Najera v. Steelhead Fabrication

Filing 34

ORDER GRANTING 11 MOTION TO AMEND COMPLAINT AND REMANDING CASE TO STATE COURT. Signed by Judge James Donato on 08/20/2014. (jdlc2, COURT STAFF) (Filed on 8/20/2014)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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RICHARD NAJERA,
Plaintiff,
v.
STEELHEAD FABRICATION,

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Defendant.

Case No. 14-cv-02070-JD
ORDER GRANTING MOTION TO
AMEND COMPLAINT AND
REMANDING CASE TO STATE
COURT
Re: Dkt. No. 11

United States District Court
Northern District of California

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This case arises out of a personal injury complaint filed by plaintiff Richard Najera in San

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Francisco Superior Court. Defendant Steelhead Metal & Fab, LLC (“Steelhead”) removed the

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action to federal court on the basis of diversity jurisdiction. Before the Court is plaintiff’s motion

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for an order granting him leave to amend his complaint and remanding the case to San Francisco

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Superior Court. Dkt. No. 11. The Court grants the motion.
BACKGROUND

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Plaintiff is a union ironworker. Dkt. No. 2 ¶ 10. His complaint alleges that “[d]efendants

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negligently fabricated, bundled, secured, and delivered a load of steel to Plaintiff’s employer and

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when the bundling was released, the steel was propelled into the air, falling onto Plaintiff and

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causing Plaintiff injury.” Id. ¶ 24. Plaintiff’s employer at the time of injury was Sheedy Drayage

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Co., which served as a steel rigging and hoisting contractor for the construction project at issue.

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Id. ¶¶ 10-11.

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Steelhead was the only named defendant at the time of removal. Dkt. No. 1 at 4.

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Steelhead is alleged to have been the fabricator and bundler of the steel that caused the injury.

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Steelhead removed the action, invoking the Court’s jurisdiction pursuant to 28 U.S.C.

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Sections 1332 and 1441(b). Steelhead asserts that there is diversity of citizenship, and that the

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amount in controversy exceeds $75,000. Dkt. No. 1 at 3.

On the same day that it filed the notice of removal, Steelhead also filed a cross-claim

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against Metropolitan Electrical, Inc. and Focus North America, Inc. for indemnity. Dkt. No. 7.

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Metropolitan is alleged to be a California corporation that acted as the electrical contracting firm

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on the subject project. Id. ¶¶ 3, 9. Plaintiff is also a citizen of California. Dkt. No. 1 at 14.
DISCUSSION

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As a preliminary matter, the removal statute is to be strictly construed against removal

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jurisdiction, and the party seeking removal bears the burden of establishing its propriety. See, e.g.,

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California ex rel. Lockyer v. Dynegy, Inc., 375 F.3d 831, 838 (9th Cir. 2004). Furthermore, “any

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doubt about the right of removal requires resolution in favor of remand.” Moore-Thomas v.

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Alaska Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir. 2009).

United States District Court
Northern District of California

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Plaintiff does not challenge whether the requirements for diversity jurisdiction were

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satisfied at the time Steelhead removed the case. Rather, plaintiff moves under 28 U.S.C. Section

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1447(e), which states, “If after removal the plaintiff seeks to join additional defendants whose

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joinder would destroy subject matter jurisdiction, the court may deny joinder, or permit joinder

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and remand the action to the State court.” Plaintiff asks that pursuant to this statute, he be

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permitted to amend his complaint to add Metropolitan and Focus as defendants in this action, and

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that the case consequently be remanded to state court, since Metropolitan is a non-diverse party

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thus destroying the Court’s diversity jurisdiction under 28 U.S.C. Section 1332. Dkt. No. 11 at 1-

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2.

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Defendant’s responses are mostly a non sequitur. As plaintiff points out, defendant’s

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opposition brief does not even mention 28 U.S.C. Section 1447(e). See Dkt. Nos. 18, 24. Despite

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his request to amend, plaintiff failed to provide the proposed amended complaint with his motion

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in violation of Local Rule 10-1. Accordingly, the Court permitted plaintiff to file that proposed

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amended complaint after the close of briefing on this motion, and for Steelhead to file a response.

