The opinion of the court was delivered by: BARRY MOSKOWITZ, District Judge
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR
On April 30, 2004, Plaintiff Steven Paul Morales filed suit in
California Superior Court against his former employers, Home
Depot U.S.A., Inc. and Maintenance Warehouse ("MWH"), alleging
wrongful termination. Morales's original complaint alleged six
causes of action: (1) conversion; (2) intentional
misrepresentation; (3) negligent misrepresentation; (4) breach of
implied contract; (5) breach of the covenant of good faith and
fair dealing; (6) wrongful termination in violation of public
policy; and (7) violation of Cal. Lab. Code § 2802. See Pl.'s
Mem. of P. & A. in Support of Mot. to Remand, Ex. A. Defendants
subsequently brought a motion for summary judgment or, in the
alternative, summary adjudication. The Superior Court granted
Defendants' motion in part, holding that there was no triable
issue of fact as to Plaintiff's first three causes of action,
which were for conversion, intentional misrepresentation, and
negligent misrepresentation. Exs. TT & RRR of Def.'s Notice of Removal ("NOR"). The Superior Court, however, denied Defendants'
motion as to the remaining four claims, which were for breach of
implied contract; breach of the covenant of good fair and fair
dealing; wrongful termination in violation of public policy; and
violation of Cal. Lab. Code § 2802. Id. The Court also granted
Plaintiff leave to amend his complaint to state a cause of action
for misappropriation. Ex. RRR to NOR.
In May 2005, Plaintiff filed his First Amended Complaint
("FAC") in Superior Court. The complaint alleged the following
five causes of action: (1) misappropriation in violation of Cal.
Civ. Code § 3344(a) and the Lanham Act, 15 U.S.C. 1125(a)(1)(A);
(2) breach of implied-in-fact contract; (3) breach of duty of
good faith and fair dealing; (4) wrongful termination in
violation of public policy; and (5) violation of Cal. Lab. Code §
2802(a) duty to defend and indemnify. Ex. YYY to NOR. On June
14, 2005, Defendants, based on the newly pleaded misappropriation
claim under the Lanham Act, removed the case to this Court. On
June 21, 2005, Plaintiffs filed a motion to remand. The Court
denied Plaintiff's motion to remand, finding that the FAC, on its
face, clearly pleaded a federal cause of action. See Order
Denying Pl.'s Mot. to Remand, entered Aug. 12, 2005, at 3. The
Court held that removal was therefore proper under
28 U.S.C. § 1441(b). Id.
On September 29, 2005, Defendants filed a motion for summary
judgment, or in the alternative, a motion for partial summary
judgment. For the reasons discussed below, Defendants' motion is
GRANTED IN PART and DENIED IN PART.
The following facts, pursuant to the summary judgment standard,
are presented in the light most favorable to the Plaintiff, the
non-moving party. Morales first began working for Defendant Home
Depot in 1993. Pl.'s Opp'n at 1. Beginning as a retail sales
associate, Morales eventually rose to the position of director.
Id. He received no negative reviews or warnings. Id. In early
2001, Morales obtained a contractor's license for the state of
Wyoming, becoming involved with construction projects there on
behalf of Home Depot. Id. See Ross Decl., Ex. 2. Morales's
name was listed as the Qualifying Supervisor for the Wyoming
license. Pl.'s Opp'n at 1. In February 2002, Plaintiff
transferred and relocated to accept a position with Maintenance Warehouse ("MWH"), a company
wholly owned by Home Depot. Id. After Morales's transfer, the
company informed him that it would not continue to use his name
and license to continue work in Wyoming. Morales Decl. at 2, ¶ 4.
At MWH, Morales worked with another employee named Paul
Raymond. Raymond was terminated in October 2002. Pl's Opp'n at 2.
