr. Coyle as a defendant is needed for the just 16 adjudication of the case and should be joined under Rule 19 because he is a required 17 party whose identity was unknown at the time the complaint was filed. (Dkt. No. 27 at 18 21.) Defendant argues that Mr. Coyle cannot be held liable because he did not witness 19 the alleged incident and was not anywhere near the incident when it occurred. (Dkt. No. 20 31 at 3.) Further, Costco asserts that the allegations against him do not give rise to claims 21 against him. (Id. at 6.) 22 Rule 19(a) requires the joinder of a person where that person’s absence would 23 preclude the grant of “complete relief among existing parties”, may “impair or impede 24 the person’s ability to protect the interest”, or “leave an existing party subject to a 25 substantial risk of incurring double, multiple, or otherwise inconsistent obligations.” Fed. 26 R. Civ. P. 19(a). While courts consider the standard set under Rule 19 to determine 27 whether to permit joinder under section 1447(e), an “amendment under § 1447(e) is a less 28 restrictive standard than for joinder under [Rule] 19.” IBC Aviation Servs., Inc., 125 F. 1 Supp. 2d at 1011-12. The standard for joinder under section 1447(e) “is met when failure 2 to join will lead to separate and redundant actions.” Id. at 1011 (citing CP Nat'l Corp. v. 3 Bonneville Power Admin., 928 F.2d 905, 910 (9th Cir. 1991)). But “[c]ourts disallow 4 joinder of non-diverse defendants where those defendants are only tangentially related to 5 the cause of action or would not prevent complete relief.” Id. at 1012 (citation omitted). 6 Here, the complaint alleges claims for negligence and premises liability against 7 Defendant and Tim Doe. (Dkt. No. 1, Not. of Removal, Ex. A, Compl.) The complaint 8 also claims that Defendant Tim Doe was a supervisor or manager of the premises at the 9 time of the alleged incident who was “responsible for the maintenance of the premises at 10 the time of Plaintiff’s slip and fall, was responsible to verify that there was in place a 11 policy which provided for the maintenance of the premises according to industry 12 standards, was responsible for the training and education of the premises employees who 13 were tasked with conducting the maintenance of the premises, and was responsible for 14 verifying that the premises be maintained according to industry standards and sufficient 15 policies and procedures.” (Id. ¶ 3.) Further, it complains that Defendants, including Tim 16 Doe, negligently managed, supervised, inspected, maintained and/or controlled the 17 premise creating “a dangerous, defect and unsafe condition in conscious disregard for the 18 risk of harm to invitees.” (Id. ¶ 15.) 19 Under long-settled California law, a store manager may be held liable for his or her 20 tortious acts. See Perkins v. Blauth, 163 Cal. 782, 787 (1912) (“if a tortious act has been 21 committed by an agent acting under authority of his principal, the fact that the principal 22 thus becomes liable does not, of course, exonerate the agent from liability.”); see also 23 Shafer v. Berger, Kahn, Shafton, Moss, Figler, Simon & Gladstone, 107 Cal. App. 4th 54, 24 68-69 (2003), as modified on denial of reh'g (Apr. 8, 2003) (agent or employee is always 25 liable for his own torts, whether his employer is liable or not; fact that tort was committed 26 by agent acting under authority of his principal and principal thus becomes liable does 27 not exonerate agent from liability); Dillon v. Wallace, 148 Cal. App. 2d 447, 455 (1957) 28 1 (manager in charge of market where the plaintiff slipped and fell was liable for his failure 2 to act and breached a duty to protect customers from injury). 3 District courts have similarly held that store managers may be named as a 4 defendant because they may be personally liable for negligence in their role as 5 employees. See Tapia v. Burlington Coat Factory of Texas, Inc., Case No. 1:23-cv- 6 01294-JLT-CDB, 2024 WL 3565984, at *3 (E.D. Cal. July 26, 2024), report and 7 recommendation adopted by 2024 WL 3861410, (Aug. 19, 2024); West v. Costco 8 Wholesale Corp., Case No. LA CV20-04265 JAK (FFMx), 2020 WL 7023777, at *4 9 (C.D. Cal. 2020); Trujillo v. Target Corp., No. 17-cv-06429 VAP (GJSx), 2017 WL 10 4864490, at *2 (C.D. Cal. Oct. 26, 2017). 11 Defendant cites to irrelevant out of circuit employment cases regarding liability of 12 agents to support its argument, (Dkt. No. 31 at 6), and does not address the numerous tort 13 cases applying California law granting a plaintiff’s motion to join a diversity-destroying 14 defendant under § 1447(e). Thus, this first factor supports the joinder of Mr. Coyle 15 because he is not tangentially related to the cause of action but directly related as he may 16 be liable for his alleged negligence in failing to keep the premises in a safe condition. 17 Further, the failure to join Mr. Coyle would lead to separate and redundant actions 18 2. Statute of Limitations 19 Second, Plaintiff contends that the two-year statute of limitations would preclude a 20 new action against Mr. Coyle in state court because the incident occurred on April 15, 21 2021. (Dkt. No. 27 at 22.) Defendant does not oppose. 