Joel Gallardo v. FCA US LLC

1 JS-6 [7] 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 EASTERN DIVISION [11] ) 12 JOEL GALLARDO, et al., ) Case No.: EDCV 20-00601-CJC (SPx) ) 13 ) ) Plaintiff, 14 ) ) v. 15 ) ORDER SUA SPONTE REMANDING ) CASE TO SAN BERNARDINO 16 FCA US, LLC, et al. ) COUNTY SUPERIOR COURT ) 17 ) ) Defendant. 18 ) ) 19 ) ) [21] I. INTRODUCTION & BACKGROUND [23] On January 14, 2020, Plaintiffs Joel and Sarah Gallardo filed an action in San [24] Bernardino County Superior Court against Defendants FCA US, LLC (“FCA”) and DCH [25] Chrysler Jeep Dodge of Temecula (“DCH”). (Dkt. 1-3 [Complaint, hereinafter [26] “Compl.”].) In general, Plaintiffs allege that they purchased a 2017 Chrysler Pacifica [27] containing a defective transmission. (Id. ¶ 8.) FCA manufactured the vehicle, but on at 1 least one occasion, Plaintiffs brought it to Defendant DCH for repair. (Id. ¶ 59.) Based 2 on the alleged defects in their vehicle, Plaintiffs assert six state law causes of action 3 against FCA for (1) violation of California Civil Code § 1793.2(d), (2) violation of 4 California Civil Code § 1793.2(b), (3) violation of California Civil Code § 1793.2(a)(3), 5 (4) breach of express written warranty, (5) breach of the implied warranty of 6 merchantability, and (6) fraud by omission. (Id. ¶¶ 26–57.) They also assert one state 7 law claim against DCH for negligent repair. (Id. ¶¶ 58–62.) [8] 9 For the purposes of diversity jurisdiction, both Plaintiffs are California citizens. 10 (Id. ¶ 3.) FCA is a Delaware Corporation with its principal place of business in 11 Michigan. (Dkt. 1 [Notice of Removal, hereinafter “NOR”] ¶ 28.) DCH is a California 12 entity.1 (Id. ¶ 30.) On March 25, 2020, FCA removed the action to this Court, invoking 13 diversity jurisdiction. (Dkt. 1 [Notice of Removal, hereinafter “NOR”].) [14] 15 II. LEGAL STANDARD [16] 17 A defendant may remove a civil action filed in state court to a federal district court 18 if the federal court would have had original jurisdiction over it. 28 U.S.C. § 1441 . 19 Federal courts have diversity jurisdiction over cases between completely diverse parties 20 that involve an amount in controversy exceeding $75,000. 28 U.S.C. § 1332 . Principles 21 of federalism and judicial economy require courts to “scrupulously confine their 22 [removal] jurisdiction to the precise limits which [Congress] has defined.” See Shamrock 23 Oil & Gas Corp. v. Sheets, 313 U.S. 100, 109 (1941). Indeed, “[n]othing is to be more 24 jealously guarded by a court than its jurisdiction.” See United States v. Ceja-Prado, 333 25 F.3d 1046 , 1051 (9th Cir. 2003) (internal quotations omitted). The defendant removing 26 the action to federal court bears the burden of establishing that the district court has [27] 1 subject matter jurisdiction over the action, and the removal statute is strictly construed 2 against removal jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). [3] 4 Federal courts have a duty to examine their subject matter jurisdiction whether or 5 not the parties raise the issue. See United Investors Life Ins. Co. v. Waddell & Reed, 6 Inc., 360 F.3d 960, 966 (9th Cir. 2004) (“[A] district court’s duty to establish subject 7 matter jurisdiction is not contingent upon the parties’ arguments.”). “The court may— 8 indeed must—remand an action sua sponte if it determines that it lacks subject matter 9 jurisdiction.” GFD, LLC v. Carter, 2012 WL 5830079 , at *2 (C.D. Cal. Nov. 15, 2012). [10] 11 III. ANALYSIS [12] 13 In its Notice of Removal, FCA contends that DCH was fraudulently joined and 14 cannot be used to destroy complete diversity. The Court disagrees. [15] 16 When a sufficient showing of fraudulent joinder is made, a court will not consider 17 the citizenship of the fraudulently joined party when determining whether there is 18 complete diversity in a case. See Grancare, LLC v. Thrower by and through Mills, 889 19 F.3d 543, 548 (9th Cir. 2018). However, “a defendant invoking federal court diversity 20 jurisdiction on the basis of fraudulent