Vincent Derosa v. Costco Wholesale Corporation et al.

Filing 25

ORDER by Judge Dale S. Fischer GRANTING Motion to Remand (Dkt. 13 ). The case is REMANDED to the Superior Court of California, County of Los Angeles. (MD JS-6. Case Terminated.) (jp)

JS-6

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

VINCENT DEROSA,
Plaintiff,
v.

2:24-cv-00442-DSF-AJRx
Order GRANTING Motion to
Remand (Dkt. 13)

COSTCO WHOLESALE
CORPORATION, et al.,
Defendants.

On January 17, 2024, Defendant Costco Wholesale Corporation
removed this case from state court. Plaintiff Vincent Derosa now
moves to remand. The Court deems this matter appropriate for
decision without oral argument. See Fed. R. Civ. P. 78; Local Rule 715.
Plaintiff makes several arguments in favor of remand, most
significantly that there is not complete diversity and that, even if there
were, the notice of removal was untimely.
There is no dispute that Defendant Costco Wholesale
Membership, Inc. (Costco Membership) is a California corporation and
not diverse from Plaintiff, who is a California citizen. Therefore, there
would appear to be no subject matter jurisdiction over the case in this
Court.
Defendants try to counter the apparent lack of complete diversity
by arguing that Costco Membership fraudulently joined. A defendant
who is a resident of the forum state is fraudulently joined “‘if the
plaintiff fails to state a cause of action against [the] resident defendant,

and the failure is obvious according to the settled rules of the state.’”
Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2001)
(quoting McCabe v. Gen. Foods Corp., 811 F.2d 1336, 1339 (9th Cir.
1987)). “[T]he test for fraudulent joinder and for failure to state a claim
under Rule 12(b)(6) are not equivalent.” Grancare, LLC v. Thrower,
889 F.3d 543, 549 (9th Cir. 2018). In evaluating a claim of fraudulent
joinder, “a federal court must find that a defendant was properly joined
and remand the case to state court if there is a ‘possibility that a state
court would find that the complaint states a cause of action against any
of the [non-diverse] defendants.’” Id. (quoting Hunter v. Philip Morris
USA, 582 F.3d 1039, 1044 (9th Cir. 2009)) (emphasis in original). In
this inquiry, “the district court must consider . . . whether a deficiency
in the complaint can possibly be cured by granting the plaintiff leave to
amend.” Id. at 550.
Defendants’ fraudulent joinder argument is clearly a fact-based
one that effectively asserts that Plaintiff cannot prove his claim against
Costco Membership. See Opp’n at 10-11. But that is not the standard
for fraudulent joinder. Whether or not Costco Membership, in fact, has
the necessarily presence at or relationship to the premises, the claims
against it are not obviously meritless absent further evidentiary
development. Further, unlike some cases where a non-diverse entity
has been spuriously joined, Plaintiff has provided an articulable reason
why Costco Membership could potentially be liable. Motion at 9-12;
Garcia Decl., Ex. H (Dkt. 15-1) (December 26, 2023 letter from
Plaintiff’s counsel to Defendants’ counsel explaining basis of claim
against Costco Membership). Plaintiff also argues that he has been
stymied by Defendants in his attempts even to evaluate their claims
regarding the propriety of claims against Costco Membership. See id.
But even if Costco Membership is fraudulently joined, the
January 17, 2024 removal would be untimely. If it is true that the
claims against Costco Membership are so obviously meritless under
settled California law that there is not even a possibility that the
complaint could ever state a claim, this would have been apparent on
the face of the complaint when it was filed on June 21, 2023. Even if
this were not the case, Defendants’ answer, filed in state court on
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August 2, 2023, explicitly asserts that Costco Membership “is an
improper party as it does not maintain the subject warehouse where
Plaintiff’s injuries stem from.” Notice of Removal, Ex. B (Dkt. 1 at 28 of
43). Therefore, the basis for Defendants’ fraudulent joinder argument
was known at least as early as August 2, 2023 – months prior to
removal.
Plaintiff has requested fees incurred due to the improper
removal. “An order remanding the case may require payment of just
costs and any actual expenses, including attorney fees, incurred as a
result of the removal.” 28 U.S.C. § 1447(c). “[A]bsent unusual
circumstances, attorney’s fees should not be awarded when the
removing party has an objectively reasonable basis for removal.”
Martin v. Franklin Capital Corp., 546 U.S. 132, 136 (2005).
The Court declines to award fees associated with the removal.
The allegations against Costco Membership are weak enough that
Defendants could have reasonably – if erroneously – believed that they
constituted fraudulent joinder. In the case of fraudulent joinder, the
appropriate amount of notice required to start the 30-day removal
period is not well-established, so it was not objectively unreasonable for
Defendants to believe that the period began later than the Court has
found in this Order.
Other than with respect to the request for fees, the motion to
remand is GRANTED. The case is REMANDED to the Superior Court
of California, County of Los Angeles.
IT IS SO ORDERED.

___________________________
Dale S. Fischer
United States District Judge

Date: March 26, 2024

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