Jamie Morales v. Gruma Corporation et al

Filing 29

MINUTES (IN CHAMBERS) by Judge Christina A. Snyder: The Court hereby GRANTS Plaintiff's Motion to Remand 15 . The Court DENIES Plaintiff's request for attorney's fees. Furthermore, Defendant's Motion to Dismiss or in the Alternat ive, to Compel Arbitration and to Stay Action 8 is denied as moot. Case Remanded to Los Angeles Superior Court, Case No. BC519594. ( MD JS-6. Case Terminated ) Court Reporter: Not Present. (Attachments: # 1 CV-103 Remand Transmittal Letter) (gk)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

JS-6

Case No.

CV 13-7341 (CAS) (FFMx)

Title

JAMIE MORALES V. GRUMA CORPORATION, ET AL.

Present: The Honorable

Date

November 12, 2013

CHRISTINA A. SNYDER

Catherine Jeang
Deputy Clerk

Not Present
Court Reporter / Recorder

N/A
Tape No.

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants

Not Present

Not Present

Proceedings:

(IN CHAMBERS): PLAINTIFF’S MOTION TO REMAND (Dkt.
#15, filed October 20, 2013)
DEFENDANT GRUMA CORPORATION D/B/A MISSION
FOODS’ MOTION TO DISMISS, OR IN THE ALTERNATIVE,
TO COMPEL ARBITRATION AND TO STAY ACTION (Dkt. 8,
filed October 10, 2013)

The Court finds this motion appropriate for decision without oral argument. Fed.
R. Civ. P. 78; Local Rule 7-15. Accordingly, the hearing date of November 18, 2013, is
vacated, and the matter is hereby taken under submission.
I.

INTRODUCTION

Plaintiff Jamie Morales filed this action in Los Angeles County Superior Court on
August 27, 2013, against defendants Gruma Corporation, Inc. (“Gruma”), Fernando
Ynez, Claudia Bolanos, and Does 1-50. Dkt. #1. Plaintiff asserts California law claims
for disability discrimination, unlawful employment practices, and defamation. Compl. ¶¶
27-81. Defendants removed this action to this Court on October 3, 2013, on the grounds
that this Court has jurisdiction based on diversity of citizenship, 28 U.S.C. § 1332. Not.
Removal 3. Defendants contended in their notice of removal that defendant Gruma was
incorporated in Nevada, and has its principal place of business in Texas. Id. at 3-4.
Defendants further contended that the alleged California citizenship of defendants Ynez
and Bolanos should be disregarded because these defendants were fraudulently joined.
Id. at 4-6.

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

JS-6

Case No.

CV 13-7341 (CAS) (FFMx)

November 12, 2013

Title

JAMIE MORALES V. GRUMA CORPORATION, ET AL.

Plaintiff filed a motion to remand this action to Los Angeles County Superior
Court on October 20, 2013. Dkt #20. Gruma filed an opposition on October 28, 2013.
Dkt. #23. Plaintiff replied on November 5, 2013. Dkt. #27. After considering the
parties’ arguments, the Court finds and concludes as follows.
II.

BACKGROUND

Plaintiff is a resident of California. Compl. ¶ 1. Plaintiff does not allege Gruma’s
state of incorporation or principal place of business. Plaintiff alleges that defendants
Bolanos and Ynez are residents of California, and are officers of Gruma. Id. ¶¶ 3-4.
Plaintiff alleges that he was hired by Gruma in its receiving department on June 13,
2006. Id. ¶ 6. Plaintiff alleges that, on October 10, 2012, he suffered an injury while at
work, which resulted in a disability. Id. ¶ 9. He missed two days of work as a result of
the injury, and then returned to work, wearing braces provided by a physician. Id. ¶ 10.
Plaintiff alleges that his physician provided defendants with a “modified/restricted work
note” on November 15, 2012, and that defendants changed plaintiff’s shift after receiving
the note. Id. ¶ 12. Plaintiff further alleges that he notified defendants in early December
2012 that he would be undergoing shoulder surgery in January of 2013. Id. ¶ 13.
Plaintiff alleges that he also attended regular physical therapy throughout November of
2012. Id. ¶ 14.
Plaintiff alleges that he worked his shift on December 22, 2012, was not scheduled
to work on December 23, 2012, and believed that defendant Ynez, plaintiff’s supervisor,
excused him from work on December 24, 2012. Id. ¶¶ 15-17. Plaintiff alleges that he
called his workplace on December 26, 2012, and stated that he was experiencing pain in
his shoulder. Id. ¶19. According to plaintiff, defendant Ynez told him to take the day
off. Id. Plaintiff alleges that he arrived at work on December 27, 2012, and was told by
Ynez not to clock in, but instead to report to the human resources office. Id. ¶ 20.
Plaintiff alleges that he believed he was meeting with human resources personnel to
prepare documentation for his impending leave to obtain shoulder surgery. Id. ¶ 21.
Plaintiff alleges that defendants Ynez and Bolanos informed him at this meeting that he
was being terminated for “3 consecutive days no call no show” with regard to the dates
December 24, 26, and 27, 2012. Id. ¶ 22.