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Dkt. No. 30. Steelhead’s response to the proposed complaint filed by plaintiff finally does

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acknowledge the existence of Section 1447(e), the controlling statute here, but its analysis is

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cursory and unhelpful. Dkt. No. 32. Overall, Steelhead’s briefing was off point.

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This still leaves the question of what factors the Court ought to consider before permitting

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plaintiff to amend and remand pursuant to Section 1447(e). The Ninth Circuit has stated that

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“[t]he language of § 1447(e) is couched in permissive terms and it clearly gives the district court

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the discretion to deny joinder.” Newcombe v. Adolf Coors Co., 157 F.3d 686, 691 (9th Cir. 1998).

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Neither the Ninth Circuit nor the Supreme Court, however, has set forth any specific factors the

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Court must take into account in exercising this discretion.

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In the face of some inconsistency in district court decisions on this issue, the Court finds

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most persuasive the analysis undertaken in Righetti v. Shell Oil Company, 711 F. Supp. 531 (N.D.

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Cal. 1989), in a decision issued when Section 1447(e) was still “entirely new.”
As the Righetti court found, the Court finds that “Congress’ concerns about late

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United States District Court
Northern District of California

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amendments which destroy diversity with the intent of delaying proceedings are not implicated

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here.” 711 F. Supp. at 534. Plaintiff moved to amend and remand just two weeks after removal,

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and no proceedings have occurred here. The state court action was filed in December 2013, and

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the case was removed in May 2014, shortly after defendant learned there was more than $75,000

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in controversy from discovery responses served by plaintiff in April 2014. See Dkt. No. 1. Given

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that Steelhead filed its answer in state court in March 2014, the case can still be said to be at an

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early stage.

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The Court also finds that “plaintiffs can state a facially legitimate claim against”

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Metropolitan and Focus. Righetti, 711 F. Supp. at 534-35. Steelhead’s cross-claim asserts that

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Steelhead manufactured the subject steel platform on Metropolitan’s behalf; that Focus, a trucking

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and transportation company, loaded the components and transported them to Metropolitan’s

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facility; and that Metropolitan then transported the components to the subject construction site.

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Dkt. No. 7 at ¶¶ 9-15. The cross-claim asserts that if plaintiff was injured, then Steelhead believes

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that plaintiff’s “damages were caused solely through the negligent, tortuous, and/or intentional

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conduct of the cross-defendants.” Id. ¶ 17. Plaintiff’s proposed amended complaint seeks only to

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add Metropolitan and Focus as additional named defendants. See Dkt. No. 31. The Court is

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satisfied that the allegations in the cross-claim alone support the conclusion that Mr. Najera can

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state a facially legitimate claim against Metropolitan and Focus.
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The Court agrees with the Righetti court that it need not -- and should not -- make an

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“inquiry into the plaintiffs’ motive for adding a non-diverse defendant,” given that “the express

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purpose of the section is to ‘take advantage of the opportunity opened by removal from a state

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court to permit remand if a plaintiff seeks to join a diversity-destroying defendant after removal.’”

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711 F. Supp. at 535. The Court further finds that it need not make any inquiry regarding the

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propriety of joinder under Rules 19 and 20 of the Federal Rules of Civil Procedure. Id.

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Steelhead clearly will not be prejudiced by the addition of Metropolitan and Focus as

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defendants. This case is still at an early stage, and it is Steelhead itself which identified and

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brought into this case these two companies, by way of its cross-claim against them.
CONCLUSION

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United States District Court
Northern District of California

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The Court therefore concludes that “[w]here, as here, a facially bona fide claim against a

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non-diverse defendant is stated, amendment is sought early in the litigation and does not appear to

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be sought for a dilatory purpose, and no prejudice to the named defendant exists, the court should

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exercise its discretion in favor of leave to amend, and permit plaintiffs to join the non-diverse

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party.” Righetti, 711 F. Supp. at 535.

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The Court grants plaintiff’s motion for leave to amend his complaint, and federal subject

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matter jurisdiction thereby being eliminated, the Court remands the matter to the Superior Court of

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San Francisco, pursuant to 28 U.S.C. Section 1447(e).

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IT IS SO ORDERED.
Dated: August 20, 2014
______________________________________
JAMES DONATO
United States District Judge

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