Gardiner Family, LLC v. Crimson Res. Mgmt. Corp.

• Decision Date: 24 September 2015
• Docket Number: Case No. 1:15–CV–00751–LJO–JLT.
• Citation: 147 F.Supp.3d 1029
• Parties: GARDINER FAMILY, LLC, a California Limited Liability Company; and Rosedale Farming Group, LLC, a California Limited Liability Company, Plaintiffs, v. CRIMSON RESOURCE MANAGEMENT CORP., A Colorado Corporation; and Does 1 Through 50, Defendants.
• Court: U.S. District Court — Eastern District of California

147 F.Supp.3d 1029

GARDINER FAMILY, LLC, a California Limited Liability Company; and Rosedale Farming Group, LLC, a California Limited Liability Company, Plaintiffs,

v.CRIMSON RESOURCE MANAGEMENT CORP., A Colorado Corporation; and Does 1 Through 50, Defendants.

Case No. 1:15–CV–00751–LJO–JLT.

United States District Court, E.D. California.

Signed Sept. 24, 2015.

Alexander Russell Wheeler, Patricia K. Oliver, R. Rex Parris, R. Rex Parris Law Firm, Lancaster, CA, Ara Ray Jabagchourian, Frank Mario Pitre, Cotchett, Pitre & McCarthy, LLP, Burlingame, CA, George F. Martin, Borton Petrini, LLP, Bakersfield, CA, Terry Kilpatrick, Ernst Law Group, San Luis Obispo, CA, for Plaintiff.

Francis M. Goldsberry, II, Richard Sterling Deitchman, Somach Simmons & Dunn, Sacramento, CA, for Defendant.

MEMORANDUM DECISION AND ORDER DENYING DEFENDANTS' MOTION TO DISMISS.

LAWRENCE J. O'NEILL

, District Judge.

Before the Court in the above-styled and numbered cause of action is Defendant Crimson A Resource Management Corporation's (“Crimson”) Motion to Dismiss, filed July 7, 2015. (Doc. 6). Plaintiffs Gardiner Family, LLC (“Gardiner Family”), and Rosedale Farming Group, LLC (“Rosedale Farming”) (together, “Plaintiffs”) filed their Opposition on July 28, 2015 (Doc. 10), and Defendants filed their Reply on August 4, 2015 (Doc. 11). The matter is appropriate for resolution without oral argument. See Local Rule 230(g). Having considered the record in this case, the parties' briefing, and the relevant law, the Court will deny Defendant's motion for the reasons set forth below.

BACKGROUND

Plaintiffs assert that this Court has original jurisdiction on the basis of diversity. Plaintiffs originally filed in federal court on May 15, 2015, asserting federal jurisdiction arises under 28 U.S.C. § 1332(a)(1)

, on the grounds that the instant dispute involves citizens of different states and the amount in controversy exceeds $75,000.00. See Compl., Doc. 1.

Defendants here do not challenge that diversity of citizenship provides an independent basis of subject matter jurisdiction. See Moses H. Cone Mem'l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 25 n. 32, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983)

. It is uncontroverted that Plaintiffs allege damages in excess of the threshold $75,000.00 amount in controversy requirement. See id.; Compl. ¶ 13. Fictional Doe defendants aside, the parties agree that Plaintiffs Gardiner and Rosedale are California corporations with their principal places of business in California and Defendant Crimson is a Colorado corporation with its principal place of business in Colorado. See 28 U.S.C. § 1332(a) ; see Compl. ¶¶ 8–10.

Nor do the parties dispute that a federal court exercising diversity jurisdiction applies the Federal Rules of Civil Procedure,¹ and the substantive law of the state in which it is located. Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938)

. The parties agree that the Court applies the substantive laws of the state of California and California state law includes substantive Doe statutes. The facts are otherwise known to the parties and need not be repeated here.

By the instant motion to dismiss, Defendant asks the Court to dismiss Plaintiffs' complaint for lack of jurisdiction based on the presence of Doe defendants. See Fed.R.Civ.P. 12(b)(1)

.

The matter is ripe for review.

LEGAL STANDARD

Rule 12(b)(1) of the Federal Rules of Civil Procedure

provides that a defendant may move to dismiss for lack of subject matter jurisdiction. Under this rule, “[t]he party asserting federal subject matter jurisdiction bears the burden of proving its existence.” Chandler v. State Farm Mut. Auto. Ins. Co., 598 F.3d 1115, 1122 (9th Cir.2010) ; Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). To succeed, the party carries the burden by proffering “the manner and degree of evidence required” at that stage of the litigation. Lujan, 504 U.S. at 561, 112 S.Ct. 2130.

DISCUSSION

I. JUDICIAL NOTICE

Defendant Crimson requests that the Court take judicial notice of Palla Farms LLC's pleadings (“the Palla Complaint”) in a state court action in which Crimson is also a defendant. See Doc. 12. Crimson does not allege that Gardiner Family or Rosedale Farming are involved in that action in any way.

