Reynolds v. EzriCare LLC

Background

Milton and Danae Reynolds filed a products-liability action in Alameda County Superior Court against EzriCare, LLC, EzriRx, LLC, Aru Pharma, Inc., Global Pharma Healthcare Private Limited, Amazon.com, Inc., and a delivery company initially identified as “Doe” Delivery Service Partner. The defendants removed the case to federal court based on diversity jurisdiction, which generally allows a federal court to hear a state-law dispute involving citizens of different states when the statutory requirements are met.

The Reynoldses alleged that Milton Reynolds bought lubricating eye drops from Amazon, that the delivery company transported the sealed package to them, and that contamination in the eye drops caused an infection and blindness in his right eye. Their claims included strict liability, negligence and gross negligence, negligent failure to warn, negligent failure to recall, breach of implied warranty, fraud, and loss of consortium.

Amazon later identified the “Doe” delivery company as To Be Delivered, LLC, which was incorporated in California. Because the Reynoldses were California residents, adding To Be Delivered would destroy the basis for diversity jurisdiction. The Reynoldses therefore sought leave to file a second amended complaint naming To Be Delivered as a defendant.

Analysis

Under 28 U.S.C. § 1447(e), a federal court may deny a request to add a defendant whose presence would destroy diversity jurisdiction, or may allow the addition and send the case back to state court. Courts commonly consider whether the new defendant is needed for a fair resolution, whether a new lawsuit would be barred by the statute of limitations, whether the plaintiff delayed, whether the claims appear valid, whether the plaintiff needs the new defendant for complete relief, and whether denying the amendment would cause prejudice.

The court determined that the claims against To Be Delivered were not facially valid. Under California law, a company that only provides services generally is not subject to strict products liability when the service aspect predominates. The court found that To Be Delivered did not design, manufacture, or sell the eye drops. Its role was limited to picking up a sealed package from an Amazon delivery station and delivering it to an address. The court also found no cited authority supporting strict liability for a company that delivered a sealed package without knowing what products it contained.

The court further concluded that the Reynoldses could obtain complete relief from the existing defendants, including EzriCare, EzriRx, or Amazon. Although the court considered the delay in identifying To Be Delivered reasonable because Amazon had delayed disclosing the company’s identity, it gave that factor no weight because the proposed claim was not facially valid and the Reynoldses would not suffer prejudice from denying the amendment. The court declined to decide whether the Reynoldses’ motive was to defeat diversity jurisdiction.

Ruling

The court denied the Reynoldses’ motion for leave to add To Be Delivered as a diversity-destroying defendant. Judge Jacquelyn Scott Corley held that the proposed claims were not facially valid under California law and that To Be Delivered was not necessary for the Reynoldses to obtain complete relief. The opinion does not state that the entire case was dismissed or that the claims against the existing defendants were resolved.