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Lori A. Pasco v. Red Robin Gourmet Burgers

November 17, 2011

LORI A. PASCO,
PLAINTIFF
v.
RED ROBIN GOURMET BURGERS, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Sheila K. Oberto United States Magistrate Judge

FINDINGS AND RECOMMENDATIONS THAT THE LAIMS AGAINST DEFENDANT MURPHY BE DISMISSED AND THAT PLAINTIFFS' MOTION FOR REMAND BE DENIED (Docket No. 8) OBJECTIONS DUE: 20 days

I. INTRODUCTION

On September 20, 2011, Plaintiff Lori A. Pasco ("Plaintiff") filed a motion seeking to remand this action to state court. A hearing was held on November 2, 2011, regarding Plaintiff's motion. For the reasons set forth below, the Court RECOMMENDS that the claims against defendant David Murphy ("Murphy") be DISMISSED, and that Plaintiff's motion for remand be DENIED.

II. BACKGROUND

A. Procedural Background

On June 16, 2011, Plaintiff filed a complaint in Stanislaus Superior Court against Defendants Red Robin International, Inc. (erroneously sued as Red Robin Gourmet Burgers, Inc.) ("Red Robin") and Murphy, Plaintiff's former immediate supervisor at Red Robin (collectively "Defendants").*fn1

Plaintiff alleges various violations of the California Fair Employment and Housing Act ("FEHA"), codified at California Government Code § 12000, et. seq.

On August 11, 2011, Defendants filed an answer to the complaint in the Stanislaus Superior Court. On August 22, 2011, Defendants filed a notice of removal. (Doc. 1.) Defendants assert in their removal that Murphy is a sham defendant and that his citizenship must be disregarded for purposes of assessing removal jurisdiction. (Doc. 1, ¶¶ 9-18.)

On September 20, 2011, Plaintiff filed a motion to remand the case to state court. (Doc. 8.) On November 2, 2011, the Court held a hearing on this motion. (Doc. 16.)

B. Factual Background

Plaintiff alleges that she was hired by Red Robin on May 25, 2005, and was promoted to General Manager in 2006. (Doc. 1, Exh. A ("Compl."), ¶ 7.) Murphy was Plaintiff's immediate supervisor. (Compl., ¶ 7.) Plaintiff alleges her supervisors "knew or should have known" that she was treated and prescribed medication for anxiety in September 2006. (Compl., ¶ 8.) Plaintiff alleges that Murphy encouraged heavy "alcohol consumption" at work parties, management conferences, and work related trips held in Las Vegas. (Compl., ¶ 10.) Plaintiff asserts that "female employees were precluded from participating in certain events, such as golfing[,] while on these [Red Robin] trips, unless they could prove to drink 'like a man.'" (Compl. ¶ 10.) Plaintiff contends that she was also "told not to hire female employees that did not fit the 'profile'" of Red Robin; the "profile" included "'fit girls'" who were "'cute'" and "'young.'" (Compl., ¶ 10.) Plaintiff further alleges disparate treatment between male and female employees, stating that male employees were not reprimanded when they engaged in "acts of discrimination" including "display[ing] inappropriate behavior such as dating co-workers, smoking marijuana, sexual harassment, need for medical leave and being so intoxicated they were thrown out of [Red Robin] related events. However, female employees were terminated for these types of acts without prior counseling or disciplinary action." (Compl., ¶ 10.)

Plaintiff states that in 2007, she was "questioned by Murphy and a human resources employee regarding her mental disability." (Compl., ¶ 13.) On March 31, 2010, Plaintiff was further questioned by Murphy regarding her mental disability and her "need for a companion dog." (Compl.,

¶ 13.) Murphy informed Plaintiff that she was "'forbidden' to bring the dog to the restaurant." (Compl., ¶ 13.) Plaintiff alleges that she later provided Murphy with copies of the applicable law allowing her to have a companion dog, which made Murphy "angry"; he "vocalized that anger to plaintiff in a phone conversation." (Compl., ¶ 13.) Plaintiff asserts that "Murphy proceeded on a fact-finding expedition that lasted nearly two (2) weeks which led to the suspension and eventual termination of Plaintiff." (Compl., ¶ 13.)

On April 23, 2010, Plaintiff filed a complaint against Red Robin with the California Department of Fair Employment and Housing ("DFEH") and the Equal Employment Opportunity Commission ("EEOC") (the "administrative complaints"). (Compl., ¶¶ 18, 20.) The DFEH issued Plaintiff a "right to sue" notice against Red Robin on May 20, 2010, and the EEOC issued a "right to sue" notice on April 6, 2011. (Compl., ¶¶ 19, 21.)

On June 16, 2011, Plaintiff filed the instant action in Stanislaus Superior Court (the "judicial complaint"). (Doc. 1.) The judicial complaint alleges six causes of action, only two of which are against Murphy: the fifth cause of action for harassment in violation of California Government Code Section 12940(j)(3) and the sixth cause of action failure to prevent discrimination, harassment, hostility in the workplace, and retaliation in violation of California Government Code Section 12940(k). (Compl., ¶¶ 47-60.)