When considering a motion to dismiss, the court ordinarily does not look beyond the four corners of the complaint. See Lee v. City of L.A., 250 F.3d 668, 688 (9th Cir.2001)

. Under Federal Rule of Evidence 201, however, “[t]he court may judicially notice a fact that is not subject to reasonable dispute because it: (1) is generally known within the court's territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed.R.Evid. 201. For instance, “[a] district court may take judicial notice of undisputed matters of public record, including documents on file in federal or state courts.” Harris v. Cnty. of Orange, 682 F.3d 1126, 1131–32 (9th Cir.2012) (citing Lee, 250 F.3d at 689 ; Bennett v. Medtronic, Inc., 285 F.3d 801, 803 n. 2 (9th Cir.2002) ). Documents not attached to a complaint may be considered if no party questions their authenticity and the complaint relies on those documents. Lee, 250 F.3d at 688.

Here, the Plaintiffs' complaint does not rely on the document at issue. See Doc. 1. Rather, Crimson highlights that the Palla Complaint shares a defendant with the instant action, implying that the two cases necessarily share other defendants and these other defendants destroy diversity. However, the state court case was brought by an unrelated plaintiff. Despite factual similarities between the two cases, there is no indication in the Palla Complaint that Plaintiffs Gardiner Family and Rosedale Farming make the same factual allegations as Palla Farms did against such third parties. Indeed, different land is involved. Palla Farms may have pleaded that such defendants were involved in activity in relation to their farm, but it cannot be said based on their pleading that it is generally known in this jurisdiction that the third parties are involved in activities related to the Gardiner Family or Rosedale Farming farms. In other words, there is a reasonable question of fact whether the other defendants named in the state action are in any way involved in the instant action. Moreover, although the plaintiffs in the two cases share counsel and the legal principles may be the same, the circumstances do not necessarily demonstrate shared facts. The Court finds that it is reasonably subject to dispute whether the same defendants are involved. Under Federal Rule of Evidence 201

, the Court concludes that it is inappropriate to judicially notice such disputed facts.

Accordingly, the Court declines to take judicial notice of facts alleged in pleadings in that different case. See Pollstar v. Gigmania, Ltd., 170 F.Supp.2d 974, 978–79 (E.D.Cal.2000)

(finding no authority for judicial notice of pleadings in an unrelated case). Defendant's request for judicial notice (Doc. 12) is DENIED.

II. JURISDICTION

The single question put to the Court in Crimson's motion to dismiss is whether a plaintiff's Doe pleading defeats original diversity jurisdiction as a matter of law. In support, Crimson relies upon Garter–Bare Co. v. Munsingwear, Inc., 650 F.2d 975, 981 (9th Cir.1980)

(finding that mere presence of Doe defendants destroys diversity jurisdiction).

Plaintiffs counter that their use of Doe defendants does not destroy diversity, citing Lindley v. Gen. Elec. Co., 780 F.2d 797 (9th Cir.1986)

(holding that California's so-called “Doe” statutes are substantive law and as such are applied under the Erie doctrine). Plaintiffs cite a string of cases starting with Macheras v. Ctr. Art Galleries–Hawaii, Inc., 776 F.Supp. 1436, 1438 (D.Haw.1991), that follow this legal principle. Plaintiffs argue that a district court must allow the use of Doe defendants as provided under substantive California law. See Cal.Civ.Proc.Code § 474.

The Ninth Circuit decided Lindley in 1986, finding that California's “Doe” statutes, § 474

, are substantive state law and concluding that a benefit derived from the state's substantive laws are applied in federal court, under the Erie doctrine, when a federal court is sitting in diversity. 780 F.2d at 800–01. The court reasoned that “the absence of a federal pleading mechanism comparable to section 474 should not deprive a plaintiff of the extension of the limitations period provided under California Doe practice.” Id. at 802 (citing Rumberg v. Weber Aircraft Corp., 424 F.Supp. 294, 298 (C.D.Cal.1976) (Pregerson, J.)). The circuit court specifically found that “[a] contrary rule would be a departure from Erie Railroad Co. ..., and its progeny, particularly Guaranty Trust Co. v. York, 326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945), because it would result in the abridgment of substantive rights under state statutes of limitations.” Id. (citations omitted).

Defendant's motion hinges on ignoring the Ninth Circuit's decision in Lindley and applying instead its prior decision in Garter–Bare, in which it held that generally, in an original federal action brought solely on the basis of diversity jurisdiction under § 1332(a)

, a plaintiff's use of fictitious Doe defendants necessarily defeats diversity and a district court thus lacks jurisdiction. 650 F.2d at 981 ; see also

Molnar v. National Broadcasting Co., 231 F.2d 684, 687 (9th Cir.1956) ; see also

Fifty Associates v. Prudential Insurance Co. of America, 446 F.2d 1187, 1191 (9th Cir.1970) (finding that a plaintiff cannot affirmatively demonstrate complete diversity if the identity and citizenship of fictional defendants are unknown). Defendant argues that despite Lindley, Garter–Bare controls.

Federal courts acknowledge the split between those courts which subscribe to the principle that a federal court must allow Doe pleading under state substantive law, post-Lindley, and others...