William J. Mouren Farming, Inc. v. Phillips 66 Pipeline, LLC

WILLIAM J. MOUREN FARMING, INC.,a California corporation, d/b/a W.J. MOUREN FARMING, Plaintiff, v. PHILLIPS 66 PIPELINE, LLC, a Delaware limited liability company;CONOCOPHILLIPS, a Delaware corporation;and Does 1 through 100, Defendants.

No. 1:18-cv-00404-DAD-BAM

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA

July 24, 2018

ORDER GRANTING DEFENDANTS' MOTION TO STRIKE JURY DEMAND AND DENYING PLAINTIFF'S COUNTER-MOTIONS FOR RELIEF

(Doc. No. 10, 15)

This matter is before the court on defendants' motion to strike plaintiff's jury demand (Doc. Nos. 10-11), and plaintiff's counter-motions for relief (Doc. No. 15). The court held a hearing on these motions on June 19, 2018, at which plaintiff's counsel John Kinsey appeared in person and defendant's counsel Morgan Lopez appeared telephonically. (Doc. No. 18.) For the reasons that follow, defendants' motion to strike plaintiff's untimely jury demand will be granted, and plaintiff's counter-motions for relief will be denied.

FACTUAL BACKGROUND

On February 1, 2018, plaintiff filed a verified complaint in the Fresno County Superior Court naming Phillips 66 Pipeline, LLC and ConocoPhillips as defendants. (Doc. No. 1 at 15.) The complaint alleged eight causes of action, all of which are based on the allegation that an oil pipeline that runs through plaintiff's property must be removed. (Id.) Plaintiff's complaint did not include a jury trial demand.

On March 26, 2018, defendants filed and served a notice of removal and removed the action to this federal court. (Doc. No. 1.) On April 20, 2018, defendants answered the verified complaint and did not demand a jury trial. (Doc. No. 5.) On May 10, 2018, plaintiff filed and served a first amended complaint ("FAC") setting forth the same eight claims for relief with minor revisions to the allegations of the complaint. (Doc. No. 6.) At that time, plaintiff also filed a demand for a jury trial as a supplement to the FAC. (Doc. No. 6-3.)

On May 16, 2018, defendants filed the pending motion to strike plaintiff's jury trial demand. (Doc. Nos. 10, 11.) On June 5, 2018, plaintiff filed an opposition to that motion, as well as a counter-motion for relief pursuant to Federal Rules of Civil Procedure 6, 39, and 41. (Doc. No. 15.) On June 12, 2018, defendants filed a reply. (Doc. No. 16.)

LEGAL STANDARDS

Pursuant to Rule 12(f) of the Federal Rules of Civil Procedure, a court may strike from a complaint "any redundant, immaterial, impertinent, or scandalous matter." "The function of a 12(f) motion to strike is to avoid the expenditure of time and money that must arise from litigating spurious issues." Sidney-Vinstein v. A.H. Robins Co., 697 F.2d 880, 885 (9th Cir. 1983). Motions to strike are generally disfavored and "should not be granted unless it is clear that the matter to be stricken could have no possible bearing on the subject matter of the litigation." Neveu v. City of Fresno, 392 F. Supp. 2d 1159, 1170 (E.D. Cal. 2005) (citation and quotation marks omitted); see also Neilson v. Union Bank of Cal., N.A., 290 F. Supp. 2d. 1101, 1152 (C.D. Cal. 2003) ("Motions to strike are generally regarded with disfavor because of the limited importance of pleading in federal practice, and because they are often used as a delaying tactic.") Although granting a motion to strike is within its discretion, in considering such a motion, the court must view the pleading in a light most favorable to the non-moving party and resolve any doubt as to the relevance of the challenged allegations in favor of the non-moving party. See In re 2TheMart.com, Inc. v. Sec. Litig., 114 F. Supp. 2d 955, 965 (C.D. Cal. 2000).

ANALYSIS

Defendants argue that plaintiff's demand for a jury trial was untimely under Federal Rule of Civil Procedure 38(b)(1) and should be stricken. (Doc. No. 11 at 2-3.) Plaintiff opposes the motion to strike their jury trial demand, first arguing that Federal Rule of Civil Procedure 81(c) is applicable here. (Doc. No. 15 at 7-9.) Plaintiff also contends that the courts in the Ninth Circuit have incorrectly interpreted the plain language of Rule 81(c) and that under a proper interpretation of that provision, its jury trial demand was timely. (Id.) Finally, plaintiff asserts that even if Rule 38 applies rather than Rule 81, its jury trial demand was timely because it was made with the filing of its FAC. (Id.) Below, the court addresses each of the provisions invoked by the parties and their possible application here.

I. Federal Rules of Civil Procedure 38 and 39

Rule 38 states that "a party may demand a jury trial by . . . serving the other parties with a written demand—which may be included in a pleading—no later than 14 days after the last pleading directed to the issue is served." Fed. R. Civ. P. 38. The Ninth Circuit has held that "a party's failure to serve and file the demand in the manner specified in Rule 38(b) constitutes a waiver of the right to a trial by jury." Solis v. County of Los Angeles, 514 F.3d 946, 953-54 (9th Cir. 2008) (citing Fed. R. Civ. P. 38(d)); see also Kulas v. Flores, 255 F.3d 780, 784 (9th Cir. 2001) ("Kulas waived any right to a jury by failing to file a timely demand as required by Fed. R. Civ. P. 38(b).").