In January 2003, a few months after he was terminated, Raymond,
an African-American, sent a letter to MWH CEO Lew Klessel,
alleging discrimination due to color and race. Id.; Def.'s
Request for Judicial Notice, Ex. A at 4 (Raymond Compl.) Raymond
alleged that Plaintiff Morales sent him an October 2002 e-mail,
which stated "you people can never be good managers so stop
trying." Pl.'s Opp'n at 2. Raymond filed charges of
discrimination with the California DFEH and the EEOC in February
2003, and eventually filed suit in Superior Court. Opp'n at 3;
Def.'s Mot. at 6.
MWH also initiated its own internal investigation, after which
it determined that the offensive e-mail had been sent from
Plaintiff's computer. Def.'s Mot. at 6-7. Furthermore, through a
cross check of phone records, MWH determined that both Morales
and Raymond likely had been at their desks at the time the e-mail
was sent. This fact, according to Defendants, precluded the
possibility that Raymond had gone into Morales's office to send
the e-mail. Id. As a result, MWH terminated Morales on or about
May 1, 2003. Id.
Plaintiff, on the other hand, contends that he was told in
early 2003 that he would be terminated if Raymond brought suit so
that the company could avoid having to defend and indemnify him.
Morales Decl. at 3. He claims that MWH "falsely claimed it had
evidence that conclusively showed [he] sent the e-mail to Mr.
Raymond" to justify the termination. Id.
Summary judgment is appropriate if the moving party
demonstrates that "the pleadings, depositions, answers to
interrogatories and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact." Fed.R.Civ.P. 56(c); Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986); Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986). A fact is material when,
under the governing substantive law, it could affect the outcome
of the case. See Anderson, 477 U.S. at 248; Freeman v. Arpaio, 125 F.3d 732, 735 (9th Cir. 1997). A dispute is genuine
if a reasonable jury could return a verdict for the nonmoving
party. See Anderson, 477 U.S. at 248.
A party seeking summary judgment always bears the initial
burden of establishing the absence of a genuine issue of material
fact. See Celotex, 477 U.S. at 323. Although the nonmoving
party bears the burden of proof on a matter at trial, the moving
party need only demonstrate to the Court that there is
insufficient evidence to support the nonmoving party's case.
Id. at 325. The moving party can satisfy this burden in two
ways: (1) by presenting evidence that negates an essential
element of the nonmoving party's case; or (2) by demonstrating
that the nonmoving party failed to establish an essential element
of the nonmoving party's case on which the nonmoving party bears
the burden of proof at trial. See Id. at 322-23. "Disputes
over irrelevant or unnecessary facts will not preclude a grant of
summary judgment." T.W. Elec. Serv., Inc. v. Pacific Elec.
Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987).
Once the moving party establishes the absence of genuine issues
of material fact, the burden shifts to the nonmoving party to set
forth facts showing that a genuine issue of disputed fact
remains. See Celotex, 477 U.S. at 314. The nonmoving party
cannot rest on the mere allegations or denials of his pleading,
but must "go beyond the pleadings and by his own affidavits, or
by the `depositions, answers to interrogatories, and admissions
on file' designate `specific facts showing that there is a
genuine issue for trial.'" Id. at 324 (citing Fed.R.Civ.P.
56(c)). When making this determination, the court must view all
inferences drawn from the underlying facts in the light most
favorable to the nonmoving party. See Matsushita Elec. Indus.
Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986);
Fontana v. Haskin, 262 F.3d 871, 876 (9th Cir. 2001). The court
must not weigh the evidence or make credibility determinations in
evaluating a motion for summary judgment. See Anderson,
477 U.S. at 255.
As a preliminary matter, this Court has jurisdiction to
consider the summary judgment motion. When a federal claim (here
the Lanham Act) is joined with non-removable state claims, "the entire case may be removed." 28 U.S.C. § 1441(c).
Plaintiff argues that the Superior Court's previous denial of the
Defendants' motion for summary judgment precludes this Court's
consideration of the issues. Plaintiff claims that because his
claims for breach of implied contract, breach of the covenant of
good faith and fair dealing, wrongful termination, and violation
of Labor Code § 2802 survived summary judgment in state court,
the case is ready for trial, at least as to those causes of
action. However, the Ninth Circuit has expressly stated that a
"state court's denial of summary judgment [does] not preclude ...