ORDER GRANTING PLAINTIFF'S MOTION TO REMAND
JOHN A. HOUSTON, District Judge.
Plaintiff originally filed this action alleging employment discrimination in Superior Court of the State of California, County of San Diego on May 6, 2013. Plaintiff named Correction Corporation of America, CCA of Tennessee LLC, Officer C. Leach, Officer D Williams, Officer R. Stribling and Does 1 through 25 as defendants. On July 14, 2013, Defendants Corrections Corporation of American and CCA of Tennessee removed the action to federal court.
On July 2, 2013, Plaintiff filed a motion to remand the action to state court. Defendants filed an opposition and Plaintiff filed a reply. The matter was set for hearing but was taken under submission without oral argument.
The federal court is one of limited jurisdiction. See Gould v. Mutual Life Ins. Co. v. New York, 790 F.2d 769, 774 (9th Cir. 1986). As such, it cannot reach the merits of any dispute until it confirms its own subject matter jurisdiction. See Steel Co. v. Citizens for a Better Environ. , 523 U.S. 83, 93-94 (1998). Removal jurisdiction is governed by 28 U.S.C. § 1441 et seq. A state court action can be removed if it could have originally been brought in federal court. Caterpillar, Inc. v. Williams , 482 U.S. 386, 392 (1987). Thus, a party invoking the federal removal statutes must establish jurisdiction by demonstrating the existence of: (1) a statutory basis; (2) a federal question; or (3) diversity of the parties. See Mir v. Fosburg , 646 F.2d 342, 345 (9th Cir. 1980). District courts must construe the removal statutes strictly against removal and resolve any uncertainty as to removability in favor of remanding the case to state court. Boggs v. Lewis , 863 F.2d 662, 663 (9th Cir. 1988). The burden is on the removing party to demonstrate federal subject matter jurisdiction over the case. See Emrich v. Touche Ross & Co. , 846 F.2d 1190, 1195 (9th Cir. 1988).
Here, Defendants removed the action based upon diversity jurisdiction. To establish diversity jurisdiction, the defendant must show: (1) complete diversity among opposing parties; and (2) an amount in controversy exceeding $75, 000. See 28 U.S.C. § 1332(a). The defendant has the burden of establishing that removal is proper and must support its jurisdictional allegations with competent proof. Duncan v. Stuetzle , 76 F.3d 1480, 1485 (9th Cir. 1996); Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) ( per curiam ); Nishimoto v. Federman-Bachrach & Assocs. , 903 F.2d 709, 712 n.3 (9th Cir. 1990).
Plaintiff moves to remand the action to state court on the grounds diversity jurisdiction does not exist and 28 U.S.C. Section 1445 bars removal.
I. Diversity Jurisdiction
Plaintiff maintains diversity does not exist because the individual defendants work and reside in the same state as Plaintiff. She further argues Defendants cannot carry their heavy burden of proof to demonstrate joinder of the individual defendants was improper. Plaintiff maintains her allegations of harassment under the Fair Employment and Housing Act ("FEHA") against the individual defendants are sufficient to state a cause of action.
Defendants argue none of the individual defendants have been served and therefore, they do not destroy diversity jurisdiction. Defendants further argue the individual defendants have been fraudulently joined in an attempt to destroy diversity jurisdiction.
Pursuant to 28 U.S.C. section 1441(b)(2), an action removed based upon diversity "may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought." While some district courts have determined, based upon the language of the statute, that removal is proper if the in-state defendants have not been served at the time of removal, Cucci v. Edwards , 510 F.Supp.2d 479 (C.D.Cal. 2007); Boles v. Courvoisier, 2012 WL 1997214 (N.D.Cal. 2012), the Ninth Circuit has rejected the argument that section 1441(b) expands diversity jurisdiction to permit removal when the non-diverse parties have not been served. Preaseau v. Prudential Ins. Co. of America , 591 F.2d 74 (9th Cir. 1979) (citing Clarence E. Morris, Inc. v. Vitek , 412 F.2d 1174 (9th Cir. 1969)). "Whenever federal jurisdiction in a removal case depends upon complete diversity, the existence of diversity is determined from the fact of citizenship of the parties named and not from the fact of service." Vitek , 412 F.2d at 1176.
As such, Plaintiff's naming of the individual defendants in the state court action precludes a finding in favor of diversity jurisdiction unless the non-diverse individual defendants were fraudulently joined. A federal court may disregard a non-diverse party named in the state court action if the court finds that the "plaintiff fail[ed] to state a cause of action against a resident defendant, and the failure is obvious according to the settled rules of the state." Morris v. Princess Cruises, Inc. , 236 F.3d 1061, 1067 (9th Cir. 2001)(citing McCabe v. General Foods Corp. , 811 F.2d 1336, 1339 (9th Cir. 1987). Thus, the relevant inquiry before the Court in deciding whether joinder was fraudulent is whether there is any possibility the plaintiff will be able to establish liability against the party in question. Ritchey v. Upjohn Drug Co. , 139 F.3d 1313, 1318-19 (9th Cir. 1998). Courts generally apply a ...