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Bodine v. First Co.

United States District Court, S.D. California

November 1, 2019

MATT BODINE, et al., Plaintiffs,
FIRST CO., a corporation, et al., Defendants.


          Hon. Thomas J. Whelan United States District Judge.

         Plaintiffs Matt Bodine, Jason Bodine, and DBS seek leave to file a Second Amended Complaint (“SAC”) naming LDI Mechanical Inc. as a defendant. Defendants oppose.

         The Court decides the matter on the papers submitted and without oral argument pursuant to Civil Local Rule 7.1(d)(1). For the reasons discussed below, the Court GRANTS the motion to amend [Doc. 14]. Because the amendment destroys diversity jurisdiction by naming LDI as a defendant, remand is warranted. Accordingly, the Court REMANDS the action to the Superior Court of California, County of San Diego.

         I. Background

         Plaintiff DBS is a California corporation-owned by Plaintiffs Matt and Jason Bodine-which sold HVAC units purchased from Defendants. (FAC [Doc. 1-3] at 5.) Plaintiffs primarily sold to HVAC wholesale distributors. (Id.) However, among Plaintiffs' customers was LDI Mechanical, an “HVAC contractor” to which Plaintiffs would typically sell Defendants' products at ten to fifteen percent above wholesale distributor price. (Id. at 5-6.)

         On October 24, 2018, Defendants provided Plaintiffs 30-days' notice for the termination of their agreement. (Id. at 16.) Plaintiffs allege that Defendants left them “with an inventory of 7 figures' value that Plaintiffs could not sell and Defendants would not take back.” (Id.)

         In July of 2019, Plaintiffs sued Defendants in the San Diego Superior Court for twenty-two claims related to the breakup of the parties' business agreement. [Doc. 1-2.] On August 12, Plaintiffs filed the operative FAC alleging twenty-five related claims. (FAC [Doc. 1-3].) Defendants then removed the case to this Court based on diversity jurisdiction. [Doc. 1-1.]

         On September 3, 2019, Defendants filed a Motion to Transfer Venue. [Doc. 9.] However, the Court granted Plaintiffs' Ex Parte Application for a Stay of Defendants' motion pending a decision on the jurisdictional motion at hand: whether to allow amendment of the complaint to add LDI as a defendant, thereby destroying diversity and forcing remand. ([Doc. 11] ¶ 1.)

         II. Standard

         28 U.S.C. § 1447(e) states: “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 state court.” 28 U.S.C. § 1447(e). Congress added subsection (e) to allow remand if a plaintiff pursues joinder of a diversity-destroying defendant after removal. H.R. Rep. No. 100-889, at 72. Permitting joinder under § 1447(e) lies in the discretion of the Court. Newcombe v. Adolf Coors Co., 157 F.3d 686, 691 (9th Cir. 1998). A court should consider the following factors when weighing whether to permit joinder: (1) whether the new defendant is required for just adjudication and would be joined under Federal Rule of Civil Procedure 19(a); (2) whether the statute of limitations would bar an action against the new defendant in state court; (3) whether there has been an unexplained delay, or the joinder request is untimely; (4) whether the plaintiff intends joinder solely to defeat diversity jurisdiction; (5) whether the claims against the prospective defendant appear valid; and (6) whether the plaintiff will be prejudiced by denial of joinder. IBC Aviation Servs., Inc. v. Compania Mexicana de Aviacion, S.A. de C.V., 125 F.Supp.2d 1008, 1011 (N.D. Cal. 2000) (citing Palestini v. Gen. Dynamics Corp., 193 F.R.D. 654, 658 (S.D. Cal. 2000)). Any of the factors might prove decisive, and none is a required condition for joinder. Vasquez v. Wells Fargo Bank, Nat'l Ass'n, 77 F.Supp.3d 911, 921 (N.D. Cal. 2015). The case should be remanded if the court permits joinder of a non-diverse defendant. See 28 U.S.C. § 1447(c).

         III. Discussion

         A. Joinder under Federal Rule of Procedure 19(a)

         Rule 19(a) requires joinder of persons whose absence would preclude complete relief, impede their ability to protect their interests, or subject a party to the danger of inconsistent obligations. Fed.R.Civ.P. 19(a); IBC, 125 F.Supp.2d at 1011. “This standard is met when failure to join will lead to separate and redundant actions.” IBC, 125 F.Supp.2d at 1012 (citing CP Nat'l Corp. v. Bonneville Power Admin., 928 F.2d 905, 912 (9th Cir. 1991)).

         Defendants admit the claims asserted against LDI and Defendants are more than tangentially related. (Opp'n [Doc. 17] 6:6-11.) The Court agrees ...

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