McCown v. Samsung SDI Co.
| Decision Date | 17 November 2022 |
| Docket Number | 5:22-cv-00976-SPG-KK |
| Parties | DAVID McCOWN, an individual, Plaintiff, v. SAMSUNG SDI CO., LTD., and DOES 1100 inclusive, Defendants. |
| Court | U.S. District Court — Central District of California |
ORDER GRANTING PLAINTIFF'S MOTION TO REMAND ACTION TO CALIFORNIA SUPERIOR COURT [ECF NO. 20]
Before the Court is Plaintiff David McCown's (“Plaintiff”) motion to remand this action to California Superior Court. (ECF No. 20 (“Mot.”)). Argument was heard on November 2, 2022. Having considered the parties' submissions, the relevant law, the record in this case, and the arguments during the hearing on the Motion, the Court GRANTS Plaintiff's Motion.
Plaintiff, a resident of Oregon, alleges that the lithium-ion battery used to power his electronic cigarette spontaneously exploded in his pocket, causing second-degree burns across his left leg. (ECF No. 1-9 ¶¶ 1, 5 (“FAC”)). The battery at-issue was wrapped in a “Hohm Tech” exterior coating. (ECF No. 20 at 28 ¶ 3). From this, Plaintiff concluded that Hohm Tech, Inc. (“Hohm Tech”), a California corporation, was the manufacturer responsible for the allegedly defective battery. See (id.); (FAC ¶ 6).
On January 4, 2021, Plaintiff filed a Complaint in the California Superior Court for the County of San Bernardino, asserting claims of Strict Products Liability and Negligent Products Liability against Hohm Tech, Inc. and Does 1-100. (ECF No. 1-4). On March 17, 2021, Plaintiff filed an amended complaint that added Benjamin Ramalho, a California resident and Chief Executive Officer of Hohm Tech, as co-defendant. (FAC ¶ 7). However, on July 30, 2021, Hohm Tech filed for Chapter 7 bankruptcy in the United States Bankruptcy Court for the Central District of California, Riverside Division (the “Bankruptcy Court”). See (Mot. at 28 ¶ 2.b); In re HOHM Tech, Inc., 6:21-bk-14150-MH (Bankr. C.D. Cal.) (the “Bankruptcy Proceeding”). Plaintiff was thereafter served with a Notice of Stay for these state court proceedings on August 3, 2021. (Mot. at 28 ¶ 2.b).
Before the issuance of the Bankruptcy Court's Stay, Plaintiff and Hohm Tech had already engaged in considerable discovery. (Id. at 27 ¶ 2.a). By April 1, 2021, Plaintiff had served 36 Requests for Production, 56 Special Interrogatories, and Form Interrogatories on Hohm Tech. (Id. at 28 ¶ 2.a.ii). Over the course of this discovery, Plaintiff concluded that the allegedly defective battery was manufactured by Samsung, rather than Hohm Tech. See (id. at 28-29 ¶ 3). On August 23, 2021, Plaintiff filed DOE Amendments to the Complaint naming Korea-based corporation Defendant as “DOE 1” and California corporation Samsung SDI America, Inc. (“Samsung America”) as “DOE 2.” (ECF Nos. 1-22, 1-23). At the time, Plaintiff continued to name Hohm Tech as a codefendant in the action because he hoped to hold Hohm Tech jointly and severally liable for his alleged harms. See (Mot. at 22 ).
On September 13, 2021, Plaintiff served Samsung America with summons. (ECF No. 1-25). On or about September 29, 2021, Samsung America's counsel (who also serves as Defendant's counsel) approached Plaintiff regarding Samsung America's dismissal from the litigation. (ECF No. 26-1 ¶ 2). Samsung America explained to Plaintiff “that [Samsung America] [was] not a proper defendant because it is not in the chain of distribution for the 18650 lithium-ion battery at issue in this action.” (Id.). Although Plaintiff harbored doubt about Samsung America's status as a viable defendant, see (Mot. at 30 ¶ 9 ()), Plaintiff did not dismiss Samsung America from the suit.
Defendant, however, insisted that it be served in compliance with Hague Convention procedures due to its status as a Korean entity. (Id. at 29, ¶ 4). Because of the Hague Convention's onerous requirements, Plaintiff proceeded to negotiate with Defendant for alternative service procedures. See (id.). On October 11, 2021, Plaintiff offered to dismiss Samsung America from the suit if Defendant accepted service and filed an Answer to the Complaint. See (ECF No. 26-1 at 5). Defendant rejected this offer on October 13, 2022. (Id.).
