Martinez v. AJM Packaging Corporation

[7] 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 37-02023-00055505-CU-WT-CTL 11 SAMANTHA MARTINEZ, Case No. 24-cv-00268-BAS-DTF 12 Plaintiff, ORDER GRANTING IN PART AND 13 v. DENYING IN PART MOTION TO REMAND (ECF No. 8) 14 AJM PACKAGING CORPORATION; ARMANDO MEDINA, [15] Defendants. [17] 18 Plaintiff Samantha Martinez filed this employment discrimination action against 19 Defendants AJM Packaging Corporation and Armando Medina in San Diego County 20 Superior Court. AJM removed the case by invoking diversity jurisdiction. 21 Plaintiff moves to remand, highlighting that both she and Medina are citizens of 22 California, which destroys diversity jurisdiction. In response, AJM contends Medina was 23 fraudulently joined, which would allow the Court to ignore his citizenship when 24 determining complete diversity. 25 AJM’s reliance on fraudulent joinder comes with a heavy burden, and the company 26 comes up short. It fails to demonstrate there is no possibility that Plaintiff could prevail 27 against Medina. Hence, for the following reasons, the Court concludes it lacks subject 28 matter jurisdiction and remands this action. 1 I. BACKGROUND 2 AJM operates a manufacturing facility in El Cajon, California. (Miele Decl. ¶ 3, 3 ECF No. 1-3.) Plaintiff is a San Diego resident who worked for AJM as a Human 4 Resources Generalist. (Compl. ¶¶ 5, 11, ECF No. 1-2.) Medina is likewise a San Diego 5 resident who worked for AJM. (Id. ¶¶ 8, 12.) AJM is a Michigan corporation with its 6 principal place of business in Detroit. (Miele Decl. ¶ 3.) 7 In late 2022, Plaintiff alleges that Medina approached her on the warehouse floor 8 during business hours. (Compl. ¶ 12.) “He placed himself physically in front of and very 9 close to Plaintiff and began commenting on her appearance, telling her she was pretty and 10 commenting on her ‘beautiful eyes.’” (Id.) Plaintiff retracted, believing “Medina was 11 going to try to kiss her on the face,” and she moved away from Medina. (Id.) Afterwards, 12 on the same day, “Medina invited Plaintiff to go paintballing with him alone.” (Id. ¶ 13.) 13 When Plaintiff said no, “Medina then asked her to take a trip to Guadalajara together, ‘to 14 see what would happen next.’” (Id.) Several days later, “Medina again invited Plaintiff to 15 go paintballing with him alone, despite Plaintiff denying his first invitation.” (Id. ¶ 14.) 16 Plaintiff alleges she “was shocked and offended” by Medina’s overt advances and reported 17 them to management as sexual harassment. (Id. ¶¶ 12–15.) AJM then allegedly placed 18 Plaintiff on administrative leave before terminating her a short time later. (Id. ¶¶ 16–20.) 19 Based on these allegations, Plaintiff brings one claim for sexual harassment against 20 Medina and AJM. (Compl. ¶¶ 21–28.) She brings eight other claims against AJM 21 stemming from the company’s alleged retaliation, failure to prevent harassment, and 22 wrongful termination. (Id. ¶¶ 29–80.) AJM timely removed the case, alleging diversity 23 jurisdiction exists because Plaintiff is a citizen of California, AJM is a citizen of Michigan, 24 and the amount in controversy exceeds $75,000. (Notice of Removal ¶ 6, ECF No. 1.) The 25 Notice of Removal does not mention Medina’s citizenship. (See id.) 26 Plaintiff moves to remand based on a lack of complete diversity. (ECF No. 8.) The 27 Motion is fully briefed, and the Court finds this matter suitable for determination on the 28 papers submitted and without oral argument. See Civ. L.R. 7.1(d)(1). 1 II. LEGAL STANDARD 2 “A motion to remand is the proper procedure for challenging removal.” Moore3 Thomas v. Alaska Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir. 2009) (citing 28 U.S.C. § 4 1447(c)). A defendant may remove “any civil action brought in a State court of which the 5 district courts . . . have original jurisdiction.” 28 U.S.C. § 1441 (a). The propriety of 6 removal turns on whether the case could have originally been filed in federal court. 7 Chicago v. Int’l Coll. of Surgeons, 522 U.S. 156, 163 (1997). “The removal statute 8 is strictly construed against removal jurisdiction, and the burden of establishing federal 9 jurisdiction falls to the party invoking the statute.” Acad. of Country Music v. Cont’l Cas. 10 Co., 991 F.3d 1059 , 1061 (9th Cir. 2021) (citation omitted). 