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

JS-6

Case No.

CV 13-7341 (CAS) (FFMx)

November 12, 2013

Title

JAMIE MORALES V. GRUMA CORPORATION, ET AL.

Plaintiff alleges that he was forced to sign documents that he “voluntarily
resigned” in order to receive his final paycheck and vacation pay. Id. ¶ 23. According to
plaintiff, he had 74.82 unpaid vacation hours at the time of his termination. Id. ¶ 24.
Plaintiff alleges that he was required to return to his workplace on January 4, 2013 to sign
these papers and receive his final checks. Id. ¶ 25.
Based on these events, plaintiff asserts six claims for relief against defendants
Gruma and Does 1-50, but not against defendants Ynez and Bolanos. These claims are
for disability discrimination in violation of Cal. Gov. Code § 12940, et seq., failure to
accommodate a disability, failure to engage in an interactive process regarding disability
accommodations, in violation of Cal. Gov. Code § 12940, et seq., unlawful retaliation,
wrongful termination, in violation of Cal. Gov. Code §§ 12940, 12945, et seq., and the
California Constitution, and failure to pay wages, in violation of Cal. Labor Code §§ 201,
203. Id. ¶¶ 27-60, 77-81.1
Plaintiff also asserts a single claim for defamation against all defendants, including
Ynez and Bolanos. Id. ¶¶ 61-76. The alleged basis for this claim is that defendants
caused the publication of defamatory statements, including “expressed and implied
accusations that [p]laintiff violated company policy and/or the law, engaged in
misconduct, and expressly and impliedly accusing [p]laintiff of potential criminal
activity.” Id. ¶ 63; see also id. ¶ 66. Plaintiff alleges that, while the precise dates of
publication of these statements are not known, he believes that such publication began
“on or before October 12, 2012, and continued at least through the present,” and that the
purpose of these statements was to justify plaintiff’s termination. Id. ¶ 63. Plaintiff
alleges that these statements are false, and are causing ongoing harm to his reputation.
Id. ¶¶ 67, 69.
III.

LEGAL STANDARD

Removal is proper where the federal courts have original jurisdiction over an
action brought in state court. 28 U.S.C. § 1441(a). Pursuant to 28 U.S.C. § 1332(a), the

1

The headings for each of these claims explicitly state that they are asserted
against Gruma and Does 1-50. E.g., Compl. at 8:20-22.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

JS-6

Case No.

CV 13-7341 (CAS) (FFMx)

November 12, 2013

Title

JAMIE MORALES V. GRUMA CORPORATION, ET AL.

