Avellanet v. FCA U.S. LLC

          PRESENT: HONORABLE JOHN F. WALTER, UNITED STATES DISTRICT JUDGE

          CIVIL MINUTES--GENERAL

         PROCEEDINGS (IN CHAMBERS): ORDER GRANTING PLAINTIFF'S MOTION FOR REMAND TO LOS ANGELES COUNTY SUPERIOR COURT [filed 9/24/19; Docket No. 11]

         On September 24, 2019, Plaintiff Robert Avellanet (“Plaintiff”) filed a Motion for Remand to Los Angeles County Superior Court (“Motion”). On October 7, 2019, Defendant FCA U.S. LLC (“FCA”) filed its Opposition. Plaintiff did not file a Reply. Pursuant to Rule 78 of the Federal Rules of Civil Procedure and Local Rule 7-15, the Court finds that this matter is appropriate for decision without oral argument. The hearing calendared for October 28, 2019 is hereby vacated and the matter taken off calendar. After considering the moving, opposing, and reply papers, and the arguments therein, the Court rules as follows:

         I. FACTUAL AND PROCEDURAL BACKGROUND

         On July 31, 2019, Plaintiff filed a Complaint against FCA in Los Angeles County Superior Court, alleging violations of the Song-Beverly Consumer Warranty Act, Cal. Civ. Code § 1790, et seq. Specifically, Plaintiff alleges that he purchased a 2016 Fiat 500x (the “Vehicle”) on October 14, 2015, and that the vehicle contained or developed defects, including a defective engine. Plaintiff claims that FCA, the manufacturer of the Vehicle, and its representatives failed to repair the vehicle after a reasonable number of attempts.

         On August 28, 2019, FCA filed its Answer to Plaintiff's Complaint. On September 3, 2019, FCA filed a Notice of Removal, alleging that this Court has diversity jurisdiction pursuant to 28 U.S.C. § 1332(a).

         On September 6, 2019, Plaintiff filed a First Amended Complaint, adding a non-diverse defendant, Fiat of Glendale (“Fiat”). Fiat is the dealership which sold the Vehicle to Plaintiff on October 14, 2015. Plaintiff alleges only one claim for relief against Fiat -- breach of the implied warranty of merchantability pursuant to California Civil Code § 1794.

         On September 24, 2019, Plaintiff filed this Motion, arguing in relevant part that the parties are no longer diverse and, thus, that the Court lacks subject matter jurisdiction over this action. FCA argues that the Court should ignore Fiat's citizenship because Fiat was fraudulently joined.

         II. LEGAL STANDARD

         “If after removal the plaintiff seeks to join additional defendants whose joinder would destroy subject matter jurisdiction, the court may deny joinder, or permit joinder and remand the action to the State court.” 28 U.S.C. § 1447(e). The Court's decision to deny or permit joinder is discretionary. See Newcombe v. Adolf Coors Co., 157 F.3d 686, 691 (9th Cir.1998).

         In considering whether to permit joinder, the Court considers the following factors: (1) whether the party sought to be joined is needed for adjudication and could be joined under Federal Rule of Civil Procedure 19(a); (2) whether the statute of limitations would prevent the filing of a new action against the new defendant if the court denies joinder; (3) whether there has been an unexplained delay in seeking joinder; (4) whether the joinder is solely for the purpose of defeating federal jurisdiction; (5) whether the claim against the new party appears valid; and (6) whether denying joinder will prejudice the plaintiff. Forward-Rossi v. Jaguar Land Rover N.A., LLC, 2016 WL 3396925, at *3 (C.D. June 13, 2016); Sandhu v. Volvo Cars of N. America, LLC, 2017 WL 403495, at *2 (N.D. Cal. Jan. 31, 2017). “A court need not consider all the issues, as any factor can be decisive, and no one of them is a necessary condition for joinder.” Negrete v. Meadowbrook Meat Co., 2012 WL 254039 at *3 (C.D. Cal. Jan. 25, 2012);.

         FCA bases its opposition on the doctrine of “fraudulent joinder.” “Although an action may removed to federal court only where there is complete diversity of citizenship, . . . one exception to the requirement for complete diversity is where a non-diverse defendant has been ‘fraudulently joined.'” Hunter v. Philip Morris USA, 582 F.3d 1039, 1043 (9th Cir. 2009) (quotations and citations omitted). 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) (emphasis added). 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 v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2001).

         “There 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 a plaintiff may prevail on the cause of action against an in-state defendant. See Id. at 1008, 1012. “The standard is not whether [a] plaintiff will actually or even probably prevail on the merits, but whether there is a possibility that [she] may do so.” Lieberman v. Meshkin, Mazandarani, 1996 WL 732506, at *3 (N.D. Cal. Dec. 11, 1996) (emphasis added). “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 Maritime Corp., 951 F.2d 40, 42-43 (5th Cir. 1992)). Moreover, any doubts concerning the sufficiency of a cause of action due to inartful, ambiguous, or technically defective pleading must be resolved in favor of remand. See Id. “[A] removing defendant alleging fraudulent joinder must do more than show that the complaint at the time of removal fails to state a claim against the non-diverse defendant. Rather, the defendant must establish that plaintiff could not amend his complaint to add additional allegations correcting any deficiencies.” Martinez v. Michaels, 2015 WL 4337059, at *5 (C.D. Cal. July 15, 2015) (quotations and citations omitted).

         Where the plaintiff seeks to join a non-diverse party after removal, as is the case here, the request to amend is governed by 28 U.S.C. § 1447(e), rather than the doctrine of fraudulent joinder. “That notwithstanding, the Court notes that the core inquiry in a fraudulent joinder analysis, i.e., whether there is any possibility of recovery against the non-diverse defendant, is subsumed in the consideration in a section 1447(e) analysis of whether plaintiff can state a valid claim against the party sought to be joined.” Taylor v. Honeywell Corp., 2010 WL 1881459, at *2 ...