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Davis v. YRC Worldwide Inc.

United States District Court, Central District of California

November 13, 2014

John Davis
v.
YRC Worldwide Inc. et al

IN CHAMBERS ORDER GRANTING PLAINTIFF’S MOTION TO REMAND [17]

HONORABLE STEPHEN V. WILSON, U.S. DISTRICT JUDGE

Introduction

The parties have presented the Court with the threshold issue of subject matter jurisdiction. The Court considered the parties’ briefs and presided over a hearing on November 10, 2014. For the reasons described below, the Court lacks jurisdiction. Consequently, the Court GRANTS Plaintiff’s motion and REMANDS the case to the Los Angeles Superior Court.

Factual Allegations

John Davis, the plaintiff, is a veteran truck driver. Compl. ¶ 10. He began working for YRC twelve years ago. Compl. ¶ 10. He alleges that two of his supervisors—Bob Pearson and Herman Bomhof—harassed him during his last year of employment. Compl. ¶¶ 12-17, 25, 34, 43. Specifically, the supervisors singled out Davis for chastisement, derided him with racial slurs (recounting two particular instances, one involving Pearson, the other Bomhof), and fired him when he asked them to stop the harassment.JCompl. ¶¶ 12-17. Although YRC reinstated Davis, it soon after terminated him again because he falsified his original employment application. Compl. ¶¶ 18-19. Davis claims that YRC’s basis was pretextual; he contends that racial bias animated YRC’s decision. See Compl. ¶¶ 19, 25, 35.

Davis brought suit against YRC and Pearson in state court, alleging four claims: racial discrimination in violation of California Government Code Section 12940(a); racial harassment in violation of California Government Code Section 12940(j); retaliation in violation of California Government Code Section12940(h); and wrongful discharge in violation of California public policy. Compl ¶¶ 21-56. YRC then removed the case. Dkt. 1. Davis responded with a motion to remand it. Dkt. 17.

Discussion

Removal jurisdiction is disfavored. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). But it is proper if the case could have been filed in federal court originally. 28 U.S.C. § 1441. One basis for subject matter jurisdiction is the parties’ diversity of citizenship. 28 U.S.C. § 1332. Another common basis is the presence of a well-pleaded federal question. 28 U.S.C. § 1331; Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987).

Here, YRC alleges that jurisdiction is proper on either ground. It argues that Pearson, a California citizen, is a sham defendant whose citizenship is immaterial. Therefore, complete diversity exists between Davis, a California citizen, and YRC, a citizen of Kansas and Delaware. Moreover, YRC submits that Davis’s claims are preempted by Section 301 of the Labor Management Relations Act, raising a federal question.

I. Diversity

It is axiomatic that jurisdiction based on 28 U.S.C. § 1332(a) requires complete diversity of citizenship. E.g., Strawbridge v. Curtiss, 7 U.S. 267 (1806). But it is equally well-established that the inclusion of sham defendants-those fraudulently joined-will not defeat removal premised on diversity. E.g., Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1318 (9th Cir. 1998).In this case, Pearson’s citizenship is the key: he, like Davis, is a California citizen, whose presence appears to destroy diversity. Thus, complete diversity exists only if YRC can show Pearson is a sham defendant whose citizenship should be disregarded.

A party is joined fraudulently if settled law obviously precludes the plaintiff from asserting a cause of action against the nondiverse defendant. See Ritchey, 139 F.3d at 1318. This standard is more permissive than the familiar lens applied to a motion to dismiss for failure to state a claim: a plaintiff must merely aver a possible claim, not a plausible one. Stillwell v. Allstate Ins. Co., 663 F.3d 1329, 1333 (11th Cir. 2011); see also Hunter v. Philip Morris USA, 582 F.3d 1039, 1046 (9th Cir. 2009) (noting the presumption against finding fraudulent joinder). And the removing defendant’s burden is heavy, for it must establish fraudulent joinder by clear and convincing evidence. Hamilton Materials, Inc. v. Dow Chemical Corp., 494 F.3d 1203, 1206 (9th Cir. 2007). All ambiguity is resolved in favor of remand. Hunter , 582 F.3d at 1042 (citing Gaus, 980 F.2d at 566).

Davis asserted one claim against Pearson: racial harassment in violation of section 12940(j) of California’s Government Code. “[H]arassment in the workplace can take the form of discriminatory intimidation, ridicule and insult that is sufficiently severe or pervasive to alter the conditions of the victim’s employment and create an abusive working environment.” Serri v. Santa Clara Univ., 226 Cal.App.4th 830, 869 (Cal.Ct.App. 2014) (internal quotation marks omitted). The totality of the circumstances must indicate that “the defendant’s conduct would have interfered with a reasonable employee’s work performance and would have seriously affected the psychological well-being of a reasonable employee and that [he or she] was actually offended.” Rehmani v. Superior Court, 204 Cal.App.4th 945, 952 (Cal.Ct.App. 2012) (quoting Fisher v. San Pedro Peninsula Hosp., 214 Cal.App.3d 590, 609-610 (Cal.Ct.App. 1989)) (internal footnotes, citations, and quotation marks omitted). Moreover, the harassing conduct “cannot be occasional, isolated, sporadic, or trivial”—rather, it must be “a concerted pattern of harassment of a repeated, routine, or a generalized nature.” Thompson v. City of Monrovia, 186 Cal.App.4th 860, 877 (Cal.Ct.App. 2010) (quoting Aguilar, 21 Cal.4th at 131).

YRC has not shown by clear and convincing evidence that it will be impossible for Davis to state a claim against Pearson. Davis alleged that his supervisors, Pearson among them, harassed him for over a year. In particular, he singled out one instance where Pearson used a pejorative slur. Compl. ¶ 13. This single incident may be insufficient to state a claim. See, e.g., Baptiste v. LIDS, __ F.Supp.2d __, 2014 WL 523024, at *14 (N.D. Cal. Feb. 5, 2014). But Davis’s allegations are sufficient to withstand a fraudulent joinder challenge. Even if Davis failed to describe enough precise interactions to state a claim, ambiguity is resolved in favor of remand, Hunter , 582 F.3d at 1042, and YRC has ...


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