Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_19-cv-02620/USCOURTS-caed-2_19-cv-02620-0/pdf.json

Parties Involved:
Autonation Chrysler Dodge Jeep Ram Roseville
Defendant
FCA US LLC
Defendant
Crystal Ramos
Plaintiff
Marlon Ramos
Plaintiff

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

MARLON RAMOS and CRYSTAL RAMOS,

Plaintiffs,

v.

FCA LLC, a Delaware Limited 

Liability Company; AUTONATION

CHRYSLER DODGE JEEP RAM 

ROSEVILLE, a Business 

Organization Form Unknown; and 

DOES 1 through 10, inclusive,

Defendant.

No. 2:19-CV-02620 WBC CKD

MEMORANDUM AND ORDER RE: 

MOTION TO REMAND

----oo0oo----

Plaintiffs Marlon and Crystal Ramos bring this action 

against defendants FCA US LLC (“FCA”), AutoNation Chrysler Dodge 

Jeep Ram Roseville (“AutoNation”), and Does 1 through 10, 

alleging that defendants sold plaintiffs a defective vehicle in 

violation of the Song-Beverly Consumer Warranty Act (the “Act”). 

Before the court is plaintiffs’ Motion to Remand. (Docket No.

10.)

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I. Relevant Allegations and Procedural Background

Plaintiffs are citizens of California. (Notice of 

Removal at 6 (Docket No. 1).) In 2018, plaintiffs purchased a 

new Jeep Grand Cherokee from defendant AutoNation. (Compl. ¶ 7

(Docket No. 1-4).) The purchase included defendants’ express 

warranty under which AutoNation and FCA US undertook to preserve 

or maintain the utility of performance of the vehicle. (Compl. ¶ 

8.) Defendants delivered the vehicle with “serious defects and 

nonconformities to warranty” including “various engine defects,”

which impaired the use, value, and safety of the vehicle. 

(Compl. ¶¶ 9, 17.) Plaintiffs delivered the vehicle to 

authorized FCA US LLC repair facilities for repair of the 

nonconformities on multiple occasions, but defendants were unable 

to conform the vehicle to the warranties. (Compl. ¶¶ 18, 19.) 

Plaintiffs filed suit in state court alleging only a 

violation of the Song-Beverly Consumer Warranty Act. (Notice of 

Removal Ex. B. (Docket No. 1-4).) Defendants subsequently 

removed the action to federal court under diversity jurisdiction. 

(Notice of Removal (Docket No. 1).) Defendants acknowledge that 

AutoNation is a citizen of California, such that its involvement 

in this action would destroy complete diversity, but take the 

position that the joinder of AutoNation was fraudulent and 

therefore does not defeat diversity. (Notice of Removal at 6-7.) 

II. Discussion

A. Motion to Remand

A defendant may remove “any civil action brought in a 

State court of which the district courts . . . have original 

jurisdiction.” 28 U.S.C. § 1441. Original jurisdiction in the 

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form of diversity jurisdiction exists where there is complete 

diversity and the amount-in-controversy exceeds $75,000. 28 

U.S.C. § 1332(a); Caterpillar Inc. v. Lewis, 519 U.S. 61, 68

(1996). “In determining whether there is complete diversity, 

district courts may disregard the citizenship of a non-diverse 

defendant who has been fraudulently joined.” Grancare, LLC v. 

Thrower by & through Mills, 889 F.3d 543, 548 (9th Cir. 2018).

Defendants argue that AutoNation was fraudulently 

joined because plaintiffs cannot establish a cause of action 

against AutoNation. (Docket No. 18 at 11-12.) To establish 

fraudulent joinder, defendants must therefore show that 

AutoNation “cannot be liable on any theory.” Id. (quoting 

Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1318 (9th Cir. 1998)). 

The failure to state a cause of action must be “obvious according 

to the settled rules of the state.” Morris v. Princess Cruises, 

Inc., 236 F.3d 1061, 1067 (9th Cir. 2001). “[I]f there is a 

possibility that a state court would find that the complaint 

states a cause of action against any of the resident defendants, 

the federal court must find that the joinder was proper and 

remand the case to the state court.” Grancare, 889 F.3d at 549

(quoting Hunter v. Philip Morris USA, 582 F.3d 1039, 1046 (9th 

Cir. 2009)); see also Madison v. Ford Motor Co., No. 2:19-CV00853 WBS DB, 2019 WL 3562386, at *2 (E.D. Cal. Aug. 6, 2019).

“A defendant invoking federal court diversity jurisdiction on the 

basis of fraudulent joinder bears a ‘heavy burden’ since there is 

a ‘general presumption against [finding] fraudulent joinder.’” 

Grancare, 889 F.3d at 550 (quoting Hunter, 582 F.3d at 1046). 

Accordingly, the court now considers whether the complaint 

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possibly pleads a cause of action against AutoNation.

The Song-Beverly Consumer Warranty Act (“Song-Beverly 

Act”) protects purchasers of “consumer goods,” defined as “any 

new product or part thereof that is used, bought, or leased for 

use primarily for personal, family, or household purposes, except 

for clothing and consumables.” Cal. Civ. Code § 1791(a). 

