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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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 8 9 RICHARD NAJERA, Plaintiff, v. STEELHEAD FABRICATION, 10 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 11 12 This case arises out of a personal injury complaint filed by plaintiff Richard Najera in San 13 Francisco Superior Court. Defendant Steelhead Metal & Fab, LLC (“Steelhead”) removed the 14 action to federal court on the basis of diversity jurisdiction. Before the Court is plaintiff’s motion 15 for an order granting him leave to amend his complaint and remanding the case to San Francisco 16 Superior Court. Dkt. No. 11. The Court grants the motion. BACKGROUND 17 18 Plaintiff is a union ironworker. Dkt. No. 2 ¶ 10. His complaint alleges that “[d]efendants 19 negligently fabricated, bundled, secured, and delivered a load of steel to Plaintiff’s employer and 20 when the bundling was released, the steel was propelled into the air, falling onto Plaintiff and 21 causing Plaintiff injury.” Id. ¶ 24. Plaintiff’s employer at the time of injury was Sheedy Drayage 22 Co., which served as a steel rigging and hoisting contractor for the construction project at issue. 23 Id. ¶¶ 10-11. 24 Steelhead was the only named defendant at the time of removal. Dkt. No. 1 at 4. 25 Steelhead is alleged to have been the fabricator and bundler of the steel that caused the injury. 26 Steelhead removed the action, invoking the Court’s jurisdiction pursuant to 28 U.S.C. 27 Sections 1332 and 1441(b). Steelhead asserts that there is diversity of citizenship, and that the 28 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 1 2 against Metropolitan Electrical, Inc. and Focus North America, Inc. for indemnity. Dkt. No. 7. 3 Metropolitan is alleged to be a California corporation that acted as the electrical contracting firm 4 on the subject project. Id. ¶¶ 3, 9. Plaintiff is also a citizen of California. Dkt. No. 1 at 14. DISCUSSION 5 As a preliminary matter, the removal statute is to be strictly construed against removal 6 7 jurisdiction, and the party seeking removal bears the burden of establishing its propriety. See, e.g., 8 California ex rel. Lockyer v. Dynegy, Inc., 375 F.3d 831, 838 (9th Cir. 2004). Furthermore, “any 9 doubt about the right of removal requires resolution in favor of remand.” Moore-Thomas v. 10 Alaska Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir. 2009). United States District Court Northern District of California 11 Plaintiff does not challenge whether the requirements for diversity jurisdiction were 12 satisfied at the time Steelhead removed the case. Rather, plaintiff moves under 28 U.S.C. Section 13 1447(e), which states, “If after removal the plaintiff seeks to join additional defendants whose 14 joinder would destroy subject matter jurisdiction, the court may deny joinder, or permit joinder 15 and remand the action to the State court.” Plaintiff asks that pursuant to this statute, he be 16 permitted to amend his complaint to add Metropolitan and Focus as defendants in this action, and 17 that the case consequently be remanded to state court, since Metropolitan is a non-diverse party 18 thus destroying the Court’s diversity jurisdiction under 28 U.S.C. Section 1332. Dkt. No. 11 at 1- 19 2. 20 Defendant’s responses are mostly a non sequitur. As plaintiff points out, defendant’s 21 opposition brief does not even mention 28 U.S.C. Section 1447(e). See Dkt. Nos. 18, 24. Despite 22 his request to amend, plaintiff failed to provide the proposed amended complaint with his motion 23 in violation of Local Rule 10-1. Accordingly, the Court permitted plaintiff to file that proposed 24 amended complaint after the close of briefing on this motion, and for Steelhead to file a response. 25 Dkt. No. 30. Steelhead’s response to the proposed complaint filed by plaintiff finally does 26 acknowledge the existence of Section 1447(e), the controlling statute here, but its analysis is 27 cursory and unhelpful. Dkt. No. 32. Overall, Steelhead’s briefing was off point. 