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May v. First Motor Group of Encino, LLC

United States District Court, D. Delaware

January 11, 2019

ROSA MAY, an individual, Plaintiff,
v.
FIRST MOTOR GROUP OF ENCINO LLC, Defendant.

          R. Karl Hill, SEITZ VAN OGTROP & GREEN, P.A., Wilmington, Delaware; Joseph A. Kaufman, Joshua M. Ullman, LEMON LAW AID, INC., Pasadena, California Counsel for Plaintiff

          Somers S. Price, Jr., POTTER ANDERSON & CORROON LLP, Wilmington, Delaware; Jon D. Universal, UNIVERSAL & SHANNON, LLP, Roseville, California Counsel for Defendant

          MEMORANDUM OPINION

          CONNOLLY, UNITED STATES DISTRICT JUDGE.

         Presently before me is the Motion to Remand and for Fees and Costs for Improper Removal filed by Plaintiff Rosa May. D.I. 21. By her motion, May seeks both the remand of this case to the Superior Court of California and an award of costs and attorney fees from Defendant First Motor Group of Encino LLC ("First Motor") under 28 U.S.C. § 1447(c). First Motor opposed remand of the case and an award of costs and attorney fees in the first instance, D.I. 25, but it has now withdrawn its opposition to remanding the case. D.I. 30. Thus, the only disputed question before me is whether May is entitled to recover costs and attorney fees under § 1447(c). Because I find that First Motor did not lack an objectively reasonable basis for seeking removal, I will deny May's request for costs and attorney fees.

         I. BACKGROUND

         On March 27, 2012, May purchased a used Mercedes-Benz car from First Motor in Encino, California. The car was equipped with airbags manufactured by Takata Corporation, a Japanese company.

         In September 2016, May filed a law suit in the Superior Court of California against Mercedes-Benz USA, LLC ("MBUSA"), the warrantor and distributor of the car she purchased from First Motor (the "MBUSA Action"). May alleged in her complaint in the MBUSA Action that her car "suffered from nonconformities]" that included a defective airbag in violation of California's Song-Beverly Consumer Warranty Act. D.I. 22-1, Ex. A ¶¶ 5, 10.

         In June 2017, May sought leave to amend her complaint in the MBUSA Action by adding First Motor as a co-defendant. May argued in papers filed in support of her request for leave to amend that because:

the [proposed] claims against [MBUSA] and First Motor [ ] involve the [same] breach of the express and implied warranties of the same vehicle, there is no purpose to be served by forcing plaintiff to file a new separate action against defendants based on the same breach and damages.

D.I. 25-1, Ex. B at 4. The Superior Court denied May's request to amend her complaint in August 2017.

         By the time the Superior Court had denied May's request to add First Motor as a defendant in the MBUSA Action, Takata Corporation's wholly-owned U.S. subsidiary, TK Holdings Inc., and certain other related entities (collectively, "Takata") had filed for bankruptcy. See In re TK Holdings Inc., No. 17-11375- BLS (the "Bankruptcy Case"). In July 2017, Takata filed in the Bankruptcy Case an Adversary Complaint and Motion for Preliminary Injunction Pursuant to 11 U.S.C. § 105(a), seeking to stay all actions with claims "arising out of or relat[ed] to [Takata's] airbag inflators ...." See In re TK Holdings, Inc. (Adversary Proceeding), No. 17-50880-BLS, Dkt. No. 1 at 2. Takata's stay motion identified the MBUSA Action as one of the pending actions for which it sought a stay. May was served with the motion but, unlike other claimants, did not oppose the stay motion.

         On August 16, 2017, the presiding judge in the Bankruptcy Case, the Honorable Brendan L. Shannon, granted Takata's stay motion in part (the "Takata Injunction"). See D.I. 25-1, Ex. C. With two exceptions not relevant here, the Takata Injunction stayed through November 15, 2017 all "Individual Actions," which the Takata Injunction defined as "lawsuits brought by individuals or entities in the United States or Canada, alleging claims and/or causes of action against the Debtors ... and/or Consenting OEMs arising out of or relating to airbag inflators manufactured by Takata." See Id. at 2, ¶ C. The court held in the Takata Injunction order that the court had "related-to jurisdiction" over the claims brought in the Individual Actions against "non-Debtor defendants" and "Consenting OEMs." Mat3, ¶ E.

         In September 2017, MBUSA removed the MBUSA Action to the United States District Court for the Central District of California. In November 2017, the Bankruptcy Court extended the Takata Injunction through February 27, 2018. See id, Ex. D.

         On December 18, 2017, Judge Shannon held oral argument on a motion brought by a car owner named Joseph Graves to lift the automatic stay imposed pursuant to 11 U.S.C. § 362(d)(1) and allow Graves to pursue claims against the dealership ...


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