Rana Gebran v. Wells Fargo Bank, N.A.

Filing 20

MINUTES (IN CHAMBERS)ORDER RE Plaintiff Motion to Remand 16 and Defendant Motion to Dismiss 11 by Judge Beverly Reid O'Connell: The Court hereby GRANTS Plaintiffs Motion toRemand and DENIES as moot WFBs Motion to Dismiss. (MD JS-6. Case Terminated) (jp)

JS-6
LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 16-07616 BRO (MRWx)

Title

RANA GEBRAN V. WELLS FARGO BANK, N.A.

Date

December 28, 2016

Present: The Honorable

BEVERLY REID O’CONNELL, United States District Judge

Renee A. Fisher

Not Present

N/A

Deputy Clerk

Court Reporter

Tape No.

Attorneys Present for Plaintiff:

Attorneys Present for Defendants:

Not Present

Not Present

Proceedings:

(IN CHAMBERS)

ORDER RE PLAINTIFF’S MOTION TO REMAND [16] AND
DEFENDANT’S MOTION TO DISMISS [11]
I.

INTRODUCTION

Two motions are pending before the Court: (1) Plaintiff Rana Gebran’s
(“Plaintiff”) Motion to Remand, (Dkt. No. 16 (hereinafter, “Remand Motion” or
“Remand Mot.”)); and, (2) Wells Fargo Bank, N.A.’s (“WFB”) Motion to Dismiss
Plaintiff’s First, Second and Third Claims, (Dkt. No. 11 (hereinafter, “MTD” or “WFB’s
Motion”)). After considering the papers filed in support of and in opposition to the
instant motions, the Court deems this matter appropriate for resolution without oral
argument of counsel. See Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. For the following
reasons, the Court GRANTS Plaintiff’s Remand Motion and DENIES as moot WFB’s
Motion.
II.

FACTUAL AND PROCEDURAL BACKGROUND
A.

Factual Background

This action arises under the California Fair Employment and Housing Act
(“FEHA”). Beginning in 2007, Plaintiff was employed as a financial specialist for
Wachovia, a financial institution. (Dkt. No. 1-1 (hereinafter, “Compl.” or “Complaint”)
¶ 6.) Plaintiff alleges that Defendant Wells Fargo & Company (“WFC”) acquired and/or
merged with Wachovia in or about 2008, whereupon Plaintiff allegedly became
employed by WFC as a registered personal banker. (Id. ¶ 7.) Plaintiff claims that she

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 16-07616 BRO (MRWx)

Title

RANA GEBRAN V. WELLS FARGO BANK, N.A.

Date

December 28, 2016

was promoted several times and ultimately managed larger branches as a branch
manager. (Id. ¶ 8.)
Thereafter, Plaintiff fell ill, and in July 2014 her psychiatrist advised her to take
medical leave from work. (Compl. ¶ 9.) Plaintiff allegedly notified Defendant of her
medical disability and intended medical leave; she claims that she made efforts to give
timely notice to Defendant of her ongoing disability and her need for continued medical
leave. (Id. ¶ 10.) On or about March 24, 2015, Plaintiff’s physician cleared her to return
to work effective June 1, 2015, and allegedly informed Defendant of Plaintiff’s clearance
to return to work. (Id. ¶ 12.)
Plaintiff maintains that during or about April 2015,1 Defendant notified her that she
was terminated for failure to provide updated documentation of her medical status.
(Compl. ¶ 13.) Plaintiff disputed the termination and requested that the human resources
department reverse the termination decision. (Id.) On May 20, 2015, Plaintiff allegedly
called Defendant to inquire about her employment status; the human resources
representative promised to update Plaintiff on May 22, 2015 regarding the matter, but
allegedly failed to do so. (Id. ¶ 14.) In light thereof, Plaintiff emailed Defendant on May
26, 2015 and June 1, 2015, but again received no response regarding her employment
status. (Id.)
On June 2, 2015, Defendant’s human resources representative allegedly contacted
Plaintiff and promised to provide a due diligence list that underlay her termination.
(Compl. ¶ 15.) But Plaintiff attests that she did not receive this documentation. (Id.)
Then, on June 27, 2015, Plaintiff received a letter from Defendant, which indicated that
Defendant had sent Plaintiff a letter on March 2, 2015, informing her that her time away
from work was considered an unapproved leave of absence because Plaintiff had failed to
provide updated documentation of her medical status. (Id. ¶ 16.) Plaintiff avers,
however, that she did not receive the March 2, 2015 letter. (Id. ¶ 17.) Finally, on January
13, 2016, Plaintiff filed a complaint of discrimination with the California Department of

