Sandra Arguello, et al. v. Costco Wholesale Corporation, et al.

Summary

The United States District Court for the Central District of California granted Plaintiffs’ motion to remand a premises-liability and related tort action to California state court. The court held that Defendant Costco failed to establish by clear and convincing evidence that the nondiverse defendant was fraudulently joined, and it vacated the scheduled hearing.

Holdings

1. Costco failed to establish by clear and convincing evidence that Kahresa Jeff was fraudulently joined because the pleadings and declarations did not eliminate the possibility that plaintiffs could state a valid or amendable cause of action against her.
2. Complete diversity did not support federal jurisdiction because plaintiffs and defendant Kahresa Jeff were alleged to be California residents, and Costco did not establish that Jeff's citizenship could be disregarded as a fraudulently joined defendant.

Questions Presented

1. Whether the California defendant, Kahresa Jeff, was fraudulently joined so that her citizenship could be disregarded for purposes of diversity jurisdiction.
2. Whether Costco established by clear and convincing evidence that plaintiffs could not state or amend a valid cause of action against Jeff under California law.
3. Whether the action should be remanded because the presence of Jeff destroyed complete diversity.

Disposition

remanded