Opinion
CV 22-03895-RSWL-RAOx
03-16-2023
CRISTINA VACA, Plaintiff, v. COSTCO WHOLESALE CORPORATION, Defendant.
ORDER re: MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT AND TO REMAND ACTION TO STATE COURT [14]
HONORABLE RONALD S.W. LEW SENIOR U.S. DISTRICT JUDGE
Plaintiff Cristina Vaca (“Plaintiff”) brought the instant Action against Defendant Costco Wholesale Corporation (“Defendant”) alleging negligence and premises liability. Currently before the Court is Plaintiff's Motion for Leave to file a First Amended Complaint and to Remand Action to State Court.
Having reviewed all papers submitted pertaining to this Motion, the Court NOW FINDS AND RULES AS FOLLOWS: the Court GRANTS Plaintiff's Motion and REMANDS this Action to state court. The Court ORDERS Plaintiff to file her First Amended Complaint with the Court by March 31, 2023, at which time the Court will remand this Action.
Local Rule 7-3 provides that “counsel contemplating the filing of any motion shall first contact opposing counsel to discuss thoroughly, preferably in person, the substance of the contemplated motion and any potential resolution. The conference shall take place at least seven (7) days prior to the filing of the motion." L.R. 7-3. “Failure to comply with the Local Rules does not automatically require the denial of a party's motion, however, particularly where the non-moving party has suffered no apparent prejudice as a result of the failure to comply." CarMax Auto Superstores Cal. LLC v. Hernandez, 94 F.Supp.3d 1078, 1088 (C.D. Cal. 2015). Here, the parties are in violation of Local Rule 7-3 because there is no indication the parties met and conferred. Nevertheless, Defendant does not seem to have been prejudiced by the violation because it was able to fully respond to Plaintiff's Motion. See generally Def.'s Opp'n to Pl.'s Mot. for Leave to Amend and to Remand (“Opp'n"), ECF No. 18. Thus, the Court should exercise its discretion to consider the Motion's merits. See CarMax Auto Superstores Cal. LLC, 94 F.Supp.3d at 1088 (electing to consider a motion's merits despite a violation of Local Rule 7-3).
I. BACKGROUND
A. Factual & Procedural Background
Plaintiff claims that she slipped and fell while at Costco Alhambra (Store #1626) (“Costco Location”) on April 2, 2022, causing her to fracture her wrist. Def.'s Notice of Removal, Ex. A (“Compl."), ECF. No. 1. Defendant owns and operates that Costco Location. Id. Plaintiff contends that Defendant maintained the Costco Location in a negligent and reckless manner, which facilitated the dangerous condition that caused and/or contributed to Plaintiff's injuries and damages. Id.
Plaintiff seeks $100,000.00 in general damages, $33,893.00 in hospital expenses and bills, and $32,400.00 in wage/income loss. Id. In response to her discovery requests, Plaintiff received footage of the incident which showed that Plaintiff fell near a kiosk that she believes Costco Wholesale Membership, Inc. (“Membership”) provided. Pl.'s Mot. to Am. and Remand (“Mot.”) at 12-14, ECF No. 14. Now, Plaintiff seeks to amend her Complaint to include Membership as a defendant. Importantly, Plaintiff is a citizen of California, Defendant is a Washington corporation, and Membership is a California corporation. See generally Mot.; Def.'s Notice of Removal, ECF No. 1. Therefore, amending the Complaint to include Membership as a Defendant would destroy diversity. Accordingly, Plaintiff also requests the Court remand this Action to state court if Plaintiff is permitted to amend her Complaint. See generally Mot.
Defendant filed its Notice of Removal [1] on June 7, 2022. Defendant then filed its Answer [11] to Plaintiff's Complaint on September 30, 2022. On December 9, 2022, Plaintiff filed the instant Motion to Amend and Motion to Remand [14]. Defendant then filed its Opposition [18] on December 23, 2022.
II. DISCUSSION
A. Legal Standard
Generally, motions to amend a complaint to add new parties are governed by Rule 15 of the Federal Rules of Civil Procedure. Rule 15 mandates that leave to amend be freely granted whenever justice requires.
Rule 15, however, “does not apply when a plaintiff amends her complaint after removal to add a diversity destroying defendant.” Greer v. Lockheed Martin, No. CV 10-1704 JF (HRL), 2010 WL 3168408, at *4 (N.D. Cal. Aug. 10, 2010) (quoting Chan v. Bucephalus Alternative Energy Group, LLC, No. C 08-04537, 2009 WL 1108744, at *3 (N.D. Cal. Apr. 24, 2009) (internal quotation marks omitted)). This type of amendment is instead analyzed under 28 U.S.C. § 1447(e), which states that, “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 language of § 1447(e) is couched in permissive terms and it clearly gives the district court the discretion to deny joinder.” Newcombe v. Adolf Coors Co., 157 F.3d 686, 691 (9th Cir. 1998).
