John Mullin et al v. General Motors LLC et al

Filing 33

MINUTES OF IN CHAMBERS ORDER GRANTING PLAINTIFFS' MOTION TO REMAND AND DENYING AS MOOT DEFENDANT'S MOTION TO STAY CASE by Judge Dolly M. Gee: Plaintiffs' Motion to Remand 15 is GRANTED, Defendant's Motion to Stay Case 18 is DENIED as moot, and this action is hereby REMANDED to Los Angeles County Superior Court, Case No. BC568381. The 1/8/2016 hearing on the motions and the Scheduling Conference are VACATED. (MD JS-6. Case Terminated) Court Reporter: Not Reported. (gk)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No.

Date

CV 15-7668-DMG (RAOx)

Title John Mullin, et al. v. General Motors, LLC
Present: The Honorable

JS-6 / REMAND

January 7, 2016
Page

1 of 7

DOLLY M. GEE, UNITED STATES DISTRICT JUDGE

KANE TIEN
Deputy Clerk

NOT REPORTED
Court Reporter

Attorneys Present for Plaintiff(s)
None Present

Attorneys Present for Defendant(s)
None Present

Proceedings: IN CHAMBERS—ORDER GRANTING PLAINTIFFS’ MOTION TO
REMAND AND DENYING AS MOOT DEFENDANT’S MOTION TO
STAY CASE [15, 18]
I.
INTRODUCTION
On December 13, 2014, seven Plaintiffs filed a Complaint in Los Angeles County
Superior Court against Defendant General Motors LLC (“GM”), relating to injuries which they
allege arose from defects in the ignition switches of GM vehicles. [Doc. # 1-7.] The Complaint
alleges three state law causes of action for: (1) strict liability; (2) negligence; and (3) breach of
warranty. Compl. ¶¶ 119–144. GM was served with the Complaint on January 6, 2015.
Removal Notice ¶ 1. [Doc. # 1.]
On September 30, 2015, GM removed the action to this Court, asserting subject matter
jurisdiction on the basis of diversity of citizenship, 28 U.S.C. §§ 1332, 1441, and 1446. [Doc. #
1.]
GM contends that the instant case is related to Multidistrict Litigation (“MDL”) pending
in the Southern District of New York. Removal Notice ¶ 5; see also id., Ex. A. On October 5,
2015, GM submitted to the United States Judicial Panel on Multidistrict Litigation (“JPML”) a
Notice of Tag-Along Action, seeking to transfer the action to MDL No. 2543. Mot. for Stay, Ex.
B [Doc. # 18.] On October 8, 2015, JPML issued an order conditionally transferring this case to
the MDL. Id., Ex. C. On October 13, 2015, Plaintiffs filed a notice of opposition to the
conditional transfer order, effectively staying the order. In Re: General Motors LLC Ignition
Switch Litigation, MDL No. 2543 (J.P.M.L. Oct. 13, 2015) [Doc. # 828]; id. [Doc. # 823]
(conditional transfer order stayed if notice of opposition filed within ensuing 7-day period).1
1

Plaintiffs filed a Motion to Vacate the conditional transfer order. Id. [Doc. # 829.] On December 16,
2015, the JPML designated the matter suitable for decision without oral argument and, to date, the motion remains
pending. Id. [Doc. # 878 at 13.]
CV-90

CIVIL MINUTES—GENERAL

Initials of Deputy Clerk KT

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No.

CV 15-7668-DMG (RAOx)

