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Ramirez v. Samsung Electronics America, Inc.

United States District Court, C.D. California

August 26, 2019

DANIEL RAMIREZ, Plaintiff,
v.
SAMSUNG ELECTRONICS AMERICA, INC., et al., Defendants.

          ORDER Re: MOTION TO REMAND

          Fernando M. Olguin United States District Judge

         Having reviewed and considered all the briefing filed with respect to plaintiff Daniel Ramirez's (“plaintiff”) Motion to Remand and for Attorney's Fees and Costs (Dkt. 27, “Motion”), the court concludes that oral argument is not necessary to resolve the Motion, see Fe d. R. Civ. P. 78; Local Rule 7-15; Willis v. Pac. Mar. Ass'n, 244 F.3d 675, 684 n. 2 (9th Cir. 2001), and concludes as follows.

         BACKGROUND

         The instant case was first removed to this court nearly two years ago. See Ramirez v. Samsung Electronics Am., Inc., Case No. 17-7684 FMO (RAOx) (C.D. Cal. 2017) (“Ramirez I”). Ramirez I involved a lawsuit between plaintiff and a number of Samsung entities. (See Ramirez I, Dkt. 1-1, Complaint at ¶¶ 3-20). Among the entities plaintiff sued in the Los Angeles County Superior Court were two California companies, Samsung SDI America, Inc. (“SDIA”), and Samsung C&T America, Inc. (“C&T”). (See id. at ¶¶ 5, 13). Plaintiff is himself a citizen of California. (See id. at ¶ 2).

         In Ramirez I, defendant Samsung Electronics America, Inc. (“SEA”), removed on the basis of diversity of citizenship. (See Ramirez I, Dkt. 1, Notice of Removal at ¶ 9). To support removal in Ramirez I, SEA argued that SDIA and C&T were sham defendants. (See id. at ¶¶ 15-16). However, the court rejected SEA's argument, and remanded the matter back to state court. (Ramirez I, Dkt. 43, Court's Order of November 27, 2017, at 7).

         After litigating in state court for a number of months, defendant Samsung Electronics Co., Ltd. (“SEC”) removed the instant action from the state court for the second time. (See Dkt. 1, Notice of Removal (“NOR”) at ECF 2).

         LEGAL STANDARD

         “Federal courts are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute[.]” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 1675 (1994). The courts are presumed to lack jurisdiction unless the contrary appears affirmatively from the record. See DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 n. 3, 126 S.Ct. 1854, 1861 (2006). Federal courts have a duty to examine jurisdiction sua sponte before proceeding to the merits of a case, see Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583, 119 S.Ct. 1563, 1569 (1999), “even in the absence of a challenge from any party.” Arbaugh v. Y & H Corp., 546 U.S. 500, 514, 126 S.Ct. 1235, 1244 (2006).

         In general, “any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court[.]” 28 U.S.C. § 1441(a). A removing defendant bears the burden of establishing that removal is proper. See 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.”) (internal quotation marks omitted); Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676, 684 (9th Cir. 2006) (per curiam) (noting the “longstanding, near-canonical rule that the burden on removal rests with the removing defendant”). Moreover, if there is any doubt regarding the existence of subject matter jurisdiction, the court must resolve those doubts in favor of remanding the action to state court. See Gaus, 980 F.2d at 566 (“Federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance.”). Indeed, “[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c); see Kelton Arms Condo. Owners Ass'n, Inc. v. Homestead Ins. Co., 346 F.3d 1190, 1192 (9th Cir. 2003) (“Subject matter jurisdiction may not be waived, and, indeed, we have held that the district court must remand if it lacks jurisdiction.”); Washington v. United Parcel Serv., Inc., 2009 WL 1519894, *1 (C.D. Cal. 2009) (a district court may remand an action where the court finds that it lacks subject matter jurisdiction either by motion or sua sponte).

