United States District Court, N.D. California
[Copyrighted Material Omitted]
For Jose Vasquez, Plaintiff: Timothy Paul Rumberger, LEAD ATTORNEY, Law Offices of Timothy P. Rumberger, Alameda, CA.
For Wells Fargo Bank, National Association, A Nevada Corporation, Defendant: Thomas Roy Kaufman, LEAD ATTORNEY, Danielle Leah Levine, Sheppard Mullin Richter & Hampton LLP, Los Angeles, CA.
ORDER RE PLAINTIFF'S MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT, MOTION FOR REMAND FOR LACK OF DIVERSITY JURISDICTION AND DEFENDANT'S MOTION TO TRANSFER VENUE
JOSEPH C. SPERO, United States Magistrate Judge.
Re: Dkt. Nos. 6, 10, 11
Plaintiff Jose Vasquez initiated this action in the Superior Court for the State of California, San Francisco County, asserting claims arising out of his employment with Wells Fargo Bank, N.A. (" Wells Fargo" ). Defendant removed the action to this Court on the basis of diversity jurisdiction, pursuant to 28 U.S.C. § 1332. Plaintiff now brings a Motion for Leave to File Fist Amended Complaint (" Motion for Leave to Amend" ) and a Motion for Remand for Lack of Diversity Jurisdiction (" Remand Motion" ). Defendant, in turn, brings a Motion to Transfer Venue (" Transfer Motion" ). The Court determined that the motions were suitable for determination without hearing and vacated the hearing set for Thursday, January 8, 2015 at 9:30 a.m. For the reasons stated below, the Court DENIES Plaintiff's Motion for Leave to Amend and Remand Motion and GRANTS Defendant's Transfer Motion.
In his complaint, Vasquez seeks to recover unpaid commissions from his former employer, Wells Fargo, which were allegedly withheld from Vasquez when he was involuntarily terminated, purportedly for " misconduct." Complaint, ¶ 5-8. Plaintiff alleges that at the time of his termination he was owed over $67,000 in commissions. Id. ¶ 5. In bringing an individual action, Vasquez opted out of a putative class action pending in San Francisco Superior Court " brought through Cesar Ascarrunz, on behalf of all California Home Mortgage Consultants who were not paid commission wages by virtue of having their employment involuntarily terminated, purportedly for alleged 'misconduct'" by Wells Fargo (hereinafter, " the Ascarrunz action" ). Id. ¶ 1. In the Complaint, Vasquez asserts claims under the California Labor Code, California Business and Professions Code and California common law. He does not assert any claims under federal law.
B. Ascarrunz Action
The history of the Ascarrunz action is set forth in an order of the San Francisco Superior Court filed August 25, 2014 (" the August 25 Order" ), of which the Court takes judicial notice. See Remand Motion at 7 & Ex. 5 thereto (Order on Parties' Joint Motion for the Legal Determination of a Stipulated Issue, Case No. CGC-13-534620, consolidated with Case No. CGC-13-535636). According to the state court, the Ascarrunz action " was initiated
by Wells Fargo's appeal of an order by the Labor Commissioner awarding Ascarrunz $18,400.73 for commission wages earned and unpaid, plus $23,229.45 in statutory interest and penalties." Remand Motion, Ex. 5 at 1. Ascuarrunz responded by filing a putative class action seeking damages, injunctive relief and restitution, and the two actions were consolidated. Id. In the August 25 Order, the court found, based upon facts to which the parties stipulated, that the provisions of the compensation plan upon which Wells Fargo relied in denying Ascarrunz commissions were unconscionable and unenforceable, and that Wells Fargo owed Ascarrunz his unpaid commissions. Id. at 2.
Thomas Kaufman represents Wells Fargo in this action and also serves as lead counsel for Wells Fargo Bank, N.A. in the Ascarrunz action. Declaration of Thomas R. Kaufman, Docket No. 16-1 (" Kaufman Decl. iso Opposition to Remand Motion" ), ¶ 1. He states in his declaration that Plaintiff's counsel, Timothy Rumberger, also represents the plaintiff in the Ascarrunz action. Id., ¶ 2. Kaufman states that in the Ascarrunz action, the parties agreed to certain stipulated facts " in hopes of receiving a legal determination on some legal issues," but that no class has ever been certified and no class action has ever been filed. Id. ¶ 4. Consequently, Kaufman states, the August 25 Order is binding only as to Ascarrunz. Id. Kaufman also states that the defendant in the Ascarrunz action did not remove the action to federal court on the basis of diversity because at the time that action was filed, the prevailing view in the district court was that Wells Fargo Bank, N.A. was a citizen of California. Id. According to Kaufman, that has changed since the Ninth Circuit issued its ruling in Rouse v. Wachovia Mortgage, FSB, 747 F.3d 707 (9th Cir. 2014), finding that Wells Fargo Bank, N.A. is not a California citizen. Id.
