Martinez v. FCA U.S. LLC

          Present: The Honorable STEPHEN V. WILSON, U.S. DISTRICT JUDGE

          CIVIL MINUTES - GENERAL

         Proceedings: ORDER GRANTING PLAINTIFF'S MOTION TO REMAND AND DENYING DEFENDANT'S MOTION TO STRIKE [19], [22]

         On August 15, 2019, Plaintiff Adrianna Martinez (“Plaintiff”) filed this lawsuit in California state court against FCA U.S. LLC (“FCA”). Dkt. 1-2. Plaintiff alleged numerous violations of California's Song-Beverly Act (as well as a breach of the implied warranty of merchantability) regarding a 2018 Dodge Durango leased by Plaintiff on Aug. 25, 2018. Id. On September 18, 2019 FCA filed a Notice of Removal with this Court on the basis of diversity jurisdiction, asserting that the parties are completely diverse, and that the amount in controversy exceeds $75, 000. Dkt. 1. FCA then filed an Answer on Sept. 25, 2019. Dkt. 11.

         On October 4, 2019 Plaintiff filed a First Amended Complaint (“FAC”), which added a second defendant, Champion Dodge, LLC (“Dealership”), who is alleged to be an auto dealership operating in California. Dkt. 14 at 3. Plaintiff includes a breach of the implied warranty of merchantability against the Dealership. Id. Plaintiff then moved to remand the case to state court, arguing that complete diversity no longer exists. Dkt. 19. FCA has filed a motion to strike, asserting that the Dealership should be stricken from Plaintiff's First Amended Complaint. Dkt. 22. For the reasons articulated below, Plaintiff's motion to remand is GRANTED and Defendant's motion to strike is DENIED.

         1. Plaintiff's Motion to Remand to State Court

         Plaintiff's motion to remand this case asserts that because the Dealership has been added to this action as a defendant and is domiciled in California (like Plaintiff), complete diversity under 28 U.S.C. § 1332(a) no longer exists, depriving this Court of jurisdiction and requiring remand. Dkt. 19-1 at 1. Plaintiff also asserts that her FAC was properly filed because pursuant to Fed.R.Civ.P. 15(a)(1)(B), the FAC was filed within 21 days of service of a responsive pleading (FCA's Answer here) by filing it Oct. 4, 2019 following FCA's Answer filed on Sept. 25, 2019. Dkt. 28 at 2.

         FCA opposes Plaintiff's motion to remand, and argues that because adding the Dealership as a non-diverse defendant would destroy diversity jurisdiction, the appropriate standard to evaluate Plaintiff's motion under is instead 28 U.S.C. § 1447(e), which provides that after an action is removed, amd “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.” Dkt. 26 at 4. FCA then argues that Plaintiff's FAC included the Dealership as a defendant solely to defeat diversity jurisdiction, and that under the relevant legal standard for considering joinder of non-diverse parties (the Murphy factors commonly applied in the Central District of California), joinder of the Dealership should be denied along with the motion to remand. Id. at 4-7. In response, Plaintiff argues that the Murphy factors favor permitting joinder of the Dealership (and remand to state court), and that prior to additional investigation undertaken following the filing of this lawsuit in preparation for initial disclosures, Plaintiff did not realize that an implied warranty claim against the Dealership was also warranted by the facts of the case. Dkt. 28 at 4.

         The Court agrees with the substantial weight of district court opinions in the Ninth Circuit choosing to analyze joinder or amendment of claims to add a non-diverse defendant under § 1447(e) as opposed to Rule 15(a)(1)'s amendment as-of-right standard. See Marroquin v. Target Corp., 2019 WL 2005793, at *4-5 (C.D. Cal. May 7, 2019) (collecting cases); McGrath v. Home Depot USA, Inc., 298 F.R.D. 601, 606 (S.D. Cal. 2014). This approach is appropriate because it permits courts to determine whether any amendment “as of right” to add non-diverse defendants is intended to destroy diversity jurisdiction or otherwise thwart federal jurisdiction and allows courts to consider the full context of the attempted joinder of a non-diverse defendant. See Marroquin, 2019 WL 2005793, at *5.

         Therefore, the Court chooses to construe this motion to remand as a motion for leave to amend subject to consideration of the Murphy factors under 28 U.S.C. § 1447(e). Murphy v. Am. Gen. Life Ins. Co., 74 F.Supp.3d 1267, 1278 (C.D. Cal. 2015). These factors include:

1. Whether the party sought to be joined is needed for just adjudication and would be joined under Fed.R.Civ.P. 19(a)

2. Whether the statute of limitations would prevent the filing of a new action against the new defendant should the court deny joinder;

3. Whether there has been unexplained delay in seeking the joinder;

4. Whether the joinder is solely for the purpose of defeating ...