11 III. ANALYSIS 12 A. Diversity Jurisdiction 13 Plaintiff contends the Court must remand this action because there is no diversity 14 jurisdiction. (Mot. 3:23–4:26.) “Diversity removal requires complete diversity, meaning 15 that each plaintiff must be of a different citizenship from each defendant.” Grancare, LLC 16 v. Thrower ex rel. Mills, 889 F.3d 543, 548 (9th Cir. 2018) (citing Caterpillar Inc. v. Lewis, [17] 519 U.S. 61, 68 (1996)). 18 Given this requirement, AJM had the burden to allege “the actual citizenship of the 19 relevant parties” when removing this case. Kanter v. Warner-Lambert Co., 265 F.3d 853 , 20 857 (9th Cir. 2001). A corporation like AJM is a citizen of its state of incorporation and 21 where its principal place of business is located. Breitman v. May Co. Cal., 37 F.3d 562 , 22 564 (9th Cir. 1994). The company demonstrates it is only a citizen of Michigan. (Miele 23 Decl. ¶ 3.) 24 The other two parties, Plaintiff and Medina, are citizens of their domicile. Kanter, [25] 265 F.3d at 857 . Although residency alone is insufficient, the Complaint suggests these 26 individuals are citizens of California. (See Compl. ¶¶ 5, 8.) AJM’s Notice of Removal 27 alleges Plaintiff is a citizen of California, but there is no corresponding allegation that 28 establishes Medina’s citizenship. (Notice of Removal ¶ 6.) Hence, unless the Court can 1 ignore Medina’s citizenship, AJM fails to meet its burden of establishing complete 2 diversity, making remand appropriate. See Grancare, 889 F.3d at 548 ; Kanter, 265 F.3d 3 at 857. 4 B. Fraudulent Joinder 5 AJM seeks to escape remand by invoking the fraudulent joinder doctrine. Under 6 this doctrine, if a non-diverse defendant is fraudulently joined, then the defendant’s 7 presence is ignored when determining diversity. Weeping Hollow Ave. Tr. v. Spencer, 831 8 F.3d 1110 , 1113 (9th Cir. 2016). “There are two ways to establish fraudulent joinder: 9 ‘(1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to 10 establish a cause of action against the non-diverse party in state court.’” Grancare, 889 11 F.3d at 548 (quoting Hunter v. Philip Morris USA, 582 F.3d 1039, 1044 (9th Cir. 2009)). 12 AJM relies on the second possibility here. (Opp’n 3:1–14, ECF No. 11.) 13 “Fraudulent joinder is established the second way if a defendant shows that an 14 ‘individual[ ] joined in the action cannot be liable on any theory.’” Grancare, 889 F.3d at 15 548 (alteration in original) (quoting Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1318 (9th 16 Cir. 1998)). However, “if there is a possibility that a state court would find that the 17 complaint states a cause of action against any of the resident defendants, the federal court 18 must find that the joinder was proper and remand the case to the state court.” Id. (quoting 19 Hunter, 582 F.3d at 1046 ). 20 This test is challenging to pass. The defendant “bears a ‘heavy burden’ since there 21 is a ‘general presumption against [finding] fraudulent joinder.’” Grancare, 889 F.3d at 22 548 (quoting Hunter, 582 F.3d at 1046 ). Examples from the Ninth Circuit are illustrative: 23 • Defendants met their heavy burden by demonstrating the statute of limitations 24 barred the claims against the non-diverse defendants. Hamilton Materials, Inc. 25 v. Dow Chem. Corp., 494 F.3d 1203, 1206 (9th Cir. 2007); Ritchey, 139 F.3d at 26 1320. 27 • Similarly, defendants satisfied this test by presenting extraordinarily strong 28 evidence or arguments that the plaintiffs’ claims could not prevail, including that 1 the defendant’s conduct was privileged and that a sham defendant was not a party 2 to the contract at issue. United Comput. Sys., Inc. v. AT&T Corp., 298 F.3d 756 , 3 761 (9th Cir. 2002); McCabe v. Gen. Foods Corp., 811 F.2d 1336, 1339 (9th Cir. 4 1987). 5 • By comparison, defendants did not meet their heavy burden where they failed to 6 preclude any possibility that the plaintiffs’ claims could prevail under state law, 7 even though there may be pleading deficiencies and not a clear path to success. 8 See Grancare, 889 F.3d at 550–52; Weeping Hollow Ave. Tr., 831 F.3d at 1114. 