Casey et al v. Pioneer Hi-Bred International, Inc. et al
Filing
56
ORDER DENYING PLAINTIFFS' MOTION FOR REMAND re: 16 . Signed by JUDGE LESLIE E. KOBAYASHI on 4/17/2013. [Order follows hearing held 4/1/2013. Minutes: 49 ] (afc) CERTIFICATE OF SERVI CEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
JEFFREY CASEY, ET AL., ON
BEHALF OF THEMSELVES AND ALL
OTHERS SIMILARLY SITUATED,
)
)
)
)
Plaintiffs,
)
)
)
vs.
)
)
PIONEER HI-BRED
INTERNATIONAL, INC., a DuPont )
)
Business and Iowa
Corporation, GAY & ROBINSON, )
)
INC., a Hawaii corporation,
)
ROBINSON FAMILY PARTNERS, a
)
general partnership
registered in Hawaii; and DOE )
)
DEFENDANTS 1-10,
)
)
Defendants.
_____________________________ )
CIVIL 12-00655 LEK-BMK
ORDER DENYING PLAINTIFFS’ MOTION FOR REMAND
Before the Court is Plaintiffs Jeffrey Casey,
Charlotte Casey, Harry Ishihara, Nancy Ishihara, Joy Kagawa,
Dellick Numazawa, Lorelei Numazawa, Glenn Odo, Lorene Odo,
Wesley Okazaki, Irwin Oyama, Janice Oyama, Alvin Robinson,
Mary Robinson, Robert Ryder, Faith Ryder, and Yukiko Tsuyama’s
(collectively, “Plaintiffs”) Motion for Remand (“Motion”), filed
on January 7, 2013.
Defendants Pioneer Hi-Bred International,
Inc. (“Pioneer”), Gay & Robinson, Inc., and Robinson Family
Partners (together, “Robinson Defendants) (all three
collectively, “Defendants”), filed their memorandum in opposition
on February 11, 2013, and Plaintiffs filed their sealed reply on
February 15, 2013.
On March 14, 2013, the Court granted
Defendants leave to file their sealed surreply.
on for hearing on April 1, 2013.
This matter came
Appearing on behalf of
Plaintiffs were Gerard A. Jervis, Esq., and Patrick Kyle Smith,
Esq., and appearing on behalf of Defendants were Michael Purpura,
Esq., Michael J. Scanlon, Esq., and Adam D. Friedenberg, Esq.
After careful consideration of the Motion, supporting and
opposing memoranda, and the arguments of counsel, Plaintiffs’
Motion is HEREBY DENIED for the reasons set forth below.
BACKGROUND
Plaintiffs filed their Complaint on May 16, 2012 in the
Circuit Court of the Fifth Circuit, State of Hawai`i (“the State
Court”).
[Dkt. no. 1 (Notice of Removal), Exh. A.]
The
Complaint alleged six claims for relief against Pioneer, all
based on the allegation that farming activities conducted by
Pioneer (on land leased from the Robinson Defendants) caused dust
and dangerous pesticides to blow into the Waimea community and
environment.
[Compl. at ¶ 72.]
The Complaint alleged one claim
of relief against the Robinson Defendants for “Landlord Liability
for Acts of Tenant” (Count 7).
[Id. at ¶¶ 129-139.]
2
Defendants moved to dismiss1 Count 7, after which the
State Court granted the motion and granted Plaintiffs leave to
amend.
[Mem. in Opp. to Motion, Exh. B.]
Plaintiffs filed their
Amended Complaint in State Court on November 9, 2012 (“Amended
Complaint”).
[Notice of Removal, Exh. C.]
The Amended Complaint
alleges: (1) negligence against all Defendants for failure to use
due care (Count 1); (2) negligence for failure to investigate and
warn against all Defendants (Count 2); (3) negligence per se
against all Defendants (Count 3); (4) strict liability against
Pioneer (Count 4); (5) trespass against all Defendants (Count 5);
(6) nuisance against all Defendants (Count 6); (7) negligent and
intentional misrepresentation against all Defendants (Count 7);
and (8) landlord liability for the acts of a tenant against the
Robinson Defendants (Count 8).
