United States District Court, N.D. California
PAMELA WOODCOX, EUGENE WOODCOX, MICHELLE CONTRERAS, and LOUIS CONTRERAS, Plaintiffs,
VOLKSWAGEN GROUP OF AMERICA, INC., D/B/A VOLKSWAGEN OF AMERICA, INC.; VOLKSWAGEN AG; ROSEVILLE VOLKSWAGEN, LLC; THE NIELLO COMPANY; and DOES 1 through 50, inclusive, Defendants.
MEMORANDUM AND RE: MOTION TO REMAND AND MOTION TO
WILLIAM B. SHUBB UNITED STATES DISTRICT JUDGE
Pamela Woodcox, Eugene Woodcox, Michelle Contreras, and Louis
Contreras brought this action in the Sacramento County
Superior Court against defendants Volkswagen Group of
America, Inc.; Volkswagen AG; Roseville Volkswagen, LLC; and
the Niello Company for damages arising out of defendants'
alleged installation of illegal “defeat devices”
in certain automobiles to avoid detection and enforcement of
Environmental Protection Agency (“EPA”) and state
vehicle emissions regulations. Defendants removed the action
to this court on January 31, 2017. Presently before the court
are plaintiffs' Motion to Remand and defendants'
Motion to Stay this case pending transfer to the Northern
District of California pursuant to 28 U.S.C. § 1407.
and Procedural History
2015, the EPA and the California Air Resource Board
(“CARB”) issued Notices of Violation to
Volkswagen Group of America for alleged violations of the
federal Clean Air Act (“CAA”). (Compl.
¶¶ 73-74 (Docket No. 1-2).) Volkswagen allegedly
installed illegal software-based “defeat devices”
in certain diesel vehicles, which “reduce the
effectiveness of the emission control systems” and
produce “compliant emission results” only
“when the vehicle was being tested for compliance with
EPA emissions standards.” (Id. ¶¶
31, 68-69, 72-73.) As a result, Volkswagen's vehicles
allegedly emitted levels of pollutants up to forty times
above EPA- and CARB-compliant levels during normal operation.
(Id. ¶ 69.)
actions resulted in well over 1, 000 actions across the
United States for their sale of purportedly “clean
diesel” vehicles containing these defeat devices. The
Judicial Panel on Multidistrict Litigation
(“JPML”) has consolidated over 1, 200 cases of
these cases into a federal multidistrict litigation in the
United States District Court for the Northern District of
California (“MDL court”). In re: Volkswagen Clean
Diesel Mktg., Sales Practices, and Prod. Liab. Litig., MDL
No. 2672, Conditional Transfer Order 85 (J.P.M.L. Feb. 21,
filed the instant action in state court, incorporating part
of the consolidated consumer class action complaint in the
MDL court and bringing separate California state law claims.
Plaintiffs allege the following causes of action: (1)
violation of California Unfair Competition Law
(“UCL”); (2) violation of California False
Advertising Law; (3) breach of express warranty under the
Song-Beverly Consumer Warranty Act; (4) violation of the
California Consumer Legal Remedies Act; (5) fraud by
concealment; and (6) negligent misrepresentation. (Compl.)
Defendants subsequently removed the case to federal court on
the basis of federal question jurisdiction. (Docket No. 1.)
February 6, 2017, plaintiffs filed a motion to remand the
case to state court for lack of subject matter jurisdiction,
arguing that the case implicates only California law. (Mot.
to Remand (Docket No. 5-2).) Defendants, anticipating
transfer of this case to the MDL court, then moved to stay
this action. (Mot. to Stay (Docket No. 6-1).) On February 10,
2017, the JPML issued a Conditional Transfer Order
(“CTO”) indicating its decision that this case
should be transferred to the MDL court. (Oswell Decl., Ex. B
at 2 (Docket No. 12-3).) Plaintiffs filed a notice of
opposition to the CTO and then moved to vacate the CTO
pursuant to J.P.M.L. Rule 7.1.
