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Thompson v. 3M Company

United States District Court, C.D. California

March 3, 2017

Kim Thompson
v.
3M Company et al.

          Present: The Honorable JESUS G. BERNAL, UNITED STATES DISTRICT JUDGE.

          CIVIL MINUTES-GENERAL

         Proceedings: Order: (1) GRANTING Plaintiff's Motion to Remand (Dkt. No. 14); (2) REMANDING this action to the California Superior Court, County of Riverside; and (3) VACATING the March 6, 2017 Hearing (IN CHAMBERS)

         On November 16, 2016, Kim Thompson (“Plaintiff”) initiated this action against 3M Company (“3M”) and Ingram Micro, Inc. (“Ingram”) (collectively, “Defendants”) in California Superior Court for the County of Riverside, alleging that she incurred injuries while employed as a packer for Ingram. (“Complaint, ” Dkt. No. 1-2.) 3M removed the case on January 4, 2017 on the basis of diversity jurisdiction, asserting that Ingram-the non-diverse Defendant-was fraudulently joined. (Not. of Removal, Dkt. No. 1.)

         On February 3, 2017, Plaintiff filed this motion to remand the action to state court. (“Motion, ” Dkt. No. 14.) Defendants opposed Plaintiff's Motion on February 13, 2017. (“Opp'n, ” Dkt. No. 18.) Plaintiff filed her reply memorandum on February 17, 2017. (“Reply, ” Dkt. No. 20.)

         The Court finds this matter appropriate for resolution without a hearing. See Fed.R.Civ.P. 78; L.R. 7-15. After consideration of the papers filed in support of and in opposition to the motion, the Court GRANTS Plaintiff's Motion to Remand.

         I. LEGAL STANDARD[1]

         “Federal courts are courts of limited jurisdiction, possessing only that power authorized by Constitution and statute.” Gunn v. Minton, 133 S.Ct. 1059, 1064 (2013). As such, federal courts only have original jurisdiction over civil actions in which a federal question exists or in which complete diversity of citizenship between the parties exists and the amount in controversy exceeds $75, 000. See 28 U.S.C. §§ 1331, 1332. “Complete diversity” means that “each defendant must be a citizen of a different state from each plaintiff.” In re Digimarc Corp. Derivative Litigation, 549 F.3d 1223, 1234 (9th Cir. 2008).

         Moreover, the Ninth Circuit “strictly construe[s] the removal statute against removal jurisdiction, ” and “[f]ederal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992); see also Jackson v. Specialized Loan Servicing, LLC, No. CV 14-05981 MMM PLAX, 2014 WL 5514142, at *6 (C.D. Cal. Oct. 31, 2014) (quoting Gaus). “The strong presumption against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper.” Jackson, 2014 WL 5514142, at *6. Doubts as to removability must be resolved in favor of remanding the case to state court. Id. (internal citations omitted).

         But removal is proper despite the presence of a non-diverse defendant where that defendant is a fraudulently joined or sham defendant. Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1318 (9th Cir. 1998); see also McCabe v. Gen. Foods Corp., 811 F.2d 1336, 1339 (9th Cir. 1987) (“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.”) As the Ninth Circuit has explained, “fraudulent joinder is a term of art” and requires courts to look at whether a plaintiff has failed to state a cause of action against a resident defendant. Id. Thus, the defendant must show that there is no possibility that the plaintiff could prevail on any cause of action it brought against the non-diverse defendant. Id.; see also Padilla v. AT & T Corp., 697 F.Supp.2d 1156, 1159 (C.D. Cal. 2009) (defendant seeking removal based on alleged fraudulent joinder “must do more than show that the complaint at the time of removal fails to state a claim against the non-diverse defendant” but must also show that “there is no possibility that the plaintiff could prevail on any cause of action it brought against the non-diverse defendant”); Gloger v. Lynch, No. 2:16-CV-05445-CAS-E, 2016 WL 4770015, at *3 (C.D. Cal. Sept. 12, 2016) (noting that “the burden of proving a fraudulent joinder is a heavy one” because “the removing party must prove that there is absolutely no possibility that the plaintiff will be able to establish a cause of action against the in-state defendant in state court.”)

         Generally, the rule is that “the propriety of removal is determined solely on the basis of the pleadings filed in state court.” Williams v. Costco Wholesale Corp., 471 F.3d 975, 976 (9th Cir. 2006). However, in the case of an allegedly fraudulent joinder, “the defendant seeking removal to the federal court is entitled to present the facts showing the joinder to be fraudulent.” McCabe v. Gen. Foods Corp., 811 F.2d 1336, 1339 (9th Cir. 1987).

         II. DISCUSSION

         Plaintiff is a resident of Riverside, California, while 3M is incorporated in Delaware, with its principal place of business in Minnesota. (See Complaint & Not. of Removal.) Accordingly, there is diversity between these two Parties for purposes of removal.[2] However, the Parties agree that Ingram is a local defendant and therefore non-diverse from Plaintiff. (Id.) In its Notice of Removal, 3M contends that Ingram is a sham defendant, joined by Plaintiff only to destroy diversity. (Not. of Removal.) It makes this argument by relying on California Labor Code section 3602, which provides that a workers' compensation claim is the exclusive remedy against an employer for injuries sustained in the course of employment. (Id. at 2.) Plaintiff is an “employee” of Ingram for purposes of the statute, 3M argues, and so is bound by the exclusive remedy rule-which means Ingram is immune from suit. (Id. at 2-3.) Thus, it concludes that Ingram is fraudulently joined because Plaintiff cannot state a cause of action against it. (Id. at 3.)

         The exclusive remedy provision in the Labor Code states: “Where the conditions of compensation set forth in Section 3600 concur, the right to recover compensation is, except as specifically provided in this section and Sections 3706 and 4558, the sole and exclusive remedy of the employee or his or her dependents against the employer.” Cal. Lab. Code § 3602. Accordingly, under this provision, when an injury occurs at the worksite, “in the normal course of the employer-employee relationship workers' compensation is plaintiffs' exclusive remedy for any injury that may have resulted.” Bohnert v. Roman Catholic Archbishop of San Francisco, 136 F.Supp.3d 1094, 1124 (N.D. Cal. 2015) (internal marks and citations omitted); see also Enslow Through Enslow v. United States, 42 F.3d 1399 (9th Cir. 1994) (“In California, worker's compensation payment is the exclusive remedy available against an employer for a work-related injury sustained by an employee.”); Angelotti v. Walt Disney Co., 192 Cal.App.4th 1394, 1403 (2011) (“Workers' compensation provides the exclusive remedy against an employer for an injury sustained by an employee in the course of employment and compensable under the workers' compensation law . . . This precludes a tort remedy against the employer if the conditions of compensation are present.”)

         Plaintiff's Motion challenges the argument that she is bound by the exclusive remedy rule in bringing claims against Ingram in two ways. First, she argues that Ingram is not clearly her “employer” under the terms of the Labor Code. (Motion at 6.) Second, she argues that, even if Ingram were her employer, she may invoke the “power ...


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