McCarty et al v. Johnson & Johnson et al, No. 1:2010cv00350 - Document 11 (E.D. Cal. 2010)

Court Description: MEMORANDUM DECISION Re Plaintiff's Motion to Amend Complaint to Join Defendant and REMAND to State Court 7 , signed by Judge Oliver W. Wanger on 6/28/10: Plaintiffs shall submit a form of order consistent with this memorandum decision within five days of electronic service. (Hellings, J)

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1 2 3 4 5 UNITED STATES DISTRICT COURT 6 FOR THE EASTERN DISTRICT OF CALIFORNIA 7 8 LYNN MARIE MCCARTY and LARRY DALE MCCARTY, 1:10-CV-00350 OWW-DLB 9 10 v. 11 12 13 JOHNSON & JOHNSON, DePUY, INC., DePUY ORTHOPAEDICS, INC., STEVE WHITEFIELD and DOES 1 through 100. Defendants. 14 15 I. INTRODUCTION 16 17 18 MEMORANDUM DECISION RE PLAINTIFFS MOTION TO AMEND COMPLAINT TO JOIN DEFENDANT AND REMAND TO STATE COURT (DOC. 7.) Plaintiffs, Before the court is Plaintiff s motion to remand for lack of subject matter jurisdiction under 28 U.S.C. § 1447(c) and to amend to join San Joaquin Valley Orthopaedics Inc. ( SJVOI ) as a 19 20 defendant under 28 U.S.C. § 1447(e). Plaintiffs, as citizens of 21 California, claim the joinder of Defendant Steve Whitefield 22 and/or the joinder by amendment of SJVOI, both California 23 citizens, defeat complete diversity of citizenship required under 24 28 U.S.C. § 1332. 25 26 Defendants oppose, asserting Mr. Whitefield is a sham defendant and there is no valid cause of action against him. Defendants also oppose amendment, arguing it is not 27 28 possible to state a valid cause of action against SJVOI. 1 II. BACKGROUND 1 This is a California state law product liability action 2 3 concerning the malfunction of an orthopaedic implant. 4 26, 2006, a prosthetic femoral rod was implanted in Plaintiff, 5 On July Lynn Marie McCarty, during surgery at Saint Agnes Hospital in 6 7 8 9 Fresno. hip. (Compl. ¶ 1.) In March 2008, Plaintiff felt pain in her A subsequent x-ray revealed a fracture of the femoral rod. (Id.) On December 15, 2009, Plaintiffs filed an action in state 10 11 court against Johnson & Johnson, DePuy, Inc., DePuy Orthopaedics, 12 Inc., and Steve Whitefield. 13 14 (Id.) Johnson & Johnson is alleged to be a corporation that designs, manufactures, sells and/or distributes the Femoral Rod that was implanted in Plaintiff . . . 15 16 17 . (Compl. ¶ 17.) DePuy, Inc., and DePuy Orthopaedics are divisions of Johnson & Johnson engaged in the business of 18 licensing, designing, manufacturing, distributing and/or 19 selling, either directly or indirectly, through third parties or 20 related entities the Femoral Rod. 21 Whitfield is alleged to be an individual who regularly conducted 22 (Compl. ¶¶ 18-19.) Steve and continues to conduct on behalf of Johnson & Johnson and/or 23 24 25 26 27 28 DePuy Orthopaedics, Inc. distribution and sales of the Femoral Rod. (Compl. ¶ 20.) The complaint alleges ten theories of damages, including forms of strict liability, negligence, breach of warranty, and 2 1 loss of consortium. 2 3 4 (Compl. ¶ 22-70.) Plaintiffs assert strict liability, breach of implied warranty, and negligent misrepresentation against Whitefield. (Doc. 7-1.) Plaintiffs claim that Mr. Whitefield was a chain in 5 6 7 the link of the product s distribution and thus should be held liable under California s stream of commerce strict liability 8 doctrine. 9 representative, Mr. Whitefield is liable for a violation of 10 implied warranty he made as part of the sale. 11 Plaintiffs assert Mr. Whitefield made negligent representations 12 (Id.) Plaintiffs also contend that, as a sales regarding the success of the prosthesis. 13 (Id.) Lastly (Id.) On February 26, 2010, Defendants removed to the United 14 15 16 Stated District Court, Eastern District of California. 1.) (Doc. 8- Defendants maintain that there is complete diversity of 17 citizenship because Steve Whitefield is fraudulently joined as a 18 sham defendant. 