Ruiz v. BMW of North America, LLC

          ORDER GRANTING PLAINTIFFS’ MOTION FOR LEAVE TO FILE FIRST AMENDMENT COMPLAINT AND DENYING MOTION TO REMAND [9, 10]

          OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE.

         I. INTRODUCTION

         Plaintiffs Joe Ruiz Sr. and Joe Ruiz Jr. (“Plaintiffs”), both residents of California, filed suit against BMW of North America (“BMW”), a Delaware Corporation, in Los Angeles County Superior Court, alleging breach of warranty claims under state and federal law. (Compl., ECF No. 1-1.) After BMW removed the case to this Court, Plaintiffs moved to amend their complaint to add diversity-destroying Defendant Finchey Corporation of California, a California Corporation d/b/a Pacific BMA (“Pacific BMW”), for alleged negligent repairs made to Plaintiffs’ vehicle. (Mot. for Leave to File First Am. Compl. (“Mot. to Am.”), ECF No. 9.) Plaintiffs also move to remand the case, claiming that the addition of Pacific BMW renders the parties non-diverse and that its federal claims can be heard in state court. (Mot. to Remand, ECF No. 10.) For the reasons discussed below, the Court GRANTS Plaintiffs’ Motion for Leave to File First Amended Complaint and DENIES Plaintiffs’ Motion to Remand.^[1]

         II. FACTUAL BACKGROUND

         Plaintiffs purchased a new 2014 BMW 427i couple from an authorized BMW dealer in Irvine, California on May 27, 2014. (Hamblin Decl. in support of Mot. for Leave (“Hamblin Decl.”) ¶ 5, ECF No. 9.) Plaintiffs allege that they received the subject vehicle with various engine defects. (Compl. ¶ 8.) On at least six occasions between September 2014 and July 2015, Plaintiffs took the vehicle in for service. (Hamblin Decl. ¶ 6, ECF No. 9.) Plaintiffs claim that BMW wrongfully denied them warranty coverage, in violation of the Song-Beverly Consumer Warranty Act, Cal. Civ. Code § 1790 et seq., and the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301. (Compl. ¶¶ 10, 27.)

         III. LEGAL STANDARD

         Rule 15(a)(2) provides that “[t]he court should freely give leave [to amend] when justice so requires.” Fed.R.Civ.P. 15(a)(2); Moss v. U.S. Secret Serv., 572 F.3d 962, 972 (9th Cir. 2009). The decision whether to grant leave to amend rests in the sound discretion of the trial court. Swanson v. U.S. Forest Serv., 87 F.3d 339, 343 (9th Cir. 1996); California v. Neville Chem. Co., 358 F.3d 661, 673 (9th Cir. 2004).

         The U.S. Supreme Court has held that courts should freely grant leave to amend absent special circumstances, such as: (1) undue delay; (2) bad faith or dilatory motive on the part of the movant; (3) repeated failure to cure deficiencies with previous amendment; (4) prejudice to the opposing party; and (5) futility of amendment. Foman v. Davis, 371 U.S. 178, 182 (1962). The party opposing the amendment carries the burden of showing why leave to amend should be denied. DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186-187 (9th Cir. 1987).

         Further, federal courts are courts of limited jurisdiction, having subject-matter jurisdiction only over matters authorized by the Constitution and Congress. U.S. Const. art. III, § 2, cl. 1; e.g., Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). A suit filed in state court may be removed to federal court if the federal court would have had original jurisdiction over the suit. 28 U.S.C. § 1441(a). But courts strictly construe the removal statute against removal jurisdiction, and “[f]ederal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). The party seeking removal bears the burden of establishing federal jurisdiction. Durham v. Lockheed Martin Corp., 445 F.3d 1247, 1252 (9th Cir. 2006) (citing Gaus, 980 F.2d at 566).

         Federal courts have original jurisdiction where an action presents a federal question under 28 U.S.C. § 1331, or diversity of citizenship under 28 U.S.C. § 1332. A defendant may remove a case from a state court to a federal court pursuant to the federal removal statute, 28 U.S.C. § 1441, on the basis of federal question or diversity jurisdiction. To exercise diversity jurisdiction, a federal court must find complete diversity of citizenship among the adverse parties, and the amount in controversy must exceed $75, 000, usually exclusive of interest and costs. 28 U.S.C. § 1332(a).

         IV. DISCUSSION

         1. Motion For Leave To File First Amended Complaint

         In their Motion, Plaintiffs seek leave to add a new claim for negligent repairs against a new diversity-destroying defendant, Pacific BMW. (Mot. for Leave 2.) Plaintiffs claim that further investigation has led them to discover that Pacific BMW conducted three of the six repair attempts on the subject vehicle. (Id.) Plaintiffs argue that the Court should grant leave to amend because the proposed amendments stem from the same series of transactions, the same vehicle, and the same repairs. (Id. 3.) They claim they only have legitimate motives and have acted with haste in seeking such an amendment. (Id. 5.)

         BMW asserts that Plaintiffs’ Motion should be denied because of undue delay and bad faith. (Opp’n 2, ECF No. 12.) In its Opposition, BMW states that the purpose of Plaintiffs’ joinder of Pacific BMW is solely to defeat diversity jurisdiction. (Id. 3.) BMW suggests that the timing of Plaintiffs’ proposed amendments further point to an improper motive because Plaintiffs knew that their vehicle was serviced at Pacific BMW prior to the ...