B. Analysis
Plaintiff seeks to amend her Complaint and to have her Action remanded to state court. See generally Mot. Plaintiff argues that Membership is an indispensable party and that she needs to amend her Complaint to join it as a defendant because Membership provided a kiosk that a majority of the subject incident revolves around. Id. Defendant counters that Membership has no duty to keep the premises safe and that Plaintiff is merely attempting to defeat diversity jurisdiction by trying to add in Membership. See generally Opp'n. For the reasons set forth, the Court agrees with Plaintiff and therefore GRANTS the Motion.
District courts have considered the following factors when determining whether joinder should be permitted under Section 1447(e): (1) whether the party sought to be joined is needed for adjudication and would be joined under Federal Rule of Civil Procedure (“Rule”) 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 federal jurisdiction; (5) whether the claim against the new party seems valid; and (6) the possible prejudice that may result to any of the parties in the litigation. Murphy v. Am. Gen. Life Ins. Co., 74 F.Supp.3d 1267, 1278 (C.D. Cal. 2015). The Court addresses each of these factors in turn.
1. Just Adjudication
Rule 19(a) provides that joinder is required if, in the absence of the necessary party, “the court cannot accord complete relief among existing parties.” Id. at 1282. Although courts tend to consider the Rule 19 standard for a necessary party, the standard for amendment under § 1447(e) is less restrictive than for joinder under Rule 19. Walsh v. Home Depot U.S.A., Inc., No. C-06-4207 SC, 2006 WL 2884411, at *3 (N.D. Cal. Oct. 10, 2006).
Specifically, the standard is met when failure to join will lead to separate and redundant actions, while it is not met when the non-diverse defendants are only tangentially related to an action, or their absence would not prevent complete relief. IBC Aviation Servs., Inc. v. Compania mexicana de Aviacion, S.A. de C.V., 125 F.Supp.2d 1008, 1012 (N.D. Cal. 2000); see also Forward-Rossi v. Jaguar Land Rover N. Am., LLC, No. 216CV00949CASKSX, 2016 WL 3396925, at *3 (C.D. Cal. June 13, 2016) (holding that a proposed defendant is more than just tangentially related to the action because all of the claims asserted against the defendant and the proposed defendant arise from the same transactions, and the resolution of these claims will likely require the same documents, witnesses, and legal and factual questions). Further, under § 1447(e), a court has discretion to deny joinder of a party “whose identity was ascertainable and thus could have been named in the first complaint.” Boon v. Allstate Ins. Co., 229 F.Supp.2d 1016, 1023 (C.D. Cal.2002).
Here, Plaintiff argues that the video provided to her during discovery “clearly showed the majority of the subject incident revolved around a kiosk likely provided by [Membership].” Mot. at 4:15-16. Plaintiff therefore argues that if this Motion were denied, Plaintiff would have to litigate the same claims against Defendant and Membership in two forums, thereby creating separate, redundant actions. Id. at 4:23-27. The Court first notes that it is possible Plaintiff may not be able to bring a separate claim against Membership in another forum because the statute of limitations on Plaintiff's potential claim has run. See Cal Code Civ. Proc. § 335.1 (establishing that the statute of limitations for injury claims is two years); Compl. at 5 (explaining that Plaintiff was injured on April 1, 2020).
Regardless of whether the statute of limitations has run, the claims against Defendant and Membership arise from the same incident: Plaintiff's slip and fall at the Costco Location. Moreover, if Plaintiff were able to bring claims against Membership, those claims and the claims in this Action would likely require the same documents, witnesses, and legal and factual questions. Therefore, the Court finds that it cannot be said that Membership is only “tangentially related” to the existing claims against Defendant; rather, Membership is directly related to these claims for relief.
Thus, this factor weighs in favor of granting plaintiff leave to amend her complaint.
2. Statute of Limitations
In determining whether an amendment that destroys complete diversity should be allowed, courts must consider “whether the statute of limitations would prevent the filing of a new action against the new defendant should the court deny joinder.” Clinco v. Roberts, 41 F.Supp.2d 1080 (C.D. Cal. 1999). Even if the statute of limitations has run, however, a plaintiff may amend its complaint to substitute named defendants for Doe Defendants under California Code of Civil Procedure § 474 “[w]hen the plaintiff is ignorant of the name of a defendant” at the time the complaint is filed. Cal. Code Civ. Proc. § 474; see also Lacombe v. Costco Wholesale Corp., No. EDCV 20-2486 JGB (SHK), 2021 WL 3208031, at *2 (C.D. Cal. July 29, 2021).