19 20 21 (Id.) On March 26, 2010, Plaintiffs moved to remand and to amend the complaint. (Doc. 7-1.) was not fraudulently joined. Plaintiffs maintain Steve Whitefield (Id.) Plaintiff filed supporting 22 23 24 25 declarations of Lynn Marie McCarty, Robert A. Abel, Jr., and Malcolm E. Gharzal, M.D. (Docs. 7-8 through 7-11.) On May 28, 2010, Defendants opposed the motion and filed the 26 supporting and supplemental declarations of Steve Whitefield. 27 (Docs. 7-5 and 8-2.) 28 Defendants acknowledge both SJVOI and Steve 3 1 2 3 4 Whitefield are California residents. Defendants maintain that Plaintiffs cannot state a valid cause of action against Mr. Whitefield because: (1) a sales representative cannot be held strictly liable under the stream of 5 6 7 commerce theory (id.); (2) a claim for breach of the implied warranty cannot be maintained because there was no privity 8 between Mr. Whitefield and Plaintiffs (id.); and (3) Mr. 9 Whitefield did not make any representations to Mrs. McCarty and 10 any evidence she offers of alleged misrepresentations made to 11 others is inadmissible hearsay (id.). 12 13 Defendants also argue that it would be futile to add SJVOI as a defendant because claims against SJVOI would fail for the same reasons claims against 14 15 16 17 18 19 Steve Whitefield would fail. (Id.) III. STANDARDS OF DECISION United States Courts have jurisdiction over civil cases if the amount in controversy exceeds $75,000 and there is complete diversity of state citizenship. 28 U.S.C. § 1332. Diversity is 20 21 required between all plaintiff and defendants. Exxon Mobil Corp. 22 v. Allapattah Servs., Inc., 545 U.S. 546 (2005). 23 presumption against removal jurisdiction in order to protect the 24 jurisdiction of state courts. 25 Co., 425 F.3d 689, 698 (9th Cir. 2005) (citing Shamrock Oil & Gas 26 27 28 There is a Harris v. Bankers Life and Gas, Copr v. Sheets, 313 U.S. 100, 108-09, (1941)). Th[is] strong presumption against removal jurisdiction means that the 4 1 defendant always has the burden of establishing that removal is 2 proper. 3 4 Gaus v. Miles, 980 F.2d 564, 566 (9th Cir. 1992). Fraudulent joinder is an exception to the diversity requirement. A sham defendant or fraudulent joinder occurs if 5 6 7 the plaintiff fails to state a cause of action against a resident defendant, and the failure is obvious according to the settled 8 rules of the state. 9 1061, 1067 (9th Cir. 2001). 10 11 12 13 Morris v. Princess Cruises, Inc., 236 F.3d A party is fraudulently joined if, after all the disputed questions of fact and all ambiguities in the controlling state law are resolved in the plaintiffs favor, the plaintiff could not possibly recover against the party whose joinder is questioned. 14 15 16 17 Kruso v. Int l Tel. & Tel. Corp., 872 F.2d 1416, 1426 (9th Cir. 1989). Courts may pierce the pleadings in order to determine if a 18 party is fraudulently joined. 19 Co., 412 F. Supp. 2d 1049, 1053 (E.D. Cal. 2006). 20 seeking removal to the federal court is entitled to present the 21 22 23 24 Maffei v. Allstate California Ins. facts showing the joinder to be fraudulent. Foods Corp., 811 F.2d 1336 (9th Cir. 1987). The defendant McCabe v. General A court may consider summary judgment-type evidence such as affidavits and deposition 25 testimony. 26 Farm Mutual Auto Ins. Co., 44 F.3d 256, 263 (5th Cir. 1995)). 27 plaintiff needs only one possibly valid claim against a non- 28 Morris, 236 F.3d at 1068, (citing Cavallini v. State 5 The 1 diverse defendant in order to defeat an assertion of fraudulent 2 joinder. 3 1998). Richey v. Upjohn Drug Co., 139 F.3d 1313 (9th Cir. 4 5 IV. ANALYSIS 6 Plaintiffs claim they have a possibility of recovering 7 against Mr. Whitefield under (1) strict liability, (2) implied 8 warranty, and (3) negligent representation. 