United States District Court, S.D. California
ORDER (1) GRANTING PLAINTIFFS' MOTION TO AMEND
THE COMPLAINT [DOC. 14] AND (2) REMANDING CASE
Thomas J. Whelan United States District Judge.
Matt Bodine, Jason Bodine, and DBS seek leave to file a
Second Amended Complaint (“SAC”) naming LDI
Mechanical Inc. as a defendant. Defendants oppose.
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
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.)
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
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.]
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.)
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.
Joinder under Federal Rule of Procedure
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)).
admit the claims asserted against LDI and Defendants are more
than tangentially related. (Opp'n [Doc. 17]
6:6-11.) The Court agrees ...