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Roland-Warren v. Sunrise Senior Living

August 4, 2009


The opinion of the court was delivered by: Hon. Jeffrey T. Miller United States District Judge


On March 17, 2009, Plaintiff Delaine Roland-Warren ("Plaintiff") filed a complaint in the Superior Court of the State of California for the County of San Diego, raising claims for racial discrimination, retaliation, and constructive discharge under the state's Fair Employment and Housing Act, Cal. Gov't Code § 12900 et seq., and for defamation, all stemming from her employment relationship with Defendant Sunrise Senior Living, Inc. (Doc. No. 1, Exh. 1, "Compl.") Defendants filed an Answer to the Complaint on June 1, 2009. (Doc. No. 1, Exh. 4.) On June 2, 2009, Defendants timely removed the action to federal court. (Doc. No. 1.)

In their Notice of Removal, Defendants claim federal subject matter jurisdiction based on diversity. 28 U.S.C. §§ 1332(a), 1441(b). Defendants allege the amount in controversy exceeds $75,000,*fn1 the Sunrise corporate defendants are not California citizens as suggested by Plaintiff, and the California citizenship of the individual defendants should be disregarded because they were fraudulently joined. (Doc. No. 1 at 2-8.) At the court's request (Doc. No. 4), Plaintiff submitted an opposition to the Notice, styled as a Motion for Remand and considered by the court as such. (Doc. No. 8, "Mot.") Defendants filed an opposition to the Motion on July 7, 2009. (Doc. No. 10, "Opp'n.")

For the reasons set forth below, the court DENIES Plaintiff's Motion for Remand and DISMISSES the defamation claims against Defendants Terry Brown, Cher Horst, and Raj D'Souza without prejudice.

I. Background

The Sunrise organization provides senior living services across the United States, Canada, the United Kingdom, and Germany. (Opp'n at 6.) The independent living and assisted living services are offered through senior facilities called "communities." (Id.) Sunrise Senior Living, Inc. ("Sunrise") develops facilities for itself, for joint ventures, or for third parties. (Id.) Sunrise Senior Living Management, Inc. ("SSLM") is a wholly-owned subsidiary of Sunrise which "enters into operating contracts with the owners of the senior living physical facilities." (Id.)

According to the allegations in the Complaint, Plaintiff, an African-American woman, was employed with Sunrise through a temporary agency from February 13, 2006 to late March 2007. (Compl. ¶¶ 6, 12, 14.) Plaintiff was initially hired as a Charge Nurse, but was promoted in May 2006 to Director of Staff Development at a higher pay rating. (Compl. ¶ 9.) After her promotion, Plaintiff covered additional nursing shifts at her elevated hourly rate. (Id.) However, in September 2006, Plaintiff noticed her pay had been reduced to the original Charge Nurse level and that other non-African-American nurses received higher pay. (Id.) Plaintiff complained about the alleged discriminatory treatment to several Sunrise managers and directors, including the named individual defendants, without success. (Id.) On September 24, 2006, Plaintiff was demoted from her management position to that of a Licensed Vocational Nurse. (Id.)

According to Plaintiff, in January 2007, she received unjustified reprimands for being late to work and for failing to transcribe lab orders, while other Licensed Vocational Nurses who were not African-American received no reprimands for more serious transgressions. (Id.) To avoid being subjected further to the alleged discriminatory treatment, Plaintiff changed her status to part-time on-call. (Id.) Throughout February 2007, Plaintiff was not assigned any shifts despite informing Sunrise regularly of her availability. (Compl. ¶ 12.) When Plaintiff called Defendant D'Souza, Executive Director of the facility, for an explanation, she was informed that she had been terminated because she had not worked any shifts. (Id.) Plaintiff's temporary agency told her "D'Souza had requested that plaintiff not be sent to the Sunrise facility." (Id.) Another Sunrise employee asked "Luz," the Director of Nurses, why Plaintiff had not been assigned nursing shifts and was told, in essence, "We don't need that kind of help here." (Id.)

Plaintiff contends the defendants neither investigated her complaints about racial discrimination and retaliation nor took any corrective action. (Compl. ¶ 13.) The intolerable working conditions allegedly forced Plaintiff's constructive termination on March 28, 2007. (Id.)

Plaintiff also alleges the defendants made defamatory statements about her, communicating "in substance, the innuendoes that plaintiff is incompetent, untrustworthy, and unfit for a management position." (Compl. ¶ 23.) Plaintiff believes Defendants published the statements to, among others, "Rhona Jones, Carol Treadway, Terry Brown, Peggy Tyson, Cher Horst, Ruth Sills, Raj D'Souza, Jennifer Delise, Luz (LNU), Nancy Bright, Rick (LNU), Norelle Johnson, Cheryl Martinez, [and] Gayle Thomas...." (Compl. ¶ 25.) Plaintiff offers that the publications occurred between August 2006 and the date of her complaint. (Compl. ¶ 22.)

II. Citizenship of Corporate Defendants

In her Complaint, Plaintiff alleges Defendants Sunrise and SSLM are both incorporated under California law with their principal places of business in California. (Compl. ¶ 2.) Defendants counter that neither Sunrise corporation is a California citizen for diversity purposes. (Not. ¶ 8.) As the parties' arguments focus on parent company Sunrise, the court assumes for purposes of this motion that SSLM is not a California citizen.*fn2

A. Legal Standards

For diversity purposes, "a corporation shall be deemed a citizen of any State by which it has been incorporated and of the State where it has its principal place of business...." 28 U.S.C. § 1332(c)(1). Defendants offer Sunrise is a Delaware corporation. (Not. ¶ 8.) In her Motion, Plaintiff has apparently conceded this point. However, Plaintiff pursues the theory that Sunrise's principal place of business is indeed California rather than Virginia, where Sunrise's corporate headquarters are located.

To determine a corporation's principal place of business, the parties agree Ninth Circuit courts first apply the "place of operations test." Davis v. HSBC Bank Nevada, N.A., 557 F.3d 1026, 1028 (9th Cir. 2009); Tosco Corp. v. Communities for a Better Env't, 236 F.3d 495, 500 (9th Cir. 2001)(per curiam). Under this test, the court determines whether one state "contains a substantial predominance of corporate operations." Davis, 557 F.3d at 1028. If so, that state is the deemed the principal place of business. Otherwise, the court moves to the "nerve center test," under which the state housing the majority of the ...

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