United States District Court, C.D. California
Present: The Honorable Fernando M. Olguin, United States
District Judge
CIVIL MINUTES - GENERAL
Proceedings:
(In Chambers) Order Remanding Action
On July
18, 2019, Kenneth Smith (“plaintiff”) filed a
Complaint in the Riverside County Superior Court against
EthosEnergy (“Ethos”), EthosEnergy (USA), LLC
(“Ethos USA”), Wood Group USA, Inc.
(“Wood”) (together with Ethos and Ethos USA,
“entity defendants”), and Tommy Hinton
(“Hinton”) (collectively,
“defendants”). (See Dkt. 1, Notice of
Removal (“NOR”) at ¶ 1; Dkt. 1-1,
Complaint). Among other claims, plaintiff asserted claims for
hostile work environment and harassment in violation of the
California Fair Employment and Housing Act
(“FEHA”), Cal. Gov't Code §§ 12900,
et seq., and intentional infliction of emotional
distress against Hinton. (See Dkt. 1-1, Complaint at
¶¶ 28-35, 89-93). On August 28, 2019, the entity
defendants removed the action on diversity jurisdiction
grounds pursuant to 28 U.S.C. §§ 1332 and 1441.
(See Dkt. 1, NOR at ¶ 4). Having reviewed the
pleadings, the court hereby remands this action to state
court for lack of subject matter jurisdiction. See
28 U.S.C. § 1447(c).
LEGAL
STANDARD
In
general, “any civil action brought in a State court of
which the district courts of the United States have original
jurisdiction, may be removed by the defendant or the
defendants, to the district court[.]” 28 U.S.C. §
1441(a). A removing defendant bears the burden of
establishing that removal is proper. See Gaus v. Miles,
Inc., 980 F.2d 564, 566 (9th Cir. 1992) (per
curiam) (“The “strong presumption”
against removal jurisdiction means that the defendant always
has the burden of establishing that removal is
proper.”) (internal quotation marks omitted);
Abrego Abrego v. The Dow Chemical Co., 443 F.3d 676,
684 (9th Cir. 2006) (per curiam) (noting the
“longstanding, near-canonical rule that the burden on
removal rests with the removing defendant”). Moreover,
if there is any doubt regarding the existence of subject
matter jurisdiction, the court must resolve those doubts in
favor of remanding the action to state court.[1] See
Gaus, 980 F.2d at 566 (“Federal jurisdiction must
be rejected if there is any doubt as to the right of removal
in the first instance.”).
Indeed,
“[i]f at any time before final judgment it appears that
the district court lacks subject matter jurisdiction, the
case shall be remanded.” 28 U.S.C. § 1447(c);
see Kelton Arms Condominium Owners Ass'n, Inc. v.
Homestead Ins. Co., 346 F.3d 1190, 1192 (9th Cir. 2003)
(“Subject matter jurisdiction may not be waived, and,
indeed, we have held that the district court must remand if
it lacks jurisdiction.”); Washington v. United
Parcel Service, Inc., 2009 WL 1519894, *1 (C.D. Cal.
2009) (a district court may remand an action where the court
finds that it lacks subject matter jurisdiction either by
motion or sua sponte).
DISCUSSION
The
court's review of the NOR and the attached state court
Complaint makes clear that this court does not have subject
matter jurisdiction over the instant matter. In other words,
plaintiff could not have originally brought this action in
federal court, as plaintiff does not competently allege facts
supplying diversity jurisdiction.[2] Therefore, removal was
improper. See 28 U.S.C. § 1441(a);
Caterpillar, Inc. v. Williams, 482 U.S. 386, 392,
107 S.Ct. 2425, 2429 (1987) (“Only state-court actions
that originally could have been filed in federal court may be
removed to federal court by the defendant.”) (footnote
omitted).
When
federal subject matter jurisdiction is predicated on
diversity of citizenship, see 28 U.S.C. 1332(a),
complete diversity must exist between the opposing parties.
See Caterpillar Inc. v. Lewis, 519 U.S. 61, 68, 117
S.Ct. 467, 472 (1996) (stating that the diversity
jurisdiction statute “applies only to cases in which
the citizenship of each plaintiff is diverse from the
citizenship of each defendant”). Plaintiff is a citizen
of California. (See Dkt. 1, NOR at ¶ 5). The
entity defendants do not appear to be citizens of California.
(See id. at ¶¶ 6-7). Hinton, however,
appears to be a citizen of California. (See id. at
¶ 8) (not setting forth Hinton's citizenship).
Defendants assert that Hinton is a sham defendant, and
therefore, his citizenship should be disregarded for purposes
of diversity jurisdiction. (See id. ¶ 8-18).
“If
a plaintiff fails to state a cause of action against a
resident defendant, and the failure is obvious according to
the well-settled rules of the state, the joinder is
fraudulent and the defendant's presence in the lawsuit is
ignored for purposes of determining diversity.”
