Lara et al v. Delta Career Education Corporation et al

Filing 21

ORDER granting plaintiffs' 14 motion to remand. It is FURTHER ORDERED REMANDING Lara v. Delta Career Education Corp., No. CV-11-00869-PHX-FJM to the Superior Court of Arizona in Maricopa County. The 16 motion to compel arbitration, and 20 Stipulation to extend deadline to provide initial disclosures are DENIED as MOOT. Signed by Judge Frederick J Martone on 07/08/11. (Attachments: # 1 Remand Letter) (ESL)

1

WO

2
3
4
5
6

IN THE UNITED STATES DISTRICT COURT

7

FOR THE DISTRICT OF ARIZONA

8
9
10
11
12
13
14
15

)
)
)
Plaintiffs,
)
)
vs.
)
)
Delta Career Education Corporation, et.)
)
al.,
)
)
Defendants.
)
)
Amber Lara, et. al.,

No. CV-11-00869-PHX-FJM
ORDER

16
17
The court has before it plaintiffs' motion to remand for lack of jurisdiction (doc. 14),
18
defendants' response (doc. 15), and plaintiffs' reply (doc. 17). We also have before us
19
defendants' motion to compel arbitration and dismiss the case or motion to stay (doc. 16), and
20
the parties' stipulation to extend deadline to provide initial disclosures (doc. 20).
21
Plaintiffs filed this action on March 1, 2010 in the Superior Court of Arizona in
22
Maricopa County alleging claims for breach of contract, breach of the covenant of good faith
23
and fair dealing, fraud, negligent misrepresentation, and negligence. Defendants removed
24
the action here on April 29, 2011 on the basis of diversity jurisdiction. Defendant Delta
25
Career Education Corporation ("Delta") purports to be a citizen of Delaware and Virginia.
26
In the Notice of Removal, defendants claim that all plaintiffs are citizens of Arizona.
27
Plaintiffs, however, filed the instant motion to remand for lack of diversity jurisdiction
28

1

because one plaintiff, Mr. Archuleta, is a citizen of Virginia, and thereby destroys diversity

2

jurisdiction.

3

Defendants may remove a state court action only if it might have been brought here

4

originally. 28 U.S.C. § 1441(a). We strictly construe the removal statute and reject

5

jurisdiction if there is any doubt as to whether removal is proper. Duncan v. Stuetzle, 76

6

F.3d 1480, 1485 (9th Cir. 1996). The party seeking removal bears the burden of proof.

7

Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676, 683-85 (9th Cir. 2006).

8

Plaintiffs move to remand because plaintiff Archuleta and defendant Delta

9

Corporation are both citizens of Virginia. Defendants respond by asking us to sever Mr.

10

Archuleta's claims and retain jurisdiction over the other parties' claims. Defendants assert

11

that we may dismiss Mr. Archuleta pursuant to Rule 21, Fed. R. Civ. P. because he is not a

12

necessary party given that his factual situation differs from the other plaintiffs and he is not

13

indispensible because he seeks separate and distinct monetary relief. Plaintiffs counter that

14

equitable considerations do not support dismissal of Mr. Archuleta. Namely, that dismissing

15

Mr. Archuleta would cause a "repeated lawsuit" in Virginia regarding substantially similar

16

claims and that Mr. Archuleta would suffer prejudice by having to bear the costs of bringing

17

a separate lawsuit and finding new counsel.

18

Rule 21, Fed. R. Civ. P. authorizes the court to "at any time, on just terms, add or

19

drop a party." It also affords us the discretionary power to perfect diversity jurisdiction by

20

dropping a nondiverse party, provided that the nondiverse party is not indispensible to the

21

action under Rule 19, Fed. R. Civ. P. Sams v. Beech Aircraft Corp., 625 F.2d 273, 277-78

22

(9th Cir. 1980).

23

There is no good reason to drop Mr. Archuleta. First, jurisdiction is determined at the

24

time of removal. Strotek Corp. v. Air Transport Ass'n. of Am., 300 F.3d 1129, 1131 (9th Cir.

25

2002). At the time of removal, Mr. Archuleta was a party and diversity did not exist.

26

Second, Mr. Archuleta is a required party because he claims an interest relating to the subject

27

of the action and dismissing him would "as a practical matter impair or impede the person's

28

ability to protect [his] interest." Fed. R. Civ. P. 19(a)(1)(B)(i). Dismissing Mr. Archuleta
-2-

1

would impair his ability to bring his claims because he would have to institute a separate

2

action in Virginia, secure alternate counsel, and proceed in a case substantially similar to this

3

one. The balance of equitable considerations weighs in favor of not dismissing Mr.

4

Archuleta. Accordingly, because both plaintiff Archuleta and defendant Delta are citizens

5

of Virginia, there is no diversity jurisdiction.

6

It is THEREFORE ORDERED GRANTING plaintiffs' motion to remand (doc. 14).

7

It is FURTHER ORDERED REMANDING Lara v. Delta Career Education Corp., No.

8

CV-11-00869-PHX-FJM to the Superior Court of Arizona in Maricopa County. The motion

9

to compel arbitration (doc. 16), and stipulation to extend deadline to provide initial

10

disclosures (doc. 20) are DENIED as MOOT.

11

DATED this 8th day of July, 2011.

12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
-3-