Schmidt v. Int'l Playthings LLC

• Citation: 503 F.Supp.3d 1060
• Decision Date: 30 November 2020
• Docket Number: No. CIV 19-0933 JB\SCY,CIV 19-0933 JB\SCY
• Parties: D. Maria SCHMIDT, as Personal Representative for the Estate of Dakotah Dedios, Deceased; and Richaline Dedios, Plaintiffs, v. INTERNATIONAL PLAYTHINGS LLC, Epoch Company, Ltd., Epoch Everlasting Play, LLC, Walmart, Inc., and Marie Short, Defendants.
• Court: U.S. District Court — District of New Mexico

503 F.Supp.3d 1060

D. Maria SCHMIDT, as Personal Representative for the Estate of Dakotah Dedios, Deceased; and Richaline Dedios, Plaintiffs,

v.INTERNATIONAL PLAYTHINGS LLC, Epoch Company, Ltd., Epoch Everlasting Play, LLC, Walmart, Inc., and Marie Short, Defendants.

No. CIV 19-0933 JB\SCY

United States District Court, D. New Mexico.

Filed November 30, 2020

John F. Walker, Martin Walker, P.C., Tyler, Texas --and-- Justin Ross Kaufman, Rosalind Bienvenu, Durham, Pittard & Spalding, L.L.P., Santa Fe, New Mexico, Attorneys for the Plaintiffs.

Gregory L. Biehler, Lewis Brisbois Bisgaard & Smith L.L.P., Albuquerque, New Mexico, Attorney for Defendant Epoch Everlasting Play, L.L.C.

Jeremy K. Harrison, Kevin D. Pierce, Modrall Sperling Roehl Harris & Sisk P.A., Albuquerque, New Mexico, Attorneys for Defendants Walmart Inc. and Marie Short.

MEMORANDUM OPINION AND ORDER

JAMES O. BROWNING, UNITED STATES DISTRICT JUDGE

THIS MATTER comes before the Court on the Plaintiffs’ Motion to Remand, filed November 4, 2020 (Doc. 18). The Court held a hearing on December 10, 2019. See Clerk's Minutes at 1, filed December 10, 2019 (Doc. 34). The primary issues are: (i) whether the Plaintiffs -- D. Maria Schmidt and Dedios, as the personal representative for the Estate of Dakotah Dedios and Richaline Dedios ("Schmidt and Dedios") -- fraudulently joined Defendant Marie Short, a non-diverse party and the store manager at Defendant Walmart, Inc. ("Walmart"), to defeat federal diversity jurisdiction, because there are no possible viable claims against Short under New Mexico law for strict products liability and negligence; and (ii) whether the Defendant Epoch Everlasting Play, LLC's ("Epoch Everlasting") Notice of Removal, filed October 3, 2019 (Doc. 1), was procedurally defective, because not all of the Defendants filed their own notices of removal, co-signed Defendant Epoch's notice of removal, or filed a consent to removal. The Court concludes (i) that Epoch Everlasting has shown that there is "no possibility" that Schmidt and Dedios can establish a cause of action against Short under a theory of strict products liability, because Short is not a seller or supplier, and there is "no possibility" that Schmidt and Dedios can establish a cause of action against Short under a theory of negligence, because there is no applicable duty under New Mexico law; and (ii) that the Notice of Removal is not procedurally defective, because the Notice of Removal satisfies the unanimity rule. Accordingly, because the Court has diversity jurisdiction under 28 U.S.C. § 1332(a)(1), the Court will deny the Motion to Remand.

FACTUAL BACKGROUND

In the Complaint, Schmidt and Dedios allege that the Defendants, International Playthings LLC; Epoch Company, Ltd. ("Epoch Co."); Epoch Everlasting; Walmart; and Short, "develop, manufacture, market and sell a line of toys under the name ‘Calico Critters,’ ... Labrador Twins, ... equipped with ... a small baby bottle ... [and] a small plastic removable pacifier." Complaint for Wrongful Death, Loss of Consortium, Personal Injury, and Punitive Damages ¶¶ 13-15, at 5-6, filed October 3, 2019 (Doc. 1-3)("Complaint"). Schmidt and Dedios allege that "[t]he manufacturer of the Labrador Twins labeled them for children 3 years and up, even though their website specifically states that they can be used by children 2 years of age." Complaint ¶ 18, at 8. Schmidt and Dedios allege that on May 5, 2018, Dedios bought the Calico Critters Labrador Twins toy at a Walmart store in Bernalillo, New Mexico, and that five days later, on May 10, 2018, her child, D.D., who was two years and nine months old at time, "aspirated the loose pacifier toy that came with the Labrador Twins. [D.D.] was taken to the hospital and subsequently was pronounced dead." Complaint ¶¶ 23-24, at 10. Schmidt and Dedios allege that the autopsy report stated that D.D. died "from choking on the loose pacifier toy on May 10, 2018." Complaint ¶ 24, at 10.

PROCEDURAL BACKGROUND

On August 16, 2019, Schmidt and Dedios filed the Complaint in state court. See Complaint ¶¶ 59-63, at 18-19. Schmidt and Dedios also filed a demand for jury trial. See Jury Demand at 20, filed October 3, 2020 (Doc. 1-3).¹ In the Complaint, Schmidt and Dedios assert four counts against the Defendants: (i) strict products liability; (ii) negligence; (iii) negligence per se; and (iv) breach of implied warranty of merchantability. See Complaint ¶¶ 27-58, at 11-18. Schmidt and Dedios seek damages for wrongful death and loss of consortium damages, as well as punitive damages. See Complaint ¶¶ 58-63, at 17-18.