9 (1) 10 11 Strict Liability. Plaintiffs claim they can recover against Mr. Whitefield 12 under California s stream of commerce strict liability doctrine, 13 pursuant to which strict liability applies downward through the 14 various links in the marketing chain from manufacturer to 15 16 distributor, to retailer, and so forth. Kasel v. Remington Arms Company, Inc., 24 Cal. App. 3d 711, 724 (1972). 17 18 19 Strict liability developed from policy interests including enhancing product safety, maximizing protection to the injured 20 plaintiff, and apportioning costs among the defendants. 21 v. HO Sports Co., Inc., 2009 WL 2590425, at *3 (E.D. Cal. 2009). 22 Where these policy justifications are not applicable, the courts 23 have refused to hold the defendant strictly liable even if that 24 Altman defendant could technically be viewed as a link in the chain in 25 26 27 28 getting the product to the consumer market. Id. (citing Arriaga v. Citi-Capital Commercial Corp., 167 Cal. App. 4th 1527, 1535 (2008)). 6 1 A distributor can be held strictly liable for products sold. 2 Vandermark v. Ford Moter Co., 61 Cal. 2d 256, 262 (1964). 3 Vandermark the court held that a retailer could held liable as a 4 distributor under stream of commerce strict liability. In Id. The 5 6 7 court reasoned that the policy concerns for manufacturers applied to retailers. Id. The courts have since applied the doctrine 8 to others similarly involved in the vertical distribution of 9 consumer goods, including lessors of personal property, 10 developers of mass-produced homes, wholesale and retail 11 distributors, and licensors. 12 13 Bay Summit Community Ass n v. Shell Oil Co., 51 Cal. App. 4th 762, 773 (1996) (citing cases). A sales company can be a distributor. In Hinds, the court 14 15 16 refused to dismiss a strict liability claim against a sales company that facilitated an order between a hospital and larger 17 corporation. 18 June 1, 2006). 19 distributor under California law and refused to recognize the 20 sales company as a sham defendant. 21 Hinds v. Zimmer, Inc., 2009 WL 1517893 (E.D. Cal. The court found that the sales company was a Id. Although Hinds does not explicitly define who or what would qualify as a 22 23 24 distributor, the corporate defendant in Hinds did not hold title to the product and did not ship the products to the 25 hospital, but did send representatives to be present during 26 surgery. 27 into the stream of commerce and qualified as a distributor. 28 Id. Hinds held that the company placed the product 7 Id. 1 Likewise, in Becraft v. Ethicon, 2000 WL 1721056 (N.D. Cal. Nov 2 2, 2000), a company that delivered contaminated sutures was a 3 distributor and therefore not a sham defendant. 4 Id. However, Altman suggests an individual salesperson working 5 6 7 directly for a manufacturer does not qualify as a distributor for purposes of the stream of commerce doctrine. 2009 WL 2590425. 8 The salesperson in Altman was a direct employee of a company that 9 manufactured wakeboarding boots. 10 that the policy implications for strict liability did not apply 11 to the individual sales person. 12 13 Id. at *3. Altman reasoned Id. ( [A]s a sales employee of the product manufacturer, the Court does not see how the policies underlying strict products liability (enhancing product safety, 14 15 16 17 18 maximizing protection to the injured plaintiff, and apportioning costs among the defendants) would be furthered by applying the doctrine to [the salesperson] .). Possessing legal title to the product is not an element of 19 distribution. 20 even though it possessed legal title to the product, a financing 21 In Arriaga, 2008 WL 2212978, the court held that, company was outside the direct chain of distribution, and could 22 23 24 25 not possibly be held strictly liable. mention of legal title is made. Furthermore in Hinds, no Hinds, 2009 WL 1517893. Defendants rely on Bay Summit Community Ass n, 51 Cal. App. 26 4th 762, to define the limitations on strict liability. 