May 30, 2013
Emmanuel Onelum, Plaintiff,
Best Buy Stores L.P., erroneously sued as Best Buy Co., Inc.; Dro Nersissian, erroneously sued as Dro Nasissian, and Does 1 through 50, Defendants.
ORDER Re: Plaintiff's Motion to Remand Removed Action 
RONALD S.W. LEW, Senior District Judge.
Currently before the Court is Plaintiff Emmanuel Onelum's ("Plaintiff") Motion to Remand Removed Action . The Court having reviewed all papers submitted pertaining to this Motion and having considered all arguments presented to the Court, NOW FINDS AND RULES AS FOLLOWS:
The Court hereby GRANTS Plaintiff's Motion. This action is remanded to the Los Angeles County Superior Court, Case No. BC500026.
Plaintiff filed this Action in Los Angeles County Superior Court against Best Buy Stores L.P., erroneously sued as Best Buy Co., Inc. ("Best Buy"); Dro Nersissian, erroneously sued as Dro Nasissian (hereinafter referred to as "Nersissian"); and Does 1 through 50 (collectively, "Defendants"), alleging claims for (1) employment discrimination based on race and national origin under California Government Code § 12940; (2) retaliation in violation of § 12940; (3) failure to prevent discrimination and harassment in the workplace in violation of § 12940; (4) intentional infliction of emotional distress ("IIED"); (5) wrongful termination in violation of public policy; and (6) harassment in violation of § 12940. Plaintiff alleges claims of IIED and harassment against Defendant Nersissian.
This Action was removed from state court based on diversity jurisdiction under 28 U.S.C. § 1332 and 1441 .
Plaintiff is a black male of Nigerian descent residing in Los Angeles County. Compl. ¶¶ 4, 18. Best Buy is a business organized under the laws of Virginia, with its principal place of business in Minnesota, doing business in Los Angeles County. Id . ¶ 5; Notice of Removal ¶ 10.
Plaintiff was employed by Best Buy as a supervisor in the Canoga Park, California Best Buy store, from October 2010 to June 2012, when he was terminated. Compl. ¶¶ 10-11. Defendant Nersissian was Plaintiff's direct supervisor. Id . ¶ 11.
Plaintiff's Complaint alleges that throughout his employment with Best Buy, he was subjected to harassment, bullying, intimidation, and discrimination by Nersissian. Id . ¶ 12. For example, on August 17, 2011, Plaintiff "observed [Nersissian] give his cash register override code to another employee in violation of company policy". Id . Plaintiff reported this to management. Id . Subsequently, the Complaint alleges, Plaintiff was "given a final write up and... placed on a 30 day action plan supposedly for poor sales numbers." Id . Later in January 2012, Plaintiff was "written up for attempting to handle an incident with a customer that was abusive towards him and his staff." Id . ¶ 13. After Plaintiff complained to human resources about Nersissian's actions, Nersissian then started to threaten him with "forced transfers or termination", and Best Buy began to cut his hours. Id . During this period, Nersissian repeatedly made disparaging comments about Plaintiff's accent. Id . ¶ 19.
II. LEGAL STANDARD
Removal to federal court is governed by 28 U.S.C. § 1441, which in relevant part states that "any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or defendants...." 28 U.S.C. § 1441(a). All named defendants must join in a removal petition. Hewitt v. City of Stanton , 798 F.2d 1230 (9th Cir. 1986).
District courts have diversity jurisdiction over all civil actions between citizens of different states where the amount in controversy exceeds $75, 000, exclusive of interest and costs. 28 U.S.C. § 1332.
The Court may remand a case to state court for lack of subject matter jurisdiction or defects in removal procedure. 28 U.S.C. § 1447(c). A defendant has the burden of proving that removal was proper. See Ethridge v. Harbor House Rest. , 861 F.2d 1389, 1393 (9th Cir. 1988). If at any time before final judgment it appears that the district court lacks subject matter jurisdiction over a case that has been removed to federal court, the case must be remanded. 28 U.S.C. § 1447(c). The Ninth Circuit strictly construes the removal statute against removal jurisdiction, and federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance. See Shamrock Oil & Gas Corp. v. Sheets , 313 U.S. 100, 108-09 (1941) (stating that removal statutes should be construed narrowly in favor of remand to protect jurisdiction of state courts).
Defendants claim that this Court has subject matter jurisdiction on the basis of diversity, 28 U.S.C. § 1332(a). Defendants do not dispute that Defendant Nersissian is a citizen of California, and Plaintiff is a citizen of California and are thus not diverse. However, Defendants claim that Nersissian's citizenship should be disregarded because he was fraudulently joined. Notice of Removal ¶ 19.
