The opinion of the court was delivered by: Illston, District Judge.
ORDER GRANTING MOTION TO REMAND;
DENYING AS MOOT MOTIONS
TO STRIKE, TO STAY AND
TO COMPEL ARBITRATION;
AND REMANDING ACTION TO
THE ALAMEDA COUNTY SUPERIOR
On April 18, 2001, the Court heard argument on plaintiff's motion to
remand and defendants' motion to strike and motion to stay this action
and compel arbitration. Having carefully considered the arguments of the
parties and the papers submitted, the Court hereby GRANTS plaintiff's
motion and DENIES defendants' motions as moot, for the reasons set forth
This employment discrimination action involves plaintiff Albert Plute's
experience as a delivery driver for defendant FedEx
Ground, Inc. ("FedEx").*fn1 Plute began working for FedEx in August
1994. Compl. ¶ 16. He claims that FedEx and two of his supervisors,
Stacy Shoun ("Shoun") and Mark Freel ("Freel"), subjected him to
discriminatory comments and unequal terms of employment on account of his
age. See Compl. ¶¶ 21-24. Plute is over the age of 40. Compl. ¶
17. Beginning in 1995, Plute complained about and participated in an
investigation of the alleged wrongful treatment. Compl. ¶ 19. He
claims that defendants nonetheless continued their behavior and
retaliated against him for exercising his rights. Compl. ¶¶ 23-24. On
or about August 18, 1999, FedEx terminated Plute. Compl. ¶ 25.
Plute filed suit in Alameda County Superior Court on August 16, 2000,
against FedEx and his supervisors in their individual capacity, alleging
age discrimination and retaliation in violation of the California Fair
Employment and Housing Act ("FEHA"), breach of contract, intentional
infliction of emotional distress, and an alternative claim under the
Unruh Act. FedEx removed the action to this Court on January 22, 2001, on
the basis of diversity jurisdiction. See Notice of Removal ¶ 1. Plute
is a California resident, and FedEx is a Delaware corporation with its
principal place of business is in Pennsylvania. Id. at ¶¶ 2-3.
According to FedEx, California residents Shoun and Freel were
fraudulently joined in the action in order to defeat complete diversity
of citizenship. Id. at ¶ 5.
Presently before the Court are plaintiff's motion to remand, FedEx's
motion to strike Shoun and Freel as defendants, and FedEx's motion to
stay the action and compel arbitration. The Court finds that defendants
cannot demonstrate complete diversity of citizenship between the
parties, and consequently, this matter must be remanded. The Court does
not reach defendants' motions, which should be raised in state court.
A suit filed in state court may be removed to federal court if the
federal court would have had original subject matter jurisdiction over
that suit. 28 U.S.C. § 1441 (a); Snow v. Ford Motor Co., 561 F.2d 787,
789 (9th Cir. 1977). A motion to remand is the proper procedure for
challenging removal. Remand to state court may be ordered either for lack
of subject matter jurisdiction or for any defect in removal procedure.
See 28 U.S.C. § 1447(c). The court may remand sua sponte or on motion
of a party, and the party who invoked the federal court's removal
jurisdiction has the burden of establishing federal jurisdiction. See
Emrich v. Touche Ross & Co., 846 F.2d 1190, 1195 (9th Cir. 1988) (citing
Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97, 42 S.Ct. 35, 66
L.Ed. 144 (1921)). The removal statute is strictly construed against
removal jurisdiction and any doubt is resolved in favor of remand. Boggs
v. Lewis, 863 F.2d 662, 663 (9th Cir. 1988); Libhart v. Santa Monica
Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979).
A district court may disregard a non-diverse party named in the state
court complaint and retain federal jurisdiction if the non-diverse party
is joined as a sham or if the joinder is fraudulent.*fn2 Farias v. Bexar
County Bd. of Trustees, 925 F.2d 866, 871 (5th Cir. 1991). Joinder is
fraudulent "[i]f the plaintiff fails to state a cause of action against a
resident defendant, and the failure is obvious according to the settled
rules of the state." McCabe v. General Foods Corp., 811 F.2d 1336, 1339
(9th Cir. 1987). There is a presumption against finding fraudulent
joinder, and defendants who assert that plaintiff has fraudulently joined
a party carry a heavy burden of persuasion. See Nishimoto v.
Federman-Bachrach & Assocs., 903 F.2d 709, 712 n. 3 (9th Cir. 1990);
Emrich v. Touche Ross & Co., 846 F.2d 1190, 1195 (9th Cir. 1988).
Courts have denied a claim of fraudulent joinder when there is any
possibility that a plaintiff may prevail on the cause of action against
the in-state defendant. See Cavallini v. State Farm Mutual Auto Ins.
Co., 44 F.3d 256, 259 (5th Cir. 1995) ("The removing party must prove
that there is absolutely no possibility that the plaintiff will be able
to establish a cause of action against the in-state defendant in state
court."); Good v. Prudential Insurance Company of America,
5 F. Supp.2d 804, 807 (N.D.Cal. 1998) ("[T]he defendant must demonstrate
that there is no possibility that the plaintiff will be able to establish
a cause of action in state court against the alleged sham defendant.").
In determining whether a defendant was joined fraudulently, the courts
must resolve "all disputed questions of fact and all ambiguities in the
controlling state law in favor of the non-removing party." Dodson, 951
F.2d at 42-43. Furthermore, "[a]ll doubts concerning the sufficiency of a
cause of action because of inartful, ambiguous or technically defective
pleading must be resolved in favor of remand [citation], and a lack of
clear precedent does not render the joinder fraudulent." Archuleta v.
American Airlines, Inc., 2000 WL 656808, *4 (C.D.Cal. 2000) (citing Gaus
v. Miles, Inc., 980 F.2d 564, 566-67 (9th Cir. 1992), and Lieberman v.
Meshkin, Mazandarani, 1996 WL 732506, *3 (N.D.Cal. 1996)). The court may
look beyond the pleadings and consider affidavits or other evidence to
determine if the joinder was a sham. Morris v. Princess Cruises, Inc.,
236 F.3d 1061, 1068 (9th Cir. 2001) (quoting Cavallini v. State Farm
Mutual Auto Ins. Co., 44 F.3d 256, 263 (5th Cir. 1995) ("[F]raudulent
joinder claims may be resolved by `piercing the pleadings' and
considering summary judgment-type evidence such as affidavits and
deposition testimony.")); Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1318
(9th Cir. 1998).
Plute asserts two causes of action against Shoun and Freel in their
individual capacity: retaliation in violation of FEHA, Cal. Gov.Code
§ 12940(h), and intentional infliction of emotional distress. To
prove fraudulent joinder, FedEx must establish that, under settled
California law, ...