federal courts have original jurisdiction over state law actions only where the amount in
controversy exceeds $75,000 and the action is between parties of diverse citizenship.
An exception to the requirement of complete diversity exists where it appears that
a plaintiff has fraudulently joined a “sham” non-diverse defendant. Judge William W.
Schwarzer et al., California Practice Guide: Federal Civil Procedure Before Trial ¶ 2:670
(The Rutter Group 2005). If a court finds fraudulent joinder of a “sham” defendant, it
may disregard the citizenship of the “sham” defendant for removal purposes. Id.
“Fraudulent joinder” is a term of art, and requires no proof of scienter on the part of the
plaintiff. Id. ¶ 2:671. Instead, a non-diverse defendant is said to be fraudulently joined
where “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).
Courts also recognize a “strong presumption” against removal jurisdiction; the
burden is on the removing defendant to demonstrate that removal is proper. See, e.g.,
Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). Similarly, “courts generally
employ a presumption against fraudulent joinder.” Diaz v. Allstate Ins. Group, 185
F.R.D. 581, 586 (C.D. Cal. 1998) (citations omitted).
Accordingly, “[t]he burden of proving a fraudulent joinder is a heavy one. The
removing party must prove that there is absolutely no possibility that the plaintiff will be
able to establish a cause of action against the in-state defendant in state court . . .” Green
v. Amerada Hess Corp., 707 F.2d 201, 205 (5th Cir. 1983) (citations omitted); see also
Dodson v. Spiliada Mar. Corp., 951 F.2d 40, 42 (5th Cir. 1992) (“We do not decide
whether the plaintiff will actually or even probably prevail on the merits, but look only
for a possibility that he may do so. If that possibility exists, then a good faith assertion of
such an expectancy in a state court is not a sham . . . and is not fraudulent in fact or in
law.”) (citations and internal quotation marks omitted); Good v. Prudential Ins. Co. of
Am., 5 F. Supp. 2d 804, 807 (N.D. Cal. 1998) (“[T]he defendant must demonstrate that
there is no possibility that the plaintiff will be able to establish a cause of action in state
court against the alleged sham defendant.”) (citing Dodson 951 F.2d at 42). In
accordance with this high standard, courts must resolve all issues of fact and all
ambiguities in the law in favor of the non-removing party when deciding whether
fraudulent joinder exists in a given case. Dodson, 951 F.2d at 42. Further, the court may
consider “affidavits or other evidence (presented by either party) on the issue of whether
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

JS-6

Case No.

CV 13-7341 (CAS) (FFMx)

November 12, 2013

Title

JAMIE MORALES V. GRUMA CORPORATION, ET AL.

a particular defendant’s joinder is sham or ‘fraudulent.’” Schwarzer ¶ 2:681 (citing W.
Am. Corp. v. Vaughan Basset Furniture, 765 F.2d 932, 936 n.6 (9th Cir. 1985)).
IV.

DISCUSSION
A.

Plaintiff’s Motion to Remand

Plaintiff contends that he has stated a claim for defamation against defendants
Ynez and Bolanos, who are citizens of California. Mot. Remand 4-6. Therefore, plaintiff
argues, Ynez and Bolanos were not fraudulently joined, and complete diversity of
citizenship does not exist between the parties. Id. Plaintiff argues that this action should
accordingly be remanded for lack of subject matter jurisdiction. Id.
The Court concludes that this action should be remanded because plaintiff’s
defamation claim is sufficient to defeat an allegation of fraudulent joinder.2 A claim for
defamation consists of a publication of a false, defamatory, and unprivileged statement
that has a natural tendency to injure or that causes special damage. E.g., Hernandez v.
First Student, Inc., 2010 WL 5313293, at *3 (C.D. Cal. Dec. 16, 2010); Smith v.
Maldonado, 72 Cal. App. 4th 637, 645 (1999); 5 Witkin, Summ. Cal. Law, Torts § 529
(10th ed. 2005).
In Umamoto v. Insphere Insurance Solutions, Inc., 2013 WL 2084475, at *4-5
(N.D. Cal. May 14, 2013), the court granted the plaintiffs’ motion to remand, finding that
a non-diverse defendant was not fraudulently joined. In that case, the plaintiffs, both
California citizens, filed an action in Santa Clara County Superior Court, asserting claims
for defamation, wrongful termination, and related torts. Id. at *1-2. The substance of the
defamation claim was that the plaintiff’s former employer, Insphere, falsely stated that it
was terminating one of the plaintiffs, Shirley Umamoto, “due to performance.” Id. at *2.

2

The Court expresses no view on whether plaintiff’s defamation claim is sufficient
to withstand a motion to dismiss for failure to state a claim pursuant to Federal Rule of
Civil Procedure 12(b)(6). See Davis v. Prentiss Properties Ltd., Inc., 66 F. Supp. 2d
1112, 1114 (C.D. Cal. 1999) (“If a court were to apply the standard of Rule 12(b)(6) to
the diversity-defeating claim, the court would be ignoring the fact that it has no
jurisdiction over that claim.”).
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

JS-6

Case No.

CV 13-7341 (CAS) (FFMx)

November 12, 2013

Title

JAMIE MORALES V. GRUMA CORPORATION, ET AL.

