Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_07-cv-01224/USCOURTS-casd-3_07-cv-01224-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 15:2301 Magnuson-Moss Warranty Act

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07cv1224

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

TIFFANI CHAMBERS,

Plaintiff,

v.

GENERAL MOTORS CORPORATION,

et al.,

Defendants.

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Civil No. 07cv1224-L(WMc)

ORDER GRANTING MOTION TO

AMEND COMPLAINT AND

REMANDING ACTION [doc. #13]

Plaintiff filed an action in the Superior Court of the State of California, for the County of

San Diego, on May 24, 2007, against defendants General Motors Corporation (“GM”) and Bob

Baker Chevrolet Subaru (“BBCS”). Because plaintiff had included a claim under the federal

Magnuson-Moss Warranty Act (“MMWA”), defendants removed the action to federal court on

the basis of the Court’s original jurisdiction, 28 U.S.C. § 1331.

Plaintiff seeks to amend her complaint to dismiss her third cause of action for violation of

the MMWA and to have this action remanded to the San Diego Superior Court. Defendants

oppose the motion. Plaintiff’s motion has been fully briefed and the Court finds this matter

suitable for determination on the papers submitted and without oral argument pursuant to Civil

Local Rule 7.1(d)(1). 

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Case 3:07-cv-01224-L-WMC Document 19 Filed 11/21/07 Page 1 of 5
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2 07cv1224

MOTION TO AMEND THE COMPLAINT 

A. Legal Standards

Rule 15(a) of the Federal Rules of Civil Procedure provides that, after a responsive

pleading has been served, “a party may amend [its] pleading only by leave of the court or by

written consent of the adverse party . . . .” FED. R. CIV. P. 15(a). Rule 15 states that leave to

amend “shall be freely given when justice so requires.” Id. The decision whether to grant or

deny leave to amend is within discretion of the trial court; however, leave to amend should be

freely given in the absence of prejudice to the opposing party. See Keniston v. Roberts, 717 F.2d

1295, 1300 (9th Cir. 1983).

Courts consider four factors in deciding whether to grant a motion for leave to amend a

complaint: (1) bad faith or dilatory motive on the part of the movant; (2) the futility of the

proposed amendment; (3) undue delay in filing the motion; and (4) prejudice to the opposing

party. See Roth v. Marquez, 942 F.2d 617, 628 (9th Cir. 1991)(citing DCD Programs v.

Leighton, 833 F.2d 183, 186 (9th Cir. 1987)). The party opposing the motion for leave to amend

a complaint bears the burden of showing any of the above four factors. See DCD Programs, 833

F.2d at 186. 

B. Discussion

As noted above, plaintiff seeks to amend her complaint to dismiss the sole federal law

claim, i.e., the MMWA claim. Plaintiff states that her MMWA claim was alleged in error and

therefore, she requests that this Court grant her motion to amend the complaint to delete the

federal claim. Defendants do not appear to oppose plaintiff’s request to delete the federal claim

but instead argue that this Court should nevertheless retain jurisdiction over the state-law claims. 

Because defendants are not prejudiced by the amendment to delete the federal claim, the

amendment would not cause undue delay, and there is no showing of bad faith or dilatory motive

on the part of plaintiff, plaintiff’s motion to amend the complaint will be granted.

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3 07cv1224

MOTION TO REMAND

As noted above, defendants removed this action because the complaint alleged a violation

based upon a substantial federal question. But with the sole federal claim omitted in the

amended complaint, plaintiff seeks to have the action remanded to the state court. Defendants

contend that the Court should retain jurisdiction of the case, however, because there is diversity

of citizenship. Additionally, defendants assert the Court should exercise its supplemental

jurisdiction over the state law claims. 

1. Diversity of Citizenship

Defendants contend that even if there is no substantive federal question remaining in the

case, the Court may exercise its diversity jurisdiction. Recognizing that plaintiff has named a

non-diverse California company as a defendant, defendants assert that BBCS is a “sham”

defendant whose residency does not defeat diversity jurisdiction. Plaintiff moves for remand

claiming BBCS is not a sham defendant.

Diversity jurisdiction requires complete diversity of citizenship, with each plaintiff being

a citizen of a different state from each defendant. 28 U.S.C. § 1332(a)(1); Morris v. Princess

Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2001). The one exception to this standard arises

when a non-diverse defendant is made a party to an action as a “sham” to defeat diversity.