The statute of limitations for a personal injury action is two years. See Cal Code Civ. Proc. § 335.1 (providing a two-year statute of limitations for claims involving “injury to . . . an individual caused by the wrongful act or neglect of another.”). The subject incident occurred on April 2, 2020, meaning that the statute of limitations ran April 2, 2022.
However, Plaintiff included Doe Defendants in her Complaint because she was allegedly ignorant of the true names of all necessary parties at the time the action was filed. Mot. at 6:13. Plaintiff is now attempting to amend her Complaint to substitute Membership in place of Doe Defendants for claims that arose out of the same incident that served as the basis for her original claims. See generally Mot. Thus, Plaintiff would be able to add Membership to her Complaint in state court under § 474.
Accordingly, this factor weighs against allowing Plaintiff to amend her Complaint. See Lacombe, 2021 WL 3208031 at *2 (holding that since the plaintiff would not be time-barred from filing a new claim in state court under § 474, this factor weighed against amendment).
3. Timeliness of Motion
Courts consider delay in determining whether to allow amendment to add a non-diverse party. Dorfman v. Massachusetts Cas. Ins. Co., No. CV 15-06370 MMM (ASx), 2015 WL 7312413, at *9 (C.D. Cal. Nov. 19, 2015). If parties have yet to file dispositive motions, courts have held that amending complaints is not unreasonable even if done several months after filing the initial complaint. Sabag v. FCA US, LLC, No. 2:16-CV-06639-CAS(RAOx), 2016 WL 6581154, at *5 (C.D. Cal. Nov. 7, 2016); see also Lara v. Bandit Indus., Inc., No. 2:12-cv-02459-MCE-AC, 2013 WL 1155523, at *3 (E.D. Cal. March 19, 2013) (holding that filing five months after the initial complaint and three months after removal was not untimely when the parties had not filed dispositive motions).
Plaintiff allegedly sent Defendant's counsel a packet of discovery on June 1, 2022, but did not receive responses until September 13, 2022, about a month after Plaintiff followed up by serving a Request for Production of Documents to obtain footage of the incident. Mot. at 3:21-23, 4:13-15. Plaintiff states that she therefore only recently identified Membership as a potential defendant to the Action. Id. at 7:10-12. Moreover, Plaintiff informed Defendant the day after Plaintiff received footage of the incident that she would be filing a Motion to Amend and Remand. Id. at 21-24.
Although it took approximately six months from the date of removal for Plaintiff to file this Motion, this delay is not unreasonable considering Plaintiff only recently learned of Membership's potential liability and acted shortly thereafter. See Sagrero v. Bergen Shippers Corp., No. 2:22-CV-04535-SPG-RAO, 2022 WL 4397527, at *3 (C.D. Cal. Sept. 23, 2022) (holding a plaintiff's explanation for her delay was “sufficiently persuasive” because she alleged she “just recently found out the correct names” of the defendants and that she could not discover them sooner because [Third Party] had provided incorrect contact information for Defendant's human resource department).
Therefore, this factor weighs in favor of allowing Plaintiff to amend its Complaint and remand the Action.
4. Plaintiff's Motive for Joinder
A court should look with particular care at a plaintiff's motive for joinder when the presence of a new defendant will defeat the court's diversity jurisdiction and will require a remand to the state court. Desert Empire Bank v. Ins. Co. of N. Am., 623 F.2d 1371, 1376 (9th Cir. 1980). In instances like these, there is a general presumption against fraudulent joinder of a sham defendant, but it will be found if the 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. Hamilton Materials, Inc. v. Dow Chem. Corp., 494 F.3d 1203, 1206 (9th Cir. 2007) (quotation omitted).
The removing party “carries the heavy burden of establishing the absence of any possibility of recovery,” and must prove there is “no possibility that the plaintiff could prevail on any cause of action it asserted against the non-diverse defendant.” Gonzalez v. J.S. Paluch Co., No. 12-08696-DDP (FMOx), 2013 WL 100210, at *4 (C.D. Cal. 2013); see also Lighting Sci. Grp. Corp. v. Koninklijke Philips Elecs. N.V., 624 F.Supp.2d 1174, 1179 (E.D. Cal. 2008) (“The claim of fraudulent joinder must be supported by clear and convincing evidence, with all ambiguities resolved in favor of the non-removing party.”). Accordingly, if there is a “glimmer of hope” that a plaintiff can sustain a claim, that is enough to prevent application of the fraudulent joinder doctrine. Id.
Plaintiff argues its motive for joinder was evidenced before the case was removed as Plaintiff stated causes of action against Doe Defendants and would have substituted Membership in for the Doe Defendants even if the case were still in state court. Mot. at 7:19-27. Defendant counters that Plaintiff seeks to fraudulently join Membership as a sham defendant to defeat diversity jurisdiction, as Membership has no real connection to the subject incident that gave rise to Plaintiff's claims. Opp'n at 5-7. Defendant also contends that Plaintiff does not have a viable claim against Membership because Membership was not responsible for maintaining the premises surrounding its kiosk. Id. at 7:14-15.
