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Uhland v. Agrigenetics, Inc.

United States District Court, D. Colorado

January 31, 2019

DOUGLAS UHLAND, d/b/a TriCounty Farms, TIMOTHY HUME, d/b/a North Fork Farms, WOOD FARMS, LLC, 3WC FARMS, LLC, ROGER SAFFER, d/b/a Saffer Farms, PATRICK HUME, d/b/a Big Flat Farms, and MARK MARSH, Plaintiffs,


          William J. Martínez, United States District Judge

         In this action, Plaintiffs bring various claims against Defendants Dow ArgoSciences LLC (“DAS”), Agrigenetics, Inc. (“Mycogen”) (jointly, “Dow”), and Kaitlyn Lowe (“Lowe”) (collectively, “Defendants”). (ECF No. 5.) Before the Court are (1) Plaintiffs' Motion for Remand (“Motion to Remand”; ECF No. 33); (2) Dow's Motion to Dismiss or Stay Action (“Motion to Dismiss”; ECF No. 15); and (3) Plaintiffs' Unopposed Motion for Substituted Service (“Motion for Substituted Service”; ECF No. 34).

         For the reasons explained below, the Court (1) grants Plaintiffs' Motion to Remand; (2) denies without prejudice Dow's Motion to Dismiss; and (3) denies Plaintiffs' Motion for Substituted Service as moot.

         I. BACKGROUND

         The following factual summary is primarily drawn from Plaintiffs' Proposed Amended Complaint.[1] (ECF No. 48-1.) On a motion to remand, disputes of fact are resolved in favor of the non-removing party. See Frontier Airlines, Inc. v. United Air Lines, Inc., 758 F.Supp. 1399, 1405 (D. Colo. 1989).

         Plaintiffs are farmers in southeast Colorado. (ECF No. 48-1 ¶¶ 1, 4-9.) They commercially grow sunflowers and other crops. (Id. ¶¶ 27-33.) DAS “develops genetically engineered sunflower seeds and advertises those seeds for sale in Colorado.” (Id. ¶ 12.) Mycogen “sells and offers for sale sunflower seeds developed by [DAS] via seed dealers.” (Id. ¶ 11.) Lowe is employed by DAS to “sell[] seeds to seed dealers in southeast Colorado” and is Mycogen's regional sales manager. (ECF Nos. 48-1 ¶¶ 13-14 & 33 at 2.) As a regional sales manager, Lowe “delivers seeds and monitors growth in Colorado fields.” (ECF No. 33 at 2.)

         In 2017, Plaintiffs sought to acquire 8H449CLDM variety sunflower seeds (“449 seeds”) from seed dealers, but were informed by Lowe and the seed dealers that the 499 seeds were not available for purchase. (ECF No. 48-1 ¶ 18.) Plaintiffs claim that Dow “[was] not selling 449 seeds at that time because they knew of [a] pollination defect and chose to withhold the seeds from the market to avoid foreseeable crop failures that they had previously documented elsewhere.” (Id.)

         Several weeks later, however, Defendants “sold the 449 seeds to seed dealers and distributors throughout southeast Colorado, based on the unfounded belief that the pollination defect would not manifest in the 2017 planting season.” (Id. ¶ 19.) “Lowe contacted several of the Plaintiffs to tell them the seeds were available.” (Id.) Plaintiffs claim they were never warned about the pollination defect. (Id. ¶ 2.)

         After purchasing 569 bags of the 449 seeds from seed dealers, Plaintiffs planted the seeds in their farms in southeast Colorado. (Id. ¶¶ 22, 27-33.) Upon harvest, Plaintiffs discovered that the “449 seeds' crop produced 55% less than the average sunflower center fill seed yield, and . . . approximately 20% less oleic oil per seed ton than on average.” (ECF No. 1 ¶ 11; see ECF No. 48-1 ¶¶ 22-23.) Plaintiffs allege that these below-average yields were the result of the pollination defect in the 449 seeds and that “alternate variety sunflowers planted in the same season produced markedly greater volumes.” (ECF No. 48-1 ¶¶ 1, 24.) As a result of the “devastating crop failure, ” “Plaintiffs lost substantial revenue and profit.” (Id. ¶ 34.)


         Plaintiffs initially filed this action in the Prowers County District Court in Lamar, Colorado, alleging negligence, negligent misrepresentation, and intentional interference with prospective business advantage against all Defendants, as well as breach of implied warranties of merchantability and fitness for a particular purpose, fraudulent concealment, and deceptive trade practices in violation of the Colorado Consumer Protection Act against Dow. (ECF No. 5.)

         On October 5, 2018, Dow removed the action to this Court on the basis of diversity jurisdiction. (ECF No. 1.) Defendant Mycogen is a resident of Delaware and Indiana, and Defendant DAS is a resident of Delaware, Indiana, and Michigan. (ECF Nos. 1 ¶¶ 5-6 & 24 ¶ 5.) While Plaintiffs and Defendant Lowe are citizens of Colorado (ECF Nos. 5 ¶¶ 4-9, 13 & 24 ¶¶ 3-4), Dow alleges that Plaintiffs had fraudulently joined Lowe solely to defeat diversity and that this Court therefore had jurisdiction to hear the dispute. (ECF No. 1 ¶ 8.) In its Notice of Removal, Dow asserts that Plaintiffs failed to establish a viable cause of action against Lowe under Colorado law. (Id. ¶¶ 20-32.)

         On November 2, 2018, Plaintiffs moved to remand this action to the Prowers County District Court, arguing that Lowe was properly joined. (ECF No. 33.) In its Response, Dow argues that Plaintiffs' Motion to Remand should be denied since Plaintiffs “failed to plead facts showing a plausible claim for relief against Lowe.” (ECF No. 37 at 5-15.)

         Plaintiffs filed a Reply on December 7, 2018, arguing that Dow cannot raise new grounds for removal in its Response. (ECF No. 48 at 1-2.) Moreover, Plaintiffs assert that Dow's reliance on the standard for a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) is misplaced since the standard for fraudulent joinder is more demanding. (Id. at 2-3.) Plaintiffs argue that even if a claim cannot withstand a Rule 12(b)(6) motion, the fraudulent joinder inquiry does not end there; a court is empowered to look beyond the complaint's face to determine if there is any possibility of a claim. (Id.) In addition, Plaintiffs counter Dow's argument that they failed to plead sufficient facts by attaching a Proposed Amended Complaint containing additional factual ...

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