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Lorenz v. United Parcel Service, Inc.

United States District Court, C.D. California

July 19, 2019

LAWRENCE LORENZ, an individual, Plaintiff,
v.
UNITED PARCEL SERVICE, INC., a corporation; UPS SUPPLY CHAIN SOLUTIONS, INC., a corporation; TERESA LEON, an individual; and DOES 1 through 20; inclusive, Defendants.

          ORDER GRANTING PLAINTIFF'S MOTION TO REMAND [12]; AND DENYING DEFENDANTS' PARTIAL MOTION TO DISMISS AS MOOT [8]

          OTIS D. WRIGHT, II UNITED STATES.DISTRICT JUDGE

         I. INTRODUCTION

         On December 28, 2018, Plaintiff Lawrence Lorenz filed this disability discrimination action in the Superior Court of California for the County of San Bernardino. (Notice of Removal (“Notice”), Ex. A (“Compl.”), ECF No. 1-1.) Defendants United Parcel Service, Inc. and UPS Supply Chain Solutions, Inc. (collectively “UPS”) removed this matter based on federal diversity jurisdiction. (Notice, ECF No. 1.) Lorenz moves to remand (“Motion”). (Mot. to Remand (“Mot.”), ECF No. 12.) After reviewing the papers filed in connection with the Motion and the Notice of Removal, the Court finds that it lacks subject matter jurisdiction. Consequently, the Court REMANDS this action to state court.[1]

         II. FACTUAL BACKGROUND

         This is a disability discrimination lawsuit arising from UPS's alleged wrongful termination of Lorenz's employment. As alleged in the Complaint, in January of 2016, while working for UPS, Lorenz sustained a work-related injury that required medical treatment and modified work duty. (Compl. ¶¶ 20-21.) Lorenz then went on temporary disability leave because UPS lacked available modified work opportunities. (Compl. ¶¶ 20-22.)

         The following year, on or about January 5, 2017, Lorenz's supervisor, Teresa Leon, offered Lorenz a lower-paying position. (Compl. ¶ 23.) Lorenz interpreted Leon's offer as a threat, that Lorenz must either accept the lower-paying position or be terminated. (Compl. ¶ 23.) Nevertheless, Lorenz declined Leon's offer. (Compl. ¶ 24.) UPS terminated Lorenz's employment shortly thereafter while Lorenz was still on disability leave. (Compl. ¶ 25.) Lorenz claims that UPS and Leon discriminated against him, including by failing to provide a reasonable accommodation for his work-related injury and intentionally terminating his employment because of his resulting physical disability. (See Compl.)

         On December 28, 2018, Lorenz filed this action in San Bernardino Superior Court against Defendants UPS and Leon. (See Compl.) Lorenz is a citizen of California. (Compl. ¶ 4; see Mot. 6.) The UPS Defendants are Ohio and Delaware corporations, with principal places of business in Georgia, and thus citizens of those three states. (Compl. ¶¶ 5-6; Notice ¶ 9.) Leon is a citizen of California. (Compl. ¶ 7; see Mot. 6.) UPS subsequently removed the action to this Court based on federal diversity jurisdiction. (See Notice ¶ 7.) UPS also partially moved to dismiss for failure to state a claim upon which relief can be granted. (Mot. to Dismiss 1, ECF No. 8.) Lorenz now moves to remand for lack of federal diversity jurisdiction. (Mot. 3.)

         III. LEGAL STANDARD

         Federal courts have subject matter jurisdiction only as authorized by the Constitution and Congress. U.S. Const. art. III, § 2, cl. 1; see also Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (“Federal courts are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute.”). A suit filed in state court may be removed to federal court only if the federal court would have had original jurisdiction over the suit. 28 U.S.C. § 1441(a). Federal courts have original jurisdiction where an action arises under federal law or where each plaintiff's citizenship is diverse from each defendant's citizenship and the amount in controversy exceeds $75, 000. Id. §§ 1331, 1332(a).

         The removal statute is strictly construed against removal, 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). The party seeking removal bears the burden of establishing federal jurisdiction. Id.

         IV. DISCUSSION

         UPS invokes diversity jurisdiction as grounds for this Court's subject matter jurisdiction. (Notice ¶ 7.) The Supreme Court “ha[s] consistently interpreted § 1332 as requiring complete diversity: In a case with multiple plaintiffs and multiple defendants, the presence in the action of a single plaintiff from the same State as a single defendant deprives the district court of original diversity jurisdiction over the entire action.” Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 553 (2005). The parties do not dispute the requisite amount in controversy. Accordingly, this Motion turns on whether complete diversity exists.

         Lorenz argues that complete diversity does not exist because both he and Leon are citizens of California. (Mot. 1.) UPS does not dispute that Leon is a citizen of California. (Opp'n to Mot. (“Opp'n”) 7, ECF No. 13; see also Notice ¶ 3.) Thus, Leon's citizenship destroys complete diversity.

         Instead, UPS argues that the Court should disregard Leon's citizenship because she was fraudulently joined to the Complaint and is, therefore, a “sham” defendant. (Opp'n 7; Notice ¶¶ 10-12.) Complete diversity of citizenship is required to remove an action to federal court, except for “where a non-diverse defendant has been ‘fraudulently joined.'” Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2001). A non-diverse defendant is fraudulently joined “[i]f 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.” McCabe v. Gen. Foods Corp., 811 F.2d 1336, 1339 (9th Cir. 1987); see also Padilla v. AT & T Corp.,697 F.Supp.2d 1156, 1158 (C.D. Cal. 2009) (citing Kruso v. Int'l Tel. & Tel. Corp., 872 F.2d 1416, 1426 (9th Cir. 1989) (“[A] non-diverse defendant is deemed a sham ...


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