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Gonzales v. Wal-Mart Stores, Inc.

United States District Court, D. Nevada

May 22, 2014

ADAM GONZALES, Plaintiff(s),
v.
WAL-MART STORES, INC., et al., Defendant(s)

REPORT AND RECOMMENDATION (Docket Nos. 9, 10)

NANCY J. KOPPE, Magistrate Judge.

Pending before the Court is Plaintiff's motion to remand this case to state court. Docket No. 9. Defendant Wal-Mart Stores, Inc. ("Wal-Mart") filed a response in opposition and Plaintiff filed a reply. Docket Nos. 14, 18. Also pending before the Court is Wal-Mart's motion to sever the claims brought against Defendant Samantha Jo Tedesco ("Tedesco"). Docket No. 10. Plaintiff filed a response and Wal-Mart filed a reply. Docket Nos. 17, 19. The Court also received supplemental briefing from the parties. Docket Nos. 21, 22.[1] The Court finds these motions appropriately decided without oral argument. See Local Rule 78-2.

Both motions require the Court to determine whether joinder is proper of claims brought under Nevada law against two defendants arising out of two incidents that both allegedly contribute to the same injury. This appears to be an issue of first impression in this District. Moreover, other courts have reached different conclusions on this issue and the Ninth Circuit has not addressed it. For the reasons explained more fully below, the Court concludes that the claims against Wal-Mart and Tedesco are properly joined in this case. Accordingly, the Court RECOMMENDS that the motion to sever be DENIED, that diversity jurisdiction be found lacking, and that the motion to remand be GRANTED.

I. BACKGROUND

Wal-Mart is a citizen of Delaware and Arkansas. See Notice of Removal at 3 (Docket No. 1). Plaintiff and Tedesco are citizens of Nevada. Compl. ¶¶ 1, 5 (Docket No. 1-2). Plaintiff alleges that, on or about August 11, 2013, he slipped on a clear liquid at a Wal-Mart store and injured his head, neck and shoulders. Id. at ¶¶ 10-11. Plaintiff brings claims against Wal-Mart alleging negligence. Plaintiff also alleges that he was a passenger in a vehicle driven by Tedesco, on or about December 4, 2013, and that he was injured at that time when Tedesco rear-ended another car. Compl. at ¶¶ 13-14. Plaintiff alleges that the car accident caused injury to his head, neck and shoulders. Id. at ¶ 15. Plaintiff brings claims against Tedesco alleging negligence.

Plaintiff alleges that the injuries suffered in the above two events are intertwined, and that it is not possible to accurately apportion the injuries sustained between the two events. Id. at ¶¶ 16-17. As a result, Plaintiff alleges that Wal-Mart and Tedesco bear the burden of apportioning damages, and that they will be held jointly and severally liable for his injuries if they cannot meet that burden. See id. at ¶¶ 17-18; see also Kleitz v. Raskin, 738 P.2d 508, 509 (Nev. 1987) (holding that once a successive tortfeasor is found to have caused injury, it has the burden of apportioning damages and will be held jointly and severally liable for the entire amount if it fails to meet that burden).

Plaintiff brought suit against both Defendants in state court. On February 12, 2014, Wal-Mart removed the case to this Court, asserting that diversity jurisdiction exists because Defendants were fraudulently misjoined. See Docket No. 1 at 3. In particular, Wal-Mart asserted that the claims against Tedesco are severable from the claims against Wal-Mart such that complete diversity would exist as to severed claims against Wal-Mart. See id. On March 12, 2014, Plaintiff filed a motion to remand to state court, arguing that the claims against Defendants were properly joined in a single suit. Docket No. 9. On March 14, 2014, Wal-Mart responded by filing a motion to sever, arguing that the claims were not properly joined in a single suit. Docket No. 10. Those two motions are now before the Court.

II. STANDARDS

A. DIVERSITY JURISDICTION AND REMAND

"Federal courts are courts of limited jurisdiction." Kokkonen v. Guardian Life Ins. Co. Of Am., 511 U.S. 375, 377 (1994). Federal courts have jurisdiction over claims arising out of state law where the claims are between citizens of different states and the amount in controversy exceeds $75, 000. See 28 U.S.C. § 1332(a). Generally speaking, diversity jurisdiction exists only where there is "complete diversity" among the parties; each of the plaintiffs must be a citizen of a different state than each of the defendants. Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996).

Under 28 U.S.C. § 1441(a), "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 defendants, to the district court of the United States for the district... where such action is pending." If jurisdiction is found lacking in a removed case, the federal court must remand the case back to state court. See 28 U.S.C. § 1447(c). In determining whether removal is proper, courts must strictly construe the removal statute against removal, and "[f]ederal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance." E.g., Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992).

B. JOINDER

Whether the Court has jurisdiction in this case turns on the application of the relevant rules governing joinder: if the claims against Tedesco and Wal-Mart are properly joined, complete diversity does not exist. Unfortunately, the parties' briefing leaves several threshold issues unaddressed. First, the crux of Wal-Mart's position is that there has been a "fraudulent misjoinder" of the claims against it and Tedesco. See, e.g., Docket No. 14 at 2. Although not acknowledged by Wal-Mart, there is uncertainty as to whether the fraudulent misjoinder doctrine applies in this Circuit, see, e.g., Osborn v. Metropolitan Life Ins. Co., 341 F.Supp.2d 1123, 1126-28 (E.D. Cal. 2004) (refusing to apply doctrine), and, if it does, the relevant standards for applying it, see Greene v. Wyeth, 344 F.Supp.2d 674, 684-85 (D. Nev. 2004) ("it is impossible to know which standard would be employed by the Ninth Circuit, " but finding no requirement of an "egregious" misjoinder). Nonetheless, Plaintiff does not contest that the doctrine applies in this Circuit nor does he argue that it requires a showing of "egregious" misjoinder or some other requirement beyond mere violation of the joinder rules. Accordingly, the Court assumes without deciding that the fraudulent joinder doctrine applies and will utilize the approach adopted in Greene focusing on whether the joinder rules have been satisfied.

Second, the parties' briefing relies exclusively on the joinder requirements outlined by the Federal Rules of Civil Procedure and fails to address the threshold issue of whether the Court's analysis is governed by the federal or state rules. See, e.g., Erie R. Co. v. Tompkins, 304 U.S. 64, 78-80 (1938). Under the Erie doctrine, federal courts sitting in diversity apply state substantive law and federal procedural law. E.g., Zamani v. Carnes, 491 F.3d 990, 995 (9th Cir. 2007). "Because it is primarily a procedural device, party joinder in the federal courts is governed by Rule 20 and state restrictions on the practice are inapplicable." 7 Charles Alan Wright, Arthur R. Miller, & Mary Kay Kane, FEDERAL PRACTICE & PROCEDURE, § 1652, at 400 (3d. ed., 2014 suppl.). Hence, for cases filed initially in federal court on the basis of diversity jurisdiction, it is well-settled that the Federal Rules of Civil Procedure apply to issues related to joinder. See, e.g., Siebrand v. Gossnell, 234 F.2d 81, 92 (9th Cir. 1956). ...


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