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Joseph v. Vitas Healthcare Corporation of California

United States District Court, C.D. California

August 27, 2019

ADENIKE JOSEPH, an individual Plaintiff,




         Pending before the Court is Plaintiff Adenike Joseph's (“Plaintiff”) Motion to Remand. (“Motion, ” Dkt. No. 7). Defendants VITAS Healthcare Corporation of California (“Defendant”) filed an opposition, and Plaintiff filed a reply. (Dkt. Nos. 9, 12.) For the reasons set forth below the Court GRANTS Plaintiff's Motion.


         Plaintiff filed the Complaint in this action in Los Angeles County Superior Court and Defendant removed it on the basis of diversity jurisdiction. See Notice of Removal (Dkt. No. 1), Compl. (Dkt. No. 1-3). The Complaint asserts eight state claims arising out of alleged racial discrimination, retaliation, wrongful termination and related wrongdoing that Plaintiff experienced while employed as a Registered Nurse Supervisor at VITAS Healthcare of California, a hospice care provider, from about July 3, 2017 to about April 17, 2018. See Compl. ¶ 12.

         Plaintiff alleges several instances of discrimination starting on or about September 2017 when a racist comment was directed at her by a VITAS human resources employee. See Compl. ¶ 14. Plaintiff alleges several additional instances of discrimination/retaliation, and asserts she was eventually terminated because “she no longer felt comfortable working for VITAS.” Compl. ¶ 20.

         Plaintiff now seeks to remand the case back to state court. Plaintiff argues that Defendant has not established that its principal place of business is not California-a fact necessary to establish diversity of citizenship between the parties. Plaintiff further argues that she directed all of her complaints to supervisors and managers of VITAS Healthcare of California and the Human Resources Department was located in the Encino Office in California. Plaintiff had no contact with any supervisors, directors or human resources staff outside of California.


         A defendant may remove a civil action filed in state court to federal court. 28 U.S.C. § 1441(a). The removal statute is strictly construed against removal. Takeda v. Nw. Nat. Life Ins. Co., 765 F.2d 815, 818 (9th Cir. 1985). If any doubt exists as to the right of removal, federal jurisdiction must be rejected. Gaus v. Miles, Inc., 980 F.2d. 564, 566-67 (9th Cir. 1992).

         For an action based on diversity of citizenship, the parties must be citizens of different states and involves an amount in controversy over $75, 000. 28 U.S.C. § 1332(a)(1). A corporation is a citizen of both (1) the State where it is incorporated, and (2) the State where it has its principal place of business. 28 U.S.C. § 1332(c)(1). As a rule, the parent company and its subsidiary are treated as distinct entities. Thus, in a suit involving a subsidiary, the Court will look to the state of incorporation and principal place of business of the subsidiary, and not its parent. Danjaq, S.A. v. Pathe Communications Corp., 979 F.2d 772, 775 (9th Cir. 1992).

         The Supreme Court in Hertz Corp. v. Friend adopted the “nerve center” test to determine where the principal place of business is located. “Principal place of business” means “the place where a corporation's high-level officers direct, control, and coordinate the corporation's activities” or “the nerve center.” Hertz Corp. v. Friend, 559 U.S. 77, 78 (2010). The Court added that a corporation's “nerve center” usually will be the corporation's headquarters. Id. However, the nerve center is the headquarters provided that the headquarters is “the actual center of direction, control and coordination… and not simply an office where the corporation holds its board meetings.” Id. The Court further clarifies that jurisdictional manipulation will not be tolerated. The Court stated that if the alleged nerve center turns out to be “nothing more than a mail drop box, a bare office with a computer, or the location of an annual executive retreat - the court should instead take as the ‘nerve center' the place of actual direction, control, and coordination, in the absence of such manipulation.” Id.

         The burden for establishing diversity of jurisdiction remains with the Defendant. Hertz., at 96. “Competent proof” must be provided to support their allegations. “[T]he mere filling of a form” for example, “the Securities and Exchange Commission's Form 10-K listing a corporation's principal executive offices without more would not be sufficient proof to establish a corporation's nerve center.” Id. at 97.


         In this case, it is undisputed that Plaintiff is a citizen of California and that VITAS Healthcare of California is incorporated in Delaware. But the parties disagree on where Defendant's principal place of business is located. Plaintiff argues that Defendant's principal place of business is in California - not where its headquarters is located. (Mot. 1:9-12). Defendant claims that its principal place of business is the ...

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