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Soto v. Tristar Products, Inc.

United States District Court, C.D. California

November 9, 2017

Wendy M. Soto
v.
Tristar Products, Inc., et al.

          Present: The Honorable MICHAEL W. FITZGERALD, U.S. District Judge Deputy Clerk: Court Reporter:

          CIVIL MINUTES-GENERAL

         Proceedings (In Chambers): ORDER RE PLAINTIFF'S MOTION TO REMAND [12]

         Before the Court is Plaintiff's Motion to Remand, filed on September 28, 2017. (Docket No. 12). On October 6, 2107, Defendants Tristar Products, Inc. (“Tristar”), Costco Wholesale Corporation (“Costco Wholesale”), and Costco Wholesale Membership, Inc. (“Costco Membership”) (Costco Wholesale and Costco Membership, together the “Costco Defendants”) filed an Opposition. (Docket No. 24). On October 16, 2017, Plaintiff filed a Reply. (Docket No. 27). The Court held a hearing on October 30, 2017.

         For the reasons set forth below, Plaintiff's Motion is GRANTED. Defendants have not established that Costco Membership was fraudulently joined, “fraudulent” being used here in its technical jurisdictional sense. Specifically, it is not clear under settled California law that Costco Membership could not be jointly and severally liable for Plaintiff's alleged injuries in connection with Plaintiff's strict products liability claim. Absent unambiguous and controlling state law indicating that it could not, which Defendants have not presented, the Court must resolve all doubts in favor of remand.

         I. BACKGROUND

         On July 21, 2017, Plaintiff filed a Complaint against Defendants in the Santa Barbara County Superior Court. (Complaint, Docket No. 1-1). The crux of Plaintiff's Complaint is that, on January 18, 2017, “Plaintiff was using a Tristar Power Pressure Cooker XL [the “Pressure Cooker”], which was purchased from the Costco [Defendants], when the Pressure Cooker malfunctioned and caused severe, permanent and disfiguring burns to Plaintiff's body.” (Id. ¶ 8). Plaintiff asserted negligence, strict products liability, and breach of implied warranty claims against all Defendants. (Id. ¶¶ 9-38). Though the Complaint did not specify a dollar amount, Plaintiff alleged that she “sustained extensive economic and non-economic damages, physical injuries, past and future medical expenses, past and future and severe and ongoing emotional distress and pain and suffering, and other such damages, all in an amount to be proven at trial.” (Id. ¶¶ 18, 32).

         Plaintiff is a California resident. (Id. ¶ 1). Tristar is incorporated in Pennsylvania with its principal place of business in New Jersey. (Id. ¶ 2; Declaration of Pamela Ferguson (“Ferguson Decl.”) (Docket No. 1-6) ¶ 2). Costco Wholesale is incorporated in Washington with its principal place of business in Washington. (Complaint ¶ 3; Ferguson Decl. ¶ 3). Costco Membership is incorporated in California. (Complaint ¶ 4; Notice of Removal (“NoR”) (Docket No. 1) ¶ 26).

         On August 29, 2017, Defendants removed the action to this Court. Defendants invoked this Court's diversity jurisdiction, arguing that “Costco Membership's presence in the case does not defeat diversity jurisdiction because it was fraudulently joined.” (NoR ¶ 27). According to Defendants, Costco Membership “cannot be a properly joined defendant here, where Plaintiff alleges negligence, strict products liability, and warranty claims arising from her alleged purchase and use of the pressure cooker” because it “is in business to collect membership fees paid by individuals and entities who wish to be members of Costco Wholesale…” and “has no role in Costco [Wholesale's] purchases, sales, or business operations…” (Id. ¶ 31). The instant Motion followed.

         In connection with its Opposition, Defendants submitted the Declaration of Zois Johnston (“Johnston Decl.”), a claims manager employed by Costco Wholesale, which provides, in pertinent part:

• Costco Membership “is in business solely to collect membership fees paid by individuals and entities who wish to be members of Costco Wholesale…, which is in the business of operating warehouse-retail membership establishments throughout the United States…”
• “Costco Membership does not engage in purchases, sales, or operations conducted by Costco Wholesale…”
• “As a Costco Membership member, an individual gains access to Costco Wholesale locations, as well as optometrists, pharmacists, photography services, travel services, insurance services, and other services… A Costco Membership member pays a fee to have access to all of the services Costco Membership provides. Costco Membership's only financial benefit comes from its membership fees.”
• “Costco Membership does not engage in any marketing activities for any products sold at Costco Wholesale…”
• Costco Membership did not design, manufacture, purchase, or sell the Pressure Cooker that allegedly injured Plaintiff, and does not have any ...

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