Brenda Sanchez v. Lane Bryant, Inc. et al

Filing 21

MINUTES OF Motion Hearing held before Judge Christina A. Snyder: The Court GRANTS plaintiff's motion to remand to state court 13 , remanding case to Los Angeles Superior Court, Case No. BC580166. Because the Court lacks subject matter jurisdiction over this action, it does not reach defendant Julie Tse's motion to dismiss 15 . (MD JS-6. Case Terminated) Court Reporter: Laura Elias. (gk)

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

‘O’

Case No.

2:15-cv-04247-CAS(ASx)

Title

BRENDA SANCHEZ V. LANE BRYANT, INC.; ET AL.

Present: The Honorable

Date

JS-6

August 17, 2015

CHRISTINA A. SNYDER

Catherine M. Jeang
Deputy Clerk

Laura Elias
Court Reporter / Recorder

N/A
Tape No.

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

Martin Aarons

Craig Staub

Proceedings:

PLAINTIFF’S MOTION TO REMAND
DEFENDANT JULIE TSE’S MOTION TO DISMISS

I.

INTRODUCTION

On April 29, 2015, plaintiff Brenda Sanchez (“plaintiff”) filed a complaint in the
Los Angeles County Superior Court against defendants Lane Bryant, Inc. (“Lane
Bryant”), Julie Tse (“Tse”), and Does 1 through 10 (collectively, “defendants”). Dkt. 1.
On June 4, 2015, Lane Bryant filed a notice of removal on the basis of diversity
jurisdiction. Not. of Removal ¶ 1. Defendants contend in their notice of removal that
defendant Lane Bryant is incorporated in Delaware, and has its principal place of
business in Ohio. Id. ¶ 12. Defendants further contend that the California citizenship of
Tse should be disregarded because this defendant was fraudulently joined. Id. ¶ 13.
Plaintiff asserts the following claims: (1) defamation (against all defendants); (2)
discrimination on the basis of age in violation of the Fair Employment and Housing Act
(“FEHA”), Cal. Gov. Code 1290 et seq. (against Lane Bryant and Does 1 through 10); (3)
wrongful termination in violation of public policy (against Lane Bryant and Does 1
through 10); (4) breach of implied-in-fact contract (against Lane Bryant and Does 1
through 10); and (5) failure to prevent discrimination in violation of FEHA (against Lane
Bryant and Does 1 through 10). Dkt. 1.
On June 30, 2015, plaintiff filed a motion to remand this case to state court. Dkt.
13. Defendants opposed the motion on July 28, 2015, Dkt. 18, and plaintiff replied on
August 3, 2015, Dkt. 20. On July 15, 2015, Tse filed a motion to dismiss pursuant to
Federal Rules of Civil Procedure 12(b)(5) and 12(b)(6). Dkt. 15. Plaintiff opposed that
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

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Case No.

2:15-cv-04247-CAS(ASx)

Date

Title

JS-6

August 17, 2015

BRENDA SANCHEZ V. LANE BRYANT, INC.; ET AL.

motion on July 28, 2015, Dkt. 17, and defendants filed a reply on August 3, 2015, Dkt.
17, 19. The Court held a hearing on August 17, 2015. Having considerd the parties’
arguments, the Court finds and concludes as follows.
II.