joinder bears a heavy burden since there is a 21 general presumption against [finding] fraudulent joinder.” Id. (internal quotations 22 omitted). Defendants can establish fraudulent joinder by showing that the defendant who 23 purportedly destroys complete diversity “cannot be liable on any theory.” See Ritchey v. 24 Upjohn Drug Co., 139 F.3d 1313, 1318 (9th Cir. 1998). This is an exacting standard 25 because “if there is a possibility that a state court would find that the complaint states a 26 cause of action against any of the resident defendants, the federal court must find that the 27 joinder was proper and remand the case to the state court.” Hunter v. Philip Morris USA, 1 FCA has not shown that DCH “cannot be liable on any theory” as to Plaintiffs’ 2 negligent repair claim. See Ritchey, 139 F.3d at 1318 . Accordingly, it has not met its 3 burden of establishing fraudulent joinder. Plaintiffs bring one cause of action against 4 DCH for negligent repair. “One who undertakes repairs has a duty arising in tort to do 5 them without negligence.” Sw. Forest Indus., Inc. v. Westinghouse Elec. Corp., 422 F.2d 6 1013, 1020 (9th Cir. 1970). In support of their negligent repair claim, Plaintiffs allege 7 that they took their vehicle to DCH on at least one occasion. (Compl. ¶ 59.) They further 8 allege that DCH owed them a duty to use ordinary care and skill in the storage, 9 preparation, and repair of their vehicle and that DCH breached this duty by failing to 10 properly store, prepare, and repair the vehicle. (Id. ¶¶ 60–61.) They allege this breach 11 was a proximate cause of their damages. (Id. ¶ 62.) [12] 13 FCA’s Notice of Removal is primarily devoted to establishing the amount in 14 controversy and provides little explanation as to why the Court should find that DCH has 15 been fraudulently joined. It asserts only that Plaintiff does not pled sufficiently detailed 16 facts and that “FCA’s counsel’s vast litigation experience in opposing these types of 17 cases has been that individual dealerships have not been regularly sued.” (NOR ¶ 32.) 18 These conclusory assertions do not come close to meeting FCA’s heavy burden of 19 establishing fraudulent joinder. Even though, as pled, the facts underlying Plaintiffs’ 20 negligent repair claim are not highly detailed, this potential deficiency could easily be 21 cured by granting Plaintiff leave to amend. See Grancare, 889 F.3d at 549 (explaining 22 that before finding fraudulent joinder, a court must also determine “whether a deficiency 23 in the complaint can possibly be cured by granting the plaintiff leave to amend”). And 24 FCA’s counsel’s experience litigating other cases says nothing of Plaintiffs’ ability to 25 state a cognizable negligent repair claim in this case. Finally, the Notice of Removal fails 26 to address the growing body of case law recognizing that local dealerships can be liable 27 to plaintiffs who assert negligent repair claims. See, e.g., Lytle v. Ford Motor Co., 2018 1 || plaintiff could not possibly recover against a dealership for negligent repair of a 2 || vehicle.”); see also Tasch v. Ford Motor Co., 2018 WL 3956493 , at *1 (finding 3 defendants did not show plaintiff’s negligent repair claim was impossible as a matter of 4 || California law) (C.D. Cal. Aug. 16, 2018); Forward-Rossi v. Jaguar Land Rover N. Am., 5 || LLC, 2016 WL 3396925 , at *4 (C.D. Cal. June 13, 2016) (same). In light of this, the 6 Court is not persuaded that FCA has met its burden of showing that DCH was 7 fraudulently joined. This action must be remanded for lack of subject matter jurisdiction. [8] 9 CONCLUSION [10] 11 “Federal jurisdiction must be rejected if there is any doubt as to the right of 12 |}removal in the first instance.” Gaus, 980 F.2d at 566 . Because FCA has failed to carry 13 burden to establish the elements of diversity jurisdiction, the Court sua sponte 14 ||] REMANDS this action to San Bernardino County Superior Court. [15] 16 DATED: April 3, 2020 Je yo ye 17 + / 18 CORMAC J. CARNEY 19 UNITED STATES DISTRICT JUDGE