22 The statute of limitations for personal injury actions due to negligence in 23 California is two years. See Cal. Code Civ. Proc. § 335.1; see Trujillo v. Target Corp., 24 17–cv–06429 VAP (GJSx), 2017 WL 4864490, at *3 (C.D. Cal. Oct. 26, 2017) (plaintiff 25 foreclosed from bringing negligence action against store manager under Cal. Code Civ 26 Proc. § 335.1). Because the claim against Mr. Coyle would be barred by the statute of 27 limitations, the Court agrees this factor supports joinder of Mr. Coyle. 28 / / / 1 3. Timeliness of Seeking Leave to Amend 2 Plaintiff timely sought to add Mr. Coyle a day after learning of his identity as the 3 Manager on the day of the incident. (Dkt. No. 27 at 22-23.) Again, Defendant does not 4 oppose. Plaintiff has shown timeliness in seeking leave to amend, and this factor 5 supports joinder. (See Dkt. No. 27-1, Lerner Decl. ¶¶ 7-15.) 6 4. Motive for Joinder 7 Fourth, Plaintiff maintains that Tim Doe, supervisor or manager of the premises, 8 was named as a defendant since the filing of the complaint. (Dkt. No. 27 at 23.) 9 Defendant does not challenge this factor. 10 Courts examine “the motive of a plaintiff in seeking the joinder of an additional 11 defendant.” Khachunts v. Gen. Ins. Co. of Amer., 682 F. Supp. 3d 827, 835 (C.D. Cal. 12 July 14, 2023) (quoting Desert Empire Bank v. Ins. Co. of N. Am., 623 F.2d 1371, 1376 13 (9th Cir. 1980)). This factor will weigh against a joinder if its sole purpose is to defeat 14 diversity jurisdiction. Murphy v. Am. Gen. Life Ins. Co., 74 F. Supp. 3d 1267, 1285-86 15 (C.D. Cal. 2015). 16 Here, the complaint originally alleged claims against Tim Doe, the manager of the 17 premises at the time of the alleged incident. By amendment, Plaintiff merely seeks to 18 replace Tim Doe with Tim Coyle while all other allegations in the complaint will remain 19 the same. Therefore, Plaintiff’s motive in seeking to join Tim Coyle is not to defeat 20 diversity jurisdiction. This factor supports granting leave to join Mr. Coyle as a 21 defendant. 22 5. Validity of Claim 23 Plaintiff next contends that the claims against Mr. Coyle state a claim. (Dkt. No. 24 27 at 24.) A claim is facially valid if it “’seems valid’, which is a lower standard than 25 what is required to survive a motion to dismiss or motion for summary judgment.” 26 Prudenciano Flores v. Nissan N. Am., Inc., No. CV 21-09411-RSWL-PDx, 2022 WL 27 1469424, at *4 (C.D. Cal. May 9, 2022) (citation omitted); see also Freeman v. Cardinal 28 Health Pharm. Servs., LLC, No. 2:14-cv-01994-JAM-KJN, 2015 WL 2006183, *3 (E.D. 1 Cal. 2015) (rejecting defendant's assertion that “the Court should consider whether the 2 amended complaint ‘could be defeated by a motion to dismiss’”). 3 “The elements of a negligence claim and a premises liability claim are the same: a 4 legal duty of care, breach of that duty, and proximate cause resulting in injury.” Kesner 5 v. Superior Ct., 1 Cal. 5th 1132, 1158 (2016). Plaintiff alleges that Costco and Mr. Coyle 6 had a duty to keep the premises safe, knew or should have known, in the exercise of 7 reasonable care, that parts of the store were in an unsafe condition, and breached their 8 duty to keep the premises safe and caused him injury. (Dkt. No. 1, Not. of Removal, Ex. 9 A, Compl. ¶¶ 9-11, 15-17.) Plaintiff has alleged a valid claim and this factor supports 10 joinder of Mr. Coyle. See Trujillo, 2017 WL 4864490, at *5 (validity of new claims 11 satisfied where the plaintiff alleged elements of a negligence claim). 12 6. Prejudice 13 Finally, Plaintiff argues undue prejudice because filing multiple lawsuits on the 14 same cause of action would result in unnecessary expenditure of resources. (Dkt. No. 27 15 at 23-24.) Plus, the claims against Tim Coyle would be barred by the statute of 16 limitations. (Id.) Defendant does not disagree. 17 Requiring the plaintiff to “proceed with expensive litigation in state court against 18 [the putative defendant] would create avoidable prejudice” if the claims against both 19 parties “arise out of the same factual circumstances.” Avellanet v. FCA US LLC, No. CV 20 19-7621-JFW(KSX), 2019 WL 5448199, at *4 (C.D. Cal. Oct. 24, 2019) (citation 21 omitted)). 22 Here, the Court agrees with Plaintiff that there would be significant expenses 23 unnecessarily expended if litigation in two courts arises out of the same factual 24 circumstances. As such, this factor supports allowing joinder. 25 After considering all six factors, the Court concludes they all weigh in favor of the 26 joinder of Mr. Coyle as a defendant. Because the Court grants Plaintiff’s motion to 27 amend to join Mr. Coyle as a defendant, complete diversity is lacking and the Court lacks 28 1 || subject matter jurisdiction over the case. Therefore, the Court also grants Plaintiff's 2 ||motion to remand the case to state court. 3 Conclusion 4 Based on the reasoning above, the Court GRANTS Plaintiff's motion for leave to 5 ||amend to add Tim Coyle as a defendant. The proposed amended complaint, (Dkt. No. 6 27-4), shall be deemed filed and is the operative complaint. Because the Court no longer 7 || has subject matter jurisdiction over the case, this action shall be remanded to the Superior 8 || Court of the State of California, County of San Diego. The hearing set for January 31, 9 shall be vacated. 10 IT IS SO ORDERED. 11 ||Dated: January 24, 2025 72 12 Hon. athe Ck 13 United States District Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28