On December 7, 2012, Defendants filed their Notice of
Removal of Civil Action Under 28 U.S.C. Sections 1332, 1441, and
1446, asserting that the case is removable because it is a civil
action between citizens of different states and the matter in
controversy exceeds $75,000.
[Notice of Removal at ¶ 7.]
As to
the parties’ citizenship, Plaintiffs are all domiciled in Waimea,
Kauai, and thus citizens of Hawai`i, and Pioneer is incorporated
1
Because the original Complaint did not specify the damages
sought or otherwise identify the amount in controversy,
Defendants did have a basis for removal to federal court. [Mem.
in Opp. to Motion to Remand at 5; Notice of Removal at 3.]
3
and has its principal place of business in Iowa.
Defendants note
that the Robinson Defendants are both Hawai`i citizens, but
assert that the Robinson Defendants’ joinder in the instant
action is “fraudulent,” and their presence must therefore be
ignored for purposes of establishing diversity jurisdiction.
[Id. at ¶ 8 (citing McCabe v. Gen. Foods Corp., 811 F.2d 1336,
1339 (9th Cir. 1987)).]
I.
Motion
In the instant Motion, Plaintiffs argue that the
citizenship of the Robinson Defendants should be considered for
purposes of determining whether diversity jurisdiction exists.
Plaintiffs first argue that Hawai`i law expressly recognizes that
tort claims can be brought against a landlord when the landlord
exercises sufficient control over the property.
[Mem. in Supp.
of Motion at 4 (citing Mitchell v. United States, No. 11-00088,
2011 WL 404986 (D. Hawai`i Sept. 12, 2011).]
Plaintiffs further argue that, under Mitchell, even if
the Robinson Defendants did not exercise control, they can still
be held liable because a nuisance has arisen from their lands.
[Id. at 6 (citing Mitchell at *7-8).]
Plaintiffs note that
questions of whether the Robinson Defendants allowed the nuisance
to exist in breach of a duty, and whether the breach was a
proximate cause of harm, are questions of fact for the jury.
[Id. at 6-7.]
4
Plaintiffs next argue that, based upon the allegations
in the Amended Complaint, settled law supports direct liability
against the Robinson Defendants.
Plaintiffs note that the
Amended Complaint alleges that the Robinson Defendants (1) had
knowledge of the harm before signing the lease with Pioneer,
[Amended Compl. at ¶¶ 39, 69;] (2) had a legal duty to ensure
that best management practices were implemented to the maximum
extent practicable, [id. at ¶¶ 25-29;] (3) failed to investigate
or prevent the dust, [id. at ¶¶ 39, 65;] (4) failed to conduct a
reasonable inspection of the premises, [id. at ¶ 39;] (5) had
actual knowledge of the risk of dust and other pollutants harming
Waimea, based upon their prior cultivation of the fields [id.;]
and (6) retained control over the property by virtue of the
indemnity and termination provisions of their lease, [id. at
¶ 192.]
Plaintiffs also argue that the Robinson Defendants owed
Plaintiffs a duty pursuant to Kauai Ordinance 808, which requires
that all “grubbing” and “grading” activities (or activities that
remove vegetation) in Kauai incorporate Best Management Practices
to the maximum extent practicable to prevent damage by
sedimentation to streams, watercourses, natural areas, and the
property of others.
[Mem. in Supp. of Motion at 13-14 (citing
Kauai County Rev. Code of Ordinance 808, §§ 22-7.4, 22-7.5).]
Plaintiffs argue that even though the ordinance creates no
5
private cause of action, it still creates a duty and standard of
care such that violation of that standard of care constitutes
negligence.
[Id. at 15-16.]
Because Plaintiffs argue that they allege viable claims
and evidence against the Robinson Defendants, Plaintiffs urge the
Court to grant the Motion and remand the case to the state court.
