United States District Court, E.D. California
GLORIA THIESSEN, by and through her Guardian Ad Litem, PAM THIESSEN, Plaintiff,
FOLSOM INVESTORS, L.P., et al., Defendants.
ORDER REMANDING CASE
L. Nunley United States District Judge
matter is before the Court on Plaintiff Gloria Thiessen's
(“Plaintiff”) Motion to Remand. (ECF No. 6.)
Folsom Investors, L.P., Folsom Group, LCC, Jerry Erwin
Associates, Inc., and Josef A. Dunham (“Mr.
Dunham”) (collectively “Defendants”) oppose
the motion.(ECF No. 10.) For the reasons set forth
below, the Court hereby GRANTS Plaintiff's Motion to
Remand. (ECF No. 6.)
Introduction and Background
who suffers from dementia, filed the instant action in the
Superior Court of California, County of Sacramento, by and
through her guardian ad litem, Pam Thiessen. Her complaint
contains the following six causes of action: (1) “Elder
Neglect/Abuse” against all Defendants; (2)
“Negligence/Negligence Per Se” against all
Defendants; (3) violation of “Resident's Bill of
Rights” against all Defendants; (4)
“Fraud/Misrepresentation” against all Defendants;
(5) “Financial Elder Abuse” against all
Defendants; and (6) “Unfair Business Practices”
against all Defendants. (ECF No. 1 at 15-46.)
removed this action pursuant to 28 U.S.C § 1441, solely
on the basis of diversity jurisdiction under 28 U.S.C. §
1332(a). (ECF No. 1.) The parties agree that the amount in
controversy exceeds $75, 000. (Compare ECF No. 1 at
5 with ECF No. 6-1.) Defendants take the position
that Defendants (other than Dunham) are citizens of
Washington for purposes of diversity. (See, e.g.,
ECF No. 1 at 2-3.) Plaintiff does not take issue with this in
her submissions. (See ECF Nos. 6-1 & 14.)
Finally, it is undisputed that both Plaintiff and Defendant
Dunham are citizens of California for diversity purposes.
(Compare ECF No. 1 at 5 with ECF No. 6-1 at
2.) Nevertheless, it is Defendants' position that this
action is removable on the basis of diversity jurisdiction
under 28 U.S.C. § 1332(a) because they contend Defendant
Dunham “was fraudulently joined in this lawsuit, and
his [citizenship] cannot be considered for purposes of
determining diversity.” (ECF No. 1 at 2-3.)
Defendant Dunham was “fraudulently joined as a party to
defeat diversity jurisdiction” is the sole focus of the
parties' submissions with respect to the instant motion.
(Compare ECF No. 6-1 at 1-2 with ECF No. 10
at 2.) To streamline the Court's analysis of the
parties' arguments, the Court will briefly set out the
legal standard governing removal and fraudulent joinder.
Standard of Review
right of removal is entirely a creature of statute and
‘a suit commenced in a state court must remain there
until cause is shown for its transfer under some act of
Congress.'” Syngenta Crop Protection, Inc. v.
Henson, 537 U.S. 28, 32 (2002) (quoting Great
Northern R. Co. v. Alexander, 246 U.S. 276, 280 (1918)).
The general removal statute, 28 U.S.C. § 1441, permits
the removal to federal court of any civil action over which
“the district courts of the United States have original
jurisdiction.” 28 U.S.C. § 1441(a). Removal is
proper under § 1441 only if the district court could
have exercised jurisdiction over the action had it originally
been filed in federal court. Caterpillar, Inc. v.
Williams, 482 U.S. 386, 392 (1987). Courts
“strictly construe [28 U.S.C. § 1441] against
removal jurisdiction, ” and “the defendant always
has the burden of establishing that removal is proper.”
Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir.
1992). Furthermore, “[i]f the district court at any
time determines that it lacks jurisdiction over the removed
action, it must remedy the improvident grant of removal by
remanding the action to state court.” California ex
rel. Lockyer v. Dynegy, Inc., 375 F.3d 831, 838 (9th
threshold requirement for removal under 28 U.S.C. § 1441
is a finding that the complaint contains a cause of action
that is within the original jurisdiction of the district
court.” Hunter v. Philip Morris USA, 582 F.3d
1039, 1042 (9th Cir. 2009). Under 28 U.S.C. § 1332(a),
“federal district courts have [diversity] jurisdiction
over suits for more than $75, 000 where the citizenship of
each plaintiff is different from that of each
defendant.” Id. at 1043. “Although an
action may be removed to federal court only where there is
complete diversity of citizenship, 28 U.S.C. §§
1332(a), 1441(b), one exception to the requirement for
complete diversity is where a non-diverse defendant has been
fraudulently joined.” Id. (internal quotation
joinder is a term of art.” McCabe v. Gen. Foods
Corp., 811 F.2d 1336, 1339 (9th Cir. 1987).
