United States District Court, C.D. California
Inez Rollins, et al.
Fresenius USA, Inc., et al.
CIVIL MINUTES - GENERAL
JESUS G. BERNAL, District Judge.
Proceedings: Order (1) DENYING Defendants' Ex Parte Application to Stay (Doc. No. 19); (2) GRANTING Plaintiffs' Motion to Remand (Doc. No. 16) and (2) REMANDING the Action to the Superior Court of the State of California, County of Los Angeles (IN CHAMBERS)
Before the Court are Plaintiffs' Motion to Remand (Doc. No. 18) and Defendants' Ex Parte Application to Stay (Doc. No. 19). The Court finds these matters appropriate for resolution without a hearing pursuant to Local Rule 7-15. After considering the papers timely filed in support of and in opposition to the motions, the Court DENIES the ex parte application to stay and GRANTS the motion to remand.
On January 16, 2013, Plaintiffs Inez Rollins and Jesse Rollins ("Platiniffs") filed a Complaint in state court against Defendants Fresenius USA, Inc. ("FUSA"), Fresenius USA Manufacturing, Inc., Fresenius Medical Care Holdings, Inc., Fresenius Medical Care North America, Inc., Fresenius USA Marketing, Inc., Fresenius Medical Clinic ("FMC"), Walter L. Weisman ("Weisman"), and Carl Anderson ("Anderson"). (Compl., Not. of Removal, Doc. No. 1, Exh. A.) The Complaint alleges twelve claims arising from injuries purportedly caused by GranuFlo and NaturaLyte, products used during dialysis. (Id. ¶¶ 1-3.) According to the Complaint, Plaintiffs are citizens of California, and Defendants are citizens of states other than California, except for FUSA, FMC, Weisman, and Anderson, who are citizens of California. (Id. ¶¶ 4-16.) On March 20, 2013, the state court coordinated this case with three others pertaining to GranuFlo and NaturaLyte. (Not. of Removal, Exh. A.) On November 21, 2013, all Defendants except FMC, Weisman, and Anderson ("Answering Defendants") answered the Complaint. (Id.) On November 22, 2013, FMC (a/k/a Kaweah Delta Medical Center) and Anderson filed a demurrer in state court claiming Plaintiffs failed to comply with the presentation requirement of the California Tort Claims Act. (Id. ¶¶ 30, 36.)
Answering Defendants removed the action to this Court on December 20, 2013 on the basis of diversity jurisdiction. (Not. of Removal.) Answering Defendants claim that FUSA is solely a citizen of Massachusetts, and FMC, Weisman, and Anderson are fraudulently joined, making removal proper. (Id. ¶¶ 13, 20, 28, 32.) Further, they contend that FMC is actually Kaweah Delta Medical Center ("Kaweah"), a public entity unaffiliated with Fresenius, and Anderson is a member of the Board of Directors of Kaweah and is also unaffiliated with Fresenius. (Id. ¶ 29-30, 34.)
On March 29, 3013, the Judicial Panel on Multidistrict Litigation ("JMPL") created a multidistrict litigation proceeding in the United States District Court for the District of Massachusetts for cases concerning GranuFlo and/or NaturaLyte. In re Fresenius/NaturaLyte Dialysate Prods. Liab. Litig., No. 1:13-md-02428-DPW (D. Mass. 2013) [hereinafter, "MDL"]. To date, over 400 cases have been transferred to the MDL. On December 31, 2013, this case was conditionally transferred to the MDL. (MDL, Doc. No. 435.) Plaintiffs opposed the conditional transfer on January 6, 2014. (MDL, Doc. No. 453.)
On January 6, 2014, Plaintiffs filed a motion to remand the action to state court. ("Motion, " Doc. No. 18.) Answering Defendants opposed on January 13, 2014. ("Opp'n, " Doc. No. 22.) On January 7, 2014, Defendants filed an ex parte application to stay the case pending the JMPL's decision regarding transfer of this action to the MDL. ("Ex Parte, " Doc. No. 19.) Plaintiff opposed the Ex Parte on January 8, 2014. ("EP Opp'n, " Doc. No. 20.) Defendants replied on January 8, 2014. ("EP Reply, " Doc. No. 21.)
II. LEGAL STANDARD
The United States Supreme Court holds that "the power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket within economy of time and effort for itself, for counsel, and for litigants." Landis v. North American Co. , 299 U.S. 248, 254 (1936). "Whether or not to grant a stay is within the court's discretion and it is appropriate when it serves the interests of judicial economy and efficiency." Rivers v. Walt Disney Co. , 980 F.Supp. 1358, 1360 (C.D. Cal. 1997) (citations omitted). District courts consider three factors when deciding whether to grant a motion to stay proceedings pending the motion filed with the MDL: "(1) potential prejudice to the non-moving party; (2) hardship and inequity to the moving party if the action is not stayed; and (3) the judicial resources that would be saved by avoiding duplicative litigation if the cases are in fact consolidated." Id.
Federal courts have original jurisdiction of all civil actions where the matter in controversy exceeds $75, 000, exclusive of interest and costs, and is between citizens of different states. 28 U.S.C. § 1332. Proper jurisdiction under Section 1332 requires complete diversity, so each plaintiff must be diverse from each defendant. Exxon Mobil Corp. v. Allapattah Servs., Inc. , 545 U.S. 546, 553 (2005). To protect the jurisdiction of state courts, removal jurisdiction should be strictly construed in favor of remand. Harris v. Bankers Life and Cas. Co. , 425 F.3d 689, 698 (9th Cir. 2005) (citing Shamrock Oil & Gas Corp. v. Sheets , 313 U.S. 100, 108-09 (1941)). "Federal jurisdiction must be rejected if there is any doubt as to the right of removal." Gaus v. Miles , 980 F.2d 564, 566 (9th Cir. 1992) (internal citation omitted). "Th[is] strong presumption' against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper." Id . (internal citations omitted).
An exception to the requirement of complete diversity exists where a defendant has been fraudulently joined to defeat diversity. Morris v. Princess Cruises, Inc. , 236 F.3d 1061, 1067 (9th Cir. 2001). "If the plaintiff fails to state a cause of action against a resident defendant, and the failure is obvious according to the settled rules of the state, the joinder of the resident defendant is deemed fraudulent." Hamilton Materials, Inc. v. Dow Chemical Corp. , 494 F.3d 1203, 1206 (9th Cir. 2007) (quoting McCabe v. General Foods Corp. , 811 F.2d 1336, 1339 (9th Cir. 1987)). Where joinder is deemed fraudulent, the defendant's presence is ignored for the purposes of determining diversity. Morris , 236 F.3d at 1067. The claim of fraudulent joinder must be supported by "clear and convincing evidence." Hamilton ...