United States District Court, C.D. California
Jared Hawkins, et al.
Ford Motor Company, et al.
Present: The Honorable PERCY ANDERSON, UNITED STATES DISTRICT
CIVIL MINUTES - GENERAL
CHAMBERS - COURT ORDER
Court is in receipt of a Notice of Removal filed by defendant
Ford Motor Company (“Ford”). In the Notice of
Removal, Ford asserts that this Court has jurisdiction over
the action brought against it and Vista Ford Lincoln of
Oxnard (“Vista Ford”) by plaintiffs Jared Hawkins
and Michael Hawkins (“Plaintiffs”) 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, 114 S.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., 167 F.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, “[a]t the time of the filing
of this action and the filing of this Notice of Removal,
Defendant FORD MOTOR COMPANY is incorporated in and a citizen
of Delaware. Defendant FORD MOTOR COMPANY is also
incorporated in and a citizen of Michigan, with a Principal
Place of Business in Dearborn, Michigan. As such, Defendant
FORD MOTOR COMPANY is not a citizen of California, but a
citizen of Delaware and Michigan. Vista Ford Lincoln of
Oxnard, upon information and belief, is a citizen of the
State of California, but it has no real interest in this
matter as it is being indemnified by FORD MOTOR COMPANY.
Further, there is no cause of action pleaded in the Complaint
that is directed to the dealership. As a consequence, Vista
Ford Lincoln of Oxnard is fraudulently joined and/or is a
nominal defendant for the purposes of diversity
analysis.” (Notice of Removal ¶ 5.)
Ninth Circuit has recognized an exception to the complete
diversity requirement where a non-diverse defendant has been
“fraudulently joined.” 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.” Plute
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.” Plute, 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 (C.D. 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, which contains no legal authority for
the proposition that one defendant's willingness to
indemnify a local and diversity-destroying defendant renders
that defendant a nominal or fraudulently joined party, this
Court cannot conclude that Vista Ford is fraudulently joined.
Nor can the Court conclude on this record that Plaintiffs
would not be afforded leave to amend their complaint to state
a viable claim against Vista Ford. Defendants have therefore
failed to meet their burden to have this Court ignore the
citizenship of Vista Ford, and the Court accordingly
concludes that Ford has not established that the citizenship
of Vista Ford is diverse from Plaintiffs' citizenship.
of the foregoing reasons, Ford has failed to meet its burden
to demonstrate the Court's diversity jurisdiction.
Accordingly, the Court remands this action to Los Angeles