Title John Mullin, et al. v. General Motors, LLC

JS-6 / REMAND

Date

January 7, 2016
Page

2 of 7

On October 19, 2015, Plaintiffs filed a Motion to Remand the case to Los Angeles
County Superior Court. [Doc. # 15.] On November 20, 2015, GM filed its opposition to the
motion. [Doc. # 19.] Plaintiff filed a reply on November 30, 2015. [Doc. # 21.]
On November 20, 2015, GM filed a Motion to Stay the case pending a decision on
transfer by the JPML. [Doc. # 18.] On December 18, 2015, Plaintiffs opposed GM’s Motion to
Stay. [Doc. # 25.] On December 23, 2015, GM filed a reply. [Doc. # 29.]
The Motion to Stay and Motion to Remand were originally scheduled for hearing on
January 8, 2015. The Court deems these matters suitable for decision without oral argument.
See Fed. R. Civ. P. 78(b); C.D. Cal. L.R. 7-15. For the reasons set forth below, Plaintiffs’
Motion to Remand is GRANTED, GM’s Motion to Stay is DENIED as moot, and this action is
REMANDED to Los Angeles County Superior Court.
II.
DISCUSSION
A. Order of the Motions
The Ninth Circuit has made clear that courts should “address subject matter jurisdiction
at the outset in the ‘mine run of cases,’ and reach other issues first only where the jurisdictional
issue is ‘difficult to determine,’ and the other ground is relatively ‘less burdensome.’” Potter v.
Hughes, 546 F.3d 1051, 1061 (9th Cir. 2008) (citation omitted). Additionally, this Court will not
perfunctorily stay a case merely because a party has submitted a motion to the MDL for transfer
and consolidation. See Rivers v. Walt Disney Co., 980 F. Supp. 1358, 1360 (C.D. Cal. 1997);
JPML Rule 2.1(d) (“The pendency of a motion . . . [or] conditional transfer order . . . before the
Panel pursuant to 28 U.S.C. § 1407 does not affect or suspend orders and pretrial proceedings in
any pending federal district court action and does not limit the pretrial jurisdiction of that
court.”). The decision to grant or deny a stay is within the district court’s discretion. Rivers, 980
F. Supp. at 1360.
Here, the parties dispute the order in which the Court should rule on the motions. GM
argues that the Court should address the Motion to Stay first and decline to rule on Plaintiffs’
Motion to Remand or, alternatively, deny Plaintiffs’ Motion to Remand and grant the Motion to
Stay. Mot. to Stay at 12; Opp. to Remand at 6. GM suggests that the MDL court is in the best
position to decide Plaintiffs’ remand motion and deferring to the MDL court would promote
judicial efficiency while preventing inconsistent rulings on the same jurisdictional issue. Opp. to
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CIVIL MINUTES—GENERAL

Initials of Deputy Clerk KT

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No.

CV 15-7668-DMG (RAOx)

Title John Mullin, et al. v. General Motors, LLC

JS-6 / REMAND

Date

January 7, 2016
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Remand at 10. Plaintiffs argue that this Court should address the “routine” motion to remand
first as “[d]istrict courts are courts of limited jurisdiction and the Court has an obligation to
assure itself of its jurisdiction.” Remand Reply at 6.
The Court must first address the jurisdictional issue before deciding GM’s Motion to
Stay. Cf. Conroy v. Fresh Del Monte Produce, Inc., 325 F. Supp. 2d 1049, 1054 (N.D. Cal.
2004) (“[I]t is in the interest of judicial economy to decide issues of jurisdiction as early in the
litigation process as possible. If federal jurisdiction does not exist, the case can be remanded
before federal resources are further expended.”). In any event, the Court does not consider the
jurisdictional issue in this action to be “difficult to determine” or outside the “mine run of cases,”
and thus, the Court will consider Plaintiffs’ Motion to Remand first. This approach is consistent
with that of other courts in this circuit. See, e.g., Perry v. Luu, 2013 WL 3354446, at *3 (E.D.
Cal. July 3, 2013) (addressing motion to remand before motion to stay pending determination by
JPML); Goodwin v. Kojian, 2013 WL 1528966, at *2 (C.D. Cal. Apr. 12, 2013) (same).
B. Motion to Remand
Pursuant to 28 U.S.C. section 1332, a district court shall have jurisdiction over a civil
action where the matter in controversy exceeds the sum or value of $75,000 and there is
complete diversity of citizenship between the parties. For diversity purposes, a corporation is
deemed to be a citizen of both the state by which it has been incorporated and the state where it
has its principal place of business. Breitman v. May Co. California, 37 F.3d 562, 564 (9th Cir.
1994) (citing 28 U.S.C. § 1332(c)). A civil action brought in a state court over which a federal
district court has original jurisdiction may be removed by the defendants to a district court where
such an action could have been brought. 28 U.S.C. § 1441.
“The burden of establishing federal subject matter jurisdiction falls on the party invoking
removal.” Marin Gen. Hosp. v. Modesto & Empire Traction Co., 581 F.3d 941, 944 (9th Cir.
2009) (citing Toumajian v. Frailey, 135 F.3d 648, 652 (9th Cir. 1998)). There is a “strong
presumption against removal jurisdiction,” and courts must reject it “if there is any doubt as to
the right of removal in the first instance.” Geographic Expeditions, Inc. v. Estate of Lhotka ex
rel. Lhotka, 599 F.3d 1102, 1107 (9th Cir. 2010) (quoting Gaus v. Miles, Inc., 980 F.2d 564, 566
(9th Cir. 1992) (per curiam) (internal quotation marks omitted)).
Here, Plaintiffs contend that complete diversity is lacking on the face of the Complaint.
Mot. to Remand at 4. The Complaint is brought on behalf of seven Plaintiffs: two Nevada
citizens, one Virginia citizen, one California citizen, one Georgia citizen, and two Michigan
citizens. Compl. ¶¶ 4-10. GM is a Delaware limited liability company with its principal place of
CV-90