9 Beyond providing these examples, the Ninth Circuit has noted that “while the party seeking 10 removal is entitled to present additional facts that demonstrate that a defendant has been 11 fraudulently joined, in many cases, the complaint will be the most helpful guide in 12 determining whether a defendant has been fraudulently joined.” Grancare, 889 F.3d at 13 549 (citation omitted) (citing Ritchey, 139 F.3d at 1318 ). 14 Adopting this prism here, AJM must show there is no possibility that Plaintiff could 15 prevail on her sexual harassment claim against Medina. This claim arises under 16 California’s Fair Employment and Housing Act (“FEHA”). (Compl. ¶¶ 21–28.) “FEHA 17 expressly prohibits sexual harassment in the workplace.” Miller v. Dep’t of Corr., 36 Cal. 18 4th 446, 460 (2005). “Sexual harassment consists of any unwelcome sexual advances, 19 requests for sexual favors, or other verbal or physical conduct of a sexual nature.” Rieger 20 v. Arnold, 104 Cal. App. 4th 451, 459 (2002) (citing Fisher v. San Pedro Peninsula Hosp., [21] 214 Cal. App. 3d 590, 607 (1989)). It commonly arises in two contexts: “quid pro quo” 22 harassment and “hostile work environment” harassment. Beltran v. Hard Rock Hotel 23 Licensing, Inc., 97 Cal. App. 5th 865 , 878 (2023). Plaintiff’s allegations against Medina 24 involve the second context. (Compl. ¶ 25.) 25 To prevail on her claim, Plaintiff must prove the harassment was “severe or 26 pervasive.” Beltran, 97 Cal. App. 5th at 878. This requirement “means conduct that alters 27 the conditions of employment and creates a work environment that is hostile, intimidating, 28 offensive, oppressive, or abusive.” Id. at 879 (quoting Jud. Council of Cal. Jury Instruction 1 No. 2524). Determining whether the conduct satisfies this standard requires an 2 examination of all the circumstances, including “[t]he nature of the conduct,” the frequency 3 in which it occurred, and “[w]hether the conduct was physically threatening or 4 humiliating.” Id. As mentioned above, Plaintiff alleges Medina made several unwelcome 5 advances, including placing “himself physically in front of and very close to Plaintiff and 6 . . . commenting on her appearance, telling her she was pretty and commenting on her 7 ‘beautiful eyes’” and asking “her to take a trip to Guadalajara together, ‘to see what would 8 happen next.’” (Compl. ¶¶ 12–13.) 9 AJM fails to show Plaintiff has no possibility of prevailing on her sexual harassment 10 claim for several reasons. First, AJM applies the incorrect standard in its Opposition. The 11 company cites caselaw that is appropriate for a challenge under Rule 12(b)(6). (Opp’n 12 4:7–14, 5:28 (citing Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009); Bell Atl. Corp. v. 13 Twombly, 550 U.S. 544, 545 (2007)).) Although “the fraudulent joinder standard shares 14 some similarities with the analysis under Rule 12(b)(6),” the Ninth Circuit has dispelled 15 any notion that they are equivalent. Grancare, 889 F.3d at 549 . The Court of Appeals 16 explained: 17 A standard that equates fraudulent joinder with Rule 12(b)(6) conflates a jurisdictional inquiry with an adjudication on the merits. Because the purpose [18] of the fraudulent joinder doctrine is to allow a determination whether the 19 district court has subject matter jurisdiction, the standard is similar to the “wholly insubstantial and frivolous” standard for dismissing claims under [20] Rule 12(b)(1) for lack of federal question jurisdiction. The relative stringency 21 of the standard accords with the presumption against removal jurisdiction, under which we “strictly construe the removal statute,” and reject federal [22] jurisdiction “if there is any doubt as to the right of removal in the first 23 instance.” [24] Id. (citations omitted). Thus, AJM’s reliance on the Rule 12(b)(6) standard misses the 25 mark. 26 Second, AJM compounds this error by asking the Court to draw a variety of 27 inferences against Plaintiff. (See Opp’n 5:25 (“The fact that other employees would have 28 seen this potential kiss strongly indicates that Medina was not trying to kiss Plaintiff. 