Carol A. Richens et al v. Ford Motor Company et al

Filing 15

MINUTES (IN CHAMBERS) Order GRANTING Plaintiffs' motion to remand by Judge Philip S. Gutierrez granting #11 MOTION to Remand Case to State Court: For the foregoing reasons, the Court concludes that it lacks subject matter jurisdiction over this case. Accordingly, Plaintiffs' motion to remand is GRANTED and the case is REMANDED to Los Angeles Superior Court, No. 19STCV06716. (see document for further details) MD JS-6. Case Terminated. (bm)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

JS-6

CIVIL MINUTES - GENERAL
Case No.

CV 19-2490 PSG (SSx)

Title

Carol Richens, et al. v. Ford Motor Company, et al.

Present: The Honorable

Date

June 13, 2019

Philip S. Gutierrez, United States District Judge

Wendy Hernandez

Not Reported

Deputy Clerk

Court Reporter

Attorneys Present for Plaintiff(s):

Attorneys Present for Defendant(s):

Not Present

Not Present

Proceedings (In Chambers):

Order GRANTING Plaintiffs’ motion to remand

Before the Court is Plaintiffs Carol Richens and Gary Richens’s (“Plaintiffs”) motion to
remand. See Dkt. # 11 (“Mot.”). Defendant Ford Motor Company (“Ford”) has opposed this
motion. See Dkt. # 12 (“Opp.”). Plaintiffs filed a reply. See Dkt. # 14 (“Reply”). The Court
finds the matter appropriate for decision without oral argument. See Fed. R. Civ. P. 78; L.R. 715. Having considered the moving papers, the Court GRANTS the motion and REMANDS the
case to state court.
I.

Background
A.

Factual Background

In January 2008, Plaintiffs purchased a 2008 Ford F350 Super Duty vehicle (“Vehicle”)
(manufactured by Defendant Ford) from Defendant McCoy Mills Ford (“McCoy Mills”), a
California dealership. See Complaint, Dkt. # 1-1 (“Compl.”) ¶¶ 2, 4, 5, 7. The Vehicle was sold
with an express written warranty “in which Defendant Ford undertook to preserve or maintain
the utility or performance of the Vehicle or to provide compensation if there is a failure in utility
or performance for a specified period of time.” Id. ¶ 8. In the event of a defect, the express
warranty permitted Plaintiffs to deliver the Vehicle for repair to Defendant Ford’s
representatives, including Defendant McCoy Mills. Id. Further, the Vehicle was sold with a
limited warranty, which covered the engine of the Vehicle from defects in factory-supplied
materials for five years after the warranty start date or for 100,000 miles, whichever occurred
first. Id.
Plaintiffs allege that the Vehicle developed several defects within the warranty period,
generally relating to the Vehicle’s engine, and that Defendants failed to repair or promptly

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

CV 19-2490 PSG (SSx)

Date

Title

June 13, 2019

Carol Richens, et al. v. Ford Motor Company, et al.

replace the Vehicle to conform with the express written warranties after being given a
reasonable opportunity to do so. Id. ¶ 9. Further, Plaintiffs contend that Defendant Ford knew
of the incurable engine defects and still failed to promptly replace the Vehicle or make
restitution as California law requires. Id. ¶¶ 11, 13.
B.

Procedural History

On February 27, 2019, Plaintiffs filed this case against Defendants in Los Angeles
Superior Court. See Compl. The complaint brings several causes of action against Defendant
Ford but only a single cause of action for breach of implied warranty against Defendant McCoy
Mills. See id. Defendants removed the case on April 2, 2019, invoking federal jurisdiction on
the basis of diversity of citizenship. See Notice of Removal, Dkt. # 1 (“NOR”), ¶¶ 10–42.
Plaintiffs now move to remand for lack of subject matter jurisdiction, arguing that the
requirements for diversity jurisdiction are not met.1
II.

Legal Standard

“Federal courts are courts of limited jurisdiction, possessing only that power authorized
by Constitution and statute.” Gunn v. Minton, 568 U.S. 251, 256 (2013) (internal quotation
marks omitted). Under 28 U.S.C. § 1441, a defendant may remove a civil action from state court
to federal district court only if the federal court has subject matter jurisdiction over the case. See
City of Chi. v. Int’l Coll. of Surgeons, 522 U.S. 156, 163 (1997) (“The propriety of removal thus
depends on whether the case originally could have been filed in federal court.”). The case shall
be remanded to state court if at any time before final judgment it appears a removing court lacks
subject matter jurisdiction. See 28 U.S.C. § 1447(c); Int’l Primate Prot. League v. Adm’rs of
Tulane Educ. Fund, 500 U.S. 72, 87 (1991). Courts strictly construe the removal statute against
removal jurisdiction. See Provincial Gov’t of Marinduque v. Placer Dome, Inc., 582 F.3d 1083,
1087 (9th Cir. 2009); Luther v. Countrywide Home Loans Servicing, LP, 533 F.3d 1031, 1034
(9th Cir. 2008). “A defendant seeking removal has the burden to establish that removal is proper
and any doubt is resolved against removability.” Luther, 533 F.3d at 1034; see also MooreThomas v. Alaska Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir. 2009) (“[A]ny doubt about the
right of removal requires resolution in favor of remand.”).
1

