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Garrett v. Bank of America, N.A.

United States District Court, N.D. California

April 24, 2014

NICOLE GARRETT, Plaintiff,
v.
BANK OF AMERICA, N.A., et al., Defendants.

ORDER GRANTING MOTION TO REMAND ECF No. 16

JON S. TIGAR, District Judge.

I. INTRODUCTION

Plaintiff brings this Motion to Remand her complaint to Alameda Superior Court, arguing that Defendant Bank of America ("BANA") has failed to demonstrate that this Court has subject-matter jurisdiction over her putatively state-law cause of action. BANA opposes this motion and has also filed a separate Motion to Dismiss. The matter came for hearing on March 7, 2014.

II. BACKGROUND

A. Factual & Procedural History

On October 11, 2013, Plaintiff Nicole Garrett ("Garrett"), a former bank teller employed by BANA, filed suit against Defendant Bank of America ("BANA") in Alameda Superior Court alleging that BANA has violated California's labor law provisions that require employers to provide seats for their workers. 8 Cal. Code Reg. § 11070(14); Plaintiff's Memorandum of Points and Authorities ("MPA") at 1-2, ECF No. 16-1. Garrett's complaint brings a single "representative" cause of action under California's Private Attorney General Act ("PAGA"), Cal. Labor Code § 2698 et. seq. MPA at 1-2. On November 13, 2013, BANA removed the complaint to this Court. Id. at 2. On November 22, 2013, Garrett filed a Motion to Remand the case back to the Alameda Superior Court. Plaintiff's Motion to Remand ("Mot."), ECF. No. 16. On the same date, BANA filed a Motion to Dismiss based on the First-to-File Rule. Defendant's Motion to Dismiss ("Mot. Dismiss"), ECF No. 15.

Since the Motion to Remand presents "a threshold jurisdictional question, " the Court must "decide it first, " before addressing the Motion to Dismiss. Lowry v. Barnhart , 329 F.3d 1019, 1022 (9th Cir. 2003) (citing Steel Co. v. Citizens for a Better Env't , 523 U.S. 83, 94 (1998).

B. Legal Standard

"[A]ny civil action brought in a[s]tate court of which the district courts of the United States have original jurisdiction, may be removed by a defendant... to [a] federal district court." 28 U.S.C. § 1441(a). "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); see also Gaus v. Miles, Inc. , 980 F.2d 564, 566 (9th Cir.1992) (the Ninth Circuit "strictly construe[s] the removal statute against removal jurisdiction"). "Federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance." Gaus at 566. Where a case is removed from state court, the removing defendant bears the burden of establishing federal jurisdiction, including the amount in controversy requirement. Abrego Abrego v. The Dow Chem. Co. , 443 F.3d 676, 682-3 (9th Cir. 2006). The court "resolves all ambiguity in favor of remand." Hunter , 582 F.3d at 1042. If the district court determines that it lacks jurisdiction, the action should be remanded back to the state court. Martin v. Franklin Capital Corp. , 546 U.S. 132, 134 (2005).

III. ANALYSIS

BANA argues that there are five separate bases for federal jurisdiction in this case: (1) that Garrett's PAGA claim "arises under" a federal statute, conferring federal-question jurisdiction; (2) that BANA is an "officer (or... [a] person acting under that officer) of the United States, " pursuant to 28 U.S.C. § 1442(a)(1); (3) that the requirements for diversity jurisdiction are satisfied; (4) that Garrett's claim qualifies as a "mass action" under the Class Action Fairness Act ("CAFA"); and (5) that Garrett's claim qualifies as a "class action" under CAFA. The Court addresses each of these arguments in turn.

A. Federal-Question Jurisdiction

On its face, Plaintiff's complaint brings only a state-law action. However, BANA argues that, under the "artful pleading doctrine, " this Court may assume jurisdiction when the state law claim substantially requires the resolution of a federal question. Opposition ("Opp'n") at 3, ECF No. 19. BANA argues that "this case arises under' federal law because Plaintiff's state law claim necessarily raises a disputed federal issue that is central to the case, ' to wit, whether the National Bank Act of 1864, 12 U.S.C. §12, et seq. (the "NBA"), preempts Plaintiff's state law claim." Id.

"[S]ince 1887 it has been settled law that a case may not be removed to federal court on the basis of a federal defense, including the defense of preemption, even if the defense is anticipated in the plaintiff's complaint, and even if both parties admit that the defense is the only question truly at issue in the case." Franchise Tax Bd. of State of Cal. v. Constr. Laborers Vacation Trust for S. California , 463 U.S. 1, 14 (1983); see also Hunter , 582 F.3d 1042-43 (citing Franchise Tax Bd. and collecting other cases).

"Courts should invoke the doctrine [of artful pleading] only in limited circumstances as it raises difficult issues of state and federal relationships and often yields unsatisfactory results." Lippitt v. Raymond James Fin. Servs., Inc. , 340 F.3d 1033, 1041 (9th Cir. 2003) (internal quotation marks omitted). "A careful reading of artful pleading cases shows that no specific recipe exists for a court to alchemize a state claim into a federal claim-a court must look at a complex group of factors in any particular case to decide whether a state claim actually arises' under federal law." Id. at 1042-43. However, "Courts have fashioned a number of proxies to determine whether a state claim depends on the resolution of a federal question to such an extent as to trigger subject matter jurisdiction." Id. at 1045. "Is the federal question basic' and necessary' as opposed to collateral' and merely possible'?" Id . (citations omitted). Is the federal question pivotal' as opposed to merely incidental'?" Id . And finally, "[i]s the federal question direct and essential' as opposed to attenuated'?" Id.