27 Summit, Shell Oil Company provided resin that was used to create 28 8 In Bay 1 a defective polybutylene plumbing system. 2 market the plumbing product and played an integral role in 3 bringing the product to the consumer market. 4 Id. Shell helped Id. Bay Summit relied on Kasel to articulate a three part test that limits the 5 6 scope of Strict Liability: (1) [T]he defendant received a direct financial benefit from its activities and from the sale of the product; (2) the defendant's role was integral to the business enterprise such that the defendant's conduct was a necessary factor in bringing the product to the initial consumer market; and (3) the defendant had control over, or a substantial ability to influence, the manufacturing or distribution process. 7 8 9 10 11 12 13 14 Id. at 776 (citing Kasel, 24 Cal. App. 3d. 711). This test, however, applied to participants outside the chain of distribution. Shell did not distribute, manufacture, sell, or 15 16 17 participate in the chain of distribution. See Arriaga v. Citi- Capital Commercial Corp., 167 Cal. App. 4th 1527 at *21 (2008) 18 (explaining that the three-part test in Bay Summit applies to 19 entities involved in the marketing process but outside the 20 vertical distribution chain). 21 portions of Kasel to affirm that control is not always necessary. 22 Thus strict liability may attach even if the defendant did not have actual possession of the defective product or control over the manner in which the product was designed or manufactured. 23 24 25 26 Elsewhere, Bay Summit quotes other Bay Summit, 51 Cal. App. 4th 778 (citing Kasel, 24 Cal. App. 3d. 711). 27 28 9 1 (a) 2 Does Mr. Whitefield qualify as a distributor for purposes of the streams of commerce theory? Plaintiffs allege that Mr. Whitefield participated in the 3 4 sale and distribution of the prosthesis. 5 According to Dr. Ghazal s declaration, Steve Whitefield was 6 (Compl. ¶ 20.) present at many of the surgeries that I conducted in which 7 8 9 [Ghazal] utilized medical products that were sold by Steve Whitefield. (Doc. 7-11 ¶ 6 [Decl. of Dr. Ghazal]). It was Mr. 10 Whitefield s custom and practice at my surgeries that he did 11 attend to bring the medical product into the operating room. 12 (Id.) 13 14 15 Whitefield counters in his declaration that He did not deliver the prosthesis to the hospital for the surgery. 7-5 ¶ 5 [Decl. of Steve Whitefield]). (Doc. St. Agnes Medical Center 16 17 18 kept a supply of prosthetic components and the hospital staff was responsible for delivery of the component. (Doc. 8-2 ¶ 5 19 [Supplemental Decl. of Steve Whitefield]). 20 the surgery to make sure the instruments and implants 21 potentially needed for the surgery were present and available. 22 (Doc. 8-2 ¶ 3.) 23 Whitefield attended Whitefield claims to not have any contractual relationship with Johnson & Johnson or Depuy. (Doc. 7-5 ¶ 2.) 24 25 26 27 28 Whitefield also never took title of the property. 4.) (Doc. 7-5 ¶ The property transferred from Depuy to St. Agnes. For the purposes of the fraudulent joinder analysis, this conflicting evidence must be viewed in the light most favorable 10 1 to Plaintiffs. 2 F.3d 329, 334 (5th Cir. 2004). 3 possibly qualifies as a distributor. 4 See McKee v. Kansas City Southern Ry. Co., 358 In this light, Mr. Whitefield Unlike in Altman, 2009 WL 2590425, which held that an individual salesman working directly 5 6 7 for the manufacturer was not a distributor for purposes of the stream of commerce doctrine, Whitefield worked for a separate 8 sales company. 9 is analogous to the presence of the corporate distributor 10 defendant s representative at the surgery in Hinds. 11 1517893, at *1. 