II.
Memorandum in Opposition
In their memorandum in opposition, Defendants argue
that Plaintiffs’ claims against the Robinson Defendants are
fatally defective as a matter of law and, thus, the Robinson
Defendants are “fraudulently joined” defendants whose citizenship
is irrelevant for jurisdictional purposes.
9.]
[Mem. in Opp. at 7-
Because, under state law, a lessor has no duty to third
parties to control the conduct of its lessee, Defendants argue
that Plaintiffs have failed to state an actionable claim against
the Robinson Defendants.
[Id. at 9.]
Defendants argue that all of Plaintiff’s claims are
based upon the core allegation that Pioneer’s improper farming
methods caused excessive dust to drift onto Plaintiffs’ property.
Defendants emphasize, however, that a landlord is only liable for
a nuisance caused by an activity carried out upon the land if at
the time of the lease the landlord knows that the activity will
cause a nuisance.
[Id. at 10 (citing Restatement (Second) of
Torts: Activities After Transfer of Land § 837 (1979); Mitchell,
6
2011 WL 4048986, at *4; Hao v. Campbell Estate, 76 Hawai`i 77,
869 P.2d 216 (1994)).]
Applying this standard to the instant case, Defendants
argue that Plaintiffs have alleged no facts demonstrating that
the Robinson Defendants had knowledge of unlawful conduct at the
time they leased the property to Pioneer, or that they leased the
property for an inherently injurious purpose.
Defendants note
that, under Hawai`i law, farming is not inherently a nuisance, as
stated in the Hawai`i Right to Farm Act.
Rev. Stat. § 165-4).]
[Id. at 15 (citing Haw.
As such, Defendants argue that the
Robinson Defendants’ knowledge that Pioneer planned to conduct
farming activities on the leased land does not equate with a
knowledge that Pioneer would create a nuisance.
As to the issue of control, Defendants argue that a
plaintiff cannot meet the Mitchell exception for landlord control
simply by making conclusory allegations.
[Id. at 18.]
Defendants further argue that the Robinson Defendants have no
duty to supervise Pioneer’s activities on leased land, and that
the fact that a lease reserves to the landlord the right to
reenter or terminate the tenancy does not indicate sufficient
“control” to impose liability.
[Id. at 21-23.]
Defendants argue that Plaintiffs’ reliance on Kauai
County Ordinance No. 808 is misplaced, as Ordinance 808 is a
permitting regulation and creates no duty of care, and its
7
violation thus does not give rise to civil liability.
27-28.]
[Id. at
Defendants note that even if the ordinance did apply and
create a duty, it is still inapplicable as Plaintiffs have not
alleged a direct claim for violation of Ordinance 808.
Because the rule of landlord non-liability is wellsettled, Defendants argue that there is no basis for a claim
against the Robinson Defendants.
Defendants therefore urge the
Court to deny the Motion.
III. Reply
In their reply, Plaintiffs argue that, contrary to
Defendants’ assertions, a landlord can be liable for the acts of
its tenant when the landlord controls the lease, has knowledge
before or after the lease commences, or contributes to the
nuisance.
Plaintiffs argue that the Restatement (Second) of
Torts, Section 837 provides for landlord liability for nuisance
if the landlord consents to the activity or knows or has reason
to know that it will be carried on, and he knows or should know
that it will necessarily involve or is already causing the
nuisance.
§ 837).]
[Reply at 3 (citing Restatement (Second) of Torts,
Plaintiffs emphasize that a finding of landlord
liability involves a “fact-driven analysis” that depends upon the
nature of the lease, the knowledge and control of the landlord,
and whether the landlord contributes to the nuisance or tortious
condition.
[Id. at 3-4.]
8
Plaintiffs further argue that the Robinson Defendants
meet this test for landlord liability, and point out the places
in the Amended Complaint where they have alleged control,
knowledge, duty, and conduct to support viable claims against the
Robinson Defendants.
196).]