CIVIL MINUTES—GENERAL

Initials of Deputy Clerk KT

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No.

CV 15-7668-DMG (RAOx)

Title John Mullin, et al. v. General Motors, LLC

JS-6 / REMAND

Date

January 7, 2016
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business in Michigan. Removal Notice ¶ 13. Therefore, for purposes of diversity jurisdiction,
GM is a “citizen” of Delaware and Michigan. Because GM and two Plaintiffs are citizens of
Michigan, diversity of citizenship appears to be absent on the face of the Complaint.
On February 5, 2015, one month after it was served with Plaintiffs’ initial complaint, GM
filed a motion in state court to dismiss the Michigan and Georgia Plaintiffs’ claims for forum non
conveniens pursuant to state law (“Mot to Dismiss”). [Doc. # 1-10.] On September 3, 2015, the
Los Angeles Superior Court granted GM’s motion to dismiss as to the Michigan and Georgia
Plaintiffs without prejudice. [Doc. # 1-24.] Within 30 days of the state court’s dismissal, GM
removed the case to this Court on September 30, 2015. Plaintiffs subsequently filed a Notice of
Appeal of the Superior Court’s decision on October 13, 2015. Friedman Decl. ¶¶ 3-4, Ex. 1
[Doc. # 15-1.] That appeal remains pending.
1. Voluntary-Involuntary Rule
“[O]nly a voluntary act of the plaintiff [can] bring about removal to federal court.” Self v.
Gen. Motors Corp., 588 F.2d 655, 658 (9th Cir. 1978). This rule is known as the “voluntaryinvoluntary” rule, and “requires that a suit remain in state court unless a ‘voluntary’ act of the
plaintiff brings about a change that renders the case removable.” Id. at 657 (citing Powers v.
Chesapeake & O. Ry., 169 U.S. 92 (1898); see also People of State of Cal. By & Through
Lungren v. Keating, 986 F.2d 346, 348 (9th Cir. 1993) (“Since a voluntary act by the plaintiff has
not rendered the case removable, it must remain in state court.”). Where a case is not removable
when commenced, the case can only become removable on diversity grounds “by the voluntary
dismissal or nonsuit by [plaintiff] of a party or of parties defendant.” Self, 588 F.2d at 659
(internal citations omitted). A nonremovable case cannot be converted into a removable one “by
an order of the court upon any issue tried upon the merits.” Id.; see also Great N. Ry. Co. v.
Alexander, 246 U.S. 276, 281 (1918) (internal citations omitted).2
Here, the Michigan Plaintiffs were dismissed by an order of the Superior Court, not by
Plaintiffs’ voluntary action. Under the voluntary-involuntary rule, this did not render the case
removable, and removal to the district court was improper. GM acknowledges that “[a]lthough
dismissal of a non-diverse party ordinarily will not create diversity jurisdiction, . . . an exception

2

Such a rule “protect[s] against the possibility that a party might secure a reversal on appeal in state court
of the non-diverse party’s dismissal . . . producing renewed lack of complete diversity in the state court action . . . .”
See, e.g., Quinn v. Aetna Life & Casualty Co., 616 F.2d 38, 40 n.2 (2d Cir. 1980) (internal citations omitted).
Indeed, in this case, Plaintiffs seek to reverse the Superior Court’s ruling before the California Court of Appeal.
CV-90

CIVIL MINUTES—GENERAL

Initials of Deputy Clerk KT

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No.

