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Garcia v. Ford Motor Co.

United States District Court, E.D. California

July 22, 2019

FORD MOTOR COMPANY; DOWNTOWN FORD SALES; and DOES 1 through 10, inclusive Defendants.



         On January 22, 2019, Ralph and Sandra Garcia (“Plaintiffs”) filed a suit against Ford Motor Company and Downtown Ford Sales (collectively “Defendants”) in Sacramento Superior Court. Plaintiffs claimed Defendants committed fraud and violated several provisions of California's “Song-Beverly Act, ” Cal. Civ. Code § 1790, et seq. See generally Compl., ECF No. 1-1.

         Defendants received a copy of Plaintiffs' complaint on January 31, 2019 and filed a timely notice of removal on March 4, 2019. ECF No. 1. See also 28 U.S.C. § 1446(b); Fed. R. Civ. Proc. 6(a). The notice invoked the Court's diversity jurisdiction, arguing (1) the Court should dismiss Downtown Ford as fraudulently joined; (2) the Court should dismiss Downtown Ford under Rule 21 even if the fraudulent-joinder doctrine does not apply; and (3) the amount in controversy exceeds $ 75, 000. Notice of Removal ¶¶ 3-8. In response, Plaintiffs filed a motion to remand. Mot. to Remand (“Mot.”), ECF No. 5.[1]

         For the reasons set forth below, the Court finds that Defendants failed to show Plaintiffs fraudulently joined Downtown Ford. Furthermore, the Court declines to dismiss Downtown Ford under Rule 21 of the Federal Rules of Civil Procedure. As a result, Downtown Ford defeats Defendants' claims of diversity jurisdiction under 28 U.S.C. § 1332(a) and prevents removal under 28 U.S.C. § 1441(b)(2). Because Defendants did not show they satisfied Section 1332's diversity requirement, the Court need not address the amount-in-controversy issue. The Court GRANTS Plaintiffs' motion to remand.


         Plaintiffs bought a 2013 Ford Edge “in or about March 2013.” Compl. at ¶ 8. Downtown Ford, a California dealership, sold Plaintiffs the vehicle. Compl. ¶¶ 5, 8. Ford Motor, a corporation incorporated in Delaware with a principal place of business in Michigan, manufactured and/or distributed the vehicle. Compl. ¶ 8. See also Notice of Removal ¶ 18.

         Plaintiffs' newly-purchased vehicle included a 3-year/36, 000-mile express bumper-to-bumper warranty and a 5-year/60, 000-mile powertrain warranty. Compl. ¶ 9. During the warranty Plaintiff's vehicle displayed several defects. Compl. ¶ 10. On multiple occasions, Plaintiffs brought the defects to Defendants' attention and requested repairs. Compl. ¶¶ 14, 26. Defendants, nevertheless, failed to conform the vehicle to the applicable warranties, replace the vehicle, or provide restitution. Compl. ¶¶ 14, 18.

         II. OPINION

         A. Fraudulent Joinder

         1. Legal Standard

         For a defendant to remove a civil case from state court, he must prove the federal court has original jurisdiction over the suit. 28 U.S.C. § 1441. A federal court may exercise jurisdiction over a case involving purely state law claims when there is complete diversity between the parties and an amount in controversy exceeding $ 75, 000. 28 U.S.C. § 1332(a). To satisfy Section 1332's diversity requirement, no plaintiff may be a citizen of the same state as any defendant. Id. When a case is removed on the basis diversity jurisdiction, no defendant may be a citizen of the state where Plaintiff brought the suit. 28 U.S.C. § 1441(b)(2).

         A court will dismiss a fraudulently-joined defendant and disregard its citizenship when determining whether the parties are diverse. McCabe v. General Foods Corp., 811 F.2d 1336, 1339 (9th Cir. 1986). A joinder is fraudulent when (1) there is actual fraud in the pleading of jurisdictional facts; or (2) a plaintiff cannot establish a cause of action against the non-diverse party in state court. Id. Courts do not often find joinder fraudulent-the burden of persuasion is high and rests squarely on defendants' shoulders. Grancare, LLC v. Thrower by and through Mills, 889 F.3d 543, 548 (9th Cir. 2018). A court resolves “all disputed questions of fact and all ambiguities in the controlling state law . . . in the plaintiff's favor.” Warner v. Select Portfolio Servicint, et al., 193 F.Supp.3d 1132, 1135 (C.D. Cal. 2016). After which, it must “appear to near certainty” that joinder was fraudulent. Diaz v. Allstate Insur. Group, 185 F.R.D. 581, 586 (C.D. Cal. 1998).

         When a defendant adopts the second approach to showing fraudulent joinder, he must prove plaintiff “fail[ed] to state a cause of action against a resident defendant . . . [that] is obvious according to the settled rules of the state.” Hunter v. Philip Morris USA, 582 F.3d 1039, 1043-44 (9th Cir. 2008). Courts do not take this obviousness requirement lightly. If there is even a “possibility” that a state court would find that the complaint states a cause of action against any of the [non-diverse] defendants, ” a federal court “must find the defendant properly joined and remand the case to state court.” Grancare, LLC, 889 F.3d at 549 (emphasis and modification in original). In this sense, the test for fraudulent joinder differs from the test that governs a Rule 12(b)(6) motion to dismiss. Id. The Ninth Circuit recently highlighted this difference:

If a plaintiff's complaint can withstand a Rule 12(b)(6) motion with respect to a particular defendant, it necessarily follows that the defendant has not been fraudulently joined. But the reverse is not true. If a defendant cannot withstand a Rule 12(b)(6) motion, the fraudulent inquiry does not end there . . . . [T]he district court must consider . . . whether ...

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