[Id. at 6 (citing Amended Compl. at ¶¶ 189-
Plaintiffs assert that the evidence in the record
supports those claims.
First, Plaintiffs point to certain
provisions in the 1998 Lease between Pioneer and the Robinson
Defendants, which Plaintiffs argue prove that the Robinson
Defendants knew that Pioneer would create a nuisance at the time
the lease was signed.
Plaintiffs next point to the April 2010
lease between Pioneer and the Robinson Defendants, arguing that
it establishes that the Robinson Defendants had sufficient
control over the property for liability to attach.
[Id. at 8.]
Plaintiffs further argue that Defendants’ violation of Kauai
Ordinance 808 is relevant in that it rebuts the Hawai`i Right to
Farm Act’s presumption that farming is not a nuisance.
[Id. at
12.]
Thus, Plaintiffs argue that they have alleged viable
claims against the Robinson Defendants and, as such, the Court
should grant Plaintiffs’ Motion for Remand.
STANDARD
Defendants removed the instant case pursuant to 28
U.S.C. §§ 1332, 1441, and 1446.
[Notice of Removal at 1.]
9
Section 1441 provides, in pertinent part:
(a) Generally.--Except as otherwise expressly
provided by Act of Congress, any civil action
brought in a State court of which the district
courts of the United States have original
jurisdiction, may be removed by the defendant or
the defendants, to the district court of the
United States for the district and division
embracing the place where such action is pending.
(b) Removal based on diversity of
citizenship.
(1) In determining whether a civil action is
removable on the basis of the jurisdiction
under section 1332(a) of this title, the
citizenship of defendants sued under
fictitious names shall be disregarded.
(2) A civil action otherwise removable solely
on the basis of the jurisdiction under
section 1332(a) of this title may not be
removed if any of the parties in interest
properly joined and served as defendants is a
citizen of the State in which such action is
brought.
28 U.S.C. § 1441.
Section 1441 is strictly construed against
removal and courts resolve any doubts about the propriety of
removal in favor of remanding the case to state court.
See
Durham v. Lockheed Martin Corp., 445 F.3d 1247, 1252 (9th Cir.
2006).
The party seeking to remove the case bears the burden of
establishing the existence of federal jurisdiction.
See
California ex rel. Lockyer v. Dynegy, Inc., 375 F.3d 831, 838
(9th Cir. 2004).
DISCUSSION
Defendants argue that Plaintiffs’ Motion must fail
10
because the Robinson Defendants have been “fraudulently joined”
and, therefore, their citizenship should not be counted for
purposes of diversity jurisdiction.
Federal courts have original jurisdiction over all
civil actions where the amount in controversy exceeds $75,000,
and there is complete diversity of citizenship.
§ 1332(a)(1).
28 U.S.C.
Complete diversity of citizenship requires that
each of the plaintiffs be a citizen of a different state than
each of the defendants.
Morris v. Princess Cruises, Inc., 236
F.3d 1061, 1067 (9th Cir. 2001).
One exception to the
requirement of complete diversity “is where a non-diverse
defendant has been ‘fraudulently joined.’”
Hunter v. Philip
Morris USA, 582 F.3d 1039, 1043 (9th Cir. 2009) (quoting Morris,
236 F.3d at 1067).
“‘Fraudulent joinder is a term of art’ and does not
require an ill motive.”
Lovell v. Bad Ass Coffee Co. of Hawaii,
Inc., 103 F. Supp. 2d 1233, 1237 (D. Hawai`i 2000) (quoting
McCabe v. General Foods Corp., 811 F.2d 1336, 1339 (9th Cir.
1987)).
Rather, fraudulent joinder occurs “[i]f 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[.]”
McCabe, 811 F.2d at 1339; Roehrig v. Tong, Civ. No.
05-00667 SPK-BM, 2006 WL 897589, at *1 (D. Hawai`i April 3, 2006)
(“The citizenship of a ‘fraudulently joined’ defendant is ignored
11
for purposes of determining diversity of citizenship.”).