Order of Pending Motions
initial matter, the court must determine which
motion--plaintiffs' motion to remand or defendants'
motion to stay--to entertain first. Generally, jurisdiction
is a preliminary matter that should be resolved before all
others. Smith v. Mail Boxes, Etc., 191 F.Supp.2d
1155, 1157 (E.D. Cal. 2002) (“[J]urisdictional issues
should be resolved before the court determines if a stay is
appropriate.”). However, the approach changes when
deference to an MDL court will further “the uniformity,
consistency, and predictability in litigation that underlies
the MDL system.” Conroy v. Fresh Del Monte Produce
Inc., 325 F.Supp.2d 1049, 1053 (N.D. Cal. 2004). The MDL
court can resolve a motion to remand when “the motion
raises issues likely to arise in other actions pending in
[the consolidated action].” Id.; see also
In re Vioxx Prods. Liab. Litig., 360 F.Supp.2d 1352,
1354 (J.P.M.L. 2005) (“[M]otions to remand . . . can be
presented to and decided by the transferee judge.”).
courts, including this one, have applied the Conroy
methodology when considering simultaneous motions to remand
and stay in the MDL context. See, e.g., Beshear v.
Volkswagen Grp. of Am., Inc., Civ. No. 16-cv-27-GFVT,
2016 WL 3040492, at *2-6 (E.D. Ky. May 25, 2016); Leeson
v. Merck & Co., Inc., Civ. No. 2:05-2240 WBS PAN,
2006 WL 3230047, at *2-4 (E.D. Cal. Jan. 27, 2006).
“First, the court should [scrutinize] the merits of the
motion to remand” and consider it in full if
“this preliminary assessment suggests that removal was
improper.” Conroy, 325 F.Supp.2d at 1053. Second,
“if the jurisdictional issue appears factually or
legally difficult, the court should determine whether
identical or similar jurisdictional issues have been raised
in other cases that have been or may be transferred to the
MDL proceeding.” Id. “[I]f the
jurisdictional issue is both difficult and similar or
identical to those in cases transferred or likely to be
transferred, the court should stay the action.”
Id.; see also Meyers v. Bayer AG, 143
F.Supp.2d 1044, 1048-49 (E.D. Wis. 2001).
this methodology, the court finds that a stay is proper.
First, in light of the defendants' subject matter
jurisdiction arguments, “removal was not plainly
improper.” See Leeson, 2006 WL 3230047, at *3.
Defendants removed this case to federal court, arguing
plaintiffs' state law claims necessarily require the
resolution of substantial federal law issues. Federal
question jurisdiction exists over state law claims “if
a federal issue is: (1) necessarily raised, (2) actually
disputed, (3) substantial, and (4) capable of resolution in
federal court without disrupting the federal-state balance
approved by Congress.” Gunn v. Minton, 133
S.Ct. 1059, 1065 (2013) (citing Grable & Sons Metal
Prods., Inc. v. Darue Eng'g & Mfg., 545 U.S.
308, 314 (2008)).
a claim can be supported by alternative and independent
theories--one of which is a state law theory and one of which
is a federal law theory--federal question jurisdiction does
not attach because federal law is not a necessary element of
the claim.” Rains v. Criterion Sys., Inc., 80
F.3d 339, 346 (9th Cir. 1996). Some of plaintiffs' claims
do not necessarily raise federal law questions. Plaintiffs
allege, for example, that defendants violated the UCL by
violating federal and state emissions laws. (Compl. ¶
90.) Thus, the UCL claim may, but does not necessarily, turn
on federal law issues. However, it is not plainly clear from
the Complaint that there are theories for each claim that do
not necessarily require resolution of a federal law issue.
the entire action arose out of the EPA's notice of
violation by defendants for their use of “defeat
devices.” (Id. ¶¶ 1-2.) The
Complaint repeatedly alleges that defendants sold vehicles
exceeding emissions standards using “defeat
devices”--a term defined by federal law--which is a
substantial issue in this litigation. See 40 C.F.R. §
1045.115(g) (“A defeat device is an auxiliary emission
control device that reduces the effectiveness of emission
controls under conditions that the engine may reasonably be
expected to encounter during normal operation and
use.”). The Complaint also specifically incorporates
many portions of the amended consolidated consumer class
action complaint in the MDL court, further complicating this
jurisdictional issue. (See Compl. ¶ 1.) Lastly,
defendants argue ...