"Fraudulent joinder is a term of art. If 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, the joinder of the resident defendant is fraudulent." McCabe v. Gen. Foods Corp. , 811 F.2d 1336, 1339 (9th Cir. 1987). The fraudulent joinder doctrine requires courts to disregard the citizenship of defendants when no viable cause of action has been stated against them, or when evidence presented by the removing party shows that there is no factual basis for the claims alleged against the defendants. See Morris v. Princess Cruises, Inc. , 236 F.3d 1061, 1067 (9th Cir. 2001). "There is a presumption against finding fraudulent joinder, and defendants who assert that plaintiff has fraudulently joined a party carry a heavy burden of persuasion." Plute v. Roadway Package Sys., Inc. , 141 F.Supp.2d 1005, 1008 (N.D. Cal. 2001). "[T]he defendant must demonstrate that there is no possibility that the plaintiff will be able to establish a cause of action in State court against the alleged sham defendant." Good v. Prudential Ins. Co. of Am. , 5 F.Supp.2d 804, 807 (N.D. Cal. 1998) (emphasis added). "[I]f there is a possibility that a state court would find that the complaint states a cause of action against any of the resident defendants, the federal court must find that the joinder was proper and remand the case to the state court." Hunter v. Philip Morris USA , 582 F.3d 1039, 1046 (9th Cir. 2009) (quoting Tillman v. R.J. Reynolds Tobacco , 340 F.3d 1277, 1279 (11th Cir. 2003)).
In determining whether a defendant was joined fraudulently, the courts must resolve "all disputed questions of fact and all ambiguities in the controlling state law in favor of the non-removing party." Dodson v. Spiliada Maritime Corp. , 951 F.2d 40, 42-43 (5th Cir. 1992). Furthermore, "[a]ll doubts concerning the sufficiency of a cause of action because of inartful, ambiguous or technically defective pleading must be resolved in favor of remand..., and a lack of clear precedent does not render the joinder fraudulent." Archuleta v. Am. Airlines, Inc., No. CV 00-1286 MMM (SHX), 2000 WL 656808, *4 (C.D. Cal. May 12, 2000) (citing Gaus v. Miles, Inc. , 980 F.2d 564, 566-67 (9th Cir. 1992), and Lieberman v. Meshkin, Mazandarani , 1996 WL 732506, *3 (N.D. Cal. 1996)).
Here, Defendants argue that the claims asserted against Nersissian, IIED and harassment, fail as a matter of law. Specifically, Defendants argue that Plaintiff's IIED claim fails because of the "managerial privilege" rule and alternatively because it is barred by the California Worker's Compensation Preemption Act, California Labor Code § 3600 et. seq.
The Court finds that Defendants have failed to demonstrate that under settled California law "there is no possibility" that Plaintiff will be able to establish a cause of action against Defendant Nersissian.
In particular, Plaintiff's IIED claim against Nersissian remains viable because state case law does not support Defendants' contention that Nersissian cannot be sued as a matter of law because he is allegedly protected by the so-called "managerial privilege". Defendants cite several cases that they allege support the contention that the conduct of managerial employees is absolutely privileged under the doctrine of managerial immunity if the disputed conduct was within the course and scope of their employment. See, e.g., Marin v. Jacuzzi , 224 Cal.App.2d 549 (1964); Aalgard v. Merchants Nat. Bank, Inc. , 224 Cal.App.3d 674, 684-86 (1990); McCabe v. Gen. Foods Corp. , 811 F.2d 1336 (9th Cir. 1987). However, each of these cases involves intentional interference with a contract induced by a third party, which is not at issue here.
As thoroughly discussed in Calero v. Unisys Corporation , 271 F.Supp.2d 1172, 1177 (N.D. Cal. 2003),
The manager's privilege arises from the notion that while a disinterested third party may be liable for interference with a contractual or economic relationship, a party having an interest in that relationship must be judged differently. See, e.g., Kozlowsky v. Westminster Nat'l Bank , 6 Cal.App.3d 593, 86 Cal.Rptr. 52 (1970). Where a managerial employee is motivated by a desire to benefit his principal, his conduct in inducing a breach of contract should be privileged. Los Angeles Airways, Inc. v. Davis , 687 F.2d 321, 328 (9th Cir. 1982). The privilege is designed to further certain societal interests by fostering uninhibited advice by agents to their principals. Id . As such, "the manager's privilege is merely an application of the general rule that the tort of intentional interference with economic relations applies only to disinterested parties." Graw v. Los Angeles County Metro. Transp. Auth. , 52 F.Supp.2d 1152, 1154 (C.D. Cal. 1999).
