Stelly v. Tesla, Inc.

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 BRUCE STELLY, Case No. 25-cv-08933-JSC 8 Plaintiff, ORDER REMANDING CASE v. 9 10 TESLA, INC. et al., Defendants. 11 12 13 Plaintiff, a California citizen, filed this state-law action against Tesla, Inc. (“Tesla”), “TY 14 (LAST NAME UNKNOWN),” and “TONY (LAST NAME UNKNOWN)” in state court. (Dkt. 15 No. 1-1 ¶¶ 7-9).1 Tesla removed the action to federal court on diversity jurisdiction grounds. 16 (Dkt. No. 1.) Because Plaintiff alleges the individual defendants are California citizens, the Court 17 ordered Tesla to show cause regarding diversity jurisdiction. (Dkt. No. 12.) 18 Tesla argues because Plaintiff has not served the individual defendants, the Court can 19 disregard their citizenship for purposes of determining complete diversity. (Dkt. No. 1, 13.) The 20 Court disagrees. Federal diversity jurisdiction requires complete diversity of citizenship and an 21 amount in controversy exceeding $75,000. See 28 U.S.C. § 1332(a). A case removed to federal 22 court must be remanded to state court “[i]f at any time before final judgment it appears that the 23 district court lacks subject matter jurisdiction.” 28 U.S.C. § 1447(c); see also Valdez v. Allstate 24 Ins. Co., 372 F.3d 1115, 1116 (9th Cir. 2004) (explaining federal courts’ independent obligation to 25 ensure they have subject matter jurisdiction). As the Court previously explained, “[t]he Supreme 26 Court and the Ninth Circuit have expressly rejected [Tesla’s] apparent position that an unserved 27 1 defendant’s citizenship is not considered in determining whether complete diversity exists.” JD v. 2 || Mitchell, No. 18-CV-06261-HSG, 2019 WL 1749521, at *2 (N.D. Cal. Apr. 19, 2019) (citing 3 Pullman Co. v. Jenkins, 305 U.S. 534, 541 (1939); Lopez v. Gen. Motors Corp., 697 F.2d 1328, 4 1331 (9th Cir. 1983); Clarence E. Morris, Inc. v. Vitek, 412 F.2d 1174, 1176 (9th Cir. 1969) 5 (“Whenever federal jurisdiction in a removal case depends on complete diversity, the existence of 6 || diversity is determined from the fact of citizenship of the parties named and not from the fact of 7 service.”)). 8 Tesla’s arguments otherwise are unavailing. Neither Cripps v. Life Insurance Co. of North 9 America, 980 F.2d 1261 (9th Cir. 1992), which considered whether unserved defendants counted 10 || for diversity in interpleader actions under 28 U.S.C. § 1335, or Congress’s 1988 amendments to 11 28 U.S.C. § 1441, which provided unserved “Doe” defendants are disregarded for diversity 12 || purposes, overrules the Supreme Court and Ninth Circuit precedent cited above. See Cripps, 980 5 13 F.2d at 1265-66 (describing 28 U.S.C. $§ 1335, 1441). And, in light of that precedent, the Court 14 || will not adopt the district court’s approach in Urquidez v. Hyatt Corporation, No. 3:24-CV-09175- 15 CAB-MMP, 2025 WL 89725, at *1-2 (S.D. Cal. Jan. 15, 2025) (denying motion to remand a 16 although unserved defendants would defeat diversity). 3 17 Because the Court lacks subject matter jurisdiction to hear this case, the Court REMANDS 18 the case to the Superior Court of the State of California for the County of Alameda.” The Court 19 further orders that the court file in this case be transferred by the clerk of this Court to the clerk of 20 || the State Court, along with a certified copy of this Order of Remand. The State Court may 21 thereupon proceed with this case. 22 IT IS SO ORDERED. 23 Dated: November 21, 2025 25 ACQUELINE SCOTT CORLE United States District Judge 26 27 > The Court also rejects Tesla’s request to delay its remand until the parties stipulate to arbitration, 2g || because the Court would not have the power to grant the parties’ stipulation in the absence of subject matter jurisdiction.