On October 29, 2021, Samsung America removed the action to the Bankruptcy Court pursuant to 28 U.S.C. § 1452 and Federal Rule of Bankruptcy Procedure 9027. (ECF No. 1-31). Soon thereafter, on November 4, 2021, Samsung America filed a Motion to Dismiss for Failure to State a Claim, which included a Request for Judicial Notice of a decision in another matter holding that Samsung America was not in the chain of production for the lithium-ion batteries at-issue. (Mot. at 30 ¶ 5). According to Plaintiff, he did not dismiss Samsung America at that time because “Samsung America did not include a declaration or other admissible evidence with its Motion, merely the decision from another Court.” (Id.).
On November 23, 2021, Plaintiff filed a Motion to Remand to the Bankruptcy Court on equitable grounds under Federal Rule of Bankruptcy Procedure 9027(d) and 28 U.S.C. § 1452(b). (Id. at 30, ¶ 6). The Bankruptcy Court entered an Order remanding the case to state court on February 2, 2022. (ECF No. 1-43).
On March 2, 2022, Plaintiff and Defendant brokered an agreement. (Mot. at 30-31 ¶ 9). Plaintiff agreed to dismiss Samsung America without prejudice in exchange for Defendant's willingness to relax the Hague Convention's service rules. (Id.). Later that month, Plaintiff also received notice from the Bankruptcy Court that Hohm Tech's bankruptcy case was closed “with no distribution to the creditors.” (Id. at 28 ¶ 2.e). “Rather than attempt to ‘squeeze blood from a turnip,' Plaintiff chose to focus efforts on the entity that ultimately manufactured the exploding lithium-ion battery-[Defendant],” and moved to dismiss Hohm Tech and Ramalho from the suit without prejudice on April 11, 2022. See (id. at 30 ¶ 8); (ECF No. 1-44 at 2). Finally, on May 13, 2022, and pursuant to its agreement with Defendant, Plaintiff dismissed Samsung America from the present action. (Mot. at 17). It is undisputed that Plaintiff never served a single discovery request on Samsung America up to this point. See (ECF No. 26 at 11-12 (“Opp.”)).
On June 7, 2022, Plaintiff served Defendant with its first round of state court discovery. (Mot. at 28 ¶ 2.f). Before serving any responses, however, Defendant removed the action to the United States District Court for the Central District of California on June 10, 2022. (ECF No. 1). This occurred nearly 17 months after Plaintiff's Complaint was originally filed against Hohm Tech in the San Bernadino Superior Court.
On July 8, 2022, Plaintiff moved to remand the action back to the San Bernardino Superior Court. (Mot.). Plaintiff argues that remand is mandatory because Defendant's motion for removal was untimely under 28 U.S.C. § 1446(c)(1). On September 7, 2022, Defendant filed an Opposition to Plaintiff's Motion, arguing that the bad faith exception to 28 U.S.C. § 1446(c)(1) applies. (Opp.). On September 14, 2022, Plaintiff filed a Reply. (ECF No. 27).
Federal courts are courts of limited jurisdiction, possessing only that power authorized by the United States Constitution and statute. See U.S. Const. art. III, § 2, cl. 2. Title 28, United States Code, Section 1332 confers original jurisdiction on federal district courts over civil actions where there is complete diversity of citizenship and the amount in controversy exceeds $75,000, exclusive of interests and costs. Complete diversity exists where each named defendant is a citizen of a different state from each named plaintiff. See 28 U.S.C. § 1332(a); Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2001) (citing Caterpillar Inc. v. Lewis 519 U.S. 61, 68 (1996)). If a case initially lacking complete diversity at the time it is filed in state court subsequently becomes removable due to a non-diverse defendant being dismissed from the case, a defendant may remove the case to the federal district court based on diversity jurisdiction. See 28 U.S.C. § 1441. However, a civil action otherwise removable solely based on diversity jurisdiction under 28 U.S.C. § 1332(a) “may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.” 28 U.S.C. § 1441(b)(2).
Section 1446(c)(1) establishes a limitation period on removal providing a defendant may not remove a civil action based on diversity jurisdiction more than one year after the action has commenced.[1] 28 U.S.C. § 1446(c)(1). An exception exists to the one-year limitation period, if the defendant shows “the plaintiff has acted in bad faith” to prevent defendant from being able to remove the action. 28 U.S.C. § 1446(c). Courts have applied the bad faith exception to plaintiffs who join a defendant solely to prevent other defendants from removing the civil action, and then dismiss the non-diverse defendant after the one year deadline has expired when the plaintiff could have kept the non-diverse defendant in the suit. See, e.g., Heacock v. Rolling Frito-Lay Sales, LP, Case No. C16-0829-JCC, 2016 WL 4009849, at *2 (W.D....
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