Zimmer v. Costco Wholesale Corporation

Background

Helen Zimmer sued Costco Wholesale Corporation in California state court over injuries she allegedly suffered during a March 11, 2021 visit to a Costco warehouse in Antioch, California. She alleged that she tripped or fell because rebar protruded from a broken and deteriorating concrete parking block that was not properly marked or delineated. Her claims were negligence and premises liability.

Costco removed the case to federal court based on diversity jurisdiction. Zimmer then moved to add Terrell Richard, who was the general manager of the Antioch warehouse when the alleged injury occurred, and to send the case back to state court. Richard is a California citizen, so adding him would destroy complete diversity if his joinder were proper.

Fraudulent-Joinder Analysis

A defendant may argue that a non-diverse party was fraudulently joined to defeat federal jurisdiction. The removing defendant bears a heavy burden, and joinder is proper if there is a possibility that a state court would find that the complaint states a claim against the non-diverse party.

Costco argued that Zimmer committed actual fraud in pleading jurisdictional facts and that she could not state a claim against Richard. The court rejected both arguments. It struck Zimmer’s counsel’s declaration because it did not comply with the court’s local rule governing declarations, but it found Costco’s actual-fraud argument unpersuasive. The court noted that there was no dispute that Richard was the Antioch warehouse’s general manager when Zimmer fell.

The court also rejected Costco’s argument that Richard could not be liable because he was not present when Zimmer fell and allegedly lacked prior notice of the damaged parking block. Under the relevant California law, negligence and premises liability require a duty of care, a breach, and a resulting injury; premises liability also requires ownership, possession, or control of the property. The court concluded that Costco had not cited authority showing that Richard could not possibly be liable, and therefore had not met its heavy burden to establish fraudulent joinder.

Joinder and Remand

Under 28 U.S.C. § 1447(e), after removal a court may deny joinder of a defendant whose addition would destroy subject-matter jurisdiction, or permit joinder and remand the case to state court. Courts may consider whether the new party is needed for a fair resolution, whether the statute of limitations would bar a new state-court action, whether the plaintiff delayed in seeking joinder, whether the purpose was solely to defeat federal jurisdiction, whether the claims appear valid, and whether denying joinder would prejudice the plaintiff.

The court found that Zimmer had not addressed the first three factors, so those factors weighed slightly against joinder. The court found that the fourth and fifth factors favored permitting joinder, relying on its conclusion that the claims against Richard were potentially valid and that Costco had not established fraudulent joinder. The sixth factor—prejudice—was neutral because the court found that neither party would be prejudiced by proceeding in federal or state court. Considering the factors together, along with the strong presumption against removal jurisdiction and the general presumption against fraudulent joinder, the court found that joinder was appropriate.

Disposition

The court granted Zimmer’s motion for joinder and remanded the action to Contra Costa County Superior Court because adding Richard destroyed diversity jurisdiction. Judge Araceli Martinez-Olguin signed the order.