United States District Court, C.D. California
Present The Honorable MICHAEL W. FITZGERALD, U.S. District
Judge Deputy Clerk: Court Reporter:
(In Chambers): ORDER RE PLAINTIFF'S MOTION TO
the Court is Plaintiff's Motion to Remand, filed on July
10, 2017. (Docket No. 26). On August 8, 2017, Defendants
Medalist Holdings, Inc., Leeward Holdings, LLC, Camarillo
Holdings, LLC, Dartmoor Holdings, LLC, IC Holdings, LLC,
Backpage.com, LLC, New Times Media, LLC, UGC Tech Group C.V.,
Atlantische Bedrijven C.V., Carl Ferrer, James Larkin, and
Michael Lacey (collectively, the “Backpage
Defendants”) filed an Opposition (Docket No. 32-1), and
on August 14, 2017, Plaintiff filed a Reply (Docket No. 36).
On August 28, 2017, the Court held a hearing on
reasons set forth below, Plaintiff's Motion is
GRANTED. In short, Plaintiff did not
“fraudulently join” or “procedurally
misjoin” non-diverse Defendant Reson Tredon Richard,
and the Court thus lacks diversity jurisdiction over this
January 25, 2017, Plaintiff filed a Complaint against the
Backpage Defendants (minus Atlantische Bedrijven C.V.) and
John Doe defendants in the Riverside County Superior Court.
(Complaint, Docket No. 1-1 at 2-28). The crux of
Plaintiff's Complaint was that Plaintiff was “a
minor girl who was sold for sex on the website
www.backpage.com, ” and that the Backpage Defendants
“knowingly created an online marketplace for sex
trafficking on www.backpage.com, and then helped sex
traffickers create and develop their sex ads so the
Backpage.com defendants could profit from the ads.”
(Id. ¶ 1.1). Plaintiff asserted the following
state law claims against the Backpage Defendants: negligence;
intentional infliction of emotional distress; assault and
battery; unjust enrichment; invasion of privacy; and civil
conspiracy. (Id. ¶¶ 5.1 - 5.32).
February 10, 2017, Plaintiff filed a First Amended Complaint
(“FAC”) in the Superior Court. (FAC, Docket No.
1-1 at 98-127). Among other changes, Plaintiff added
Atlantische Bedrijven C.V. as a defendant. (FAC ¶ 2.13).
Plaintiff alleged that each of the Backpage Defendants (now
including Atlantische Bedrijven C.V.) “owned, operated,
designed and controlled the [www.backpage.com] website,
including its content, ” and “profited from the
website …, including sex ads posted of [Plaintiff] and
other women and children, even though [they] knew those
profits were derived from illegal conduct.”
(Id. ¶¶ 2.5 - 2.16). Plaintiff also added
Richard as a defendant, alleging that he knew that Plaintiff
was a minor yet “engaged in communications with
[Plaintiff] for immoral purposes, took illicit photographs of
[Plaintiff], posted illicit photographs of [Plaintiff] on
www.backpage.com, and actively solicited adults to have sex
with Plaintiff … by posting sex ads for [Plaintiff] on
www.backpage.com.” (Id. ¶ 2.21).
Plaintiff alleged that Richard paid the Backpage Defendants
“a fee in order to advertise [Plaintiff] for sex on
www.backpage.com, ” in exchange for which the Backpage
Defendants “ ‘moderated' each ad of
[Plaintiff] to make it less obvious that the ads were for
sex” and “then posted a sanitized version of each
add on www.backpage.com.” (Id. ¶¶
and Richard are California residents. (Declaration of Devin
M. Storey (Docket No. 26-2) ¶ 10; AC ¶ 2.21). The
Backpage Defendants are variously domiciled in Delaware,
Arizona, Texas, the Netherlands, and Curacao. (AC
¶¶ 2.5-2.16; Notice of Removal (“NoR”)
(Docket No. 1) ¶¶ 9, 26-62). The Backpage
Defendants removed the action to this Court on June 23, 2017,
within 30 days of service upon Atlantische Bedrijven C.V.
(NoR ¶¶ 6, 7, 17-19). In removing this action, the
Backpage Defendants invoke this Court's diversity
jurisdiction, arguing that Richard was
“procedurally” and/or “fraudulently”
misjoined and that his presence in the action should thus be
disregarded for purposes of diversity jurisdiction analysis.
(Id. ¶¶ 63-77).
parties acknowledge, the threshold requirement for removal
under 28 U.S.C. § 1441 is a “finding that the
complaint . . . is within the original jurisdiction of the
district court.” Ansley v. Ameriquest Mortgage
Co., 340 F.3d 858, 861 (9th Cir. 2003). Federal question
jurisdiction is not asserted and the jurisdictional amount is
not in doubt. The issue, then, is whether Richard defeats
complete diversity, specifically whether he is misjoined in
strong presumption against removal jurisdiction means that
the defendant always has the burden of establishing that
removal is proper, and that the court resolves all ambiguity
in favor of remand to state court.” Hunter,
582 F.3d at 1042 (internal quotation marks and citation
exception to the complete-diversity rule recognized by the
Ninth Circuit “‘is where a non-diverse defendant
has been ‘fraudulently joined.'” Id.
(quoting Morris v. Princess Cruises, Inc., 236 F.3d
1061, 1067 (9th Cir. 2001)). The joinder is considered
fraudulent “[i]f 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 . . .
.” Id. (quoting Hamilton Materials, Inc.
v. Dow Chemical Co., 494 F.3d 1203, 1206 (9th Cir.
2007)). A removing defendant must “prove that
individuals joined in the action cannot be liable on any
theory.” Ritchey v. Upjohn Drug Co., 139 F.3d
1313, 1318 (9th Cir. 1998).
defendants face a heavy burden in establishing that removal
is appropriate, a court determining whether joinder is
fraudulent “must resolve all material ambiguities in
state law in plaintiff's favor.” Macey v.
Allstate Property and Cas. Ins. Co., 220 F.Supp.2d 1116,
1117 (N.D. Cal. 2002) (citing Good v. Prudential Ins. Co.
of America, 5 F.Supp.2d 804, 807 (N.D. Cal. 1998)).
“If there is a non-fanciful possibility that plaintiff
can state a claim under [state] law against the non-diverse
defendant[, ] the court must remand.” Id.;
see also Good, 5 F.Supp.2d at 807 (“[T]he
defendant must demonstrate that there is no possibility that
the plaintiff will be able to establish a cause of action in
State court against the alleged sham defendant.”).
Given this standard, “[t]here is a presumption ...