12 13 Also, Mr. Whitefield attended the surgery, which See 2009 WL He says he was there to see the products needed for surgery were present and available. It is of no moment that Mr. Whitefield s employer SJVOC and 14 15 16 Mr. Whitefield did not hold title to the product. See Arriaga, 167 Cal. App. 4th 1527. 17 The policy rationale for strict liability applies with 18 greater force to Mr. Whitefield than it did to the salesperson in 19 Altman. 20 defendant. 21 In Altman, the manufacturer was already named as a Consequently, little would have been gained in terms of product safety, maximizing protection to the injured 22 23 24 plaintiff, and apportioning costs among the defendants, by naming an individual sales employee of the manufacturer. Here, however, 25 Mr. Whitefield was named to represent a separate source in the 26 stream of commerce, that of the distributor. 27 principal in his own company and a separate party who profited 28 11 Mr. Whitefield is 1 from the sale. 2 3 4 Unlike the defendant in Bay Summit, which limited the reach of strict liability to those outside of the chain of distribution, whether Mr. Whitefield is a part of the direct 5 6 7 chain of distribution is materially in dispute. All that is required for purposes of disproving fraudulent joinder is a 8 possibly valid claim. 9 here. 10 determinations as to the scope and reach of California s strict 11 liability doctrine. 12 13 Richey, 139 F.3d at 1313. There is one It is more appropriate to permit the state court to make See Spataro v. Depuy Orthopaedics, Inc., 2009 WL 382617 at * 8 (D.N.M. 2009). Here, where Mr. Whitefield worked for a separate sales 14 15 16 company and attended Plaintiff s surgery to assure presence of the product, it is possible that Plaintiffs can recover from him 17 under the streams of commerce theory. 18 15178893; Bercraft, 2000 WL 1721056. 19 requires only a possibility of recovery. 20 that burden. 21 See Hinds, 2009 WL The standard of review Plaintiffs have met Because Mr. Whitefield was not fraudulently joined, complete diversity does not exist. Plaintiffs motion to remand 22 23 24 25 26 is GRANTED. (b) Is SJVOI a distributor under the streams of commerce theory? Even if, arguendo, Mr. Whitefield should not be considered 27 part of the stream of commerce under Altman, his employer, SJVOC, 28 a California corporation, qualifies under Hinds. 12 Similar to 1 Hinds, viewing the uncontroverted allegations and evidence in a 2 light most favorable to Plaitniffs, SJVOI is a sales company that 3 facilitated sales of prosthetic devices between the hospital and 4 the manufacturer. 2009 WL 15178893. SJVOI s assertion that it 5 6 7 is not a distributor is unsupported. SJVOI profits from the sale of the product, facilitates the sale of the product, and even 8 sends representatives to attend surgery, just as the sales 9 company did in Hinds. 10 11 12 13 As discussed above, transfer of title is not a necessary component of distribution under the stream of commerce theory. Plaintiffs have met their burden of establishing that it is possible for them to recover against SJVOI for strict liability. 14 15 16 Whether amendment is otherwise permissible is discussed below. 17 18 19 (2) Implied Warranty. Plaintiffs implied warranty claim alleges that Defendant sold and delivered the femoral rod to the operating room 20 21 (Compl. ¶ 51); and that the femoral rod was warranted for its 22 strength, stability, and durability (Compl. ¶ 48-52). 23 makes no mention of privity. 24 25 26 27 28 Plaintiff California has implemented the Uniform Commercial Code s implied warranty provision. Code § 2314. Cal. Com. Code § 2315; Cal. Com. The implied warranty of fitness requires that a buyer of goods rely upon the seller's skill or judgment to select 13 1 or furnish a suitable product. 2 Intraocular, Inc., 29 Cal. App. 4th 788 (1994). 3 the goods shall be merchantable is implied in a contract for 4 their sale. Evreats v. Intermedics A warranty that Cal. Com. Code § 2314. 