III. DISCUSSION

A. Legal Standard -- Remand

"A defendant may remove an action to federal court based on federal question jurisdiction or diversity jurisdiction." Hunter v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009) (citing 28 U.S.C. § 1441). It is presumed, however, "that a cause lies outside [the] limited jurisdiction [of the federal courts] and the burden of establishing the contrary rests upon the party asserting jurisdiction." Id. (internal quotation marks omitted).

"Federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance." Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (per curiam). The defendant always bears the burden of establishing that removal is proper, and the court "resolves all ambiguity in favor of remand." Hunter, 582 F.3d at 1042.

The propriety of removal requires the consideration of whether the district court has original jurisdiction of the action, i.e., whether the case could have originally been filed in federal court based on a federal question, diversity of citizenship, or another statutory grant of jurisdiction. See Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). If the case is within the original jurisdiction of the district court, removal is proper so long as the defendant complied with the procedural requirements set forth in 28 U.S.C. § 1446. If the case is not within the original jurisdiction of the district court, removal is improper. The absence of subject matter jurisdiction is not waivable by the parties. See Am. Fire & Cas. Co. v. Finn, 341 U.S. 6 (1951).

Federal district courts have original jurisdiction over cases where there is complete diversity of citizenship, i.e., between citizens of different states. See 28 U.S.C. § 1332(a). Further, a defendant may remove an action to federal court under Section 1332 provided no defendant is a citizen of the same state in which the action was brought. See id. § 1441(a), (b). An exception to the requirement for complete diversity exists, however, when a non-diverse defendant has been fraudulently joined for the purpose of defeating diversity jurisdiction. McCabe v. Gen. Foods Corp., 811 F.2d 1336, 1339 (9th Cir. 1987). In that case, the district court may disregard a non-diverse party named in the state court complaint and retain jurisdiction if joinder of the non-diverse party is a sham or fraudulent.

B. Contentions of the Parties

Defendants' notice of removal asserts that this Court has jurisdiction based on diversity under 28 U.S.C. § 1332(a)(1). Defendants state that Plaintiff is a citizen of California and that Red Robin, a Nevada corporation, is a citizen of that state. While Defendants admit that Murphy is a citizen of California, they argue that he is a fraudulent or sham defendant. Defendants contend that Plaintiff's judicial complaint alleges causes of action against Murphy for harassment, but the administrative complaints filed with the DFEH and EEOC failed to assert a harassment claim. As such, Plaintiff failed to exhaust her administrative remedies regarding the alleged harassment, and the charges against Murphy are barred. The Court thus lacks jurisdiction over that particular claim. Defendants assert that Murphy must therefore be dismissed from this action, and the remaining parties -- Plaintiff and Red Robin -- are diverse.

Plaintiff's motion for remand asserts that removal was improper because diversity is lacking as Murphy is not a sham defendant. The California Fair Employment and Housing Act ("FEHA") allows for separate claims of discrimination and harassment, and Plaintiff's claim of discrimination includes the harassment she experienced due to Murphy's discriminatory conduct toward her. Plaintiff contends that it would be difficult to envision how the EEOC or DFEH would ignore evidence of harassment based on sex, age, and disability while investigating the claims for discrimination based on the same. Further, Plaintiff argues that a state court complaint that does not allege domicile or citizenship at the time of filing cannot be removed on grounds of diversity.

C. Murphy Is a Sham/Fraudulent Defendant 1 Legal Standard -- Fraudulent Joinder "Fraudulent joinder is a term of art" and does not require an ill motive. McCabe, 811 F.2d at 1339; Lewis v. Time Inc., 83 F.R.D. 455, 460 (E.D. Cal. 1979), aff'd, 710 F.2d 549 (9th Cir. 1983). Joinder will be deemed fraudulent where the plaintiff fails to state a cause of action against the resident defendant, and the failure is obvious according to the settled rules of the state. Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1318 (9th Cir. 1998); McCabe, 811 F.2d at 1339. The defendant alleging the fraudulent joinder carries the heavy burden of demonstrating the improper joinder. See Hunter, 582 F.3d at 1044.

In determining whether a cause of action is stated, typically courts "'look only to a plaintiff's pleadings to determine removability.'" Richey, 139 F.3d at 1318 (quoting Gould Mut. Life Ins. Co. of N.Y., 790 F.2d 769, 773 (9th Cir. 1986)). Yet, where fraudulent joinder is an issue, the Ninth Circuit has directed that courts may go "somewhat further" by allowing a defendant to present facts showing that joinder is fraudulent. Id. The review of the complaint, however, is constrained to the facts actually alleged therein; it does not extend to facts or causes of action that could be alleged via an amended complaint. Kruso v. Int'l Tel. & Tel. Corp., 872 F.2d 1416, 1426 n.12 (9th Cir. 1989) (affirming district court's refusal to consider allegations made in plaintiffs' unfiled, proposed amended complaint submitted as an attachment to a motion for reconsideration to determine whether valid claims had been stated for fraudulent joinder purposes (citing C. Wright & A. Miller & E. Cooper, Federal ...


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