The defendant seeking removal to federal court may go
beyond the plaintiff’s pleadings and “is entitled to present the
facts showing the joinder to be fraudulent.”
Ritchey v. Upjohn
Drug Co., 139 F.3d 1313, 1318 (9th Cir. 1998) (quoting McCabe,
811 F.2d at 1339).
See also Morris, 236 F.3d at 1068
(“[F]raudulent joinder claims may be resolved by ‘piercing the
pleadings’ and considering summary judgment-type evidence such as
affidavits and deposition testimony.”) (citations omitted).
There is, however, a “general presumption against fraudulent
joinder,” which must be proven by “clear and convincing
evidence.”
Hamilton Materials, Inc. v. Dow Chem. Corp., 494 F.3d
1203, 1206 (9th Cir. 2007).
To determine whether a non-diverse defendant was
fraudulently joined, the Court must be guided by Hawai`i law.
See McCabe, 811 F.2d at 1339; Lovell, 103 F. Supp. 2d at 1237
(“This court examines whether Plaintiffs have failed to state a
claim against the resident defendants . . . under the settled law
of Hawai`i.”).
In applying the fraudulent joinder rule since McCabe,
the Ninth Circuit has focused on whether the plaintiff’s claim
against the non-diverse defendant is “obvious” under “settled”
state law.
See McCabe, 811 F.2d at 1339; Morris, 236 F.3d at
1068; Hunter, 582 F.3d at 1048.
This district court has
12
interpreted the McCabe fraudulent joinder rule to mean that
“[t]he court may conduct a Rule 12(b)(6)-type analysis, looking
initially at the allegations of the complaint to determine
whether the complaint states a claim under state law against the
in-state defendant.”
Coastal Constr. Co., Inc. v. N. Amer.
Specialty Ins. Co., Civ. No. 10-00206 DAE-BMK, 2010 WL 2816694,
at *4 (D. Hawai`i July 14, 2010) (quoting Cnty. of Haw. v.
Unidev, LLC, 2010 WL 520696, at *4 (D. Hawai`i Feb. 11, 2010)).
Defendants must show “that there is no possibility, based on the
pleadings, that [the] plaintiff can state a cause of action
against the non-diverse defendant in state court.”
Id. (quoting
Pampillonia v. RJR Nabisco, Inc., 138 F.3d 459, 461 (2d Cir.
1998)).
Where the facts and evidence establish that a plaintiff
cannot allege an actionable claim against the non-diverse
defendant, the “presence of a fraudulently joined resident
defendant [does] not defeat diversity jurisdiction[.]”
Lovell,
103 F. Supp. 2d at 1237; see also Gibo, 2013 WL 363140 at *9-10.
In the instant case, Defendants argue that Plaintiffs
fail to state an actionable claim against the Robinson Defendants
and that the Court must therefore disregard their citizenship for
jurisdictional purposes.
The Court agrees.
As a general rule, a lessor is not liable for the
tortious conduct of its lessee.
See Mitchell, 2011 WL 4048986,
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at *4 (stating that, generally, a landowner is not liable for
injuries occurring on the land once the lessor takes possession,
and that landowner liability “turns on ‘the degree of control’
the landowner exercises over the land.”).
The Restatement
(Second) of Torts, Section 837 provides that a lessor of land is
subject to liability for a nuisance caused by an activity carried
out upon its land only if, at the time of the lease, the lessor
(1) consents to the activity or knows or has reason to know it
will be carried on, and (2) knows or should know that it will
necessarily involve or is already causing a nuisance.
Restatement (Second) of Torts: Activities After Transfer of Land
§ 837 (1979); see also Meloy v. City of Santa Monica, 12 P.2d
1072, 1074 (Cal. Ct. App. 1932) (finding a landlord not
responsible for a nuisance caused by lessee where land “leased
for a lawful and proper purpose, when there is no nuisance or
illegal structure upon it at the time of the letting”); City of
L.A. v. Star Sand & Gravel Co., 12 P.2d 69 (Cal. Ct. App. 1932)
(same).