BACKGROUND

Plaintiff’s complaint alleges the following: plaintiff, a woman over the age of forty,
was hired by Lane Bryant in November 1991 to work as a sales associate. Compl. ¶¶ 2,
9. Several months later, plaintiff was promoted to work as a co-manager. Id. ¶ 9.
Around 1997 or 1998, plaintiff was promoted again to work as a store manager. Id.
Plaintiff worked in this position until she was terminated in August 2014. Id.
Throughout her employment, plaintiff alleges, she received awards and recognition for
her performance as a store manager. Id. ¶ 10.
On two occasions during her employment, plaintiff underwent surgery, once on her
right knee and again for a tumor. Id. ¶ 11. Plaintiff contends that, on both of these
occasions, Tse made comments to the effect that plaintiff’s going on leave as a result of
her surgeries was an inconvenience to Tse. Id. Plaintiff claims that these comments
made her feel guilty. Id.
Plaintiff alleges that on different occasions during her employment, Tse made
comments about plaintiff’s age; specifically, that she needed to look younger and more
trendy, that she was not being fresh enough, not keeping up with the trends and was very
old school, and that there was a need to have fresh faces in the store. Id. ¶ 12.
In August 2014, Tse fired plaintiff citing that she was a poor performer. Id. ¶ 13.
Plaintiff disputes the claim that she was a poor performer and asserts that she was fired
because of her age. Id.
Plaintiff asserts a single claim for defamation against all defendants, including Tse.
Dkt. 1. The basis for this claim is that defendants caused the publication of defamatory
statement including “express and implied accusations…that Plaintiff violated Defendant
Employer’s policies, expressly and impliedly that Plaintiff was a poor performer,
incompetent, an unskilled store manager, was not able to perform as store manager, and
not being able to speak to competencies [sic].” Compl. ¶¶ 17, 21. While the precise
dates of publication of these statements are not alleged, plaintiff alleges they began on or
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
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2:15-cv-04247-CAS(ASx)

Date

Title

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August 17, 2015

BRENDA SANCHEZ V. LANE BRYANT, INC.; ET AL.

before August 11, 2014, and have continued thereafter. Id. ¶ 18. Plaintiff alleges that
any investigation defendants conducted into the truth of these statements was “nonexistent and at best reckless.” ¶ 27. Plaintiff also alleges that these statements were
knowingly false and that they have caused harm to her personal and professional
reputations. Id. ¶¶ 21, 30.
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
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. Grp., 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
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UNITED STATES DISTRICT COURT
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BRENDA SANCHEZ V. LANE BRYANT, INC.; ET AL.

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
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.

ANALYSIS

Defendants argue that removal is proper because complete diversity exists and the
amount in controversy exceeds $75,000. Specifically, defendants argue that Tse—who is
a citizen of California—is a “sham” defendant whose citizenship should be disregarded,
leaving completely diverse parties. Not. of Removal ¶ 13. Plaintiff counters that Tse is
not a “sham” defendant and, as such, complete diversity does not exist and removal was
improper. Mot. to Remand at 2.
Plaintiff’s complaint alleges a claim for defamation against Tse. 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., Smith v.
Maldonado, 72 Cal. App. 4th 637, 645 (1999); Hernandez v. First Student, Inc., 2010 WL
5313293, at *3 (C.D. Cal. Dec. 16, 2010); 5 Witkin, Summ. Cal. Law, Torts § 529 (10th
ed. 2005).
In Morales v. Gruma Corporation, 2013 WL 6018040, at *6 (C.D. Cal. Nov. 12,
2013), this Court granted the plaintiff’s motion to remand, finding that a non-diverse
defendant was not fraudulently joined. In that case, the plaintiff, a California citizen,
filed an action for disability discrimination, unlawful employment practices, and
defamation against an out of state corporation and two of its officers, both California
citizens. Id. at *1-2. Defendants removed the case to federal court, arguing that the
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

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2:15-cv-04247-CAS(ASx)

Date

Title

JS-6

August 17, 2015

BRENDA SANCHEZ V. LANE BRYANT, INC.; ET AL.