“Joinder of a non-diverse defendant is deemed
fraudulent, and the defendant's presence in the lawsuit
is ignored for purposes of determining diversity, ‘[i]f
the plaintiff fails to state a cause of action against [that
non-diverse] 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) (quoting McCabe , 811 F.2d at 1339). In
addition to the “strong presumption against removal
jurisdiction, ” there is a “general
presumption” against finding there has been a
fraudulent joinder. Hunter, 582 F.3d at 1042, 1046.
Thus, the Ninth Circuit has explained that a party relying on
a fraudulent joinder theory to demonstrate removal is
appropriate has a “heavy burden.” Id.
The party seeking removal “is entitled to present the
facts showing the joinder to be fraudulent.”
Morris, 236 F.3d at 1067. However,
“[f]raudulent joinder must be proven by clear and
convincing evidence.” Hamilton Materials, Inc. v.
Dow Chem. Corp., 494 F.3d 1203, 1206 (9th Cir. 2007).
Court finds that this action must be remanded for two
separate reasons. The first of these the Court raises sua
sponte. See Valdez v. Allstate Ins. Co., 372
F.3d 1115, 1116 (9th Cir. 2004) (noting that federal courts
are “obligated to consider sua sponte whether
[they] have subject matter jurisdiction”). Defendants
seem to assume - and Plaintiff has not challenged - that
Defendant Folsom Investors, L.P. takes its citizenship for
diversity purposes from one (if not all) of the following:
the principal place of business of the limited partnership,
which Defendants indicate is Washington; and the citizenship
of its general partner, which Defendants suggest is a
Washington by noting the general partner is a “limited
liability company formed in the State of Washington[, ] under
the laws of the State of Washington[, and whose] members are
all citizens of Washington.” (ECF No. 1 at 4.)
Supreme Court has long made it clear that “a limited
partnership is deemed to be a citizen [for diversity
purposes] of every state of which any of its general or
limited partners is a citizen.” Evans v.
California, No. 17-cv-00531-BAS-BGS, 2017 WL 3605378, at
*2 (S.D. Cal. Aug. 21, 2017) (citing Carden v. Arkoma
Assocs., 494 U.S. 185 (1990)). Defendants make no effort
to identify the citizenship of their limited partners. For
this reason alone, Defendants do not meet their burden to
show that removal is proper. Moreover, given Defendants'
apparent ignorance of the rule for limited partnerships and
its similarities to the rule for limited liability companies,
the Court is not inclined to accept Defendants' assertion
about the citizenship of Folsom Investors, L.P.'s general
partner. See id. (“[A]n LLC is a citizen of
every state of which its owners/members are citizens.”)
(quoting Johnson v. Columbia Props. Anchorage, LP,
437 F.3d 894, 899 (9th Cir. 2006)). This presents its own
problem as the general partner, Folsom Group, LCC, is also a
Defendant. Consequently, even if Defendants met their burden
with respect to fraudulent joinder, the Court would
nevertheless remand the instant action.
this in mind, the Court turns to the parties arguments.
Plaintiff begins with the premise that Defendant Dunham is
not fraudulently joined if Plaintiff has stated a cause of
action against him that does not obviously fail according to
the settled rules of the state of California. (See
ECF No. 6-1 at 5-6.) Defendants do not take issue with this
premise. (See generally ECF No. 10.) In any event,
it is plainly correct. See Morris, 236 F.3d at 1067.
From this premise, Plaintiff argues she “easily states
a valid cause of action against [Defendant] Dunham for elder
abuse/neglect.” (ECF No. 6-1 at 6.) Her argument consists
of the following three points: First, citing a published
opinion from the California Supreme Court, Plaintiff argues
“nursing home administrators can be held individually
liable for elder abuse.” (ECF No. 6-1 at 6 (citing
Delaney v. Baker, 20 Cal.4th 23 (1999).) Second,
Plaintiff contends she has adequately alleged that Defendant
Dunham is such an administrator under ...