The opinion of the court was delivered by: Present: The Honorable Christina A. Snyder, U.S. District Judge
RITA SANCHEZ NOT REPORTED N/A Deputy Clerk Court Reporter / Recorder Tape No.
Attorneys Present for Plaintiffs: Attorneys Present for Defendants: NOT PRESENT NOT PRESENT
Proceedings: PLAINTIFFS' MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT AND JOINDER OF DOE DEFENDANTS AND TO REMAND ACTION TO STATE COURT (filed on 10/20/11)
INTRODUCTION AND BACKGROUND
The Court finds this motion appropriate for decision without oral argument. Fed. R. Civ. P. 78; Local Rule 7-15. The hearing date of November 21, 2011 is hereby vacated.
Plaintiffs Ashley and Anthony Vincenti ("Plaintiffs") filed suit in state court on March 4, 2011, against defendant Exxon Mobil Corporation ("Exxon Mobil"). Compl., at 1, Dkt. No. 10, at 3. Plaintiffs' First Amended Complaint ("FAC") alleged claims under state law for negligence, nuisance, trespass, and loss of consortium as a result of health problems caused by contamination of their property at 208 Palm Avenue, Santa Barbara, California. FAC at 4-8, Dkt. No. 2. The contamination originated from the site of a former Mobil Service Station at 314 Santa Barbara Street, Santa Barbara, California (the "Mobil Station"). Id. On September 6, 2011, Exxon Mobil filed a notice of removal, stating that the parties are of diverse citizenship because Plaintiffs are citizens of California and Exxon Mobil is a citizen of New Jersey and Texas, and that the action became removable on September 1, 2011, when Exxon Mobil first knew that the amount in controversy exceeded the jurisdictional minimum. Notice of Removal ¶¶ 9-10, Dkt. No. 1; 28 U.S.C. § 1332.
Plaintiffs now seek leave to file a Second Amended Complaint to add non-diverse defendants, which would deprive the Court of jurisdiction and necessitate remand of this action to state court. Plaintiffs allege that three of the proposed additional defendants, Eskandar Jahangir, George Castle, and Ralph Poulin, operated the Mobil Station, including underground fuel tanks, from 1956 through 1987. Proposed Second Amended Complaint ("Proposed SAC") ¶¶ 4-6, 11. Plaintiffs contend that Jahangir is a citizen of California, and submit business and property records showing that he owns residential property in Santa Barbara County and operates an Exxon Mobil gas station in Santa Barbara. See Reply, Exs. A, B. Plaintiffs allege that the fourth proposed defendant Holguin, Fahan & Associates, Inc. ("Holguin") is a California business organization that managed, operated and controlled soil testing and remediation activities at the site of the Mobil Station following its decommissioning in 1987. Proposed SAC ¶¶ 12-13. Exxon Mobil responds that the proposed additional defendants are "sham" defendants and should not be joined.
After examining all relevant factors, the Court grants Plaintiffs' motion for leave to file the Second Amended Complaint, and no longer having a basis for subject matter jurisdiction, the Court remands this action to the Superior Court of California, County of Santa Barbara, Case No. 1374353.
Except for amendments made as a matter of course or pursuant to stipulation, leave of court is required to amend a pleading. Fed. R. Civ. P. 15(a)(2). Generally, leave to amend the pleadings is freely given unless the opposing party makes a showing of undue prejudice, bad faith, futility, or undue delay. Martinez v. Newport Beach City, 125 F.3d 777, 785 (9th Cir. 1997)(overruled on other grounds); Ascon Props., Inc. v. Mobil Oil , 866 F.2d 1149, 1160 (9th Cir. 1989). However, if after removal the plaintiff seeks to add defendants whose presence would destroy subject matter jurisdiction, the court has discretion to deny joinder, or permit joinder and remand the action. 28 U.S.C. § 1447(e).
In determining whether to permit joinder, courts take into account the following factors: (1) whether the party to be joined would be a necessary party under Rule 19 of the Federal Rules of Civil Procedure; (2) whether the statute of limitations would bar action against the new defendants in state court; (3) whether there is any unexplained delay in seeking joinder; (4) whether plaintiff is seeking to join a party solely to destroy diversity of citizenship; (5) the apparent validity of the claims; and (6) any prejudice to plaintiff, such as whether judgment can be satisfied against the existing defendants or whether the proposed party can be sued in state court. Schwarzer et al., California Practice Guide, Federal Civil Procedure Before Trial, § 2:3654 (The Rutter Group 2011) (citing Lopez v. General Motors, 697 F.2d 1328, 1332 (9th Cir. 1983); Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 352 (1988); Desert Empire Bank v. Ins. Co. of N. Am., 623 F.2d 1371, 1376-77 (9th Cir. 1980); Newcombe v. Adolf Coors Co., 157 F.3d 686, 691 (9th Cir. 1998); Clinco v. Roberts, 41 F. Supp. 2d 1080, 1083 (C.D. Cal., 1999)).
Turning to the first factor, Rule 19 of the Federal Rules of Civil Procedure provides for mandatory joinder where joinder would not deprive the court of subject matter jurisdiction and where in that party's absence the court cannot provide complete relief among the existing parties. Fed. R. Civ. P. 19(a)(1); see Lopez, 697 F.2d at 1332. California Civil Code Section 1431.2 provides that in actions for personal injury, property damage, or wrongful death, the liability of each defendant for non-economic damages (subjective non-monetary losses such as emotional distress) shall be several and not joint, and that each defendant's liability for non-economic damages shall be accorded a separate judgment in direct proportion to that defendant's percentage of fault. Cal. Civ. Code § 1431.2. Here, Plaintiffs seek both economic and non-economic damages, including compensation for emotional distress. First Amended Complaint ("FAC"), at 6-7, Dkt. No. 2, at 12-13. Without joinder, the lack of joint liability for non-economic damages under California law could prevent Plaintiffs' complete recovery of non-economic damages. For instance, if Exxon Mobil were found liable for a fraction of damages ...