United States District Court, C.D. California
Present: The Honorable PERCY ANDERSON, UNITED STATES DISTRICT
CIVIL MINUTES - GENERAL
IN CHAMBERS - COURT ORDER
Court is in receipt of a Notice of Removal filed by defendant
Ford Motor Company ("Ford"). According to the
Notice of Removal, defendant South Bay Ford, Inc.
("South Bay Ford") has joined in the Notice of
Removal. In the Notice of Removal, Ford and South Bay Ford
(collectively "Defendants") assert that this Court
has jurisdiction over the action brought against them by
plaintiff Eric Amis ("Plaintiff) based on the
Court's diversity jurisdiction. See 28 U.S.C.
courts are courts of limited jurisdiction, having subject
matter jurisdiction only over matters authorized by the
Constitution and Congress. See, e.g., Kokkonen
v. Guardian Life Ins. Co., 511 U.S. 375, 377, H4S.Ct.
1673, 1675, 128 L.Ed.2d 391 (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). A removed action must be remanded to state
court if the federal court lacks subject matter jurisdiction.
28 U.S.C. § 1447(c). "The burden of establishing
federal jurisdiction is on the party seeking removal, and the
removal statute is strictly construed against removal
jurisdiction." Prize Frize, Inc. v. Matrix (U.S.)
Inc., l67F.3d 1261, 1265 (9th Cir. 1999). "Federal
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).
attempting to invoke this Court's diversity jurisdiction,
Defendants must prove that there is complete diversity of
citizenship between the parties and that the amount in
controversy exceeds $75, 000. 28 U.S.C. § 1332. To
establish citizenship for diversity purposes, a natural
person must be a citizen of the United States and be
domiciled in a particular state. Kantor v. Wellesley
Galleries, Ltd., 704 F.2d 1088, 1090 (9th Cir. 1983).
Persons are domiciled in the places they reside with the
intent to remain or to which they intend to return. See
Kanter v. Warner-Lambert Co., 265 F.3d 853, 857 (9th
Cir. 2001). "A person residing in a given state is not
necessarily domiciled there, and thus is not necessarily a
citizen of that state." Id. For the purposes of
diversity jurisdiction, a corporation is a citizen of any
state where it is incorporated and of the state where it has
its principal place of business. 28 U.S.C. § 1332(c);
see also Indus. Tectonics, Inc. v. Aero Alloy, 912
F.2d 1090, 1092 (9th Cir. 1990).
to the Notice of Removal, "Ford contends that Plaintiff
fraudulently joined South Bay Ford in this case for no reason
other than to defeat diversity jurisdiction and prevent
removal of the action to federal court." (Notice of
Removal ¶ 24.) In support of this allegation, Defendants
Plaintiff has not alleged a single cause of action against
South Bay Ford. Each of the causes of action alleged by
Plaintiff either identifies no defendant at all or the cause
of action is specifically pled "Against Ford Only."
Ford believes that Plaintiff has no intention of pursuing any
claim against South Bay Ford, and that South Bay Ford was
only named to defeat the claim of diversity and removal to
Federal Court, due to the fact that Ford has recently sought
an MDL within the Federal Court, which was recently ordered.
(Notice of Removal ¶ 25.) The Ninth Circuit has
recognized an exception to the complete diversity requirement
where a non-diverse defendant has been
"fraudulentlyjoined." Morris v. Princess
Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2001). If a
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). If the Court
finds that the joinder of a non-diverse defendant is
fraudulent, that defendant's presence in the lawsuit is
ignored for the purposes of determining diversity. See,
e.g., Morris, 236 F.3d at 1067.
is a presumption against finding fraudulent joinder, and
defendants who assert that plaintiff has fraudulently joined
a party carry a heavy burden of persuasion." Piute
v. Roadway Package Sys., Inc., 141 F.Supp.2d 1005, 1008
(N.D. Cal. 2001). A claim of fraudulent joinder should be
denied if there is any possibility that the plaintiff may
prevail on the cause of action against the in-state
defendant. See id. at 1008, 1012. "The standard
is not whether plaintiffs will actually or even probably
prevail on the merits, but whether there is a possibility
that they may do so." Lieberman v. Meshkin,
Mazandarani, No. C-96-3344 SI, 1996 WL 732506, at *3
(N.D. Cal. Dec. 11, 1996); see also Good v. Prudential
Ins. Co. of Am., 5 F.Supp.2d 804, 807 (N.D. Cal. 1998)
("[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."). "In determining whether a defendant
was joined fraudulently, the court must resolve 'all
disputed questions of fact and all ambiguities in the
controlling state law in favor of the non-removing
party." Piute, 141 F.Supp.2d at 1008 (quoting
Dodson v. Spiliada, 951 F.2d 40, 42-43 (5th Cir.
1992)). A court should remand a case "unless the
defendant shows that the plaintiff 'would not be afforded
leave to amend his complaint to cure [the] purported
deficiency'" Padilla v. AT&T Corp., 697
F.Supp.2d 1156, 1159 (CD. Cal. 2009) (quoting Burris v.
AT&T Wireless, Inc., No. C 06-02904 JSW, 2006 WL
2038040, at *2 (N.D. Cal. July 19, 2006)).
least on this record, this Court cannot conclude that
Plaintiff would not be afforded leave to amend his Complaint
to state a viable claim against South Bay Ford. Defendants
have therefore failed to meet their burden to establish that
South Bay Ford is fraudulently joined, and the Court will not
ignore its citizenship for purposes of evaluating whether
diversity jurisdiction exists. Because the Court cannot
ignore the citizenship of South Bay Ford, the Court concludes
that Ford has not established that the citizenship of South
Bay Ford is diverse from Plaintiff.
of the foregoing reasons, Defendants have failed to meet
their burden to demonstrate the Court's diversity
jurisdiction. Accordingly, the Court remands this action to
Los Angeles ...