Defendants fail to cite a single case that applies this managerial privilege rule to the tort of intentional infliction of emotional distress. It is questionable whether Defendants' "managerial privilege" theory could be asserted with respect to an intentional infliction of emotional distress claim. See Winzler v. Victor O. Schinnerer & Co., No. C-92-1679 DLJ, 1992 U.S. Dist. LEXIS 12790, *8-9 (N.D. Cal. July 14, 1992) (rejecting defendants' argument that managerial privilege applies to intentional infliction of emotional distress claim); Losik v. Current, Inc., 92-20352 SW, 1992 U.S. Dist. LEXIS 20550, *6 (N.D. Cal. Oct. 30, 1992) (holding that allegations of intentional infliction of emotional distress are outside scope of managerial privilege). Here, Defendants have failed to show that a state court will find that the manager's privilege applies in this Action.
Defendants rely heavily on McCabe and Janken v. GM Hughes Electronics , 46 Cal.App.4th 55 (1996), but appear to misread the cases. In McCabe, the plaintiff's cause of action for wrongful discharge against his supervisors was found to be deficient because the supervisor's conduct was privileged. 811 F.2d at 1339. The Court dismissed plaintiff's claim for intentional infliction of emotional distress because the plaintiff had not shown the requisite "outrageousness" to qualify for that tort claim, not because of managerial privilege. Id. at 1340. Janken is inapposite here because it held that plaintiffs' allegation that defendants laid them off or placed caps on their salaries was just normal "managerial" conduct, not outrageous conduct sufficient to state a claim for IIED. 46 Cal.App.4th at 80.
Besides the question of whether the managerial privilege is even applicable to IIED, "it is far from clear under California law whether the managerial privilege is an affirmative defense or part of the plaintiff's cause of action." Calero , 271 F.Supp.2d at 1180 (comparing Aalgaard v. Merchs. Nat'l Bank, Inc. , 224 Cal.App.3d 674, 683 (1990)("privilege, is an affirmative defense, not an element of plaintiff's cause of action....") with California Jury Instruction CA BAJI 12.70)("The essential elements of this claim are: 1. The defendant engaged in outrageous, [unprivileged] conduct:...")). "It is also uncertain whether the privilege, if any, is absolute or conditional. What is clear from a review of cases such as Aalgard is that the question of the privilege as well as the claim itself is bound up in the conduct of the defendant and is thoroughly fact intensive." Id.
Further, it is possible that Plaintiff may be able to state a claim of IIED against Nersissian. California permits recovery for conduct "so extreme and outrageous as to go beyond all possible bound of decency and to be regarded as atrocious and utterly intolerable in a civilized community." Rulon-Miller v. Int'l Bus. Mach. Corp. , 162 Cal.App.3d 241, 254 (1984). Terminating an employee is not alone sufficient to satisfy the standard for extreme and outrageous conduct. Pitman v. City of Oakland , 197 Cal.App.3d 1037, 1047 (1988). Where behavior goes beyond the act of termination, however, it is for the court to determine whether on the evidence severe emotional distress can be found. Rulon-Miller , 162 Cal.App.3d at 254; see also Calero , 271 F.Supp.2d at 1177.
Plaintiff alleges that Nersissian threatened to terminate or transfer him on a monthly basis, that Nersissian repeatedly disparaged Plaintiff's accent, and that Nersissian's actions were "extreme and outrageous". Plaintiff allegedly suffered emotional distress involving anxiety attacks, lack of sleep and fatigue. Compl. ¶ 47. Further, Nersissian was a person standing in a position of authority over Plaintiff. A state court could possibly find that Plaintiff has established a cause of action for intentional infliction of emotional distress. See, e.g., Alcorn v. Anbro Eng'g, Inc. , 2 Cal.3d 493, 499 (1970) (holding that plaintiff's allegation that his supervisor called him racial epithets was sufficient to state a claim for intentional infliction of emotional distress). "There is no authority for the proposition that someone in [Nersissian's] position may not be liable in tort for the intentional infliction of emotional distress providing all of the elements of that tort are satisfied. Indeed, California case law is replete with cases where conduct of the employer or one of its agents or employees is so outside the bounds of conduct tolerated by a decent society that it may give rise to a claim for intentional infliction of emotional distress." Calero , 271 F.Supp.2d at 1178-79.