Morris, 236 F.3d at 1067. Allegations of the presence of a sham defendant can only succeed on

a showing that “there is no possibility that the plaintiff will be able to establish a cause of action”

against that defendant under well-settled rules of state law. Good v. Prudential Ins. Co., 5 F.

Supp. 2d 804, 807 (N.D. Cal. 1998). In other words, to be a “sham” defendant, the failure to

state a claim against that defendant must be “obvious” under settled state law. McCabe v. Gen.

Foods Corp., 811 F.2d 1336, 1339 (9th Cir.1987). Defendants, as the removing party, have the

burden of proving that the non-diverse defendants are shams. See Gaus v. Miles, 980 F.2d 564,

566 (9th Cir. 1992).

Defendants contend that plaintiff’s “complaint does not allege any independent

allegations against Bob Baker Chevrolet Subaru, and has merely lumped the dealer into

plaintiff’s counsel’s typical form complaint.” (Opp. at 7). But as plaintiff correctly notes in her

Case 3:07-cv-01224-L-WMC Document 19 Filed 11/21/07 Page 3 of 5
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reply memorandum, the fourth cause of action for violation of the Consumer Legal Remedies

Act and the sixth cause of action for breach of the Implied Warranty of Merchantability adhere

to the dealer, BBCS. (Reply at 2). 

Because defendants have not shown that plaintiff could not possibly recover against the

individual defendant BBCS, defendants have not met their burden to show that BBCS is a sham

defendant. Accordingly, the Court finds that diversity jurisdiction is not present and remand to

the Superior Court of the State of California in and for the County of San Diego is appropriate.

2. Exercise of Supplemental Jurisdiction

Defendants also argue that the Court should retain jurisdiction over the case even though

the federal claim has been dismissed. Under 28 U.S.C. § 1367, district courts may decline to

exercise supplemental jurisdiction over a claim if the court has dismissed all claims over which it

has original jurisdiction. 28 U.S.C. § 1367 provides in relevant part:

(c) the district courts may decline to exercise supplemental jurisdiction over a

claim under subsection (a) if-

(1) the claim raises a novel or complex issue of State law,

(2) the claim substantially predominates over the claim or claims over

which the district court has original jurisdiction,

(3) the district court has dismissed all claims over which it has original

jurisdiction, or

(4) in exceptional circumstances, there are other compelling reasons for

declining jurisdiction . . . .

28 U.S.C. § 1367(c).

In the preceding section of this Order, this Court permitted plaintiff leave to amend the

complaint to delete the sole federal claim over which it has original jurisdiction. Thus, the

condition set forth in 28 U.S.C. § 1367(c)(3) is satisfied. The Court recognizes that “in the usual

case in which all federal-law claims are eliminated before trial, the balance of factors . . . will

point toward declining to exercise jurisdiction over the remaining state-law claims.” Acri v.

Varian Assoc., 114 F.3d 999, 1001 (9th Cir. 1997) (internal quotations omitted); see also Warren

v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1143 n. 7 (9th Cir. 2003) (The court did not

abuse its discretion by declining to exercise supplemental jurisdiction over the remaining state

law claims).

In determining whether to remand, the Court considers the values of economy,

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convenience, fairness and comity. Acri, 111 F.3d at 1001. Here, plaintiff’s remaining claims are

based solely on substantive state law and the state court is in the best position to apply and

interpret that law. The claims were filed originally in state court, no discovery has taken place,

and this Court has only considered the current motion to amend and remand in this action. 

Further, remand will not result in prejudice to defendants, because the case is at an early stage of

litigation. See Bader v. Electronics for Imaging, Inc., 195 F.R.D. 659, 662-63 (N.D. Cal. 2000)

(“[W]hile a change from federal to state court might create a tactical disadvantage to defendants,

that is not legal prejudice.”) (referencing Hamilton v. Firestone Tire & Rubber Co., 679 F.2d

143 (9th Cir.1982)). Accordingly, this Court declines to exercise supplemental jurisdiction over

the remaining state law claims and grants plaintiff’s motion to remand.

CONCLUSION

 IT IS ORDERED granting plaintiff’s motion to amend complaint. IT IS FURTHER

ORDERED remanding this matter to the San Diego County Superior Court. IT IS FURTHER

ORDERED directing the Clerk of the Court to close this case.

IT IS SO ORDERED.

DATED: November 21, 2007

M. James Lorenz

United States District Court Judge

COPY TO: 

HON. WILLIAM McCURINE

UNITED STATES MAGISTRATE JUDGE

ALL PARTIES/COUNSEL

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