United States District Court, D. Montana, Great Falls Division
ROBERT KOVAK and CONNIE DARKO, as personal representatives of the Estate of Shelby Rae Kovack, Plaintiffs,
FORD MOTOR COMPANY; TRW AUTOMOTIVE LLC.; TRW VEHICLE SAFETY SYSTEMS, INC.; FORD MOTOR CREDIT COMPANY, LLC; and BISON MOTOR CO., Defendants.
ORDER ADOPTING FINDINGS AND RECOMMENDATIONS
BRIAN MORRIS, District Judge.
This dispute concerns the existence of federal jurisdiction. The underlying suit regards the death of seventeen year-old Shelby Kovack, who was killed when the 2001 Ford Explorer that she was driving rolled in August 2012. (Doc. 10 at 7; doc. 39 at 1.) Plaintiffs Robert Kovack and Connie Darko, on behalf of Shelby's estate, (Plaintiffs) allege the liability of Ford Motor Company, TRW Automotive LLC, TRW Vehicle Safety Systems, Inc, Ford Motor Credit Company, LLC, and Bison Motor Company (collectively Defendants) under negligence and strict liability theories. (Doc. 10 at 2-6, 7-15.)
Plaintiffs filed the complaint in this case against the Defendants in the Eighth Judicial District of Montana, Cascade County on October 11, 2013. (Doc. 10 at 1.) Two of the Defendants, Ford Motor Company and Ford Motor Credit Company (collectively Ford), with the consent of all remaining Defendants, removed the case based upon diversity of citizenship on November 20, 2013. 28 U.S.C. §§ 1441(a), 1446; (doc. 1). A critical element of removal was Ford's allegation that the Plaintiffs fraudulently had joined the only non-diverse Defendant, Bison Motor Company. ( Id. at 6-7.)
Plaintiffs moved to remand the case back to the Eighth Judicial District of Montana, Cascade County, on December 20, 2013. (Doc. 16.) The Court referred the matter to Judge Strong. (Doc. 22.) Judge Strong entered findings and recommendations on March 3, 2014. (Doc. 37.) Judge Strong recommended that the Court remand to the Eighth Judicial District of Montana based upon the "possibility that a state court would find that the complaint states a cause of action against the resident defendant...." (Doc. 37 at 8.)
Ford objected to Judge Strong's findings and recommendations on March 13, 2014. (Doc. 38) Plaintiffs responded to Ford's objections on March 27, 2014. (Doc. 39.) Title 28, Section 636(b)(1) of the United States Code entitles an objecting party to review de novo of the findings and recommendations to which they object. The Court will review for clear error all other findings and recommendations. McDonnell Douglas Corp. v. Commodore Bus. Mach., Inc., 656 F.2d 1309, 1313 (9th Cir. 1981). The Court will adopt Judge Strong's findings and recommendations in full for the reasons discussed below.
Ford, with the consent of all other Defendants, removed this case pursuant to 28 U.S.C. §§ 1441(a) and 1446. The Court possesses personal jurisdiction over the parties, who either reside in Montana, or have done substantial business in Montana. FED. R. CIV. P. 4(k)(1)(A); MONT. R. CIV. P. 4(b). Subject matter jurisdiction may exist pursuant to 28 U.S.C. § 1332, based upon the diversity of the parties. Complete diversity of citizenship provides the only basis that the parties have asserted for federal jurisdiction. Whether complete diversity exists remains in dispute.
Defendants removed this action into the District of Montana "based upon the following federal jurisdiction basis: diversity of citizenship under 28 U.S.C. § 1332." (Doc. 1 at 2.) Ford qualified removal upon an exception to the requirement for complete diversity, "because the only non-diverse defendant has been fraudulently joined." ( Id. at 3.) Plaintiffs conversely assert "colorable claims against non-diverse Bison Motor Co. under Montana law, " (doc. 16 at 2) and that as a result, this Court lacks jurisdiction under 28 U.S.C. § 1332. (Doc. 17 at 10.)
A party generally may remove an action from state court to federal court only where complete diversity of citizenship exists. 28 U.S.C. §§ 1332(a), 1441(b). The fraudulent joinder of a non-diverse defendant represents one exception to the requirement for complete diversity. Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir.2001). Fraudulent joinder occurs "if the plaintiff fails to state a cause of action against a resident defendant, and the failure is obvious according to the settled rules of the state." Hamilton Materials, Inc. v. Dow Chem. Corp., 494 F.3d 1203, 1206 (9th Cir. 2007) (emphasis added). The defendant bears the burden of proving that the requisite jurisdiction exists to support removal. Gaus v. Miles, 980 F.2d 564, 566 (9th Cir.1992).
The question arises whether Ford has shown an obvious failure by the Plaintiffs to state a cause of action against Bison Motor Company under Montana law. See Hamilton Materials, Inc., 494 F.3d at 1206. Ford bears "the burden of proving that the plaintiff failed to state a cause of action against the resident defendant who would otherwise destroy diversity, and that the failure is obvious according to the settled law of the state." Murakami v. E.L. DuPont De Nemours & Co., 191 F.3d 460 (9th Cir. 1999). Removal of this case would be improper if Ford failed to make this showing.
Judge Strong found that the Plaintiffs had stated a valid claim against Bison Motors Company under Montana law, and that as a result, complete diversity did not exist between the parties. (Doc. 37 at 9.) Judge Strong recommended that the case be remanded to the Eighth Judicial District of Montana, Cascade County. ( Id. ) Ford ...