5 Under California law, privity between parties is required 6 7 for either claim of implied warranty. Privity of contract is a 8 pre-requisite in California for recovery on a theory of breach of 9 implied warranties of fitness and merchantability. 10 Baxter Healthcare Corp., 158 Cal. App. 4th 1039, 1058 (2008). 11 There is no privity between the original seller and a subsequent 12 13 Blanco v. purchaser who is in no way a party to the original sale. v. Sherwin Williams Co., 42 Cal. 2d 682, 695-96 (1954). Burr The one 14 15 16 exception to this requirement is for foodstuffs, which are not at issue in this case. Evreats, 29 Cal. App. 4th at 788. Courts have held that a medical device sold by a hospital to 17 18 a patient does not create an implied warranty between outside 19 sellers or representatives. 20 defective intraocular lens that was implanted in the patient s 21 eye. In Evreats, a patient received a Evreats, 29 Cal. App. 4th at 788. The patient claimed a 22 23 24 cause of action against the manufacturer. Id. Evreats held that the patient could not sue the manufacturer or distributor of the 25 prosthetic, because there was not privity between the patient and 26 manufacturer. 27 skill or judgment to select or furnish a suitable product. 28 Id. [Plaintiff] relied upon his physician s 14 Id. There is no privity between Whitefield and Plaintiff. 1 As in 2 Evreats, the Femoral Rod was sold to the hospital and then chosen 3 by the doctor. 4 Mr. Whitefield did not sell the product directly to Mrs. McCarty. Like Evreats, Plaintiff relied on the advice of 5 6 7 her doctor and the doctor chose the device. Mrs. McCarty never met Mr. Whitefield and did not receive any representations from 8 him. 9 nor is there any suggestion that privity would exist between 10 Plaintiffs and SJVOI. 11 12 13 There was no privity between Plaintiff and Mr. Whitefield, Plaintiffs have no possibility of recovering against Mr. Whitefield or SJVOI on their implied warranty claim. The claim is DISMIISED WITHOUT LEAVE TO AMEND. 14 15 16 17 18 19 (3) Negligent Misrepresentation. Plaintiffs also allege that Mr. Whitefield negligently misrepresented the product. The standard of review for a fraudulent joinder allows for Defendant to pierce the pleadings and apply an approach similar 20 21 to summary judgment. Maffei, 412 F. Supp. 2d 1049. Defendant 22 bears the burden of presenting evidence to prove that the joinder 23 is fraudulent. 24 present admissible facts that suggest a possibility of recovery 25 under the theory. 26 27 28 In order to rebut such a showing, Plaintiff must Affidavits, depositions, and declarations may be considered in establishing a possibility of the claim. Morris, 236 F.3d at 1068. 15 In order to show a possibility of relief, Plaintiff must 1 2 provide admissible evidence that a cause of action is possible. 3 Under Federal Rules of Evidence Rule 402 [h]earsay is not 4 admissible except as provided by these rules or by other rules 5 6 7 prescribed by the Supreme Court pursuant to statutory authority or by Act of Congress. Here Defendants have met their initial burden of presenting 8 9 evidence that undermines the validity of Plaintiffs negligent 10 misrepresentation claim. 11 he did not speak to or make any representation or warranties to 12 13 Steve Whitefield s declaration states either Mr. Mccarty or Mrs. Mccarty prior to her surgery. 7-7.) (Doc. Whitefield s supplemental declaration confirms that he 14 15 16 made no statements about the appropriateness of the rod to Dr. Ghazal. (Doc. 8-2) In support of Plaintiffs claim, Mrs. McCarty declares: 17 18 Dr. Gazal specifically informed me that Steve Whitefield 19 represented to Dr. Ghazal that the subject femoral rod was a 20 proper and appropriate device for my particular surgery. 