Plaintiffs allege both a breach of express warranty and a breach 

of implied warranty of merchantability under the Act. Possible 

liability under either of these theories suffices to establish 

that joinder was not fraudulent. See Grancare, 889 F.3d at 548-

49.

Unless disclaimed by the Act, “every sale of consumer 

goods that are sold at retail” in California is “accompanied by 

the manufacturer's and the retail seller's implied warranty that 

the goods are merchantable.” Cal. Civ. Code § 1792 (emphasis 

added). Under the Act, an implied warranty of merchantability 

guarantees that “consumer goods meet each of the following: (1) 

Pass without objection in the trade under the contract 

description; (2) Are fit for the ordinary purposes for which such 

goods are used; (3) Are adequately contained, packaged, and 

labeled; (4) Conform to the promises or affirmations of fact made 

on the container or label.” Cal. Civ. Code § 1791.1(a). 

Plaintiff alleges that AutoNation sold plaintiff the 

vehicle at issue. (Compl. ¶ 7.) When delivered, the vehicle 

allegedly had “various engine defects” that impaired the use and 

safety of the car. (Compl. ¶¶ 9, 17.) Defendants have not 

replaced the vehicle and have not remedied the defects. (Compl. 

¶¶ 21, 22.) “Vehicles subject to engine failure cannot be said 

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to be merchantable.” Cholakyan v. Mercedez-Benz USA, LLC, 796 F. 

Supp. 2d 1220, 1244 (C.D. Cal. 2011). The allegations plausibly 

establish that AutoNation breached the “retail seller's implied 

warranty that the goods are merchantable,” Cal. Civ. Code § 1792, 

because the alleged defects impaired the use of the car and 

consequently made the vehicle not “fit for driving,” see

Cholakyan, 796 F. Supp. 2d at 1241. Accordingly, there is at 

least a possibility that plaintiffs state a claim against 

AutoNation for breach of implied warranty of merchantability.

Defendant argues that the complaint does not 

specifically state that AutoNation was unable to repair the 

vehicle. While such a deficiency, if it exists, is relevant to 

plaintiffs’ breach of express warranty claim, see Orichian v. BMW 

of North America, LLC, 226 Cal.App.4th 1322, at 1333-1334 (2014)

(requiring allegations of seller’s failure to repair defect), it 

is not relevant to plaintiff’s claim for breach of implied 

warranty of merchantability, see Cholakyan, 796 F. Supp. 2d at 

1241-44. Defendant has therefore failed to show that AutoNation 

“cannot be liable on any theory.” See Grancare, 889 F. 3d at 

548. Because there is a possibility that plaintiffs state a 

claim against AutoNation, plaintiffs’ joinder of AutoNation was 

not fraudulent.1 Accordingly, considering that both AutoNation 

 

1 Aside from allegations of a deficient complaint, 

defendants contend that plaintiffs’ joinder of AutoNation is 

fraudulent because plaintiff seeks the same remedies from both 

defendants and because FCA may indemnify AutoNation. (Opp. to 

Mot. to Remand at 9.) Neither of these arguments go to the 

possibility of the complaint stating a cause of action and 

therefore are not reasons for the court to find fraud. 

Further, although defendants moved to compel 

arbitration (Docket No. 20), the court must still remand this 

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and plaintiffs are citizens of California, the parties are not 

completely diverse, and this court does not have original 

jurisdiction over the action. The court will therefore remand 

this action.

B. Dismissal of AutoNation under Rule 21

A court “may cure jurisdictional defects by dismissing 

dispensable nondiverse parties under Federal Rule of Civil 

Procedure 21.” Madison, 2019 WL 3562386, at *4 (citing NewmanGreen, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 832-33 (1989)). 

Defendants ask the court to exercise its discretion under Rule 21 

and drop AutoNation as a party to preserve complete diversity. 

(Opp. to Mot. to Remand at 14.) 

The court declined to exercise that discretion under 

nearly identical circumstances in Madison v. Ford Motor Co., No. 

2:19-CV-00853 WBS DB, 2019 WL 3562386 (E.D. Cal. Aug. 6, 2019). 

In Madison, plaintiffs sued defendants Ford Motor Company and its 

in-state representative Elk Grove Ford in state court alleging 

various state law claims arising from the sale of a vehicle. Id.

at *1. Defendants removed the action under diversity 

jurisdiction and argued that Elk Grove Ford was fraudulently 

joined. Id. at *2. This court found that plaintiffs’ joinder 

was not fraudulent. Id. at *4. Defendants then asked the court 

 

action. A court can compel arbitration under the Federal 

Arbitration Act (FAA) “only when the federal district court would 

have jurisdiction over a suit on the underlying dispute.” Moses 

H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 26 n.32 

(1983). The FAA “does not create any independent federalquestion jurisdiction under 28 U.S.C. § 1331.” Id. Accordingly, 

absent “an independent basis for federal jurisdiction,” the court 

cannot enforce the FAA. Id.

