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California Crane School, Inc. v. National Commission for Certification of Crane Operators

August 18, 2008

CALIFORNIA CRANE SCHOOL, INC., A CALIFORNIA CORPORATION; JOHN NYPL, AN INDIVIDUAL, PLAINTIFFS,
v.
NATIONAL COMMISSION FOR CERTIFICATION OF CRANE OPERATORS, A NON-PROFIT CORPORATION; THE INTERNATIONAL ASSESSMENT INSTITUTE, A FLORIDA CORPORATION; GRAHAM BRENT, AN INDIVIDUAL; ANTHONY MITCHELL, AN INDIVIDUAL; ROBERT HORNAUER, AN INDIVIDUAL; DOES ONE THROUGH 100, DEFENDANTS.



The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge

MEMORANDUM AND ORDER

Through the present action, Plaintiffs California Crane School and John Nypl ("Plaintiffs") seek damages under California state law for antitrust violations, interference with prospective business, interference with contract, and unfair competition and false advertising.

Plaintiffs filed the action in Superior Court of the State of California in and for the County of Nevada. Defendants National Commission for Certification of Crane Operators ("NCCCO"), International Assessment Institute ("IAI"), and several individuals including Robert Hornauer ("Hornauer"), later removed the action to this Court. Presently before the Court is Plaintiff's Motion for Remand and Attorneys' Fees.*fn1

BACKGROUND

Plaintiff Nypl, a California resident, is the sole owner of California Crane School ("CCS"), a California corporation that provides training courses designed to assist in the certification of crane operators in California. Defendants NCCCO and IAI are incorporated, and maintain headquarters, in states other than California. Together NCCCO and IAI are responsible for developing and administering the standards and tests required for crane certification in California. In the past, CCS worked closely with NCCCO and IAI to properly certify those who take their courses.

Defendant Hornauer is a NCCCO employee and a resident of California. Plaintiffs claim that he plays an active role in the Defendants' "anti-competitive behavior and illegal activities," and name him as a defendant for all counts in the Complaint.

On the other hand, Defendants allege that he is named as a defendant for the sole purpose of destroying diversity.*fn2

Accordingly, Defendants removed the action to this Court pursuant to 28 U.S.C. §§ 1332 and 1441 on the grounds that Hornauer was fraudulently joined.

In now moving to remand, Plaintiffs argue that the Complaint as currently drafted contains claims to which Hornauer is potentially liable.

STANDARD

Civil actions not premised upon federal questions are removable to federal court only if there is complete diversity of citizenship between the parties. 28 U.S.C. §§ 1332(a)(1), 1441. Each of the plaintiffs' citizenship must be diverse from each of the defendants'. Caterpillar, Inc. v. Lewis, 519 U.S. 61, 68, 117 S.Ct. 467, 136 L.Ed. 2d 437 (1996). However, if the plaintiff fails to state a cause of action against a non-diverse defendant, and the failure is obvious according to settled state law, joinder of the non-diverse defendant is fraudulent and the defendant will be ignored for the purposes of determining diversity. McCabe v. General Foods, 811 F.2d 1336, 1339 (9th Cir. 1987).

A defendant is entitled to present facts that prove fraudulent joinder. Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2001) (citing McCabe, 811 F.2d at 1339). The court may also consider summary judgment-type evidence, such as affidavits and deposition testimony. Id. at 1068 (quoting Cavallini v. State Farm Mutual Auto Ins. Co., 44 F.3d 256, 263 (5th Cir. 1995)).

"A 'strong presumption' exists against fraudulent joinder, and all factual disputes and ambiguities in the controlling state law must be resolved in favor of the non-moving party." Rodriguez v. Hall Ambulance, 2007 WL 470624, *6 (E.D.Cal. 2007) (citing Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992)).

If the defendant cannot prove fraudulent joinder and the federal court lacks jurisdiction, the action is remanded to state court. 28 U.S.C. § 1447(c). An order remanding a removed case to state court "may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal." Martin v. Franklin Capital Corp., 546 U.S. 132, 134, 126 S.Ct. 704, 163 L.Ed. 2d 547 (2005) (quoting 28 U.S.C. ยง 1447(c)). Courts ...


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