In the instant case, Plaintiffs have failed to allege
facts demonstrating that the Robinson Defendants had knowledge of
the alleged nuisance at the time of the letting.
Plaintiffs cite
provisions from the two leases between the Robinson Defendants
and Pioneer acknowledging that Pioneer would be conducting
farming operations on the leased land and argue that the Robinson
14
Defendants thus had knowledge of the alleged nuisance at the time
they entered into the leases.
[Reply at 7-9; Exhs. A & B.]
While it is clear that the Robinson Defendants knew that Pioneer
would undertake farming activities at the time they entered into
the lease, farming is not inherently a nuisance.
See Haw. Rev.
Stat. § 165-4 (“[t]here shall be a rebuttable presumption that a
farming operation does not constitute a nuisance.”).
Further,
Plaintiffs have not alleged that the Robinson Defendants were
made aware of the complaints made to Pioneer regarding its
farming operations such that the Robinson Defendants knew or
should have known of the alleged nuisance prior to signing the
new lease with Pioneer in 2010.
Thus, the Court FINDS that
Plaintiffs have not demonstrated that the Robinson Defendants
knew or should have known about the alleged nuisance at the time
the 1998 or 2010 lease was signed.
See Meloy, 12 P.2d at 1074
(“A landlord is not responsible to other parties for the
misconduct or injurious acts of his tenant to whom his estate has
been leased for a lawful and proper purpose, when there is no
nuisance or illegal structure upon it at the time of the
letting.”)
Plaintiffs also argue that provisions in the leases
allowing the Robinson Defendants to enter the land and inspect
the premises, and granting them certain other rights and Pioneer
certain obligations, demonstrate that the Robinson Defendants had
15
sufficient control over the premises to give rise to liability.
The Court FINDS that these provisions are standard lease
provisions and do not, absent more, establish that the Robinson
Defendants had control over the premises such that they may be
held liable for the alleged nuisance caused by Pioneer.
See
Mitchell, 2011 WL 4048986, at *4-5 (finding that similar lease
terms “do not establish that the [landlord] had day to day
control over the property for liability purposes.”).
Finally, Plaintiffs argue that Kauai Ordinance 808
creates an affirmative duty on the part of the Robinson
Defendants such that they may be held liable in the instant case.
Plaintiffs have not, however, alleged a direct claim for relief
against the Defendants based upon a violation of Ordinance 808,
nor could they, as Ordinance 808 does not create a private right
of action for its violation.
See Arquette v. State, 128 Hawai`i
423, 443, 290 P.3d 493, 513 (2012) (noting that a duty of care
may be established by a legislative enactment if the legislation
provides that a violation shall give rise to civil liability).
As such, the Court FINDS that Ordinance 808 likewise does not
establish liability on the part of the Robinson Defendants.
The Court therefore concludes that Plaintiffs’ claims
against the Robinson Defendants are not “obvious” under “settled”
state law.
See McCabe, 811 F.2d at 1339; Morris, 236 F.3d at
1068; Hunter, 582 F.3d at 1048.
Because Plaintiffs do not allege
16
actionable claims against the Robinson Defendants, the Court
FINDS that the Robinson Defendants are “fraudulently joined” and
their citizenship should thus be ignored for purposes of
diversity jurisdiction.
1237.
See, e.g., Lovell, 103 F. Supp. 2d at
The Motion is therefore DENIED.
CONCLUSION
On the basis of the foregoing, Plaintiffs’ Motion for
Remand, filed on January 7, 2013, is HEREBY DENIED.
IT IS SO ORDERED.
DATED AT HONOLULU, HAWAII, April 17, 2013.
/S/ Leslie E. Kobayashi
Leslie E. Kobayashi
United States District Judge
JEFFREY CASEY, ET AL. V. PIONEER HI-BRED INTERNATIONAL, INC., ET
AL; CIVIL NO. 12-00655 LEK-BMK; ORDER DENYING PLAINTIFFS’ MOTION
FOR REMAND
17
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