complaint removed to this Court on February 25, 1993. Plaintiff filed a first amended complaint on March 15, 1993. He did so without leave of this Court or his opposing parties' consent. Although plaintiff may have thought his amendment proper under Rule 15(a) of the Federal Rules of Civil Procedure (party may amend his "pleading once as a matter of course at any time before a responsive pleading is served"), the first amended complaint may not be used to defeat the removal of plaintiff's case to federal court. 6 Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure: Civil § 1477, at 562 (2d ed. 1990) ("[A] party may not employ Rule 15(a) to interpose an amendment that would deprive the district court of jurisdiction over a removed action.").
Plaintiff worked for First Nationwide from July 13, 1987, until he was terminated on February 14, 1992. First Nationwide, a federal savings bank, is owned by Ford. Ford also owns The Associates, a savings and loan institution. During the course of his employment at First Nationwide, plaintiff administered the Ford Employee Banking Program.
On February 8, 1991, plaintiff was assigned to work with The Associates and to assist with Ford's APEX program; the APEX program "booked" loans in First Nationwide's name. Prior to February 8, 1991, the Office of Thrift Supervision ("OTS") and the Federal Deposit Insurance Corporation had found the APEX program in a state of noncompliance with federal banking regulations dealing with affiliate transactions.
On October 4, 1991, plaintiff complained to senior management at First Nationwide that the APEX program continued to operate in violation of federal and state laws; plaintiff specifically cited 12 U.S.C. § 371c, which places restrictions on transactions with affiliates. On January 2, 1992, plaintiff advised First Nationwide of his intention to give additional information of the allegedly illegal activities to the OTS. Plaintiff did write to the OTS on February 14, 1992, concerning his knowledge of the affiliate transaction violations. Later that same day, plaintiff was summarily discharged. Between the time plaintiff notified senior management of the continuing violations and the date of his termination, plaintiff was placed on performance improvement, his responsibilities were limited, and he started reporting to an individual who had less seniority than did plaintiff's previous supervisor.
Plaintiff had experienced other problems at First Nationwide prior to his termination. Beginning in April 1990, plaintiff reported to Reid. Reid allegedly made unwelcome and unsolicited verbal remarks of a sexual nature that created an offensive and hostile work environment for plaintiff. On December 3, 1991, plaintiff gave notice to First Nationwide that he was the victim of sex discrimination and sexual harassment. On December 12, 1991, Reid placed plaintiff in the performance improvement program.
On January 29, 1992, plaintiff filed a charge with the California Department of Fair Employment and Housing ("DFEH"), alleging sex discrimination and sexual harassment by Reid. On February 13, 1992, one day before his termination, plaintiff's supervisors received notice that plaintiff had filed a charge with the DFEH and that he had contacted the OTS.
Plaintiff filed his complaint in the California Superior Court on January 28, 1993. Plaintiff stated six causes of action: (1) wrongful termination, (2) sexual harassment, (3) sex discrimination, (4) age discrimination, (5) retaliation, and (6) tortious interference with contractual relationship. Defendants removed plaintiff's complaint to this Court on February 25, 1993.
The federal question removal statute provides in pertinent part: "Any civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties or laws of the United States shall be removable without regard to the citizenship or residence of the parties." 28 U.S.C. § 1441(b). "The party invoking the removal statute has the burden of establishing federal jurisdiction." Holcomb v. Bingham Toyota, 871 F.2d 109, 110 (9th Cir.), cert. denied, 493 U.S. 846, 107 L. Ed. 2d 100, 110 S. Ct. 141 (1989).
This suit lacks complete diversity among the parties: plaintiff is a citizen of California and defendant First Nationwide is incorporated in the state of California. For this Court to acquire removal jurisdiction over plaintiff's suit, therefore, that suit must arise under federal law.
To determine whether plaintiff's suit arises under federal law, the Court must apply the "well pleaded complaint" rule:
Whether a case is one arising under the Constitution or a law or treaty of the United States, in the sense of the jurisdictional statute . . ., must be determined from what necessarily appears in the plaintiff's statement of his own claim in the bill or declaration, unaided by anything alleged in anticipation of avoidance of defenses which it is thought the defendant may interpose.
Taylor v. Anderson, 234 U.S. 74, 75-76, 58 L. Ed. 1218, 34 S. Ct. 724 (1914) (emphasis added). The determination of whether a case arises under federal law is not made by referring to the actual complaint filed, but rather to the "well pleaded complaint." Merrell Dow Pharmaceuticals Inc. v. Thompson, 478 U.S. 804, 808, 92 L. Ed. 2d 650, 106 S. Ct. 3229 (1986).
The Supreme Court has stated that the "vast majority" of cases that come within the federal courts' "arising under" jurisdiction fall within "Justice Holmes' statement, 'A suit arises under the law that creates the cause of action.'" Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 8-9, 77 L. Ed. 2d 420, 103 S. Ct. 2841 (1983) (quoting American Well Works Co. v. Layne & Bowler Co., 241 U.S. 257, 260, 60 L. Ed. 987, 36 S. Ct. 585 (1916)). If federal law does not create the plaintiff's cause of action, the suit may still "arise under" federal law, but only if "it appears that some substantial, disputed question of federal law is a necessary element of one of the well-pleaded state claims, or that one or the other claim is 'really' one of federal law." Id. at 13 (emphasis added).
Defendants do not argue that federal law creates any of plaintiff's causes of action. They claim instead that removal of this case was proper because two of plaintiff's causes of action fall into the second category of claims discussed in Franchise Tax Board. According to defendants, plaintiff's first cause of action for wrongful termination and his fifth cause of action for retaliation both involve a "substantial" question of federal law, and that the "substantial" question is a "necessary element" of each claim.
Defendants point to 12 U.S.C. § 1831j, which provides a civil remedy to individuals who are punished for reporting misconduct at federally-regulated financial institutions, and argue that the facts alleged in the first and fifth causes of action state a claim under § 1831j. With respect to plaintiff's first cause of action (for wrongful termination), defendants cite paragraph 19 of the complaint, wherein plaintiff alleges that he wrote to the OTS on February 14, 1992 "regarding his knowledge of [First Nationwide's] affiliate transaction violations," and also paragraph 21, wherein "plaintiff alleges that his termination was retaliatory for alleging violations by defendants which represent violations of public policy." With respect to plaintiff's fifth cause of action (for retaliation), defendants cite paragraph 51 of the complaint, wherein plaintiff alleges that defendants received notice on February 13, 1992 (one day before the termination), that he had contacted the OTS.
Defendants insist that the facts alleged in these paragraphs state a claim for relief under § 1831j. They cite the following portion of that statute:
No insured depository institution may discharge or otherwise discriminate against any employee with respect to compensation, terms, conditions, or privileges of employment because the employee . . . provided information to any Federal Banking agency or to the Attorney General regarding any possible violation of any law or regulation by the depository institution or any director, officer, or employee of the institution.