Ford briefly argues that Plaintiffs failed to comply with the requirements of Local Rule 7-3
before bringing their motion. See Opp. 4:3–5:2. However, even assuming arguendo that this is
correct, the Court has its own obligation to ensure that it has subject matter jurisdiction over the
case, and therefore it cannot simply ignore Plaintiffs’ contention that jurisdiction is lacking.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 19-2490 PSG (SSx)

Date

Title

June 13, 2019

Carol Richens, et al. v. Ford Motor Company, et al.

Generally, subject matter jurisdiction is based on the presence of a federal question, see
28 U.S.C. § 1331, or on complete diversity of citizenship between the parties, see 28 U.S.C.
§ 1332. For a federal court to exercise diversity jurisdiction, there must be “complete” diversity
between the parties and the $75,000 amount in controversy requirement must be met. See
Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 267 (1806); 28 U.S.C. § 1332(a). When a
plaintiff files a case in state court over which the federal courts could have had original
jurisdiction, the defendants can generally remove the case to federal court. See 28 U.S.C.
§ 1441(a). However, when federal jurisdiction is based on diversity, a case cannot be removed if
any of the defendants “is a citizen of the State in which such action is brought.” Id. § 1141(b).
III.

Discussion
A.

Fraudulent Joinder

The citizenship of the parties is not in dispute. Plaintiffs are citizens of California,
Defendant Ford is a citizen of Delaware and Michigan, and Defendant McCoy Mills is a citizen
of California. See NOR ¶¶ 18–19. Because Plaintiffs and Defendant McCoy Mills are all
citizens of California, it would appear that complete diversity does not exist. However,
Defendant Ford argues that Defendant McCoy Mills’ California citizenship should be ignored
because it was fraudulently joined to defeat federal jurisdiction. NOR ¶ 21.
Plaintiffs advance three arguments in support of their motion for remand: (1) Ford failed
to carry its heavy burden of demonstrating that Defendant McCoy Mills was fraudulently joined;
(2) Ford failed to prove that the amount in controversy exceeds $75,000; and (3) Ford did not
sufficiently plead Plaintiffs’ citizenship. See Mot. 1:15–2:12. The Court will address only the
fraudulent joinder issue because it finds it dispositive.
i.

Legal Standard

When a defendant has been fraudulently joined, the Court “may ignore the presence of
that defendant for the purpose of establishing” jurisdiction. Hunter v. Philip Morris USA, 582
F.3d 1039, 1043 (9th Cir. 2009). Joinder is fraudulent 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.” Id. The question is not whether the plaintiff will prevail, but rather whether there is any
“possibility that a state court would find that the complaint states a cause of action against any of
the resident defendants.” Id. at 1046 (emphasis added). Thus, “[a] defendant . . . bears [a]
‘heavy burden’ of establishing fraudulent joinder.” Lew v. Medtronic, Inc., No. CV 14-8303 JLS

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

CV 19-2490 PSG (SSx)

Date

Title

June 13, 2019

Carol Richens, et al. v. Ford Motor Company, et al.

(VBKx), 2014 WL 7185299, at *1, 10 (C.D. Cal. Dec. 16, 2014) (quoting Hunter, 582 F.3d at
1046).
ii.

