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Zane Hardin v. Wal-Mart Stores

April 22, 2011



I. History*fn1

Plaintiff Zane Hardin ("Plaintiff") has been an employee of Defendant Wal-Mart ("Defendant") for several years. Plaintiff alleges he has been mistreated in a variety of ways by Defendant's supervisors including Defendant Gregory Cox ("Cox"). The consequences of these actions also affect Plaintiff's wife, Plaintiff Ruth Hardin.

Plaintiff originally filed this case in state court on March 20, 2008; at that time, Cox and Ruth Hardin were not parties to the case. Plaintiff's original complaint contained four causes of action: employment discrimination based on age and disability in violation of California's Fair Employment and Housing Act ("FEHA"); violation of the Americans with Disabilities Act; refusing to allow disabled employees to use disabled parking in violation of California's Business & Professions Code §17200; and refusing to allow disabled employees to use disabled parking in violation of California Civil Code §51. Defendant removed the action to federal court based on diversity jurisdiction. After two rounds of motions to dismiss, the Americans with Disabilities Act claim was dropped, but the other three remained. Defendant made a motion for summary judgment. In opposition, Plaintiff raised evidence relating to matters arguably not encompassed in the operative complaint. Defendant asked the court to ignore that evidence, or in the alternative, to allow time for additional discovery on those matters. The court treated the matter as a motion to amend the complaint and granted leave to amend.

The operative Third Amended Complaint ("TAC") lists fourteen causes of action: (1) FEHA; (2) California's Business & Professions Code §17200; (3) California Civil Code §51; (4) intentional infliction of emotional distress; (5) breach of contract; (6) promissory estoppel; (7) fraudulent and negligent misrepresentation; (8) conversion; (9) civil assault; (10) negligent infliction of emotional distress; (11)wrongful demotion; (12) breach of third party beneficiary contract; (13) defamation; and (14) elder abuse. Doc. 100. In the TAC, Plaintiff has added Cox as a defendant and Ruth Hardin as a plaintiff. A few days later, Plaintiff filed an amendment to the TAC, seeking to add a fifteenth cause of action entitled "labor violations." Doc. 103. Defendant has filed a motion to strike and a motion to dismiss claims 1, 2, 3, 5, 6, 7, 9, 10, 12, 14, and 15 for failure to state a claim and lack of administrative exhaustion. Doc. 111. Plaintiff opposes the motions and the matter was taken under submission without oral argument.

II. Legal Standards

Under Federal Rule of Civil Procedure 12(b)(6), a claim may be dismissed because of the plaintiff's "failure to state a claim upon which relief can be granted." A dismissal under Rule 12(b)(6) may be based on the lack of a cognizable legal theory or on the absence of sufficient facts alleged under a cognizable legal theory. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact)....a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable" Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007), citations omitted. "[O]nly a complaint that states a plausible claim for relief survives a motion to dismiss. Determining whether a complaint states a plausible claim for relief will, as the Court of Appeals observed, be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged -- but it has not shown that the pleader is entitled to relief." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009), citations omitted. The court is not required "to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). The court must also assume that "general allegations embrace those specific facts that are necessary to support the claim." Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 889 (1990), citing Conley v. Gibson, 355 U.S. 41, 47 (1957), overruled on other grounds at 127 S. Ct. 1955, 1969. Thus, the determinative question is whether there is any set of "facts that could be proved consistent with the allegations of the complaint" that would entitle plaintiff to some relief. Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514 (2002). At the other bound, courts will not assume that plaintiffs "can prove facts which [they have] not alleged, or that the defendants have violated...laws in ways that have not been alleged." Associated General Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 526 (1983).

In deciding whether to dismiss a claim under Rule 12(b)(6), the Court is generally limited to reviewing only the complaint. "There are, however, two exceptions....First, a court may consider material which is properly submitted as part of the complaint on a motion to dismiss...If the documents are not physically attached to the complaint, they may be considered if the documents' authenticity is not contested and the plaintiff's complaint necessarily relies on them.

Second, under Fed. R. Evid. 201, a court may take judicial notice of matters of public record." Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001), citations omitted. The Ninth Circuit later gave a separate definition of "the 'incorporation by reference' doctrine, which permits us to take into account documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the plaintiff's pleading." Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005), citations omitted. "[A] court may not look beyond the complaint to a plaintiff's moving papers, such as a memorandum in opposition to a defendant's motion to dismiss. Facts raised for the first time in opposition papers should be considered by the court in determining whether to grant leave to amend or to dismiss the complaint with or without prejudice." Broam v. Bogan, 320 F.3d 1023, 1026 n.2 (9th Cir. 2003), citations omitted.

If a Rule 12(b)(6) motion to dismiss is granted, claims may be dismissed with or without prejudice, and with or without leave to amend. "[A] district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts." Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc), quoting Doe v. United States, 58 F.3d 494, 497 (9th Cir. 1995). In other words, leave to amend need not be granted when amendment would be futile. Gompper v. VISX, Inc., 298 F.3d 893, 898 (9th Cir. 2002).

