Jones v. L'Oreal USA, Inc.

Background

Cynthia L. Jones filed a complaint in the Superior Court of Alameda County against L’Oreal USA, Inc., L’Oreal USA Products, Inc., SoftSheen-Carson, LLC, Soft Sheen*Carson (W.I.), Inc., Strength of Nature, LLC, Godrej SON Holdings, Inc., Avlon Industries, Inc., Safeway, Inc., and The Vons Companies, Inc. The complaint alleged that hair-relaxer products made by the manufacturing defendants contained chemicals associated with an increased risk of hormone-related cancers and reproductive problems, including uterine fibroids. Jones alleged that she used several identified products, developed uterine fibroids, underwent a hysterectomy, and suffered physical and emotional injuries. Her complaint asserted 17 causes of action, including strict liability, warranty, negligence, fraud, and unlawful-business-practices claims.

The L’Oreal defendants removed the case to federal court under diversity jurisdiction. They argued that Safeway and Vons had been fraudulently joined, meaning improperly included to prevent federal jurisdiction, because the manufacturers had no records showing that they sold the products to those retailers in California. Avlon also argued that its products were not sold through general consumer retailers such as Safeway or Vons. After the removal, defendants filed motions to dismiss, but the parties agreed to pause briefing on those motions while the court decided the remand motion.

Remand Analysis

Diversity jurisdiction generally requires every plaintiff to have different citizenship from every defendant. A federal court may disregard the citizenship of a defendant who was fraudulently joined, but the removing party carries a heavy burden. If there is a possibility that a state court could find that the complaint states a claim against a nondiverse defendant, the federal court must treat the joinder as proper. Disputed facts must be resolved in the plaintiff’s favor for purposes of the remand motion.

Jones submitted a declaration stating that her mother bought specific hair-relaxer products from Safeway and Albertsons during earlier periods and that Jones later bought Dark and Lovely from Safeway in Sacramento. The court concluded that there was a possibility Jones had a viable claim against Safeway. It relied on the principle that, in a product-liability action, every supplier in the chain of distribution, including a retailer, may potentially be liable. Because Safeway was a California citizen and had not been fraudulently joined, the court concluded that diversity jurisdiction was lacking.

Ruling

Judge Susan Illston granted Jones’s motion for remand and remanded the case to the Superior Court for the County of Alameda. The court denied defendants’ pending motions to dismiss the complaint without prejudice to renewal in state court. The opinion did not decide the merits of Jones’s product-liability or other claims.