California officers were fraudulently joined. Id. at *1. The basis for plaintiff’s
defamation claim was that defendants had caused to be published defamatory statements,
including “expressed and implied accusations that Plaintiff violated company policy
and/or the law, engaged in misconduct, and expressly and impliedly accusing Plaintiff of
potential criminal activity.” Id. at *2. The plaintiff alleged that the defamatory
publications 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. The plaintiff alleged that these statements were false, and were causing ongoing harm
to his reputation. Id. The Court found that these allegations were sufficiently specific to
raise a “non-fanciful possibility” that plaintiff could state a claim for defamation in
California state court. Id. at *4.
This case is analogous to Morales. Here, plaintiff alleges that defendant Tse
caused to be published defamatory statements including “express and implied
accusations…that Plaintiff violated Defendant Employer’s policies, expressly and
impliedly that Plaintiff was a poor performer, incompetent, an unskilled store manager,
was not able to perform as store manager, and not being able to speak to competencies
[sic].” Compl. ¶ 21. Although plaintiff does not allege the precise dates of these
defamatory publications, she contends that they started “on or before August 11, 2014,
and have continued thereafter.” Id. at ¶ 19. Plaintiff further alleges that these defamatory
statements were made for the purpose of justifying her termination, id., and that their
publication has resulted in injury to her personal and professional reputation, id. at ¶ 30.
Accordingly, like the plaintiff’s allegations in Morales, here plaintiff’s allegations are
sufficiently specific to raise a “non-fanciful possibility” that plaintiff will be able to state
a claim for defamation in California state court. See Morales, 2013 WL 6018040, at *4;
see also 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);
Umamoto v. Insphere Ins. Solutions, Inc., 2013 WL 2084475, at *5 (N.D. Cal. May 14,
2013) (finding allegation that plaintiff was required to self-publish statements that she
was terminated “due to performance reasons” was sufficient to raise a “non-fanciful
possibility” that plaintiff could state a claim for defamation in California state court.)
Defendants assert that plaintiff has made only vague allegations of defamation
without specific facts regarding where, under what circumstances, or to whom the alleged
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

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Case No.

2:15-cv-04247-CAS(ASx)

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Title

JS-6

August 17, 2015

BRENDA SANCHEZ V. LANE BRYANT, INC.; ET AL.

defamatory statements were made. Not. of Removal ¶16. However, the standard in a
fraudulent joinder analysis is not whether plaintiff has a probability of prevailing on the
merits of his claim; rather, it is whether there is any possibility that plaintiff can state a
claim.1 While plaintiff has not pled her claim in great detail, plaintiff has pled sufficient
facts to raise at least a possibility that she will be able to state a claim for defamation in
state court.2

1

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).
2

Defendants assert that plaintiff’s motion to remand should be denied for the
additional reason that Tse’s alleged statements were non-actionable statements of
opinion, as opposed to statements of fact. Opp. to Mot. to Remand, at 5. However,
plaintiff has alleged that Tse’s statements were made as statements of fact, not opinion,
Compl. ¶ 25, and numerous courts have found that allegations of similar comments
regarding work performance were sufficient to raise a possibility of stating a claim for
defamation in state court, see, e.g. Webber, 2012 WL 4845549, at *6 (plaintiff alleged
defamatory statements that he was terminated for “poor performance”); Umamoto, 2013
WL 2084475, at *5 (plaintiff alleged defamatory statements that she was terminated “due
to performance reasons”). Furthermore, California courts have held that statements of
opinion which imply a knowledge of fact can constitute defamatory statements. See
Gallant v. City of Carson, 128 Cal. App. 4th 705, 709 (2005) (“[D]efamatory statements
are not protected if they imply an assertion of false objective fact.”). Here, plaintiff
alleges that Tse stated that plaintiff was incompetent and otherwise a poor performer.
Compl. ¶ 21. Therefore, a state court could find that, even if Tse’s statements constituted
an opinion, they implied knowledge of facts regarding plaintiff’s work habits and general
performance as an employee for Lane Bryant. See Gallant, 128 Cal. App. 4th, at 709 (“the
statement that plaintiff ‘is an incompetent [employee]…implies a knowledge of
facts…that plaintiff is generally disqualified for [her] profession, it is defamatory if it is
false…”). Accordingly, the Court finds this argument unavailing.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
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2:15-cv-04247-CAS(ASx)

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August 17, 2015

BRENDA SANCHEZ V. LANE BRYANT, INC.; ET AL.

