Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_16-cv-04692/USCOURTS-cand-3_16-cv-04692-0/pdf.json

Nature of Suit Code: 893
Nature of Suit: Environmental Matters
Cause of Action: 28:1331 Fed. Question

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UNITED STATES DISTRICT COURT

DISTRICT OF MINNESOTA

David Verschoor, 

Plaintiff,

v.

Volkswagen Group of America, Inc., a 

corporation; Volkswagen 

Aktiengesellschaft, a business entity, form 

unknown; and Does 1 through 20, 

inclusive;

Defendants.

Case No. 16-cv-01256-MJD-KMM

REPORT AND

RECOMMENDATION

Robert L. Hyde, Esq., and Anthony P. Chester, Esq., Hyde & Swigart, counsel for 

plaintiff

Mary E. Bolkcom, Esq., Mickey W. Greene, Esq., and Paul E. D. Darsow, Esq., 

Hanson Bolkcom Law Group, Ltd., counsel for defendants

Plaintiff David Verschoor purchased or leased a 2012 Volkswagen Jetta 

Sportswagen, a vehicle manufactured and sold by Volkswagen Group of America, 

Inc., and Volkswagen Aktiengesellschaft (collectively “VW”).

1

(ECF No. 1-1, Compl. 

¶ 28.) The vehicle included a two liter turbo diesel engine that VW marketed as a 

clean diesel engine capable of traveling greater distances than other economy cars on a 

single tank of gas. (Id. ¶ 20.) On September 3, 2015, VW stated that it had installed 

“defeat devices” on their “clean diesel” vehicles designed to pass clean-air emissions 

testing. (Id. ¶¶ 11-16.) Mr. Verschoor alleges that VW violated several state 

consumer-protection statutes and committed common law torts through the 

 

1

In this report and recommendation, the background facts concerning the 

nature of the plaintiff’s claims are taken from the plaintiff’s complaint. The Court’s 

recitation of those allegations here is not intended to indicate any opinion on the 

merits of the dispute. 

Case 3:16-cv-04692-CRB Document 26 Filed 06/17/16 Page 1 of 6
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installation of the defeat devices and through the representations regarding the 

efficiency of its engines. (Id. ¶¶ 46-96.)

This case is one of hundreds initiated against VW since September 3, 2015, 

when the defeat device issue came to light. Many of those cases have been filed in the 

federal courts, and VW has removed others from state courts. And many of these 

federal cases are putative class actions. The Judicial Panel on Multidistrict Litigation 

(“JPML”) centralized those actions for coordinated and consolidated pretrial 

proceedings in the Northern District of California before United States District Judge 

Charles R. Breyer. In re Volkswagen “Clean Diesel” Mktg., Sales Practices, and Prods. Liab. 

Litig., MDL No. 2672 (JPML Dec. 8, 2015). There are over 760 actions currently 

pending in that consolidated MDL proceeding, and the JPML issued a conditional 

transfer order for this case on May 24, 2016. Id., ECF No. 1682. 

Mr. Verschoor started this lawsuit on April 27, 2016, in the District Court of 

Hennepin County, Minnesota. (ECF No. 1, Notice of Removal ¶ 1.) VW removed 

the litigation to this Court on May 12, 2016. (Id.) In its notice of removal, VW 

alleged that despite the complaint’s recitation of exclusively state-law claims, it 

nonetheless presents federal questions because the allegations concern the Federal 

Clean Air Act and regulations passed by the Environmental Protection Agency. (Id. 

¶¶ 10-12.) 

Currently pending before the Court are two motions: the plaintiff’s motion to 

remand this action to state court, fuled on May 13, 2016 (ECF No. 3); and the 

defendants’ motion to stay this litigation pending transfer of this case to the MDL in 

the Northern District of California (ECF No. 11).2 Mr. Verschoor argues that this 

case should be remanded because all of his claims are state-law claims and there is no 

federal question giving this Court subject-matter jurisdiction. (ECF No. 5.) 

In response to Mr. Verschoor’s remand motion, VW asserts that removal was 

appropriate and federal subject-matter jurisdiction exists because the complaint raises 

a substantial federal issue. (ECF No. 20 at 16-27.) VW also argues that it is 

unnecessary for this Court to decide Mr. Verschoor’s challenge to federal subjectmatter jurisdiction at this time because the MDL court has already established a 

 

2 The District Court has referred the motion to remand to this Court for a report 

and recommendation under 28 U.S.C. § 636 and Local Rule 72.1. The motion to stay 

is likely a non-dispositive motion for which this Court could issue an order. 

However, because the two motions are intertwined, this Court addresses both in this 

report and recommendation. 

Case 3:16-cv-04692-CRB Document 26 Filed 06/17/16 Page 2 of 6
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procedure for addressing that very issue, a process to which this Court should defer. 