Umamoto alleged that she was then forced to republish this statement in applications and
interviews for new employment. Id. at *4. Plaintiffs asserted this defamation claim
against Insphere as well as Katherine Feeny, an Insphere manager. Id. at *4. The
defendants removed the action to the federal district court, arguing that Katherine Feeny,
a California citizen, was a “sham” defendant, and that federal subject matter jurisdiction
existed based on diversity of citizenship. Id. at *3. While the court found that plaintiff’s
defamation claim against Feeny was likely to fail because the complaint alleged that
Insphere, and not Feeny, made the statement regarding Umamoto’s termination, the court
nonetheless concluded that remand was warranted because there was a “non-fanciful
possibility that plaintiff can state a claim [for defamation].” Id. at *5 (quoting Macey v.
Allstate Property and Cas. Ins. Co., 220 F. Supp. 2d 1116, 1117 (N.D. Cal. 2002)). The
court went on to say that it was “not persuaded that [p]laintiffs could not allege facts
showing that Feeny was the originator of . . . the statement.” Id.
This case is analogous to Umamoto. Here, plaintiff alleges that all defendants,
including Ynez and Bolanos, caused the publication of defamatory statements, including
“expressed and implied accusations that [p]laintiff violated company policy and/or the
law, engaged in misconduct, and expressly and impliedly accusing [p]laintiff of potential
criminal activity.” Compl. ¶ 63; see also id. ¶ 66. Plaintiff alleges that, while the precise
dates of publication of these statements are not known, he believes that such publication
began “on or before October 12, 2012, and continued at least through the present,” and
that the purpose of these statements was to justify plaintiff’s termination. Id. ¶ 63. Like
the statement about termination “due to performance” in Umamoto, plaintiff’s allegations
regarding statements made by Ynez and Bolanos are sufficiently specific to raise a “nonfanciful possibility” that plaintiff can state a claim for defamation in Los Angeles
Superior Court. See Umamoto, 2013 WL 2084475, at *5; Handy v. Wells Fargo Bank,
N.A., 2008 WL 4980758, at *2 (D. Ariz. Nov. 12, 2008) (finding allegation that
defendant “disseminated and published false statements concerning the Plaintiff which
were intended to cast Plaintiff in a false and unfavorable light,” combined with allegation
that plaintiff was terminated for “fraud/monetary losses” was sufficient to defeat assertion
of fraudulent joinder); Webber v. Nike USA, Inc., 2012 WL 4845549, at *6 (S. D. Cal.
Oct. 9, 2012) (finding that allegation of defamation based on statement that the plaintiff
was terminated for “poor performance” was sufficient to establish a “non-fanciful
possibility that a California state court could conclude that Plaintiff” alleged a claim for
defamation).
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

JS-6

Case No.

CV 13-7341 (CAS) (FFMx)

November 12, 2013

Title

JAMIE MORALES V. GRUMA CORPORATION, ET AL.

Moreover, to the extent that the allegations in the complaint might be insufficient
to state a claim for defamation in state court, it is possible that such deficiencies could be
cured by amendment. See Padilla v. AT&T Corp., 697 F. Supp. 2d 1156, 1159 (C. D.
Cal. 2009) (granting motion to remand when defendant failed to show that the plaintiff
would not be granted leave to amend his complaint to cure the asserted deficiency);
Barsell v. Urban Outfitters, Inc., 2009 WL 1916495, at *3 (C.D. Cal. July 1, 2009)
(same).3
Gruma resists this conclusion, arguing that plaintiff’s allegations of defamation are
insufficient because plaintiff does not allege the substance of the alleged defamatory
statements. Opp. Mot. Remand 4-7. This argument is unavailing for two reasons. First,
all but two of the cases cited by Gruma address the sufficiency of allegations of
defamation outside the context of fraudulent joinder. E.g., Jacobson v. Schwarzenegger,
357 F. Supp. 2d 1198, 1216 (C.D. Cal. 2004) (evaluating defamation allegations in the
context of a motion to dismiss for failure to state a claim). While these cases are
informative as to the elements of a defamation claim, they are of limited applicability in
determining whether the allegations of defamation are sufficient to defeat an assertion of
fraudulent joinder. This is so because of the dual presumptions against removal
jurisdiction, Gaus, 980 F.2d at 566, and fraudulent joinder, Diaz, 185 F.R.D. at 586. In
light of these presumptions, the Court does not hold plaintiff to the same pleading
standard as it would on a motion to dismiss pursuant to Federal Rule of Civil Procedure
12(b)(6). See Davis, 66 F. Supp. 2d at 1114.
Second, the two cases cited by Gruma that addressed the sufficiency of defamation
claims in the fraudulent joinder context are inapposite. In Toth v. Guardian Industries
Corp., 2012 WL 468244, at *4 (E.D. Cal. Feb. 13, 2012), the court relied on Jacobson in
determining that the plaintiff’s allegations of defamation against a non-diverse defendant