21 7-8.) (Doc. This is second layer hearsay and inadmissible because Dr. 22 23 24 Gazal has a motive to shift responsibility for the allegedly defective rod, the McCarty declaration is inadmissible. However, 25 Dr. Gazal s declaration does not include any statements about 26 representations made by Steve Whitefield. (Doc. 7-11.) 27 never met or talked to Defendant. 28 16 Plaintiff These alleged statements are 1 inadmissible hearsay. 2 misrepresentation. 3 4 Plaintiff offers no other evidence of Plaintiffs have not shown a possibility of recovery on this cause of action. It IS DISMISSED 5 6 7 8 9 10 B. Amendment. In the event that Mr. Whitefield is found to be a sham defendant, Plaintiffs move to amend to join SJVOI. As discussed above, it is possible that Plaintiffs could recover against SJVOI under a theory of strict liability. 11 12 13 A judge has discretion to allow or deny an amendment to add a party that destroys diversity. If after removal the plaintiff 14 seeks to join additional defendants whose joinder would destroy 15 subject matter jurisdiction, the court may deny joinder, or 16 permit joinder and remand the action to state court. 17 § 1447(e). 18 19 28 U.S.C. Courts consider six factors when determining whether amendment should be granted: (1) Whether there are any valid claims; 20 21 (2) If the party is required to be joined by rule 19 of 22 the Federal Rules of Civil procedure; 23 (3) Whether the statue of limitations precludes naming 24 the party in state court; 25 (4) Whether there was unexpected delay in joinder; 26 27 28 (5) Whether joinder is only for defeating diversity jurisdiction; and 17 1 (6) Whether denial would prejudice plaintiff. 2 IBC Aviation Services v. Companies Mexicanna de Aviation, 125 F. 3 Supp. 2d 1008 (N.D. Cal. 2000). 4 (1) 5 Meritorious Claim. A meritorious claim is an important factor in determining if 6 7 an amendment should be granted. 8 2d 1080 (C.D. Cal. 1999). 9 Clinco v. Roberts, 41 F. Supp. Many of the other factors rely on the results of a meritorious claim. 10 In this case as seen above, Plaintiffs can state a valid 11 12 strict liability claim against SJVOI. 13 (2) 14 15 16 Rule 19 Joinder. Federal Rules of Civil Procedure 19 requires joinder of persons whose absence would preclude the grant of complete relief, or whose absence would impede their ability to protect 17 18 19 their interests or would subject any of the parties to the danger of inconsistent obligations. IBC at 1011. In general, Rule 19 20 is satisfied when joinder would prevent redundant litigation. 21 IBC held that forcing a plaintiff to litigate in two forums was a 22 waste of judicial resources and risked inconsistent judgment. 23 Id. 24 Denying an amendment would force SJVOI to take separate action on the same facts and law relating to the current case. 25 26 27 28 When evaluated as part of the 28 U.S.C. § 1447(e) determination, a court also must examine whether the non-diverse defendant sought to be joined is tangentially related to the 18 1 cause of action. 2 product, is not tangentially related to the strict liability 3 claim. 4 Id. Here, SJVOI, a distributor of the It is in the direct chain of distribution. California law specifically subjects distributors to liability under the 5 6 7 streams of commerce doctrine. This factor favors amendment. 8 9 10 (3) Motive. [T]he motive of a plaintiff in seeking the joinder of an additional defendant is relevant to a trial court s decision to 11 12 13 grant the plaintiff leave to amend. Desert Empire Bank v. Ins. Co. of N. America, 623 F.2d 1371, 1376 (9th Cir. 1980). [A] 14 trial court should look with particular care at such motive in 15 removal cases, when the presence of a new defendant will defeat 16 the court's diversity jurisdiction and will require a remand to 17 the state court. 