United States District Court, C.D. California
ORDER GRANTING MOTION TO REMAND [Dkt. No. 22.]
DEAN D. PREGERSON, District Judge.
Presently before the Court is Plaintiffs' Motion for Remand. Having heard oral arguments and considered the parties' submissions, the Court adopts the following order.
Plaintiff James Hendricks suffers from mesothelioma, a type of cancer associated with asbestos exposure. (Decl. Sean Worley, Ex. A (Dkt. No. 22-3)(State Complaint), ¶ 16.) Defendants are all either manufacturers of asbestos products or owners of premises where such products were stored, handled, or installed. (Id. at ¶ 10.)
Plaintiff James Hendricks, Jr. and his father were both employed by State Defendant SoCal Edison ("Edison"). (Decl. Marc Brainich, Ex. D at 9:18-19; Worley Decl., Ex. E.) In the state court proceedings, Edison argued that state workers' compensation law prevented a claim based on any contact with asbestos fibers both during his own time of employment. (Decl. Marc Brainich, Ex. D at 9-10.) Plaintiffs also alleged liability based on exposure to fibers that were carried home on his father's clothes from Edison's power plant when Mr. Hendricks, Jr. was a child. (Worley Decl., Ex. E.) The state court granted summary judgment to Edison, focusing primarily on the latter ("secondary") exposure theory. (Decl. Marc Brainich, Ex. E.)
Once Edison was no longer a party, Defendant General Electric ("GE") removed the case to the federal district court, alleging that diversity existed because Edison was a sham defendant, fraudulently joined to the state action. (Notice of Removal, ¶ 15.) Plaintiffs now bring this motion for remand, arguing that Edison was not a sham defendant and that Plaintiffs brought a legitimate claim against Edison, even if it was unsuccessful in the state court. (Mot. Remand.) Plaintiffs also argues that removal was improper because GE failed to obtain the consent of two other Defendants, Crown Cork and Soco-West. (Mem. P. & A. ISO Mot Remand at 9.)
II. Legal Standard
A defendant may remove a case from state court to federal court if the case could have originally been filed in federal court. 28 U.S.C. § 1441(a); see also Snow v. Ford Motor Co., 561 F.2d 787, 789 (9th Cir. 1977). As the removing party, Defendant bears the burden of proving federal jurisdiction. Duncan v. Stuetzle, 76 F.3d 1480, 1485 (9th Cir. 1996); see also Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003). The removal statute is strictly construed against removal jurisdiction, and federal jurisdiction must be rejected if any doubt exists as to the propriety of removal. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (explaining that courts resolve doubts as to removability in favor of remand). The "core principle of federal removal jurisdiction on the basis of diversity" is that "it is determined (and must exist) as of the time the complaint is filed and removal is effected." Strotek Corp. v. Air Transp. Ass'n. of Am., 300 F.3d 1129, 1131 (9th Cir. 2002).
A. Alleged Fraudulent Joinder of Edison
"Fraudulent joinder is a term of art. 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 fraudulent." McCabe v. Gen. Foods Corp., 811 F.2d 1336, 1339 (9th Cir. 1987). To find fraudulent joinder, it must be clear at the time the complaint is filed that "the individuals joined in the action cannot be liable on any theory." Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1318 (9th Cir. 1998).
In this case, the state court granted summary judgment to Edison because it was obliged to follow Campbell v. Ford Motor Co., 206 Cal.App.4th 15 (2012). Campbell held, in a similar situation, that Ford's legal duty could not extend to the family members of contractors working at its plants. Id. at 31-32. This holding appears to have been largely based on policy considerations. The Court reasoned that the limit on duty was necessary to prevent "otherwise potentially infinite liability" and stated that "the consequences of a negligent act must [sometimes] be limited to avoid an intolerable burden on society, " even where the risk was foreseeable. Id.
Plaintiff argued in state court that Campbell should be limited to the case of contractors and not applied to family members of actual employees. The superior court, however, felt itself bound by another case, Haver v. BNSF Ry. Co., decided on the same day that Plaintiffs filed their original complaint. 226 Cal.App.4th 1104 (June 3, 2014), review granted and opinion superseded sub nom. Haver v. BNSF R. Co., 331 P.3d 179 (Cal. Aug. 20, 2014). In Haver, the plaintiff made precisely the same argument - that Campbell should be construed narrowly to apply only to contractors, and not to employees. Id. The court of appeals rejected that argument because the Campbell opinion used the term "workers" rather than "contractors, " and because in a footnote the Campbell court said that its analysis did not "turn on" the distinction between employee and contractor. Id. Citing Haver, the superior court rejected Plaintiffs' attempt to distinguish between employees and contractors.
The superior court's duty, of course, was to decide a motion for summary judgment given the law available to it at the time. This Court, on the other hand, must decide a more limited and more difficult question: whether it was "obvious" under settled California law, at the time the ...