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to sever Elk Grove Ford under Rule 21. Id. This court declined 

to do so because severance “would defeat the purpose of 

permissive joinder” –- convenience and efficiency –- and because 

accepting defendants’ argument would constitute “an improper endrun around [the court’s] rejection of the fraudulent misjoinder 

doctrine.” Id. at *4 (quoting Hampton v. Insys Therapeutics, 

Inc., 319 F. Supp. 3d 1204, 1214 (D. Nev. 2018)).

For the same reasons, the court declines to sever 

AutoNation. Here, “the claims against both defendants are 

sufficiently intertwined, factually and legally, such that 

severance would be inconvenient and inefficient.” See Madison,

2019 WL 3562386, at *4. Accordingly, the court declines to 

exercise its discretion under Rule 21.

C. Attorney’s Fees

Plaintiffs request an award of attorney’s fees and 

costs pursuant to 28 U.S.C. § 1447(c). (Mot. to Remand at 7.) 

“An order remanding the case may require payment of just costs 

and any actual expenses, including attorney fees, incurred as a 

result of the removal.” 28 U.S.C. § 1447(c). The standard for 

awarding fees turns on the “reasonableness of the attempted 

removal.” See Moore v. Permanente Med. Grp., 981 F.2d 443, 446–

47 (9th Cir. 1992). “Absent unusual circumstances, courts may 

award attorney’s fees under § 1447(c) only where the removing 

party lacked an objectively reasonable basis for seeking removal. 

Conversely, when an objectively reasonable basis exists, fees 

should be denied.” Martin v. Franklin Capital Corp., 546 U.S. 

132, 141, 126 S. Ct. 704, 711, 163 L. Ed. 2d 547 (2005). “The 

objective reasonableness of removal is measured at the time of 

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removal.” Cent. Valley Med. Grp., Inc. v. Indep. Physician 

Assocs. Med. Grp., Inc., No. CIV. 1:19-00404-LJO-SKO, 2019 WL 

3337891, at *6 (E.D. Cal. July 25, 2019) (quoting Pope v. Wells 

Fargo Bank, N.A., No. CIV. 2:10-2807-WBS-KJM, 2010 WL 8388301, at 

*5 (E.D. Cal. Nov. 29, 2010). 

At the time of removal, there was no objectively 

reasonable basis for defendants to seek removal. The law was 

clear that defendants had to show that plaintiffs “fail[ed] to 

state a cause of action against [AutoNation], and [that] the 

failure [was] obvious according to the settled rules of the 

state.’” Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067 

(9th Cir. 2001) (quoting McCabe v. Gen. Foods Corp., 811 F.2d 

1336, 1339 (9th Cir. 1987)); see also Grancare, 889 F.3d 543, 552 

(“[T]he degree of clarity in the relevant law at the time of 

removal is a relevant factor in determining whether a defendant's 

decision to remove was reasonable.”) Defendants did not have 

reason to believe the alleged failure was “obvious.” Defendants 

do not offer any authority suggesting that similar allegations of 

a sale of a defective vehicle were insufficient to state a claim 

under the Song-Beverly Act. Cf. Gardner v. UICI, 508 F.3d 559, 

562 (9th Cir. 2007) (finding case law supporting removal to 

suggest that removal was not “objectively unreasonable”). 

Further, as discussed above, this court and other California 

district courts have rejected the fraudulent-defendant removal 

strategy in very similar circumstances over and over again. See

Madison, 2019 WL 3562386, at *4; Wittinger v. Ford Motor Co., No. 

2:18-CV-03214-WBS-EFB, 2019 WL 1993983, at *2 (E.D. Cal. May 6, 

2019) (remanding and granting attorney’s fees); Cavale v. Ford 

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Motor Co., No. 1:18-CV-00680-LJO-BAM, 2018 WL 3811727, at *3 

(E.D. Cal. Aug. 9, 2018); Levine v. Ford Motor Co., No. 2:18-CV09995-SVW-JEM, 2019 WL 990437, at *1 n.1 (C.D. Cal. Feb. 28, 

2019) (collecting cases). 

Moreover, defendants do not satisfy the objective 

reasonability standard because a majority of defendants’ 

reasoning relies on matters unrelated to plaintiffs’ complaint. 

For example, in its notice of removal, defendants state that it 

is FCA’s “belie[f] [that] Plaintiffs have no intention of 

prosecuting” their claim against AutoNation (Notice of Removal ¶ 

26) and that “FCA’s counsel’s vast litigation experience in 

opposing these types of cases has been that individual 

dealerships have not been regularly sued” (Id. at ¶ 27). Both

arguments constitute FCA counsel’s subjective appreciation of the 

circumstances and do not satisfy the objective reasonability 

standard. The court will therefore order payment to plaintiffs 

of attorney’s fees associated with defendants’ removal. 

IT IS THEREFORE ORDERED that plaintiffs’ Motion to 

Remand (Docket No. 10) be, and the same hereby is, GRANTED; 

IT IS FURTHER ORDERED that plaintiffs’ request for an 

award of attorneys’ fees and expenses is GRANTED in the sum of 

$3,420.00; and

This action is HEREBY REMANDED to the Superior Court of 

the State of California, in and for the County of Placer.

Dated: February 19, 2020

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