The opinion of the court was delivered by: Present: The Honorable Christina A. Snyder
Deputy Clerk Court Reporter / Recorder Tape No.
Attorneys Present for Plaintiffs:
Proceedings: (In Chambers:) ORDER TO SHOW CAUSE REGARDING
WHY ACTION SHOULD NOT BE REMANDED FOR LACK OF SUBJECT MATTER JURISDICTION
INTRODUCTION & BACKGROUND
Plaintiff Payam Piroozmehr filed the instant action in Los Angeles County Superior Court against Zale Delaware, Inc. ("Zale"); Hannah Breschard ("Breschard"); and Does 1--50, alleging: (1) employment discrimination in violation of the California Fair Employment and Housing Act ("FEHA"), Cal. Gov. Code §§ 12900 et seq.; (2) harassment on the basis of gender in violation of FEHA; (3) failure to prevent harassment and discrimination on the basis of sex in violation of FEHA; (4) retaliation in violation of FEHA; (5) wrongful termination in violation of public policy; (6) intentional infliction of emotional distress ("IIED"); (7) negligent hiring, retention, and supervision; (8) violation of California Labor Code § 1197.5 (equal pay); (9) failure to provide mandated timely meal and rest periods, California Labor Code §§ 226.7 and 512; (10) failure to provide accurate itemized wage statements, California Labor Code §§ 226 and 226.3; and (11) unfair, unlawful and fraudulent business practices in violation of California Business and Professions Code § 17200. Plaintiff's second and sixth claims for harassment and IIED respectively are against all defendants, and all other claims are against Zale only. See generally Compl. The gravamen of plaintiff's complaint is that his manager, Breschard, discriminated against him and harassed him because plaintiff was the only male working in a jewelry store. Id. ¶¶ 20--35. In addition, plaintiff alleges that Zale violated California labor laws by refusing to give employees required breaks. Id. ¶¶ 36--43.
Defendants removed the action to this Court on April 10, 2012, on the basis of diversity of citizenship pursuant to 28 U.S.C. § 1332(a). Defendants argue that jurisdiction is proper because Breschard is a sham defendant and her California citizenship should be disregarded such that there is complete diversity between the parties. Notice of Removal ¶ 10.
Removal is proper where the federal courts have original jurisdiction over an action brought in state court. 28 U.S.C. § 1441(a). Pursuant to 28 U.S.C. § 1332(a), the federal courts have original jurisdiction over state law actions only where the amount in controversy exceeds $75,000 and the action is between parties of diverse citizenship.
An exception to the requirement of complete diversity exists where it appears that a plaintiff has fraudulently joined a "sham" non-diverse defendant. Judge William W. Schwarzer et al., California Practice Guide: Federal Civil Procedure Before Trial ¶ 2:670 (The Rutter Group 2005). If a court finds fraudulent joinder of a "sham" defendant, it may disregard the citizenship of the "sham" defendant for removal purposes. Id. "Fraudulent joinder" is a term of art, and requires no proof of scienter on the part of the plaintiff. Id. ¶ 2:671. Instead, a non-diverse defendant is said to be fraudulently joined where "the 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." McCabe v. Gen. Foods , 811 F.2d 1336, 1339 (9th Cir. 1987).
Courts also recognize a "strong presumption" against removal jurisdiction; the burden is on the removing defendant to demonstrate that removal is proper. See, e.g., Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). Similarly, "courts generally employ a presumption against fraudulent joinder." Diaz v. ...