Finally, Defendants argue that Plaintiff's claim for intentional infliction of emotional distress is barred by the exclusivity provisions of the Workers' Compensation Act. Cal. Lab. Code § 3602. The Court finds that Defendants have not shown that Plaintiff's claim is preempted by the CWA.
Generally, claims for emotional distress caused by the employer's conduct causing distress such as "discharge, demotion, discipline or criticism" are preempted by the Workers' Compensation Act, even when the employer's acts causing the distress are intentional or outrageous. Gantt v. Sentry Ins. , 1 Cal.4th 1083, 1099 (1992), rev'd on other grounds, Green v. Ralee Eng'g Co. , 19 Cal.4th 66, 80, n. 6 (1998). Such distress, whether intentional or negligent conduct on the part of the employer, is considered "part of the normal risk of employment" and hence subject to the exclusive remedies of the workers' compensation laws. Charles J. Vacanti, M.D., Inc. v. State Comp. Ins. Fund , 24 Cal.4th 800, 814-15 (2001).
The phrase "normal part of the employment relationship, " however, does not encompass all conduct that occurs on the job. Cole v. Fair Oaks Fire Prot. Dist. , 43 Cal.3d 148, 160 (1987). Tort recovery pursued via a separate civil action is permitted if the conduct of the employer has a "questionable" relationship to the employment or where the employer steps out of his proper role. Id. at 161; see also Shoemaker v. Myers , 52 Cal.3d 1, 16 (1990) (holding that the exclusive remedy provisions are not applicable to risks not "reasonably encompassed within the compensation bargain" under the Workers' Compensation Act).
In particular, the Supreme Court of California held in Livitsanos v. Superior Court , 2 Cal.4th 744, 754 (1992), that "so long as the basic conditions of compensation are otherwise satisfied (Lab. Code, § 3600), and the employer's conduct neither contravenes fundamental public policy... nor exceeds the risks inherent in the employment relationship, an employee's emotional distress injuries are subsumed under the exclusive remedy provisions of workers' compensation." However, where the plaintiff has contended that the employer's conduct is outside the normal risks of the employment relation, claims for emotional distress are not preempted by CWA. Id . In Livitsanos, the Court held that the plaintiff's intentional infliction of emotional distress and defamation claims, premised on her contention that defendants falsely claimed that she embezzled money, could be "outside the scope and normal risks of employment" such that CWA does not preempt her claims. Id .; see also Kovatch v. Cal. Cas. Mgmt. Co., Inc. , 65 Cal.App.4th 1256, 1277 (holding that an emotional distress claim arising from unlawful harassment was not preempted), rev'd on other grounds, Aguilar v. Atlantic Richfield Co. , 25 Cal.4th 826, 107 (2001); Fretland v. Cnty. of Humboldt , 69 Cal.App.4th 1478, 1492 (1999) (holding that an emotional distress claim arising from unlawful discrimination was not preempted).
Defendants rely heavily upon Cole , 43 Cal.3d 148 (1987), but it "does not prohibit all emotional distress causes of action against an employer... only those based on conduct that is a normal risk of the employment relationship." Fretland , 69 Cal.App.4th at 1492.
"There is no bright line test in determining what behavior is part of the employment relationship or reasonably encompassed within the compensation bargain. Nevertheless, district courts must resolve ambiguities in the controlling state law in favor of the non-removing party when evaluating fraudulent joinder." Calero , 271 F.Supp.2d at 1181.
Here, Plaintiff's intentional infliction of emotional distress claim is based on the allegation that Defendant Nersissian repeatedly threatened to terminate him, while also disparaging his accent. Defendants have failed to show that Plaintiff's claim is impossible as a matter of California law. Specifically, Defendants have not shown whether Defendant Nersissian's acts are within the "normal risks" of the employment relationship or the fundamental public policy of California. To the contrary, the Ninth Circuit has held that racial discrimination is not a "normal part" of the workplace. Miller v. Fairchild Indus., Inc. , 885 F.2d 498, 510 (9th Cir. 1989).
For the reasons discussed above, the Court finds that Plaintiff's claim of intentional infliction of emotional distress raises a possible cause of action.
Accordingly, the Court need not reach Defendants' additional argument that Plaintiff cannot possibly state a claim against Nersissian for harassment.
Based on the foregoing, this Court GRANTS Plaintiff's Motion to Remand. The Clerk shall close this action and remand it to the Los Angeles County Superior Court, Case No. BC500026.
IT IS SO ORDERED.