United Computer Systems, Inc. v. AT & T Corp.,
298 F.3d 756, 761 (9th Cir. 2002) (internal quotation marks
omitted). “It is only where the plaintiff has not, in
fact, a cause of action against the resident defendant, and
has no reasonable ground for supposing he has, and yet joins
him in order to evade the jurisdiction of the federal court,
that the joinder can be said to be fraudulent, entitling the
real defendant to a removal.” Albi v. Street &
Smith Publications, Inc., et al., 140 F.2d 310, 312 (9th
Cir. 1944) (footnote omitted); see Allen v. Boeing
Co., 784 F.3d 625, 634 (9th Cir. 2015) (“[J]oinder
is fraudulent when a plaintiff's failure to state a cause
of action against the resident defendant is obvious according
to the applicable state law.”). A defendant must show
by “clear and convincing evidence” that the
plaintiff does not have a colorable claim against the alleged
sham defendant. See Hamilton Materials Inc. v. Dow
Chemical Corp., 494 F.3d 1203, 1206 (9th Cir. 2007)
(“Fraudulent joinder must be proven by clear and
convincing evidence.”); see also Mireles v. Wells
Fargo Bank, N.A., 845 F.Supp.2d 1034, 1063 (C.D. Cal.
2012) (“Demonstrating fraudulent joinder”
requires showing that “after all disputed questions of
fact and all ambiguities . . . are resolved in the
plaintiff's favor, the plaintiff could not possibly
recover against the party whose joinder is
questioned.”) (emphasis in original); Vasquez v.
Bank of Am., N.A., 2015 WL 794545, *4 (C.D. Cal. 2015)
(finding defendants had not met the “heavy burden of
persuasion to show to a near certainty that joinder was
fraudulent” because plaintiff could amend complaint to
state at least one valid claim) (internal quotation marks
omitted). Indeed, “[a] defendant invoking federal court
diversity jurisdiction on the basis of fraudulent joinder
bears a heavy burden since there is a general presumption
against [finding] fraudulent joinder.” Grancare,
LLC v. Thrower by & through Mills, 889 F.3d 543, 548
(9th Cir. 2018) (internal quotation marks omitted).
The
court finds that defendants have failed to meet their
“heavy burden” of demonstrating fraudulent
joinder by clear and convincing evidence. See
Grancare, 889 F.3d at 548. Defendants contend that
plaintiff's discrimination, harassment and intentional
infliction claims against Hinton are not viable.
(See Dkt. 1, NOR at ¶¶ 11). For instance,
defendants contend that Hinton's comments to plaintiff
that he was “moving like a fucking old lady” and
he was a “fucking idiot” are insufficient to
support a claim because plaintiff did not report his alleged
injury until after the comments were made. (See id.
at ¶ 15). However, defendants concede that plaintiff
alleges his advised Hinton of an injury via text message
weeks prior to the comments, although defendants contend such
allegations are insufficient to state a claim. (See i d
.). Defendants also contend that plaintiff's
allegations in support of his intentional infliction claim do
not meet the high bar required to state such a claim because
Hinton's comments were not sufficiently outrageous.
(Id. at ¶ 17).
However,
defendants attack on plaintiff's Complaint is an
insufficient ground upon which to disregard the harassment
and intentional infliction claims against Hinton for purposes
of diversity jurisdiction. See Padilla v. AT & T
Corp., 697 F.Supp.2d 1156, 1159 (C.D. Cal. 2009)
(“[A] defendant seeking removal based on an 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.”); Munoz v. Laboratory
Corporation of America, et al, 2015 WL 4507104, *1 (C.D.
Cal. 2015) (“Even where presently deficiently
pled, where Plaintiffs may amend [the] claim to cure any
arguable defects, it may not be said that it is impossible
for them to state a claim against [the defendant].”)
(emphasis in original); Gebran v. Wells Fargo Bank,
N.A., 2016 WL 7471292, *5 (C.D. Cal. 2016) (explaining
that a court must look at whether plaintiff has a cause of
action against an alleged defendant “rather than
inquire whether [the] defendant[] could propound defenses to
an otherwise valid cause of action”). At this juncture,
it cannot be said that the state court would find the claims
to be inadequately pled or that plaintiff would be unable to
amend the Complaint to the state court's satisfaction.
See Hunter v. Philip Morris USA, 582 F.3d 1039, 1046
(9th Cir. 2009) (“[I]f there is a possibility that a
state court would find that the complaint states a cause of
action against any of the resident defendants, the federal
court must find that the joinder was proper and remand the
case to the state court.”); Martinez v .
Michaels, 2015 WL 4337059, *9 (C.D. Cal. 2015)
(“[C]ourts ordinarily find IIED claims based on
workplace harassment or discrimination viable even where
asserted against individual supervisors.”); Rangel
v. Bridgestone Retail Operations, LLC, 200 F.Supp.3d
1024, 1034 (C.D. Cal. 2016) (remanding action because
although “Plaintiff's operative complaint [did] not
adequately allege a cause of action against [the] Individual
Defendant . . . for IIED, Defendants [did] not m[e]et their
burden of establishing that Plaintiff [was] incapable of
amending his complaint to state a valid IIED claim”).
As such, defendants cannot show that it is “obvious
according to the well-settled [law of California]” that
plaintiff cannot state a claim against Hinton. See United
Comput. Sys., Inc., 298 F.3d at 761; Allen, 784
F.3d at 634 (“[J]oinder is fraudulent when a
plaintiff's failure to state a cause of action against
the resident defendant is obvious according to the applicable
state law.”).
In sum,
given that any doubt regarding the existence of subject
matter jurisdiction must be resolved in favor of remanding
the action to state court, see Gaus, 980 F.2d at
566, the court is not persuaded, under the circumstances
here, that defendants have met their heavy burden of showing
that Hinton was fraudulently joined. Because Hinton appears
to be a citizen of California, there is no basis for
diversity jurisdiction, and the court lacks subject matter
jurisdiction over this matter.
This
order is not intended . Nor is it intended to be included in
or submitted to any online ...