1 Instead, a much more reasonable interpretation is that Medina moved closer to Plaintiff 2 simply so she could hear him.”); id. 6:9–10 (arguing there is no basis to infer Medina’s 3 request for Plaintiff to go paintballing with him alone “was a romantic gesture” because 4 paintballing “is actually the opposite of romantic: it is a simulated gunfight often played in 5 large teams, outdoors, and in the dirt”).) These arguments flunk the test under Rule 6 12(b)(6), let alone the more stringent inquiry required for fraudulent joinder. See 7 Grancare, 889 F.3d at 549 ; see also, e.g., In re Roundup Prod. Liab. Litig., 396 F. Supp. 8 3d 893, 896 (N.D. Cal. 2019) (explaining disputed questions of fact and ambiguities are 9 resolved in favor of the plaintiff when determining fraudulent joinder). 10 Third, much of the authority AJM cites to show Medina’s harassment is not 11 actionable is outdated. As Plaintiff highlights, the law changed in 2019. “Prior to 2019, 12 [the requirement to show the harassment was severe or pervasive] was quite a high bar for 13 plaintiffs to clear, even in the context of a motion for summary judgment.” Beltran, 97 14 Cal. App. 5th at 878. Then, in 2019, the California Legislature made clear that “[a] single 15 incident of harassing conduct is sufficient to create a triable issue regarding the existence 16 of a hostile work environment if the harassing conduct has unreasonably interfered with 17 the plaintiff’s work performance or created an intimidating, hostile, or offensive work 18 environment.” Id. (quoting Cal. Gov’t Code § 12923(b)). That same law “clarified that a 19 hostile work environment exists ‘when the harassing conduct sufficiently offends, 20 humiliates, distresses, or intrudes upon its victim, so as to disrupt the victim’s emotional 21 tranquility in the workplace, affect the victim’s ability to perform the job as usual, or 22 otherwise interfere with and undermine the victim’s personal sense of well-being.’” Id. 23 (quoting Cal. Gov’t Code § 12923(a)). Hence, AJM’s reliance on older California cases 24 and nonbinding federal authority is unpersuasive. Further, given Plaintiff’s allegations 25 above and the controlling law, there is a possibility that she will prevail on her sexual 26 harassment claim against Medina. [28] 1 In sum, AJM does not meet its “heavy burden” to show Medina was fraudulently 2 joined. See Grancare, 889 F.3d at 548 . Consequently, the Court finds it lacks subject 3 jurisdiction over this case and grants Plaintiff’s request to remand this action. 4 C. Attorneys’ Fees 5 As part of her request for remand, Plaintiff asks the Court to award attorneys’ fees 6 and costs under 28 U.S.C. § 1447 (c). (Mot. 8:2–11; Reply 7:6–8:13, ECF No. 12.) “Absent 7 unusual circumstances, a court may award costs and attorney’s fees under § 1447(c) only 8 where the removing party lacked an objectively reasonable basis for seeking removal.” 9 Grancare, 889 F.3d at 552 . “But removal is not objectively unreasonable solely because 10 the removing party’s arguments lack merit, or else attorney’s fees would always be 11 awarded whenever remand is granted.” Lussier v. Dollar Tree Stores, Inc., 518 F.3d 1062 , 12 1065 (9th Cir. 2008). 13 Although AJM’s fraudulent joinder position is not persuasive, the Court is 14 unconvinced that AJM lacked an objectively reasonable basis for seeking removal. Indeed, 15 Plaintiff recognizes that she could have included more detailed allegations about Medina’s 16 alleged sexual harassment to foreclose Defendant’s attempt to demonstrate Medina is a 17 sham defendant. (See Mot. 6:23–7:10; Reply 5:6–20.) Ultimately, the Court exercises its 18 discretion to deny Plaintiff’s request for fees and costs. Cf. Cortez v. Target Corp., No. 19 CV 23-6284-JFW(MARX), 2023 WL 6516452 , at *4 (C.D. Cal. Oct. 4, 2023) (denying 20 request for fees in similar circumstances). 21 // 22 // 23 // 24 // 25 // 26 // 27 // 28 // 1 |}IV. CONCLUSION 2 For the foregoing reasons, the Court concludes remand is appropriate, but denies 3 || Plaintiff's request for attorneys’ fees and costs. Consequently, the Court GRANTS IN 4 ||PART and DENIES IN PART Plaintiffs’ Motion to Remand. (ECF No. 8.) The Court 5 || REMANDS this action to the San Diego County Superior Court for lack of subject matter 6 ||jurisdiction. See 28 U.S.C. § 1447 (c) (“If at any time before final judgment it appears that 7 || the district court lacks subject matter jurisdiction, the case shall be remanded.”). 8 IT IS SO ORDERED. [9] 10 || DATED: July 2, 2024 Lin 4 (Bashan. 6 11 United States District Judge [28] Qo.