(Id. at 12-16.) In its own motion seeking a stay pending transfer to the MDL, VW

raises essentially the same arguments. (See ECF No. 13.) In support of its request for 

a stay, VW argues that: (1) this Court need not decide whether subject-matter 

jurisdiction exists prior to entering an order staying the case (id. at 9-10); (2) staying 

the case will conserve party and judicial resources (id. at 10-14); and (3) entering a stay 

will not prejudice Mr. Verschoor (id. at 14-15). 

This Court agrees with VW that this matter should be stayed pending the 

JPML’s decision whether to transfer this proceeding to the MDL. Consequently, the 

Court also concludes that the motion to remand should be denied without prejudice

so that Mr. Verschoor may renew his request for a remand in the MDL court, or if 

the case is not transferred, in this Court.

3

 The Court recommends such a disposition 

for several reasons. 

First, the Court has the authority to stay this case despite the pending challenge 

to federal jurisdiction. To support his argument to the contrary, Mr. Verschoor relies 

on State of Minnesota v. Pharmacia Corp., Case No. 05-cv-01394-PAM-JSM, 2005 WL 

2739297 (D. Minn. Oct. 24, 2005). However, Pharmacia involved a unique set of 

factual circumstances, limiting its usefulness in resolving the issues here. In fact, a 

close reading of the Pharmacia case on which Mr. Verschoor so heavily relies reveals 

greater support for the defendants’ position in this case than the plaintiff’s.

 

3 Other judges in this District have reached similar conclusions in related cases 

where plaintiffs have moved to remand and VW has requested a stay pending transfer 

to the MDL. See Edens v. Volkswagen Group of Am., Inc., Case No. 16-cv-00750-WMWLIB, ECF No. 35 (D. Minn. May 24, 2016) (staying litigation pending resolution of 

conditional transfer order and canceling hearing on pending motion to remand); Davis 

v. Volkswagen Group of Am., Inc., Case No. 16-cv-00748-RHK-BRT, ECF No. 31 (D. 

Minn. May 20, 2016) (denying motion to remand); Weekes v. Volkswagen Group of Am., 

Inc., Case No. 16-cv-00760-SRN-TNL, ECF No. 24 (D. Minn. May 11, 2016) (denying 

plaintiff’s motions to remand without prejudice and staying the proceedings pending 

transfer to the MDL); Arguello v. Volkswagen Group of Am., Inc., Case No. 16-cv-00211-

SRN-LIB, ECF No. 22 (D. Minn. Apr. 20, 2016) (same); Buffington v. Volkswagen Group 

of Am., Inc., Case No. 16-cv-00666-JNE-JSM, ECF No. 25 (D. Minn. May 10, 2016) 

(same); Davis v. Volkswagen Group of Am., Inc., Case No. 16-cv-00748-RHK-BRT, ECF 

No. 26 (D. Minn. Apr. 15, 2016) (granting in part motion to stay proceedings except 

to the extent that plaintiff sought an order remanding the case from the presiding 

district judge). Indeed, the Court is unaware of any judge from this district agreeing 

to decide the remand issue rather than allow it to be resolved by the MDL.

Case 3:16-cv-04692-CRB Document 26 Filed 06/17/16 Page 3 of 6
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In Pharmacia, the court considered the plaintiff’s motion to remand at the same 

time as the defendant’s motion to stay pending transfer to an MDL proceeding. But

the similarities to this litigation end there. Long before those motions came before 

Judge Magnuson, “the case was transferred [a first time] by the [MDL] Panel to [the

MDL proceeding].” Id. at *1. The MDL court then considered and granted the 

plaintiff’s motion to remand the action back to state court. Id. Long after the 

remand, the United States Supreme Court decided a case that the defendant believed 

changed the federal-question-jurisdiction calculus, giving it a new basis to argue that 

the case belonged in federal court. Id. As a result, the defendant removed the case to 

federal court a second time, more than three years after the case initially commenced. 

Id. Faced with another motion to remand and the defendant’s request that the case be 

stayed pending transfer back to the MDL a second time, the district court first 

determined that the defendant’s removal was untimely and that the court lacked 

jurisdiction over the plaintiff’s claims. Id. at *2-4. 

With respect to the federal-question issue, the Pharmacia court explained that 

the MDL court had already “specifically rejected” an earlier version of the argument 

advanced by the defendant in favor of the second removal. Id. at *3 (“Defendant fails 

to acknowledge that the MDL court further held that Merrell Dow [Pharmaceuticals, Inc. 

v. Thompson, 478 U.S. 804 (1986)] compelled remand. The MDL court specifically 

rejected Defendant’s contention that the prospect of multiple judicial determinations 

on the meaning of AWP warranted removal.”). Verschoor’s argument relies heavily

on the Pharmacia court’s observation that “the absence of subject matter jurisdiction 

renders the Court powerless.” Id. at *2. In this case, however, there is no comparable 

prior judicial determination that federal subject-matter jurisdiction does not exist. 