Schmidt and Dedios served the Complaint upon Short on August 21, 2019. See Summons at 23-24, filed October 3, 2020 (Doc. 1-3). Schmidt and Dedios served the Complaint upon International Playthings on September 3, 2019, through the Secretary of State of New Mexico. See Summons at 37-41. Schmidt and Dedios served the Complaint upon Epoch Everlasting on September 3, 2019, through the Secretary of State of New Mexico. See Summons at 42-46. Schmidt and Dedios served the Complaint upon Epoch Co. on September 3, 2019, through the Secretary of State of New Mexico. See Summons at 47-51. On October 2, 2019, counsel for Walmart Inc. accepted service. See Motion to Remand Memo at 2. Schmidt and Dedios served the Complaint upon Walmart on October 3, 2019, through its authorized agent in New Mexico. See Motion to Remand Memo at 1-6.

On October 4, 2020, Epoch Co. moved to dismiss for lack of personal jurisdiction and improper service. See Motion to Dismiss for Improper Service and Lack of Personal Jurisdiction by Epoch Company, Ltd., filed October 4, 2020 (Doc. 5). On November 4, 2020, Schmidt voluntarily dismissed Epoch Co. from this action. See Notice of Voluntary Dismissal Without Prejudice as to Defendant Epoch Company, Ltd. Only, filed November 4, 2020 (Doc. 20).

1. The Notice of Removal and the Amended Notice of Removal.

On October 3, 2019, Epoch Everlasting filed a Notice of Removal in federal court based on diversity jurisdiction. See Notice of Removal ¶¶ 3-10, at 1-4. In the Notice of Removal, Epoch Everlasting alleges that the action is removable to federal court based on diversity jurisdiction because: (i) the amount in controversy exceeds $75,000, "as Plaintiffs allege damages for wrongful death, and because the true parties in interest are diverse," Notice of Removal ¶ 3-10, at 2; and (ii) complete diversity exists between the parties based on their respective citizenship, place of incorporation, and headquarters, and because "Defendant Marie Short, an individual and resident of Rio Rancho, New Mexico, ... was named in this lawsuit for the sole purpose of destroying complete diversity and to prevent removal. This fraudulent joinder also abrogates application of the forum defendant rule." Notice of Removal ¶¶ 4-5, at 2. Epoch Everlasting also alleges that "[a]ll Co-Defendants have consented to removal of this matter." Notice of Removal ¶ 9, at 4.

The Honorable Steven C. Yarbrough, United States Magistrate Judge for the District of New Mexico, sua sponte found that the Notice of Removal failed to properly allege facts sufficient for diversity jurisdiction. See Order to Amend at 1-3, filed October 22, 2019 (Doc. 13). Specifically, Judge Yarbrough found that Epoch Everlasting failed allege the Plaintiffs’ citizenship and failed to properly allege the Defendants’ citizenship, noting that a limited liability company is different than an incorporated entity for purposes of determining diversity jurisdiction. See Order to Amend at 1-3. Judge Yarbrough ordered Epoch Everlasting to amend its Notice of Removal to cure these deficiencies. See Order to Amend at 3.

Epoch Everlasting filed an the Amended Notice of Removal, alleging: (i) the Plaintiff objectively seeks more than $75,000; (ii) complete diversity exists because: (a) the Plaintiffs, Richaline Dedios, mother of D.D., and Schmidt, as the personal representative for the estate of D.D., are citizens of New Mexico; (b) "[n]o Defendant is a citizen or has its principal place of business in New Mexico. No member of an any LLC defendant is a citizen of New Mexico;" and (c) the Plaintiff "fraudulently joined Marie Short to defeat diversity jurisdiction," so her citizenship should be ignored for the purposes of determining diversity. See Amended Notice of Removal ¶¶ 5-14, at 2-4, filed November 6, 2019 (Doc 22). Specifically, as to the Defendants’ diversity requirements, Epoch Everlasting in the Amended Notice of Removal alleges that: (i) "Defendant Wal-Mart, Inc. is a Delaware Corporation and its principal place of business in ... Bentonville, Arkansas"; (ii) "Defendant Epoch Everlasting Play LLC ... is a limited liability company formed in Delaware and has its principle place of business in New Jersey. Its sole member and manager is Epoch Playthings LLC, which was organized in the state of Delaware"; (iii) "Epoch Playthings LLC is a wholly owned subsidiary of Epoch Co. Ltd., which is incorporated in Japan and with its principal place of business in Tokyo, Japan"; and (iv) "International Playthings LLC is not a separate entity, but is the same company as [Epoch Everlasting]. International Playthings LLC changed its name to Epoch Everlasting Play LLC in 2017." Amended Notice of Removal ¶¶ 6-13, at 2-3.

Epoch Everlasting argues Schmidt and Dedios fraudulently joined Short. See Amended Notice of Removal ¶¶ 14-17, at 4-7. Epoch Everlasting contends fraudulent joinder exists where "there is no reasonable basis in fact or colorable ground supporting the claim against the joined defendant, or no real intention in good faith to prosecute the action against the defendant or seek a joint judgment." Amended Notice of Removal ¶ 15, at 4 (quoting In re Briscoe, 448 F.3d 201, 217 (3d Cir. 2006) ). Epoch Everlasting contends that a store manager has no duty to inspect products to ensure that they meet state or federal safety guidelines. See Amended Notice of Removal ¶ 16, at 5 (cit...