Kaufman states that when he learned that the instant action had been filed by Vasquez, on October 15, 2014, he sent an email to Rumberger asking him why Vasquez was filing a separate action given that his claims appeared to fall within the ambit of the Ascarrunz putative class action. Id. ¶ 5. According to Kaufman, he received an email from Rumberger on October 16, 2014 stating that Vasquez, like Ascurrunz, was not paid commissions on loans that were funded post-termination but that unlike Ascarrunz, Vasquez had been " paid all commissions on those loans that funded as of the date of termination." Id. ¶ 6.
According to Kaufman, Ascarrunz worked in " various offices within the Bay Area" before he was terminated by Wells Fargo. Id. ¶ 3. In contrast, he states, Vasquez worked in Santa Barbara California. Id. ¶ 7.
C. Wells Fargo Entities
Defendant presents evidence that in 2012, all persons employed as Wells Fargo Home Mortgage Consultants (the position held by Vasquez) in the State of California were employed by Wells Fargo Bank, N.A. Declaration of Nicole Hess, Docket No. 14-1 (" Hess Decl. iso Opposition to Remand Motion" ), ¶ 2. According to Hess, an Employee Relations Sr. Consultant for Wells Fargo, none of the Wells Fargo Home Mortgage Consultants in the State of California was employed by Wells Fargo & Company in 2012. Id.
According to Patricia Ruedenberg, Assistant Secretary of Wells Fargo Bank, N.A., Wells Fargo Bank, N.A. " is a national banking association with its main office located in Sioux Falls, South Dakata." Declaration of Patricia A. Ruedenberg, Docket No. 14-1 (" Ruedenberg Decl. iso Opposition to Remand Motion" ), ¶ 2. Ruedenberg further states that " Wells Fargo & Company is a bank holding company
which, at this time, indirectly holds 100% of Wells Fargo Bank, N.A.'s common stock." Id., ¶ 3. Ruedenberg states that " [d]uring 2012, Wells Fargo Bank, N.A. was a direct and indirect, wholly-owned subsidiary of Wells Fargo & Company. During 2012, Wells Fargo Bank, N.A. had multiple parent corporations including WFC Holdings Corporation, Charter Holdings, Inc., IBID, Inc., and Wells Fargo & Company." Id. ¶ 4. A chart attached as Exhibit A to the Ruedenberg Declaration illustrates the ownership of Wells Fargo Bank, N.A. as of October 2012.
Plaintiff presents evidence that Wells Fargo & Company is based in San Francisco, California, namely, the official public records of the California Secretary of State listing the location of Wells Fargo & Company as " 420 Montgomery Street, San Francisco, CA." Declaration of Timothy P. Rumberger in Support of Plaintiff's Motion for Leave to File First Amended Complaint, Docket No. 10-1 (" Rumberger Decl. iso Motion for Leave to Amend" ), ¶ 8 & Ex. 3. Plaintiff also cites the Form 10-k filed by Wells Fargo & Company for the fiscal year ending December 31, 2013, in which it states that Wells Fargo Bank, N.A. is its " principal subsidiary" and makes up 90% of its assets. Id. ¶ 9 & Ex. 4. According to Plaintiff, Wells Fargo & Company " does not distinguish between its employees and those of its subsidiaries" in the Form 10-k. Id., Ex. 4A Further, Plaintiff contends, the 2013 Annual Report for Wells Fargo & Company " set[s] forth solely a 'Consolidated Statement of Income,' 'Consolidated Balance Sheet,' 'Consolidated Statement of Changes in Equity,' and a 'Consolidated Statement of Cash Flows'-- which does not distinguish between its financial data and that of its primary subsidiary, Wells Fargo Bank, N.A., evidencing on its face that Wells Fargo & Company benefits directly from the loans Plaintiff originated during his employment and from the commission-wages Plaintiff has been denied despite having generated these loans on behalf of his employer." Id., ¶ 9.
D. Motion for Leave to Amend
In his Motion for Leave to Amend, Plaintiff seeks to amend his complaint in this action to add Wells Fargo & Company as a defendant. Motion for Leave to Amend at 3; see also Rumberger Decl. iso Motion for Leave to Amend, Ex. 1 (Proposed First Amended Complaint). Plaintiff cites the standard set forth in Rule 15(a)(2), which provides that " [t]he court should freely give leave [to amend] when justice so requires." Id. at 4. Here, Plaintiff asserts, justice requires that he be permitted to amend because the action was filed recently and thus, there has been no undue delay. Id. Further, Plaintiff asserts, while the requested amendment will admittedly destroy diversity jurisdiction, " Wells Fargo Bank, N.A. can hardly be heard to claim 'prejudice' from the amendment when Wells Fargo & Company is the ultimate responsible party according to its own officially filed public record Form 10-k filed for the fiscal year ending December 31, 2013." Id. Plaintiff also notes that he asserts claims under the California Labor Code, which " defines 'employer' extremely broadly to include all parties responsible or who benefit from its violations -- extending even to 'other person[s] [acting] on behalf of an employer' (Cal. Labor Code § 558(a)) -- thus ...