Nor is there a radically untimely second attempt at removal. To read Pharmacia as 

standing for the proposition that a federal court cannot “act on a motion to stay a 

proceeding in favor of transfer to the MDL” (ECF Mo. 18 at 5), takes the Pharmacia 

court’s words out of context,4and ignores the relevant and unique three-year history 

of the case prior to the order at issue. 

Turning to the factors the Court must consider in determining whether a stay is 

appropriate, this Court notes that the MDL court has established procedures “to 

 

4 As the Honorable Susan R. Nelson observed in Arguello, in staying the litigation 

pending a transfer to the MDL, the Court is not “transferring [its] jurisdiction,” but 

determining that “in the course of considering [a] challenge [to federal subject-matter 

jurisdiction] either [this Court] should do it or Judge Breyer [who is presiding over the 

MDL] should do it.” Case No. 16-cv-00211-SRN-LIB, ECF No. 25, Apr. 20, 2016 

Tr. 11:17-20.

Case 3:16-cv-04692-CRB Document 26 Filed 06/17/16 Page 4 of 6
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resolve motions challenging federal jurisdiction, and hence the Court expects 

[plaintiffs’] arguments to be addressed relatively quickly in the MDL.” Davis, Case 

No. 16-cv-00748-RHK-BRT, ECF No. 31 at 3. There is no indication in the record 

that if the JPML ultimately transfers this matter to the MDL, Mr. Verschoor will lose 

the opportunity to litigate the remand issues. Indeed, the opposite is true, as the 

MDL court has already stated its intention to decide the federal-question-jurisdiction 

issue early in the process. As a result, staying this case until such time as it may be 

transferred to the MDL court will not cause Mr. Verschoor unfair prejudice. And 

although there might be some delay and inconvenience for Mr. Verschoor as a result 

of a stay, “the efficiencies gained through the MDL will benefit all parties.” Edens, 

Case No. 16-cv-00750-WMW-LIB, ECF No. 35. “If this case is transferred to the 

MDL, the MDL court likely will be in a better position—and certainly not in a worse 

position—to address Plaintiff’s motion to remand.” Id. 

Staying this case so that the MDL court may address Mr. Verschoor’s remand 

motion will also conserve judicial resources. The MDL was established precisely so 

that a single court could decide “common factual and legal questions arising out of 

VW’s conduct.” Davis, Case No. 16-cv-00748-RHK-BRT, ECF No. 31 at 3. If the 

case is transferred, as the Court predicts, the stay gives the MDL court the chance to 

consider a question to which it will have already devoted substantial attention. 

Conversely, to deny VW’s request for a stay while this matter is subject to a 

conditional transfer order risks unnecessary expenditure of this Court’s resources. 

This Court should not expend its energy evaluating a complex issue it will likely never 

decide; a relatively short stay of the proceedings while the JPML decides whether to 

transfer the matter is the best way to prevent such potential waste under these 

circumstances. See Kemp v. Tyson Seafood Grop., Inc., 19 F. Supp. 2d 961, 964-65 (D. 

Minn. 1998) (noting that conservation of judicial resources is a relevant factor 

weighing in favor of the entry of a stay). 

For all these reasons, IT IS HEREBY RECOMMENDED that:

1. Plaintiff’s motion to remand (ECF No. 3) should be DENIED 

WITHOUT PREJUDICE and Plaintiff be permitted to either renew the motion to 

remand before the MDL court if the case is transferred, or in this proceeding in the 

event the JPML vacates its conditional transfer order. 

2. Defendants’ motion to stay (ECF No. 11) be GRANTED.

Case 3:16-cv-04692-CRB Document 26 Filed 06/17/16 Page 5 of 6
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Date: June 17, 2016

s/ Katherine Menendez

Katherine Menendez

United States Magistrate Judge 

NOTICE

Filing Objections: This Report and Recommendation is not an order or 

judgment of the District Court and is therefore not appealable directly to the Eighth 

Circuit Court of Appeals.

Under Local Rule 72.2(b)(1), “a party may file and serve specific written 

objections to a magistrate judge’s proposed finding and recommendations within 14 

days after being served a copy” of the Report and Recommendation. A party may 

respond to those objections within 14 days after being served a copy of the 

objections. LR 72.2(b)(2). All objections and responses must comply with the word 

or line limits set for in LR 72.2(c).

Under Advisement Date: This Report and Recommendation will be 

considered under advisement 14 days from the date of its filing. If timely objections 

are filed, this Report and Recommendation will be considered under advisement from 

the earlier of: (1) 14 days after the objections are filed; or (2) from the date a timely 

response is filed.

Case 3:16-cv-04692-CRB Document 26 Filed 06/17/16 Page 6 of 6