III. Discussion

As an initial matter, Plaintiff was granted leave to amend in order to conform the case to the evidence. In explaining why amendment was necessary, the court said that "Plaintiff's allegations could be considered new theories for relief under existing causes of action or they could be considered evidence in support of the existing causes of action." Doc. 99, November 29, 2010 Order, at 3:8-9. Defendant had objected to consideration of the new facts and requested in the alternative "that these facts alluded to by Plaintiff be reflected in an amendment to the allow Wal-Mart to conduct discovery on the additional allegations." Doc. 91, Summary Judgment Reply, at 10:6-8. The court had not contemplated Plaintiff adding additional causes of action. However, as Defendant has acquiesced to the amendment (as evidenced by not seeking dismissal of the fourth, eighth, and eleventh causes of action), the court will deal with the TAC as is. For the causes of action that Plaintiff fails to adequately plead, no leave to amend is granted. Plaintiff has already been given three opportunities to amend his complaint and further amendment would constitute undue delay at this late stage of the proceedings. See Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876, 892 (9th Cir. 2010) ("the district court may exercise its discretion to deny leave to amend due to undue delay, bad faith or dilatory motive on part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party, and futility of amendment), citations and quotations omitted.

A. Joinder of Cox as a Defendant

Cox is an Assistant Manager at the Wal-Mart store Plaintiff works at. Both Plaintiff and Cox are citizens of California. This case is before the court on diversity jurisdiction. "If after removal the plaintiff seeks to join additional defendants whose joinder would destroy subject matter jurisdiction, the court may deny joinder, or permit joinder and remand the action to the State court." 28 U.S.C. §1447(e). Plaintiffs may not circumvent 28 U.S.C. §1447(e) by relying on Fed. Rule Civ. Proc. 15(a) to join non-diverse parties. See Clinco v. Roberts, 41 F. Supp. 2d 1080, 1086 (C.D. Cal. 1999). "There are a variety of factors courts have considered while exercising their discretion under § 1447(e), including: (1) whether the party sought to be joined is needed for just adjudication and would be joined under Fed. Rule Civ. Proc. 19(a); (2) whether the statute of limitations would prevent the filing of a new action against the new defendant should the court deny joinder; (3) whether there has been unexplained delay in seeking the joinder; (4) whether the joinder is solely for the purpose of defeating federal jurisdiction; and (5) whether the claim against the new party seems valid. Other factors...include; (6) the possible prejudice that may result to any of the parties in the litigation; (7) the closeness of the relationship between the new and the old parties; (8) the effect of an amendment on the court's jurisdiction; and (9) the new party's notice of the pending action." Oum v. Rite Aid Corp., 2009 U.S. Dist. LEXIS 5959, *3 (C.D. Cal. Jan. 20, 2009), citations omitted.

In this case, Cox should not be considered a necessary party under Fed. Rule Civ. Proc. 19. Plaintiff alleges Cox violated FEHA by harassing him. Plaintiff makes only sparse factual allegations against Cox, consisting of: failure to provide Plaintiff training, wrongfully changing Plaintiff's work schedule, and refusing to deal with Plaintiff's complaints. See Doc. 100, TAC, at 14:1-14. All of Plaintiff's factual allegations against Cox is prefaced by reference to "WalMart/Cox." This indicates that all of Plaintiff's claims are, at base, against Defendant; Cox is just Defendant's agent. From the allegations of the TAC, it does not appear that Cox is the primary employee at Wal-Mart that is allegedly harassing Plaintiff or that his allegedly harassing actions are more severe. Whether Cox's actions are central to Plaintiff's claims against Defendant is significant. See Chan v. Bucephalus Alternative Energy Group, LCC, 2009 U.S. Dist. LEXIS 39362 (N.D. Cal. Apr. 24, 2009) ("Kim's conduct is the primary basis for each of Plaintiff's causes of action"). "Courts disallow joinder of non-diverse defendants where those defendants are only tangentially related to the cause of action or would not prevent complete relief." IBC Aviation Servs. v. Compania Mexicana De Aviacion, S.A. de C.V., 125 F. Supp. 2d 1008, 1012 (N.D. Cal. 2000). While Cox can not be said to be tangentially related, there is no danger that Plaintiff would receive incomplete relief if he is only permitted to pursue his claim against Defendant. Plaintiff's allegations against Cox can all be charged against Defendant and there is no fear that Defendant would be unable to satisfy a money judgment. Plaintiff would not suffer any prejudice if Cox is not a named defendant; Cox is still available as a witness subject to subpoena under Fed. Rule Civ. Proc. 45. Further, there is a concern that Plaintiff seeks to join Cox in order to defeat federal subject matter jurisdiction. It does not appear from the TAC that he treated Plaintiff any worse than other Wal-Mart employees and naming him as a defendant is a rather random move.

B. FEHA Exhaustion

Defendants challenges all claims arising from allegations that post date the April 6, 2010 FEHA charge, arguing that Plaintiff has not administratively exhausted them. Plaintiff has provided a letter from the Department of Fair Employment and Housing ("DFEH") which indicates that Plaintiff filed a charge with the DFEH through the online right-to-sue system on November 12, 2010. Doc. 106, Part 1, January 12, 2011 Letter. The DFEH admits that its computer system malfunctioned, losing the record and preventing printout of a right-to-sue notice. Plaintiff then filed additional charges with the DFEH on January 16 and 17, 2011; he received right to sue notices for those charges. See Doc. 106, Part 1, at 6, 10, and 14. The TAC was filed on December 10, 2010. "Defendant argues "Plaintiff should not be allowed to rectify his fundamental failure to exhaust his administrative remedies prior to filing his Complaint by simply filing three late administrative charges." Doc. 111, Brief, at 9:8-10. As a practical matter however, the court accepts that Plaintiff has cured any defect in subject matter jurisdiction. Even if subject matter jurisdiction was lacking at the time the TAC was filed, it exists now; the case has ripened. If the court were to find that Plaintiff lacked subject ...

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