28 2 1 This still leaves the question of what factors the Court ought to consider before permitting 2 plaintiff to amend and remand pursuant to Section 1447(e). The Ninth Circuit has stated that 3 “[t]he language of § 1447(e) is couched in permissive terms and it clearly gives the district court 4 the discretion to deny joinder.” Newcombe v. Adolf Coors Co., 157 F.3d 686, 691 (9th Cir. 1998). 5 Neither the Ninth Circuit nor the Supreme Court, however, has set forth any specific factors the 6 Court must take into account in exercising this discretion. 7 In the face of some inconsistency in district court decisions on this issue, the Court finds 8 most persuasive the analysis undertaken in Righetti v. Shell Oil Company, 711 F. Supp. 531 (N.D. 9 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 11 United States District Court Northern District of California 10 amendments which destroy diversity with the intent of delaying proceedings are not implicated 12 here.” 711 F. Supp. at 534. Plaintiff moved to amend and remand just two weeks after removal, 13 and no proceedings have occurred here. The state court action was filed in December 2013, and 14 the case was removed in May 2014, shortly after defendant learned there was more than $75,000 15 in controversy from discovery responses served by plaintiff in April 2014. See Dkt. No. 1. Given 16 that Steelhead filed its answer in state court in March 2014, the case can still be said to be at an 17 early stage. 18 The Court also finds that “plaintiffs can state a facially legitimate claim against” 19 Metropolitan and Focus. Righetti, 711 F. Supp. at 534-35. Steelhead’s cross-claim asserts that 20 Steelhead manufactured the subject steel platform on Metropolitan’s behalf; that Focus, a trucking 21 and transportation company, loaded the components and transported them to Metropolitan’s 22 facility; and that Metropolitan then transported the components to the subject construction site. 23 Dkt. No. 7 at ¶¶ 9-15. The cross-claim asserts that if plaintiff was injured, then Steelhead believes 24 that plaintiff’s “damages were caused solely through the negligent, tortuous, and/or intentional 25 conduct of the cross-defendants.” Id. ¶ 17. Plaintiff’s proposed amended complaint seeks only to 26 add Metropolitan and Focus as additional named defendants. See Dkt. No. 31. The Court is 27 satisfied that the allegations in the cross-claim alone support the conclusion that Mr. Najera can 28 state a facially legitimate claim against Metropolitan and Focus. 3 1 The Court agrees with the Righetti court that it need not -- and should not -- make an 2 “inquiry into the plaintiffs’ motive for adding a non-diverse defendant,” given that “the express 3 purpose of the section is to ‘take advantage of the opportunity opened by removal from a state 4 court to permit remand if a plaintiff seeks to join a diversity-destroying defendant after removal.’” 5 711 F. Supp. at 535. The Court further finds that it need not make any inquiry regarding the 6 propriety of joinder under Rules 19 and 20 of the Federal Rules of Civil Procedure. Id. 7 Steelhead clearly will not be prejudiced by the addition of Metropolitan and Focus as 8 defendants. This case is still at an early stage, and it is Steelhead itself which identified and 9 brought into this case these two companies, by way of its cross-claim against them. CONCLUSION 10 United States District Court Northern District of California 11 The Court therefore concludes that “[w]here, as here, a facially bona fide claim against a 12 non-diverse defendant is stated, amendment is sought early in the litigation and does not appear to 13 be sought for a dilatory purpose, and no prejudice to the named defendant exists, the court should 14 exercise its discretion in favor of leave to amend, and permit plaintiffs to join the non-diverse 15 party.” Righetti, 711 F. Supp. at 535. 16 The Court grants plaintiff’s motion for leave to amend his complaint, and federal subject 17 matter jurisdiction thereby being eliminated, the Court remands the matter to the Superior Court of 18 San Francisco, pursuant to 28 U.S.C. Section 1447(e). 19 20 21 22 IT IS SO ORDERED. Dated: August 20, 2014 ______________________________________ JAMES DONATO United States District Judge 23 24 25 26 27 28 4

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