         DISCUSSION

         This case was commenced in the state court on October 16, 2017. (See Ramirez I, Dkt. 1-1, Complaint at ECF 12). Title 28 U.S.C. § 1446(c) provides that “[a] case may not be removed under subsection (b)(3) on the basis of jurisdiction conferred by section 1332 more than 1 year after commencement of the action, unless the district court finds that the plaintiff has acted in bad faith in order to prevent a defendant from removing the action.”

         Because SEC removed the instant action “more than 1 year after commencement of the action, ” 28 U.S.C. § 1446(c), it argues that plaintiff engaged in “bad faith manipulation of his pleadings” to prevent an earlier removal. (Dkt. 1, NOR at ¶ 32). Specifically, it argues that SDIA and C&T - who are named as defendants in the operative second amended complaint (“SAC”), (see Dkt. 4-49, SAC at ¶¶ 8, 13) - “were fraudulently joined as sham defendants in Plaintiff's bad faith attempt to defeat diversity jurisdiction.” (Dkt. 1, NOR at ¶ 26). As proof, it points to the fact that the state court granted summary judgment against both SDIA and C&T. (See i d. at ¶¶ 15-16, 32). SEC also notes that plaintiff “voluntarily submitted a request for dismissal as to SDIA twelve days after the one-year anniversary of the filing of the initial Complaint, ” and also declined to mount a defense against the summary judgment motion directed at SDIA. (Id. at ¶ 34). Finally, SEC contends that plaintiff “failed to take any meaningful discovery against [C&T] other than to send basic written discovery that provided the same information originally provided to this Court by” two declarations. (Id. at ¶ 35).

         “The bad faith exception, as distinct from the doctrine of fraudulent joinder, applies to plaintiffs who joined - and then, after one year, dismissed - defendants whom they could keep in the suit, but that they did not want to keep in the suit, except as removal spoilers.” Heller v. Am. States Ins. Co., 2016 WL 1170891, *2 (C.D. Cal. 2016) (alterations, emphasis, and internal quotation marks omitted). The court is unpersuaded that SEC has “met [its] burden of showing Plaintiff acted in bad faith to prevent removal.” Jones v. Ramos Trinidad, 380 F.Supp.3d 516, 523 (E.D. La. 2019). To begin with, the mere fact that plaintiff assented to dismissal of SDIA 12 days after the action's one-year anniversary, (see Dkt. 1, NOR at ¶ 34), does not establish plaintiff's bad faith. See, e.g., Stroman v. State Farm Fire & Cas. Co., 2019 WL 1760588, *3 (W.D. Wash. 2019) (noting that “courts have also found that the dismissal of a non-diverse defendant thirteen days after the commencement of the action insufficient to signify that the plaintiff acted in bad faith[], ” and concluding that “the dismissal of [non-diverse defendant] one year and two days after the commencement of the state court action, by itself, does not establish Plaintiffs' alleged bad faith in preventing removal”) (citing Weber v. Ritz Carlton Hotel Co., 2018 WL 4491210, *4 (N.D. Cal. 2018)). Moreover, as plaintiff explains, he consented to dismissal of SDIA because “discovery revealed that SDIA was not involved in the design, manufacture, or distribution of the Samsung S7 Edge or its lithium-ion battery[.]” (Dkt. 27, Motion at 7).

         Beyond this, defendants' argument that SDIA and C&T were added to this action in bad faith is seriously undermined by the court's conclusion in Ramirez I that neither was a sham defendant. (See Ramirez I, Dkt. 43, Court's Order of November 27, 2017). Indeed, the court explicitly found that “[e]ven assuming [SDIA and C&T] did not provide the battery or phone at issue, plaintiff has still alleged a colorable claim against them.” (Id. at 3) (internal citation omitted). Even though SDIA and C&T were later dismissed on “summary judgment after the benefit of discovery, ” it is not clear to the court why it should disturb its earlier holding, ...


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