United States District Court, N.D. California, Oakland Division
ORDER TO SHOW CAUSE WHY ACTION SHOULD NOT BE REMANDED
FOR LACK OF SUBJECT MATTER JURISDICTION
SAUNDRA BROWN ARMSTRONG, SENIOR UNITED STATES DISTRICT JUDGE
10, 2019, Plaintiff Anja Akhile (“Plaintiff”)
filed the instant employment discrimination action against
Defendants Equinox Holdings, Inc., a Delaware Corporation
(“Equinox”) and Equinox Fitness Berkeley, Inc., a
California Corporation (“EF Berkeley”) in the
Superior Court for the County of Alameda. Notice of Removal,
Dkt. 1, Ex. A (Complaint). On June 12, 2019, Defendant
Equinox removed the action to this Court pursuant to 28
U.S.C. § 1441. Notice of Removal at 1.
alleges that this Court has subject matter jurisdiction based
on diversity of citizenship. Id. ¶ 7 (citing 28
U.S.C. § 1332(a)). According to Equinox, it is a citizen
of the States of Delaware and New York. Id. ¶
10. Equinox acknowledges that both Plaintiff and Defendant EF
Berkeley are citizens of the State of California.
Id. ¶¶ 14-18. However, Equinox contends
that EF Berkeley is a “sham” defendant whose
citizenship should be disregarded for the purpose of
assessing the Court's jurisdiction. Id.
Court has “an independent obligation to determine
whether subject matter jurisdiction exists, even in the
absence of a challenge from any party.” Arbaugh v.
Y&H Corp., 546 U.S. 500, 514 (2006); see
also 28 U.S.C. § 1447(c) (“If at any time
before final judgment it appears that the district court
lacks subject matter jurisdiction, the case shall be
remanded.”). Although Equinox preliminarily addressed
the issue of fraudulent joinder in the Notice of Removal, the
Court finds that further briefing is required.
burden of establishing federal jurisdiction is on the party
seeking removal, and the removal statute is strictly
construed against removal jurisdiction.” Prize
Frize Inc. v. Matrix Inc., 167 F.3d 1261, 1265 (9th Cir.
1999). “There are two ways to establish fraudulent
joinder: ‘(1) actual fraud in the pleading of
jurisdictional facts, or (2) inability of the plaintiff to
establish a cause of action against the non-diverse party in
state court.'” Grancare, LLC v. Thrower,
889 F.3d 543, 548 (9th Cir. 2018) (citation omitted). Under
the second theory, on which Equinox appears to rely, the
removing defendant must show that “there is no
possibility” that the plaintiff can prevail against the
non-diverse defendant. Id. at 549, 551 (rejecting
application of the Rule 12(b)(6) “failure to state a
claim” standard). As the Ninth Circuit has recognized,
a defendant invoking diversity jurisdiction on the basis of
fraudulent joinder bears a “heavy burden” in
light of the “general presumption against [finding]
fraudulent joinder.” Id. at 548 (citations
issue of fraudulent joinder may be resolved by looking beyond
the pleadings, including the consideration of “summary
judgment-type evidence, ” Morris v. Princess
Cruises, Inc., 236 F.3d 1061, 1068 (9th Cir. 2001),
and/or materials of which the court may take judicial notice,
Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1320 (9th
Cir. 1998). See also Grancare, 889 F.3d at 549
(“the party seeking removal is entitled to present
additional facts that demonstrate that a defendant has been
because a finding of fraudulent joinder involves a
determination that the plaintiff cannot state a claim against
the non-diverse defendant, see Grancare, 889 F.3d at
549-50, the Court may, upon resolution of this issue, dismiss
any fraudulently joined defendants. See Wong v.
Bell, 642 F.2d 359, 361-62 (9th Cir. 1981) (holding that
a trial court may dismiss a complaint or claim sua sponte
provided that the plaintiff is given notice and an
opportunity to respond in writing).
IT IS HEREBY ORDERED THAT:
Equinox shall show cause why this action should not be
remanded for lack of subject matter jurisdiction due to the
presence of a non-diverse defendant. Equinox shall file a
written response to this Order, not to exceed ten pages, by
July 26, 2019. Failure to file a timely response may
result in the remand of the action without further notice.
Plaintiff may file a response to Equinox's filing, not to
exceed ten pages, by August 2, 2019. Plaintiff is
hereby given notice that the failure to file a timely
response may result in the dismissal of Defendant EF Berkeley
without further notice.
Equinox may file a reply, not to exceed five pages, by
August 9, 2019.
factual assertions in the parties' writing filings shall
be supported by a declaration, other summary-judgment-type
evidence, or ...