Defendants also contend that the allegedly defamatory statements are shielded
from liability because they are privileged. Not. of Removal ¶ 17. Defendants assert two
theories by which defendant Tse’s statements are privileged, California Civil Code
section 47(c) and the doctrine of managerial immunity. Opp. to Mot. to Remand at 1.
The court addresses each of these theories in turn.
Pursuant to California Civil Code section 47(c), a communication is privileged if it
is made “without malice, to a person interested therein, by one who is also interested.”
Cal. Civ. Code § 47(c). The statutory privilege, however, is qualified, not absolute, and a
plaintiff may defeat the privilege by a showing of “malice.” See id. “The malice
necessary to defeat a qualified privilege is ‘actual malice’ which is established by a
showing that the publication was motivated by hatred or ill will towards the plaintiff or
by a showing that the defendant lacked reasonable grounds for belief in the truth of the
publication and therefore acted in reckless disregard for the plaintiff’s rights.” Noel v.
River Hills Wilsons, Inc., 113 Cal. App. 4th 1363, 1370 (2003). The issue of malice is a
question of fact to be decided by the jury. See Greenly v. Sara Lee Corp., 2008 WL
1925230, at *9 (E.D. Cal. Apr. 30, 2008) (citing McMann v. Wadler, 189 Cal. App. 2d
124, 129 (1961)).
In Johnson v. Wells Fargo & Co., Inc., 2014 WL 6475128, at *9 (C.D. Cal. Nov.
19, 2014), the court rejected the defendants’ argument that a defendant had been
fraudulently joined because the alleged defamatory statements were privileged under
section 47(c). In that case, the plaintiff alleged that an in-state defendant made
defamatory statements about him that were knowingly false. Id. Furthermore, he alleged
that these statements were made to retaliate against him and to justify his termination. Id.
Lastly, he alleged that these statements were made following a reckless investigation. Id.
The court found that these allegations were “sufficient to plead malice, at least for
purposes of avoiding removal on the basis of fraudulent joinder.” Id.
This case is the same. Here, plaintiff alleges that the defamatory statements
regarding her poor job performance were knowingly false, Compl. ¶21, and that, to the
contrary, she received awards and recognition for her performance. Id. at ¶ 10.
Furthermore, plaintiff alleges that the statements regarding her performance were made
following an investigation that was “non-existent and at best reckless”. Id. at ¶ 27.
Finally, plaintiff alleges that on several occasions Tse made plaintiff “feel guilty” for
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

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Case No.

2:15-cv-04247-CAS(ASx)

Date

Title

JS-6

August 17, 2015

BRENDA SANCHEZ V. LANE BRYANT, INC.; ET AL.

taking time off following medical procedures. Id. at ¶ 11. Plaintiff also alleges that Tse
made several disparaging comments about her age and that in general her “trend” was not
“fresh enough” or young enough. Id. at ¶12. Accordingly, like the plaintiff in Johnson,
here plaintiff has alleged that purportedly defamatory statements were knowingly false
and were made following a reckless investigation. See Johnson, 2014 WL 6475128, at
*9. Furthermore, a jury could find that Tse’s alleged pattern of disparaging comments
directed towards plaintiff supports at least an inference that Tse harbored ill will or
hostility towards plaintiff when she made the allegedly defamatory statements. See
Noel,113 Cal. App. 4th at 1370 (“‘[A]ctual malice’...is established by a showing that the
publication was motivated by hatred or ill will towards the plaintiff”).
Defendants resist this conclusion, arguing that plaintiff has failed to rebut the
section 47(c) privilege. Opp to Mot. to Remand at 2. In support, defendants rely
principally on Kacludis v. GTE Sprint Communications Corp., 806 F. Supp. 866, 872
(N.D. Cal. Oct. 1, 1992), a case in which the court found that the plaintiff had failed to
plead sufficient facts rebutting the qualified privilege. However, Kacludis is inapposite
because the court addressed the plaintiff’s pleadings in the context of a motion to dismiss,
as opposed to the more stringent standard for fraudulent joinder. See Id. Moreover, at
this juncture, plaintiff’s burden is not to rebut the privilege, but rather merely to raise the
possibility that she may be able to rebut that privilege in state court. As stated above, the
Court finds that plaintiff has alleged sufficient facts to plead malice in the fraudulent
joinder context.
Turning to defendants’ argument that Tse’s statements were privileged under the
doctrine of managerial immunity, the Court likewise finds this argument unavailing.
Defendants assert that, absent specific allegations that a manager was acting entirely for
his or her own benefit, the doctrine of managerial immunity shields that manager from
individual liability. Opp. to. Mot. to Remand at 3. Defendants further assert that
plaintiff’s claim cannot succeed because the doctrine of managerial immunity is an
absolute privilege.
However, the doctrine of managerial immunity was established by California
courts in the context of claims involving intentional interference with a contractual
relationship against a supervisor who determined to fire the plaintiff. See Huynh v. Vu,
111 Cal. App. 4th 1183, 1195 (2003) (“[T]he manager’s privilege is most often applied to
bar actions against managers of a business entity that charge the managers with inducing
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UNITED STATES DISTRICT COURT
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BRENDA SANCHEZ V. LANE BRYANT, INC.; ET AL.