18 19 Id. In IBC, the court refused to impute an improper motive to Plaintiff simply because Plaintiff seeks to add a non-diverse defendant post-removal. IBC, 125 F. Supp. 2d 20 21 22 at 1012. Defendant claims the amendment is motivated by destroying 23 diversity. 24 SJVOI. 25 SJVOI until after the removal. 26 27 28 However, there is a potentially valid claim against Moreover, Plaintiff was not aware of the existence of Amending to add a party previously unknown defendant that participated in the stream of commerce is reasonable under the circumstances. 19 (4) 1 Statute of Limitations. The statute of limitations is also a factor in determining 2 3 whether to permit amendment. 4 period for a strict liability claim is three years. 5 Id. at 1008. The limitations Cal. Civ. Code § 338; see also County of Santa Clara v. Atl. Richfield Co., 6 7 8 13 Cal. App. 4th 292, 301 (2006). Here, Plaintiffs discovered the fracture in the Femoral Rod on March 31, 2008. 9 18.) 10 (Compl. ¶ The three year limitations period does not expire until March 31, 2011. 11 (5) 12 13 14 Timeliness. Timeliness is a factor in determining if the amendment should be granted. Courts consider the status and time frame of 15 the litigation, and whether there has been delay in seeking 16 amendment. 17 when discovery had not yet begun. 18 19 20 Id. In IBC, the court held that amendment was timely Id. Plaintiff did not know of the existence of SJVOI until the removal. (Doc. 9-1 [Pls. Reply to Defs. Opp n to Pls. Mot. To Remand And To Am.]) In this case disclosures have not been 21 22 23 24 25 exchanged, and the initial case management conference has not yet occurred. (Id.) (6) Plaintiffs amendment is timely. Prejudice. Prejudice to the plaintiff is also considered. Prejudice 26 27 28 exists if the proposed defendant is crucial to the case. Newcombe v. Adolf Coors Co., 157 F.3d 686, 691 (9th Cir. 1998). 20 1 Prejudice does not exist if complete relief can be afforded 2 without that defendant. 3 found where the plaintiff sought an injunction and damages that 4 Id. In Newcombe, prejudice was not could be fully satisfied by the other defendants. Here, the 5 6 7 streams of commerce doctrine permits a strict liability claim against SJVOI. One of the purposes of strict liability is to 8 apportion costs among the responsible defendants. 9 SJVOI is a potentially responsible party, Plaintiffs will be 10 prejudiced in its absence. 11 12 So long as Because Plaintiff meets all six factors, amendment to add SJVOI as a defendant is proper. The motion to amend is granted. 13 14 15 C. Attorney s Fees and Costs. Plaintiffs also seek compensation for attorney s fees 16 incurred in conjunction with this motion to remand. 17 permissible under 28 U.S.C. § 1447(c) but discretionary. 18 19 Costs are Congress has unambiguously left the award of fees to the discretion of the district court. Moore v. Permanente Medical 20 21 Group, Inc., 981 F.2d 443, 446 (9th Cir. 1992). Courts have 22 remanded but not given fee s where a claim was arguable. 23 Pheley, 2000 WL 236438 (N.D. Cal. Feb. 16, 2000). 24 issue of fraudulent joinder was fairly debatable and Defendants 25 removal was not without foundation. 26 and costs is DENIED. 27 28 21 Wehr v. Here, the Plaintiffs request for fees V. CONCLUSION 1 2 For the reasons set forth above: 3 (1) Plaintiffs motion to remand is GRANTED because Mr. 4 5 Whitefield was not fraudulently joined to the strict liability claim. Even if he were, Plaintiffs can state a claim against 6 7 8 9 10 SJVOI for strict liability. (2) Plaintiffs shall pursue amendment in the state court. (3) Plaintiffs request for attorney s fees and costs is DENIED. 11 (4) Plaintiffs shall submit a form of order consistent with 12 this memorandum decision within five days of electronic service. 13 14 SO ORDERED Dated: June 28, 2010 15 16 17 /s/ Oliver W. Wanger Oliver W. Wanger United States District Judge 18 19 20 21 22 23 24 25 26 27 28 22

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