CV 15-7668-DMG (RAOx)

Title John Mullin, et al. v. General Motors, LLC

JS-6 / REMAND

Date

January 7, 2016
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to this rule arises when the non-diverse party has been fraudulently joined.” Removal Notice ¶
22.
According to GM, because Plaintiffs fraudulently joined the Michigan Plaintiffs “solely
for the purpose of defeating diversity and avoiding transfer,” removal is proper. Id. ¶ 23.
2. Fraudulent Misjoinder
An exception to the voluntary-involuntary rule exists where the non-diverse party has
been fraudulently joined. Graybill-Bundgard v. Standard Ins. Co., 793 F. Supp. 2d 1117, 111920 (N.D. Cal. 2011) (citing Self, 588 F.2d at 656). Under that scenario, the court may ignore the
presence of the so-called “sham party” for the purpose of determining the existence of diversity.
Hunter v. Philip Morris USA, 582 F.3d 1039, 1043 (9th Cir. 2009) (citation omitted). There is,
however, a “general presumption against fraudulent joinder” in addition to “the strong
presumption against removal jurisdiction.” Id. at 1046.
Under the federal removal statute, a defendant may remove an action within 30 days of
receipt, “through service or otherwise, of a copy of the initial pleading.” 28 U.S.C. § 1446(b)(1).
Removals based on fraudulent joinder or misjoinder are subject to the time limitations set forth
in 28 U.S.C. section 1446.3 See, e.g., Rollins v. Fresenius USA, Inc., 2014 U.S. Dist. LEXIS
16761, at *13 (C.D. Cal. Feb. 4, 2014) (finding “no support for the claim that removal on the
basis of fraudulent joinder is possible outside of the initial 30-day limit imposed by §
1446(b)(1)”); Graybill-Bundgard v. Standard Ins. Co., 793 F. Supp. 2d 1117, 1120 (N.D. Cal.
2011) (“Defendant was able to determine that the Commissioner was fraudulently joined when it
was served with the complaint . . . . Therefore, under 28 U.S.C. § 1446(b), it was required to
remove within thirty days of service.”). If a case is not removable on the basis of the initial
pleading, a defendant may later remove within 30 days of receipt “of a copy of an amended
3

GM at different points refers interchangeably to both “fraudulent joinder” and “fraudulent misjoinder.”
See, e.g., Removal Notice ¶ 24 (“As the fact of fraudulent joinder is undisputed, removal is proper.”); Opp to
Remand at 12 (“Michigan Plaintiffs were fraudulently, or procedurally, misjoined for the sole purpose of defeating
removal to federal court”). There is, however, a difference. In a fraudulent joinder claim, a diverse defendant
contends that a plaintiff joined a non-diverse defendant against whom the plaintiff has no real claim in order to
defeat federal jurisdiction. In contrast, fraudulent misjoinder occurs when a plaintiff adds potentially valid claims to
the complaint—either claims by other non-diverse plaintiffs or claims against other non-diverse defendants—which
do not comport with permissive joinder rules. Keune v. Merck & Co. (In re Propecia (Finasteride) Prod. Liab.
Litig.), 2013 U.S. Dist. LEXIS 117375, at *34 (E.D.N.Y. May 17, 2013). Although the Court acknowledges this
distinction, “the difference is not applicable to the time frame within which removal is allowed.” Utica Mut. Ins.
Co. v. Am. Re-Insurance Co., 2015 U.S. Dist. LEXIS 54384, at *12-13 (N.D.N.Y Apr. 27, 2015) (applying section
1446(b)’s 30-day removal period to removal based on fraudulent misjoinder).
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CIVIL MINUTES—GENERAL

Initials of Deputy Clerk KT

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No.