Discussion

Defendant Ford argues that the non-diverse defendant dealership, McCoy Mills, was
fraudulently joined because the statute of limitations for breach of implied warranty—the only
claim brought against McCoy Mills—has long since run. See Opp. 5:3–13:10. Ford has raised
this same argument in several factually indistinguishable cases, but courts have consistently
rejected it, concluding that the potential application of various California tolling doctrines
rendered it at least possible that the plaintiff could state a breach of implied warranty claim
against the non-diverse dealership. See, e.g., Less v. Ford Motor Co., No. 18cv1992-MMA
(AGS) 2018 WL 4444509, at *1, 3 (S.D. Cal. Sept. 18, 2018); Audo v. Ford Motor Co., No.
3:18-cv-00320-L-KSC, 2018 WL 3323244, at *1, 2 (S.D. Cal. July 6, 2018); Chipley v. Ford
Motor Co., No. 18-cv-01161-YGR, 2018 WL 1965029, at *1, 3 (N.D. Cal. Apr. 26, 2018);
Cardenas v. Ford Motor Co., No. CV 18-1090 DSF (PLAx), 2018 WL 2041616, at *1 (C.D.
Cal. Apr. 23, 2018). The Court reaches the same conclusion here.
A statute of limitations defense can provide a sufficient basis for finding fraudulent
joinder. See Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1320 (9th Cir. 1998) (holding that the
resident defendants were fraudulently joined because the statute of limitations barred the claims
brought against them). But the defendant must be able to show that there is no possibility that
the plaintiff’s claim was timely.
Under California law, the implied warranty of merchantability lasts for one year after
delivery of the vehicle, and the statute of limitations runs for four years from when the warranty
was breached. Less, 2018 WL 4444509, at *3. As Plaintiffs purchased the Vehicle in 2008 but
did not bring this case until 2019, see Compl. ¶ 7, simple arithmetic would suggest that the
statute of limitations has run. But the limitations period is subject to several tolling doctrines
under California law, including the delayed discovery rule, repair doctrine, and fraudulent
concealment. Courts have consistently held in cases factually indistinguishable from this
one—many involving Ford itself—that these doctrines could potentially toll the statute of
limitations for breach of implied warranty. See Less, 2018 WL 4444509, at *3; Audo, 2018 WL
3323244, at *2; Chipley, 2018 WL 1965029, at *3; Cardenas, 2018 WL 2041616, at *1. Ford
has essentially ignored these adverse decisions in its brief, and the arguments it has made have

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

CV 19-2490 PSG (SSx)

Date

Title

June 13, 2019

Carol Richens, et al. v. Ford Motor Company, et al.

not convinced the Court to go against the overwhelming weight of authority.1 Because it is
possible that Plaintiffs will be able to establish that the statute of limitations for their claim
against McCoy Mills should be tolled, Ford had not carried its heavy burden of establishing that
McCoy Mills was fraudulently joined. Accordingly, the Court cannot ignore McCoy Mills’
citizenship, and therefore there is an absence of complete diversity between the parties.
B.

Discretionary Severance

Federal Rule of Civil Procedure 21 permits the Court “at any time, on just terms, [to] add
or drop a party.” Defendant Ford argues that because Defendant McCoy Mills is a dispensable
party, the Court should exercise its discretionary authority to sever McCoy Mills and allow the
claims against Defendant Ford to proceed in federal court. In response, Plaintiffs argue that
Defendant McCoy Mills is indispensable to this litigation because Plaintiffs’ claim for relief
against the dealership arises out of the same transactions as their claims against Ford.
Specifically, the claims involve the same vehicle, same defects, and same unsuccessful attempts
at repair, so ultimately resolution of the claims turns on the same legal and factual questions.
See Mot. 7:24–8:1.
However, even assuming for the sake of argument that McCoy Mills is a dispensable
party, Plaintiffs are the masters of their complaint and chose to sue Defendants Ford and McCoy
Mills together. See Lincoln Prop. Co. v. Roche, 546 U.S. 81, 91 (2005) (“In general, the
plaintiff is the master of the complaint and has the option of naming only those parties the
plaintiff chooses to sue.”). The Court sees no reason to override Plaintiffs’ choice. Defendant
Ford’s request for severance is therefore DENIED.

1

To the extent Ford argues that facts necessary to justify tolling are not alleged in the complaint,
see Opp. 8:27–9:7; 9:20–10:2; 12:11–15, it is Ford’s burden to “show that the plaintiff[s] would
not be afforded leave to amend [their] complaint to cure [the] purported deficiency.” Padilla v.
AT&T Corp., 697 F.Supp. 2d 1156, 1159 (C.D. Cal. 2009). Ford has not grappled with the
myriad decisions cited by Plaintiff where courts found that tolling was a theoretical possibility,
and the Court sees no reason why tolling would not also be possible in identical circumstances
here.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 19-2490 PSG (SSx)

Title

Carol Richens, et al. v. Ford Motor Company, et al.

III.

Date

June 13, 2019

Conclusion

For the foregoing reasons, the Court concludes that it lacks subject matter jurisdiction
over this case. Accordingly, Plaintiffs’ motion to remand is GRANTED and the case is
REMANDED to Los Angeles Superior Court, No. 19STCV06716.
IT IS SO ORDERED.

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