BANA provides little authority in its papers to support its contention that these factors weigh in its favor. In fact, in the case that BANA primarily cites in its papers, the Ninth Circuit found that the "[plaintiff] d[id] not have to rely on a violation of [federal law] to bring [his] claim in California state court" and thus there was no basis for removal. Lippitt , 340 F.3d at 1043. Similarly here, in order to bring a claim for violation of California Wage Order 4-2001, Garrett must (1) show that the employer violated the state code (4-2001), (2) meeting state-law procedural requirements, and (3) be an "aggrieved employee" as defined in Section 2699.3 of PAGA, a state law. Cal. Labor Code § 2698 et. seq. Garrett must also show that she was not provided with a suitable seat, that the nature of the work reasonably permitted use of seats, no suitable seats were placed in reasonable proximity to the work area, and such seating would not have interfered with the performance of her duties. 8 Cal. Code Reg. § 11070(14). As in Lippitt, none of these requirements compels the Court to resolve a federal question. The federal question only arises as a defense, not under the claim that Garrett asserts. Thus, the elements of her claim by themselves do not constitute a basis for removal.

BANA's citation to Grable & Sons Metal Products, Inc. v. Darue Eng'g & Mfg. , 545 U.S. 308 (2005), Opp'n at 3, also provides little support for BANA's position. In Grable, a plaintiff brought a quiet title action in state court, claiming that Defendant's title was invalid because 26 U.S.C. § 6335 required the IRS to give Grable notice of the sale by personal service, not by certified mail. Grable & Sons Metal Products, Inc. v. Darue Eng'g & Mfg. , 545 U.S. 308 (2005). The Supreme Court concluded that such a case was removable because the plaintiff was asking the court to interpret 26 U.S.C. § 6335, a federal tax provision, in order to prove the state claim. Id. at 316. In the present matter, however, Garrett is not asserting a claim that requires the interpretation of any federal law. BANA's defense may require such an interpretation, but that alone is not a basis for removal.

With all of this said, the Court is aware that there is at least one exception to the otherwise strong presumption that a federal defense does not confer federal-question jurisdiction over a putative state-law claim: "a state claim may be removed to federal court... when a federal statute wholly displaces the state-law cause of action through complete pre-emption. " Beneficial Nat. Bank v. Anderson , 539 U.S. 1, 8 (2003) (emphases added). The standard for determining whether there is "complete pre-emption" requiring removal is when "the federal statute[] at issue provide[s] the exclusive cause of action for the claim asserted and also set[s] forth procedures and remedies governing that cause of action." Id . In Beneficial Nat. Bank, the Supreme Court analyzed the specific provisions of the NBA governing usury and found that they provided such specific and exclusive procedures for determining and remedying usury that there is, in effect, "no such thing as a state-law claim of usury against a national bank." 539 U.S. at 11. Hence, removal was proper. BANA does not even cite Beneficial Nat. Bank, much less meet its burden of establishing that this action falls within its ambit.

Citing Watters v. Wachovia Bank, N.A., BANA argues that the Supreme Court "ha[s] interpret[ed] grants of both enumerated and incidental powers' to national banks as grants of authority not normally limited by, but rather ordinarily pre-empting, contrary state law." 550 U.S. 1, 12 (2007) (quoting Barnett Bank of Marion Cty., N.A. v. Nelson , 517 U.S. 25, 32 (1996)). But the very next sentence of Watters makes clear that even this broad preemption is subject to exceptions that depend upon the particular nature of the state law and the NBA provision at issue: "[s]tates are permitted to regulate the activities of national banks where doing so does not prevent or significantly interfere with the national bank's or the national bank regulator's exercise of its powers." 550 U.S. at 12.

BANA has not demonstrated that the NBA so directly controls the precise question of worker seating as to provide the exclusive cause of action through which such an action can be brought against a national bank. To the contrary, "[t]he labor laws upon which plaintiff bases her claim are laws of general applicability, no different for a bank than for any business that wishes to conduct its affairs within California." Garibaldi v. Bank of America, No. 13-cv-02223 SI, ECF No. 44, at 6-7, 2014 WL 172284 at *4 (N.D. Cal. January 15, 2014).

In Garibaldi, the "[p]laintiff br[ought] ten causes of action: (1) breach of contract; (2) failure to pay accrued wages upon termination; (3) failure to pay overtime and/or straight-time pay; (4) missed meal breaks; (5) reimbursement of travel expenses; (6) waiting time penalties; (7) failure to provide accurate wage statements; (8) illegal form of payment and unlawful coercion; (9) unfair business practices; and (10) a claim under [PAGA]." Id. at 2-3. The Garibaldi court determined that "[r]equiring a national bank to comply with state labor laws regarding the compensation of employees does not conflict with the business of banking in a manner that would require the Court to find these laws preempted by the NBA." Id. at 7. The Garibaldi court held that those regulations were ...


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