CV 15-7668-DMG (RAOx)

Title John Mullin, et al. v. General Motors, LLC

JS-6 / REMAND

Date

January 7, 2016
Page

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pleading, motion, order[,] or other paper from which it may first be ascertained that the case is
one which is or has become removable.” 28 U.S.C. § 1446(b)(3). In other words, “[w]hen the
defendant receives enough facts to remove on any basis under section 1441, the case is
removable, and section 1446’s thirty-day clock starts ticking.” Durham v. Lockheed Martin
Corp., 445 F.3d 1247, 1253 (9th Cir. 2006).
Here, in addition to challenging the merits of GM’s removal based on a fraudulent
misjoinder theory, Plaintiffs contend that GM’s notice of removal is untimely “as all of the same
facts and information used in its Notice of Removal have been known for many months prior to
filing for removal.” Mot. to Remand at 8. The Court agrees. GM had to remove the case by
February 5, 2015, or 30 days after service, to be timely. Id.; cf. Rollins, 2014 U.S. Dist. LEXIS
16761, at *13 (“the Court has been unable to locate, any Ninth Circuit precedent that supports
application of anything other than the first paragraph of 1446(b) to a fraudulent joinder case,’
even where ‘a diverse defendant [] claims it was not able to ascertain that a nondiverse defendant
was fraudulently joined until . . . more than thirty days after the diverse defendant was initially
served’”) (quoting Verduzco v. Ford Motor Co., 2013 WL 6053833, at *2 (E.D. Cal. Nov. 15,
2013)).
Even assuming that GM may seek fraudulent misjoinder removal outside of the initial 30day period under section 1446(b)(1), the Court finds that GM nonetheless exceeded the second
30-day time limit under section 1446(b)(3). On February 5, 2015, GM filed a motion to dismiss
claims by the Michigan Plaintiffs. In its state court brief, GM stated that the “Michigan
Plaintiffs’ decision to file suit in this State can only be explained by forum shopping and a desire
to avoid federal diversity jurisdiction, which is not a legitimate basis for maintaining their
actions in this Court.” Mot. to Dismiss at 7 (emphasis added); see also id. at 15 (“It appears that
this case was filed in California solely to defeat federal diversity jurisdiction by joining a
Michigan resident as a plaintiff.”). Thus, the evidence shows that GM knew about what it
contends to be a fraudulent misjoinder at least as of February 5, 2015. Generously assuming GM
“first ascertained” this case’s removability on that date, section 1446(b)(3) required GM to file
its removal notice by March 7, 2015. Because GM did not remove this action until September
30, 2015, its removal is untimely.4 Accordingly, the Court GRANTS Plaintiffs’ motion to
remand.

4

GM argues that removal is timely because “removal is not possible until the misjoined parties are dropped
from an action.” Opp. to Remand at 13. To support this proposition, GM cites to dicta from Osborn v. Metro. Life
Ins. Co., 341 F. Supp. 2d 1123, 1127 n.10 (E.D. Cal. 2004) (quoting 14 Charles Alan Wright, Arthur R. Miller &
Edward H. Cooper, Federal Practice & Procedure: Jurisdiction 3d § 3723, at 656 (3d ed. 1998), which is not
binding on this Court. See also Dekalb v. C.R. Bard, Inc., 2013 U.S. Dist. LEXIS 189089, at *11-14 (C.D. Cal. Oct.
CV-90

CIVIL MINUTES—GENERAL

Initials of Deputy Clerk KT

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No.

CV 15-7668-DMG (RAOx)

Title John Mullin, et al. v. General Motors, LLC

JS-6 / REMAND

Date

January 7, 2016
Page

7 of 7

III.
CONCLUSION
In light of the foregoing, Plaintiffs’ Motion to Remand is GRANTED, Defendant’s
Motion to Stay Case is DENIED as moot, and this action is hereby REMANDED to Los
Angeles County Superior Court. The January 8, 2016 hearing on the motions and the scheduling
conference are VACATED.
IT IS SO ORDERED.

8, 2013) (the “fraudulent misjoinder” doctrine has received a “tepid” response outside the Eleventh Circuit, and has
not been adopted by the Ninth Circuit).
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Initials of Deputy Clerk KT