Under Rule 39(b) the court has discretion to order a trial by jury despite a party's failure to make a timely demand. However, the Ninth Circuit has held that the discretion granted the court under that rule is "narrow" and '"does not permit a court to grant relief when the failure to make a timely demand results from an oversight or inadvertence' such as a good faith mistake of law with respect to the deadline for demanding a jury trial." Zivkovic v. S. Cal. Edison Co., 302 F.3d 1080, 1086-87 (9th Cir. 2002) (quoting Pac. Fisheries Corp. v. HIH Cas. & Gen. Ins., Ltd., 239 F.3d 1000, 1002-03 (9th Cir. 2001)); see also Richardson v. Stanley Works, Inc., 597 F.3d 1288, 1297-98 (Fed. Cir. 2010); Duhn Oil Tool, Inc. v. Cooper Cameron Corp., 818 F. Supp. 2d 1193, 1205 (E.D. Cal. 2011) ("A district court's discretion under Rule 39(b) is narrow and doesnot permit a court to grant relief when the failure to make a timely demand results from an oversight or inadvertence."). Because it is an oversight and/or inadvertence that appears to be at issue here, relief pursuant to Rule 39(b) is unavailable under Ninth Circuit precedent.

II. Federal Rule of Civil Procedure 38 and the Filing of a First Amended Complaint

As noted, plaintiff argues that under Rule 38, its jury trial demand was timely because it was made with its FAC. The argument is unpersuasive. As used in Rule 38, the word "issue" has been found to refer to "issues of fact, not issues of law." Trixler Brokerage Co. v. Ralston Purina Co., 505 F.2d 1045, 1050 (9th Cir. 1974); see also Lutz v. Glendale Union High School, 403 F.3d 1061, 1066 (9th Cir. 2005) ("Rather, Rule 38(b) is concerned with issues of fact."); Bentler v. Bank of America Nat'l Trust & Sav. Ass'n, 959 F2d 138, 141 (9th Cir. 1992). Therefore, the "last pleading directed to the issue" refers to the pleading asserting the responsive denial to the factual allegations underlying a plaintiff's claim. Pac. Fisheries Corp., 239 F.3d at 1002, n.2 (finding that the answer was the "last pleading directed to such issue"). When the original complaint and an amended complaint turn on the same matrix of facts, the amended complaint does not constitute the presentation of a new issue for which a jury trial should be granted as matter of right. Las Vegas Sun, Inc. v. Summa Corp., 610 F.2d 614, 620 (9th Cir. 1979); see also Lutz, 403 F.3d at 1066 ("Our caselaw is clear, though, that 'the presentation of a new theory does not constitute the presentation of a new issue on which a jury trial should be granted [as of right] under . . . Rule 38(b).'") (quoting Trixler Brokerage Co., 505 F.2d at 1050).

Here, defendants' answer was served on April 20, 2018. (Doc. No. 5.) Plaintiff's amended complaint did not change its claims for relief, add any new issues to this action, or substantially change the matrix of facts upon which it is based. (See Doc. Nos. 1, 6.) Therefore, the "last pleading directed to the issue" within the meaning of Rule 38 was defendants' answer.¹ (Doc. No. 5.) Plaintiff's demand for a jury trial was first filed with its FAC on May 10, 2018,which was past the fourteen-day deadline set forth in Rule 38. (Doc. No. 6.) As alluded to above, the typical remedy for such an untimely jury trial demand is to strike it. Pac. Fisheries Corp., 239 F.3d at 1002 ("An untimely request for a jury trial must be denied unless some cause beyond mere inadvertence is shown."); see also Lutz, 403 F.3d at 1065, n.4.

III. Federal Rule of Civil Procedure 81

Plaintiff's primary contention is that its jury trial demand submitted with its FAC was timely according to the plain language of Rule 81(c). (Doc. No. 15 at 6.) Defendant disputes whether Rule 81(c) is applicable here and argues that, even if it is, plaintiff's jury trial demand would be untimely.

Rule 81(c) effectively creates three exceptions in removed actions to Rule 3 8(b)'s requirement that a jury trial demand must be made within fourteen days of service of the "last pleading directed to the issue." No jury demand is required under Rule 38(b) if: (1) a demand was made before the action was removed (see Fed. R. Civ. P. 81(c)(3)(A)); (2) the state in which the action was filed did not require an "express demand" (see id.); or (3) all necessary pleadings to place the case at issue have been filed in the state court, and the demand is served within fourteen days of removal (see Fed. R. Civ. P. 81(c)(3)(B)).

Here, plaintiff concedes that the first and third exceptions under Rule 81 do not apply because its original complaint filed in state court did not include a jury trial demand. (See Doc. Nos. 1; 15 at 6-9.) However, plaintiff argues that at the time of the removal to this federal court, California law "did not require an express demand for a jury trial"...