United States District Court, C.D. California
CIVIL MINUTES - GENERAL.
DOLLY M. GEE, Judge.
Proceedings: IN CHAMBERS-ORDER TO SHOW CAUSE WHY THIS ACTION SHOULD NOT BE REMANDED FOR LACK OF SUBJECT MATTER JURISDICTION
On February 26, 2014, Plaintiff Christina Avalos filed a Complaint in Los Angeles County Superior Court alleging various state law causes of action for products liability and medical malpractice against Defendants William Dobkin, M.D., Medtronic, Inc., and Medtronic Sofamor Danek, USA, Inc. [Doc. # 1-1, at 23-140.] On April 11, 2014, Medtronic, Inc., and Medtronic Sofamor Danek, USA, Inc. ("Medtronic") removed the action to this Court on the basis of diversity jurisdiction under 28 U.S.C. § 1332. [Doc. # 1.]
Under Section 1332(a), district courts have original jurisdiction of all civil actions between citizens of different states "where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs...." Diversity jurisdiction under 28 U.S.C. § 1332 requires complete diversity: every plaintiff must be diverse from every defendant. See Lincoln Property Co. v. Roche , 546 U.S. 81, 89, 126 S.Ct. 606, 163 L.Ed.2d 415 (2005). The removal statute-28 U.S.C. § 1441(a)-is strictly construed against removal jurisdiction, and if there is any doubt as to the right of removal in the first instance, federal jurisdiction must be rejected. Geographic Expeditions, Inc. v. Est. of Lhotka ex rel. Lhotka , 599 F.3d 1102, 1106-07 (9th Cir. 2010) (citing Gaus v. Miles, Inc. , 980 F.2d 564, 566 (9th Cir. 1992) ( per curiam )). "The burden of establishing federal subject matter jurisdiction falls on the party invoking removal." Marin Gen. Hosp. v. Modesto & Empire Traction Co. , 581 F.3d 941, 944 (9th Cir. 2009) (citing Toumajian v. Frailey , 135 F.3d 648, 652 (9th Cir. 1998)).
Here, Medtronic acknowledges that complete diversity is lacking on the face of the Complaint because Avalos and Dobkin are citizens of California. (Not. of Removal ¶¶ 12, 15.) Nonetheless, Medtronic contends that the complete diversity requirement is met because Dobkin is (1) fraudulently misjoined and (2) fraudulently joined in this action.
1. Medtronic's Fraudulent Misjoinder Argument is Unpersuasive
Medtronic argues that this Court has jurisdiction under the "fraudulent misjoinder" doctrine, relying on a line of authority beginning with the Eleventh Circuit's decision in Tapscott v. MS Dealer Service Corp. , 77 F.3d 1353, 1359-60 (11th Cir. 1996), abrogated on other grounds, Cohen v. Office Depot, Inc. , 204 F.3d 1069 (11th Cir. 2000). (Not. of Removal ¶¶ 18-24.) Tapscott involved two putative classes of plaintiffs, each of which sued a different group of defendants based on "wholly distinct" transactions. Tapscott , 77 F.3d at 1360. Defendant Lowe's, the representative of one defendant class, removed the case to federal court on the basis of diversity jurisdiction, and the district court disregarded the citizenship of the second class of defendants, asserted jurisdiction, and severed and remanded the remainder of the action. Id. at 1355, 1360. The Eleventh Circuit affirmed the district court's orders, holding that where a plaintiff's attempt to defeat diversity by joining parties is "so egregious as to constitute fraudulent joinder, " a court could disregard the fraudulently joined parties in order to assert diversity jurisdiction. Id. at 1360. The court noted that it "d[id] not hold that mere misjoinder is fraudulent joinder." Id.
The "fraudulent misjoinder" doctrine has received a "tepid" response outside the Eleventh Circuit. See Early v. Northrup Grumman Corp. , 2:13-CV-3130, 2013 WL 3872218, at *2 (C.D. Cal. July 24, 2013). While the Fifth Circuit adopted the doctrine in a one-paragraph opinion, see In re Benjamin Moore & Co. , 309 F.3d 296, 298 (5th Cir. 2002), the other circuit courts to consider the doctrine have not formally adopted it. See, e.g., California Dump Truck Owners Ass'n v. Cummins Engine Co., Inc. , 24 Fed.App'x. 727, 729 (9th Cir. 2001) ("For purposes of discussion we will assume, without deciding, that this circuit would accept the doctrines of fraudulent and egregious joinder as applied to plaintiffs."); Lafalier v. State Farm Fire and Cas. Co. , 391 Fed.App'x. 732, 739 (10th Cir. 2010); In re Prempro Products Liability Litigation , 591 F.3d 613 (8th Cir. 2010).
District courts in this circuit have criticized the "fraudulent misjoinder" doctrine. See Osborn v. Metro. Life Ins. Co. , 341 F.Supp.2d 1123, 1127-28 (E.D. Cal. 2004) (opining that "the last thing the federal courts need is more procedural complexity" associated with fraudulent misjoinder doctrine, noting the doctrine raises "unnecessary difficulties, " such as uncertainty as to whether the federal or state joinder rules should apply, and suggesting the state court was competent to determine the issue of misjoinder); Early , 2013 WL 3872218, at *2-*3 (noting "the doctrine raises more questions than answers" because it is not clear when joinder is so egregious or otherwise inappropriate to require application of doctrine, and concluding that the doctrine "flips [the maxim that § 1441 should be narrowly construed] on its head by making cases removable that by § 1441's plain terms should not be, effectively increasing the jurisdiction of federal courts beyond what the rules envision"); Perry v. Luu , 1:13-CV-00729, 2013 WL 3354446, at *5 (E.D. Cal. July 3, 2013) (noting court was "confounded" by the "circular logic" of fraudulent misjoinder doctrine which "requires the Court first-in full recognition of the lack of diversity jurisdiction-sever part of the case and only then find it has jurisdiction" while "the authority to sever misjoined claims or defendants under Rule 20 presumes the Court has jurisdiction to act" (emphasis in original)).
It appears that two district courts in this circuit have used "fraudulent misjoinder" to exercise diversity jurisdiction, see Sutton v. Davol , 251 F.R.D. 500, 503-05 (E.D. Cal. 2008); Greene v. Wyeth , 344 F.Supp.2d 674, 684-85 (D. Nev. 2004). Many other courts in this circuit have declined to decide whether the doctrine is good law, finding that it would not control their respective cases. See, e.g., Ramirez v. Our Lady of Lourdes Hosp. at Pasco , 2:13-CV-01108, 2013 WL 5373213, at *3-*4 (W.D. Wash. Sept. 25, 2013); Caouette v. Bristol-Myers Squibb Co. , C-12-1814, 2012 WL 3283858, at *6-*7 (N.D. Cal. Aug. 10, 2012); Selman v. Pfizer, Inc. 11-CV-1400, 2011 WL 6655354, at *12-*13 (D. Or. Dec. 16, 2011).
Medtronic identifies no precedent binding on this Court to support its contention that "fraudulent misjoinder" doctrine applies here. The Ninth Circuit has not formally adopted the doctrine, and under Ninth Circuit precedent, 28 U.S.C. § 1441 is to be strictly construed and "[f]ederal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance." Gaus , 980 F.2d at 566. Moreover, Medtronic has not demonstrated that Dobkin was joined in order to defeat ...