Phan v. Costco Wholesale Corporation

Background

Ryan Phan brought a personal-injury and premises-liability action against Costco Wholesale Corporation after slipping and falling at a Costco gas station. He sought compensation for injuries and lost wages. Phan originally filed the case in California Superior Court in Alameda County. Costco later removed the action to the U.S. District Court for the Northern District of California.

Phan moved to remand, meaning he asked the federal court to return the case to state court. He raised two arguments: first, that Costco had not established the citizenship needed for diversity jurisdiction; and second, that unnamed Doe defendants might be California citizens and therefore destroy diversity.

Court's Analysis

Federal courts have diversity jurisdiction when the parties are citizens of different states, subject to the applicable statutory requirements. A corporation is considered a citizen of its state of incorporation and the state where it has its principal place of business.

The court found that Costco met its burden of showing that it was incorporated in Washington and maintained its principal place of business there. Because Phan was identified as a California citizen, the court concluded that complete diversity existed between the named parties. The court rejected Phan's argument that Costco's stores in California established California citizenship, explaining that the location of stores did not determine Costco's citizenship for this purpose.

The court also held that the citizenship of defendants sued under fictitious names is disregarded when deciding whether removal is proper. The possible California citizenship of the unnamed Doe defendants therefore did not defeat diversity. The court found no evidence that Costco acted in bad faith by removing the case before responding to discovery about employees who may have witnessed the incident. Costco's request for judicial notice of certain state-court documents was denied as moot.

Ruling

Judge Yvonne Gonzalez Rogers denied Phan's motion to remand. The court stated that removal was proper and that Phan was not entitled to fees and costs incurred in connection with the motion.