Navarro Barrera v. Costco Wholesale Corporation

Background

Maria Luisa Navarro Barrera alleged that she fell on a slippery floor in a Costco warehouse and sued three defendants in state court for negligence and premises liability: Costco Wholesale Corporation, Costco Wholesale Membership, Inc., and Steven Chamberlain. The opinion identifies Costco Wholesale Corporation as a Washington State corporation, Costco Wholesale Membership, Inc. as a California corporation, and Chamberlain as allegedly a California resident in the complaint. Costco removed the case to federal court based on diversity jurisdiction, which allows federal courts to hear certain disputes involving parties from different states.

Navarro Barrera moved to remand, or return, the case to state court. She primarily argued that Costco Wholesale Membership, Inc.'s California citizenship defeated the required diversity.

Costco Wholesale Membership, Inc.

Costco argued that the court should disregard Costco Wholesale Membership, Inc.'s citizenship because the entity was fraudulently joined. Fraudulent joinder is a rule allowing a federal court to disregard a non-diverse defendant when the plaintiff cannot establish a possible state-law claim against that defendant.

The court explained that Navarro Barrera's negligence and premises-liability claims required a duty of care, a breach of that duty, and a legally connected injury. It also explained that a defendant generally is not liable for a dangerous condition on property that the defendant did not own, possess, or control.

Costco submitted a declaration stating that Costco Wholesale Membership, Inc. exists solely to collect membership fees; does not own, lease, operate, or manage any Costco warehouse in the United States; and does not clean warehouses. The declaration also stated that Costco Wholesale Corporation owns or leases all Costco warehouses in the United States and manages and operates them, and that the two Costco entities are separate corporations.

The court found the declaration specific and supported by the declarant's personal knowledge. It rejected Navarro Barrera's reliance on allegations that Costco Wholesale Membership, Inc. owned, operated, or controlled the warehouse because allegations alone could not overcome the evidence. The court concluded that Costco Wholesale Membership, Inc. could not be held liable for the negligence and premises-liability claims, ruled that it was fraudulently joined, and disregarded its citizenship when assessing removal.

Steven Chamberlain

Although the complaint alleged that Chamberlain was a California resident, Navarro Barrera did not dispute Costco's allegation and evidence that he was actually a Washington resident. The court therefore concluded that Chamberlain's presence did not defeat diversity.

Possible Future Defendant

Navarro Barrera stated that discovery might identify and permit her to join the person who was the actual manager when the incident occurred, and that person might be a California resident. The court stated that any later joinder would not require remand at that point. The court expressed no opinion on whether a future motion to remand would be proper after such a joinder.

Ruling

Judge Rita F. Lin denied the motion to remand. After disregarding Costco Wholesale Membership, Inc.'s citizenship, the court found a California plaintiff and two Washington defendants remained, so the action did not lack complete diversity.