3

Gruma cites Kruso v. International Telephone & Telegraph Corp., 872 F.2d 1416,
1426 n.12 (9th Cir. 1989) for the proposition that courts should not consider the
possibility of future amended complaints when considering a motion to remand. Opp.
Mot. Remand 2-3. Kruso is distinguishable because its analysis of this issue appears to
rely on the fact that amendment of the complaint in that case would not have cured the
defect in the plaintiffs’ claims against the non-diverse defendants. See 872 F.2d at 1426;
see also Umamoto, 2013 WL 2084475, at *6-7 (distinguishing Kruso on this basis).
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

JS-6

Case No.

CV 13-7341 (CAS) (FFMx)

November 12, 2013

Title

JAMIE MORALES V. GRUMA CORPORATION, ET AL.

were insufficient to justify remand. In this regard, the court found that the plaintiff’s
general allegations of statements by the defendants that the plaintiff was “incompetent at
her job, engaged in reprehensible conduct, and lacked cooperation” were too general and
conclusory. Id. It appears that the court in Toth, like the court in Jacobson, evaluated the
defamation claim under the Rule 12(b)(6) standard, rather than the more lenient standard
on a motion to remand. See id. (“Plaintiff’s allegations are insufficient under California
law to state a claim for defamation against [one of the defendants].”)
In Roland-Warren v. Sunrise Senior Living, 2009 WL 2406356, at *8 (S.D. Cal.
Aug. 4, 2009), the court found the plaintiff’s defamation allegations insufficient because
the plaintiff failed to identify the “time, place, particular speakers, or recipients of the[]
statements.” In that case, the plaintiff alleged that the defendants made statements that
she was “incompetent, untrustworthy, and unfit for a management position.” Id. The
court stated that the allegations were also insufficient because it could not determine
whether the statements were intended as opinion or fact, or whether they were privileged.
Id. Here, by contrast, plaintiff’s allegations give rise to a reasonable inference that the
defamatory statements were made by Ynez and Bolanos. In this regard, plaintiff alleges
that these individuals met with him to inform him that he was being terminated, and also
alleges that the defamatory statements were made in order to justify his termination.
Compl. ¶¶ 22, 63. In addition, the allegation in the complaint that defendants stated that
plaintiff “violated company policy” are sufficiently specific such that the Court is able to
determine that the statement was intended as fact, and not opinion. Cf. Roland-Warren,
2009 WL 2406356, at *8.
These cases are also inapposite because they rejected the possibility that the
plaintiff would be able to correct the deficiencies in the defamation allegations by filing
an amended complaint. Toth, 2012 WL 468244, at *5; Roland-Warren, 2009 WL
2406356, at *8. Even if it could not be said that Toth and Roland-Warren are inapposite,
the Court finds the reasoning in the cited recent cases in this district to be more
persuasive. E.g., Umamoto, 2013 WL 2084475, at *5; Padilla, 697 F. Supp. 2d at 1159;
Barsell, 2009 WL 1916495, at *7.
B.

Plaintiff’s Request for Attorney’s Fees

Plaintiff requests attorney’s fees of $6,000 on the grounds that Gruma’s removal
was unreasonable and contrary to prevailing law. Mot. Remand 7. Gruma responds that
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

JS-6

Case No.

CV 13-7341 (CAS) (FFMx)

November 12, 2013

Title

JAMIE MORALES V. GRUMA CORPORATION, ET AL.

an award of attorney’s fees is unwarranted because it had objectively reasonable grounds
for removal. Opp. Mot. Remand 7.
The Court declines to award attorney’s fees to plaintiff. Ordinarily, courts award
attorney’s fees under the removal statute only when the “removing party lacked an
objectively reasonable basis for seeking removal.” Martin v. Franklin Capital Corp., 546
U.S. 132, 141 (2005). In this regard, the Toth and Roland-Warren cases, although not
ultimately persuasive to this Court, are sufficient to provide a reasonable basis for
Gruma’s removal petition herein.
V.

CONCLUSION

Based on the foregoing, the Court hereby GRANTS plaintiff’s motion to remand.
The Court DENIES plaintiff’s request for attorney’s fees. Furthermore, defendant’s
Motion to Dismiss, or in the Alternative, to Compel Arbitration and to Stay Action is
denied as moot.
IT IS SO ORDERED.
00
Initials of Preparer

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