Defendant has not met its heavy burden to establish there is no possibility Plaintiff can succeed in her claims against Membership. See Lighting Sci. Grp. Corp., 624 F.Supp.2d at 1179. Plaintiff alleged a substantial portion of the incident revolved around a kiosk likely provided by Membership, and Defendant has not established definitively that this is either not true or that Membership cannot be liable in any way. Mot. at 4:13-15, 8:1-3; see generally Opp'n. Defendant claims Membership is not liable because it bore no responsibility for maintaining the premises. Opp'n at 7:12-18. But at this point, it is unclear exactly what Plaintiff slipped on. See generally Compl. Indeed, it is possible that Membership's kiosk could have played a role in the slip. And the Court construes such ambiguities in favor of Plaintiff, the non-removing party. See Lighting Sci. Grp. Corp., 624 F.Supp.2d at 1179.
Therefore, this factor weighs in favor of allowing Plaintiff to amend its Complaint and remand the Action. ///
5. Valid Claim
A facially valid claim need only “seem valid” under section 1447(e), which is a lower standard than what is required to survive a motion to dismiss or motion for summary judgment. Prudenciano Flores v. Nissan N. Am., Inc., No. CV 21-09411-RSWL-PDx, 2022 WL 1469424, at *4 (C.D. Cal. May 9, 2022). Further, “the claim need not be plausible nor stated with particularity” for purposes of joinder under § 1447. See Found. Bldg. Materials, LLC v. Action Gypsum Supply, No. SACV 21-01804-CJC(KESx), 2022 WL 705337, at *4 (C.D. Cal. Mar. 8, 2022).
Plaintiff alleges that there is “no doubt” that Plaintiff may have valid claims against Membership, due to a substantial portion of the incident revolving around a kiosk likely provided by Membership. Mot. at 4:13-15, 8:1-3. Defendant counters that there is no valid claim against Membership, as Membership is not responsible for maintaining a safe environment at the Costco Location, and thus, cannot be at fault for the alleged negligence or recklessness that led to Plaintiff's claim. Opp'n at 7:12-18.
Plaintiff has met the low threshold for stating a facially valid claim. Plaintiff has shown that it is possible she may sustain a claim against Membership because the footage of the incident “clearly” showed the majority of the incident revolved around the kiosk that was likely provided by Membership.
Therefore, this factor tends to weigh in favor of allowing Plaintiff to amend its Complaint and remand the Action.
6. Prejudice to Parties in Litigation
In determining whether a plaintiff would suffer prejudice if the court were to deny leave to amend, courts have considered whether denial would lead the plaintiff to forgo claims against the non-diverse defendants. Murphy v. Am. Gen. Life Ins. Co., 74 F.Supp.3d 1267, 1286 (C.D. Cal. 2015). Further, where claims against parties sought to be joined in an action “arise out of the same factual circumstances,” it is to the economic benefit of all parties and the judicial system to “have the entire controversy adjudicated only once,” and to force the plaintiff to “proceed with expensive litigation in state court” to avoid prejudice. Avellanet v. FCA U.S. LLC, No. CV 19-7621-JFW(KSX), 2019 WL 5448199, at *4 (C.D. Cal. Oct. 24, 2019).
Plaintiff alleges she would be greatly prejudiced if this Motion were denied. Mot. at 8:6-7. Plaintiff claims that if she cannot join Membership, then she would be forced to pursue redundant litigation arising out of the same facts and legal issues, or in the alternative, forgo pursuing any potential claims at all against Membership. Id. at 8-12.
As Plaintiff's claims against Membership arise from the same incident for which Plaintiff asserts claims against Defendant, the Court agrees that Plaintiff would be forced to pursue essentially the same claims in two forums if this Motion were denied. Therefore, it would be beneficial to have these claims adjudicated all at once in state court.
Accordingly, this factor weighs in favor of allowing Plaintiff to amend her Complaint and remand the Action.
Since five of the six factors weigh toward allowing Plaintiff to amend her Complaint to substitute in Membership as a Defendant, the Court GRANTS Plaintiff's Motion to Amend. Consequently, diversity is destroyed, and the Court should REMAND this Action to state court. The Court ORDERS Plaintiff to file her First Amended Complaint with the Court by March 31, 2023, at which time the Court will remand this Action.
III. CONCLUSION
Based on the foregoing, the Court GRANTS Plaintiff's Motion and REMANDS this Action to state court. The Court ORDERS Plaintiff to file her First Amended Complaint with the Court by March 31, 2023, at which time the Court will remand this Action.
IT IS SO ORDERED.