the entity to breach a contract.”). Several courts have questioned whether the doctrine is
applicable outside of that context. See, e.g. Hernandez v. Ignite Restaurant Grp., Inc.,
917 F. Supp. 2d 1086, 1091 (E. D. Cal. Jan. 9, 2013) (“[I]t is not clear whether the
manager’s privilege applies outside the scope of claims for intentional interference with a
contract.”); Atkins v. Prudential Ins. Co. of Am., 2013 WL 2898048, at * 2 (C. D. Cal
Jun. 13, 2013) (same). Defendants cite two cases in which managerial immunity was
applied in a defamation case. Opp. to Mot. to Remand at 3 (citing Kacludis, 806 F. Supp.
at 872; and Blount v. San Ramon Royal Vista Golf Courses, Inc., 1999 WL 300684, at
*3-4 (N.D. Cal. May 7, 1999)). Neither of these cases, however, addressed the question
of the doctrines applicability to defamation cases in significant detail and numerous
other courts have refused to apply the doctrine to claims arising outside the scope of
intentional interference with a contractual relationship. See, e.g. Hernandez, 917 F. Supp.
2d at 1091 (collecting cases); Morcote v. Oracle Corp., 2005 WL 3157512, at *7 (N. D.
Cal. Nov. 23, 2005) (finding that cases cited in support of the managers privilege could
not stand “for the broad proposition that managers may not be sued in tort for actions
taken in the scope of their employment.”).
Further, courts in California are divided as to whether managerial immunity
establishes a qualified or absolute privilege. See Hyunh, 111 Cal. App. 4th at 1195
(“[T]he question of whether the privilege is absolute or qualified is ‘somewhat muddled
in California law’ resulting in a ‘knot of authority’ on the issue.”); Calero v. Unisys
Corp., 271 F. Supp. 2d 1172, 1180 (N. D. Cal. May 19, 2003) (“It is also uncertain
whether the privilege, if any, is absolute or conditional. What is clear…is that the
question of the privilege…is bound up in the conduct of the defendant and is thoroughly
fact intensive.”). Accordingly, the Court is not convinced by defendants argument that a
state court would apply the doctrine of managerial immunity to this case, or that if a court
did do so, that plaintiff would be unable to rebut that privilege. See Hernandez, 917 F.
Supp. 2d at 1091 (granting plaintiff’s motion to remand because “[i]n light of this lack of
clarity, it cannot be said that the manager’s privilege clearly bars Plaintiff’s
defamation…claims against Defendant”).3

3

For purposes of plaintiff’s motion to remand, the Court finds only that defendants
have failed to establish that there is no possibility that plaintiff can state a claim against
Tse for defamation in California state court. The Court expresses no opinion regarding
whether plaintiff has pled sufficient facts to state a claim upon which relief can be
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UNITED STATES DISTRICT COURT
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BRENDA SANCHEZ V. LANE BRYANT, INC.; ET AL.

Because defendants have not met their burden to demonstrate that there is no
possibility that plaintiff may assert a claim against Tse, the Court finds that Tse is not a
“sham” defendant and her joinder was not fraudulent. In light of this, complete diversity
does not exist and removal was improper.
V.

CONCLUSION

In accordance with the foregoing, the Court GRANTS plaintiff’s motion to remand
to state court. Because the Court lacks subject matter jurisdiction over this action, it does
not reach defendant Tse’s motion to dismiss.
IT IS SO ORDERED.
00
Initials of Preparer

:

05

CMJ

granted.
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