The opinion of the court was delivered by: The Honorable Gary Allen Feess
Proceedings: (In Chambers)
ORDER RE: MOTION TO REMAND & MOTION FOR ATTORNEY'S FEES
On October 7, 2008, plaintiffs Walter Stanbrough and Robert Farden sued their former employer, Georgia-Pacific Gypsum LLC ("GP-Gypsum"), Stanley Warenda, their former supervisor, and Koch Industries, Inc. ("Koch") in Los Angeles Superior Court, alleging various state claims, including age discrimination, harassment, and breach of contract. On December 17, 2009, Defendants timely removed the case to this Court on the basis of diversity jurisdiction. (Not. of Removal (Docket No. 1).) Plaintiff now moves to remand the case based on a lack of complete diversity, and seeks attorney's fees incurred in connection with the motion to remand. For the reasons set forth below, the motion to remand is GRANTED, and the motion for attorney's fees is DENIED.
Plaintiffs contend that Defendants' removal was improper because complete diversity is lacking, given that Plaintiffs and defendant Warenda are all California citizens. Defendants respond by asserting that Plaintiffs joined Warenda for the sole purpose of destroying diversity and preventing removal, and that his citizenship must therefore be ignored for purposes of determining diversity. If Defendants are correct that Warenda is a "sham" defendant, complete diversity would exist because defendants GPGypsum and Koch are not citizens of California.
The Court has jurisdiction to determine whether it has jurisdiction, and whether Warenda was fraudulently joined to the action to destroy complete diversity. McCabe v. Gen. Foods Corp., 811 F.2d 1336, 1339 (9th Cir. 1987). "If [a] 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, the joinder of the resident defendant is fraudulent." Id. "[T]here is a general presumption against fraudulent joinder," however, and a defendant carries a heavy burden and must prove fraudulent joinder by clear and convincing evidence. Hamilton Materials, Inc. v. Dow Chemical Corp., 494 F.3d 1203, 1206 (9th Cir. 2007). A defendant may meet this burden only by demonstrating "that there is no possibility that [the plaintiff] would be able to establish a cause of action against [the resident defendant] in state court." Dodson v. Spiliada Maritime Corp., 951 F.2d 40, 42 (5th Cir. 1992); Good v. Prudential Ins. Co. of Am., 5 F. Supp. 2d 804, 807 (N.D. Cal. 1998). While Defendants are "entitled to present the facts showing the joinder to be fraudulent," McCabe, 811 F.2d at 1339, all disputed questions of fact and ambiguities in the law must be resolved in favor of the plaintiff, Dodson, 951 F.2d at 42; Plute v. Roadway Package Sys., Inc., 141 F. Supp. 2d 1005, 1008 (N.D. Cal. 2001).
The only claim Plaintiffs allege against Warenda is harassment on the basis of age in contravention of sections 12940(j)(1) and (j)(3) of the California Government Code. Section 12940(j)(1) provides that "[i]t shall be an unlawful employment practice . . . [f]or an employer . . . or any other person, because of . . . age . . . , to harass an employee, an applicant, or a person providing services pursuant to a contract." Cal. Gov't Code § 12940(j)(1). Section 12940(j)(3) makes clear that "[a]n employee of an entity subject to this subdivision is personally liable for any harassment prohibited by this section that is perpetrated by the employee, regardless of whether the employer or covered entity knows or should have known of the conduct and fails to take immediate and appropriate corrective action." Id. § 12940(j)(3) (emphasis added).
Under the third cause of action in the complaint, Plaintiffs plead the following allegations of harassment:
Defendants engaged in actions to harass plaintiffs because of their age. Defendants directed numerous comments to plaintiffs, as was stated above, shunned them in daily activities, refused to involve them in various projects, and took other actions directed toward plaintiffs.
As a proximate result of defendants' willful, knowing, and intentional harassment, plaintiffs sustained damages in sums according to proof . . . [and] have suffered and continue to suffer humiliation, emotional distress, and mental and physical pain and anguish, all to their damage in sums according to proof.
Defendants' harassment of plaintiffs were done intentionally, in a malicious, oppressive manner, entitling ...