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Covarrubias v. Ford Motor Co.

United States District Court, N.D. California

July 3, 2019

FORD MOTOR COMPANY, et al., Defendants.



         In 2012, Plaintiff Alexis Covarrubias (“Plaintiff”) purchased a vehicle manufactured by Ford Motor Company (“Ford”) from Citrus Motors Ontario Inc. (“Citrus Motors”), a Ford dealership. The vehicle was covered by Ford's express written warranty. The vehicle developed defects during the warranty period that Ford and Citrus Motors could not repair, and Ford did not replace the vehicle or make restitution to Plaintiff. Plaintiff filed suit against both Ford and Citrus Motors (collectively, “Defendants”) in state court, asserting five claims against Ford and one claim, for breach of the implied warranty of merchantability, against Citrus Motors. Defendants then removed the action to this Court, alleging that Plaintiff had fraudulently joined Citrus Motors in this case for no reason other than to defeat federal diversity jurisdiction.

         Currently before the Court is Plaintiff's motion to remand the case to state court. Docket No. 13 (“Mot.”). Because Ford has met its heavy burden of showing that Citrus Motors was fraudulently joined, and the amount-in-controversy requirement for diversity jurisdiction is met, the Court DENIES the motion to remand.

         I. BACKGROUND

         Plaintiff's state court complaint alleges that on June 28, 2012, she purchased a 2012 Ford F-150 vehicle (the “Vehicle”) from Citrus Motors. Docket No. 1-1 (“Compl.”) ¶ 8. In connection with the purchase, Plaintiff received an express 3-year/36, 000 mile bumper-to-bumper warranty and a 5-year/60, 000 mile powertrain warranty from Ford. Id. ¶ 9. Under the warranty, Ford undertook to maintain the utility or performance of the Vehicle or to provide compensation if there is a failure in utility or performance. Id. If the Vehicle developed a defect and Plaintiff presented the Vehicle to Ford's representative, the representative would repair the defect. Id.

         Plaintiff's Vehicle developed numerous defects during the warranty period that substantially impaired the use, value, or safety of the Vehicle, including defects related to the engine, transmission, and electrical system. Id. ¶ 10. Ford and its representatives “have been unable to service or repair the Vehicle to conform to the applicable express warranties after a reasonable number of opportunities.” Id. ¶ 11. Despite this, Ford did not “promptly replace the Vehicle or make restitution to Plaintiff.” Id.

         On February 25, 2019, Plaintiff filed her complaint against Defendants in the Santa Clara Superior Court. The complaint asserts various causes of action against Ford, including breach of implied warranty in violation of the Song-Beverly Consumer Warranty Act (“Song-Beverly Act”), Cal. Civ. Code § 1790, et seq. See Id. ¶¶ 8-33. The same cause of action for breach of implied warranty is the only claim asserted against Citrus Motors. See Id. ¶¶ 29-33.

         On April 4, 2019, Defendants filed a notice of removal on the basis of diversity jurisdiction. Docket No. 1 at 1. The notice of removal alleges that there is complete diversity of the parties because Plaintiff is a citizen of California and Ford is a citizen of Michigan and Delaware. Id. ¶¶ 18-19. Ford claims that the California citizenship of Citrus Motors does not defeat diversity because Plaintiff named Citrus Motors as a defendant for the sole purpose of preventing removal. Id. ¶ 21. Ford further alleges that the amount in controversy exceeds $75, 000 based upon the allegations in Plaintiff's complaint. Id. ¶¶ 10-17.

         Plaintiff moved to remand this case to state court on May 10, 2019. See Mot. Defendants oppose the motion. See Docket No. 15 (“Opp.”).


         A defendant may remove “any civil action brought in a State court of which the district courts . . . have original jurisdiction.” 28 U.S.C. § 1441(a). District courts have original jurisdiction over civil actions between citizens of different states in which the amount in controversy exceeds $75, 000. Id. § 1332(a)(1). To properly invoke diversity jurisdiction, the defendant bears the burden of proving that the parties in the action are completely diverse, i.e., that “each plaintiff [is] of a different citizenship from each defendant.” Grancare, LLC v. Thrower by & through Mills, 889 F.3d 543, 548 (9th Cir. 2018).

         The removal statutes are strictly construed against removal. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). “The 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 v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009) (citation and internal quotation marks omitted). If a defendant improperly removes a case over which the federal court lacks diversity jurisdiction, the federal court must remand the case to state court. 28 U.S.C. § 1447(c).

         Although the removing party must establish complete diversity, “fraudulently joined defendants will not defeat removal on diversity grounds.” Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1318 (9th Cir. 1998). “The term ‘fraudulent joinder' is a term of art, used for removal purposes, and does not connote any intent to deceive on the part of plaintiff or his counsel.” Plute v. Roadway Package Sys., Inc., 141 F.Supp.2d 1005, 1008 n.2 (N.D. Cal. 2001). The Ninth Circuit has recently clarified that there are two ways to establish fraudulent joinder:

(1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against the non-diverse party in state court. Fraudulent joinder is established the second way if a defendant shows that an individual joined in the action cannot be liable on any theory. But if there is a possibility that a state court would find that the complaint states a cause of action against any of the resident ...

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