1

In the Complaint, Plaintiff claims that she was terminated “during or about April 2016.” (Compl. ¶ 13
(emphasis added).) Based on the other alleged dates in Plaintiff’s Complaint, the Court presumes that
Plaintiff intended to claim that she was terminated during or about April 2015.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 16-07616 BRO (MRWx)

Title

RANA GEBRAN V. WELLS FARGO BANK, N.A.

Date

December 28, 2016

Fair Employment and Housing (“DFEH”). (Id. ¶ 18.) In response, the DFEH issued to
Plaintiff a “Right to Sue Notice.” (Id.)
B.

Procedural Background

Plaintiff filed her original action in the Superior Court for the State of California,
County of Los Angeles (“Los Angeles Superior Court”) against WFC on August 4, 2016,
alleging four claims: (1) employment discrimination on the basis of disability, in
violation of Cal. Gov’t Code § 12940(a); (2) failure to engage in good faith interactive
process, in violation of Cal. Gov’t Code § 12940(n); (3) failure to make reasonable
accommodations for a known disability, in violation of Cal. Gov’t Code § 12940(m); and,
(4) wrongful termination, in violation of Cal. Labor Code § 1102.5. (See Compl.) On
September 13, 2016, Plaintiff served the summons and Complaint on Defendant WFC.
(See Dkt. No. 1 (“Removal”) ¶ 6.) On September 23, 2016, Plaintiff filed the Proof of
Service of Summons in Los Angeles Superior Court. (Removal ¶ 4.) Then, on October
13, 2016, WFB removed the action from Los Angeles Superior Court to this District.2
(See generally Removal.) WFC joined in the Removal. (Removal at 1, n.1.)
On October 20, 2016, WFB filed the instant Motion to Dismiss. (See MTD.)
Concurrent with the MTD, WFB filed a request for judicial notice. (Dkt. No. 12
(“RJN”).) On October 31, 2016, Plaintiff opposed WFB’s Motion to Dismiss. (Dkt. No.
14 (“MTD Opp’n”).) WFB replied in support of its Motion to Dismiss on November 7,
2016. (Dkt. No. 15 (“MTD Reply”).) On November 11, 2016, the Court, on its own
motion, continued the hearing on the Motion to Dismiss to December 12, 2016. (See
Dkt. No. 17.)
On November 9, 2016, Plaintiff filed the instant Remand Motion. (Remand Mot.)
WFB opposed the Remand Motion on November 21, 2016. (Dkt. No. 18 (“Remand
Opp’n”).)

2

In its Notice of Removal, WFB responded as “Wells Fargo Bank, N.A., erroneously sued as Wells
Fargo & Company.” (See Removal (emphasis in original).)

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LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 16-07616 BRO (MRWx)

Title

RANA GEBRAN V. WELLS FARGO BANK, N.A.

III.

Date

December 28, 2016

LEGAL STANDARD

Federal courts are of limited jurisdiction and possess only that jurisdiction which is
authorized by either the Constitution or federal statute. Kokkonen v. Guardian Life Ins.
Co. of Am., 511 U.S. 375, 377 (1994). Pursuant to § 1332(a)(1), a federal district court
has jurisdiction over “all civil actions where the matter in controversy exceeds the sum or
value of $75,000, exclusive of interest and costs,” and the dispute is between citizens of
different states. 28 U.S.C. § 1332(a)(1). The Supreme Court has interpreted § 1332 to
require “complete diversity of citizenship,” meaning each plaintiff must be diverse from
each defendant. Caterpillar Inc. v. Lewis, 519 U.S. 61, 67–68 (1996).
28 U.S.C. § 1441(a) provides that a civil action may be removed to the district
court only if the district court has original jurisdiction over the issues alleged in the state
court complaint. In determining whether removal in a given case is proper, a court
should “strictly construe the removal statute against removal jurisdiction.” Gaus v.
Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). “Federal jurisdiction must be rejected if
there is any doubt as to the right of removal in the first instance.” Id. The removing
party therefore bears a heavy burden to rebut the presumption against removal. See id.
IV.

DISCUSSION
A.

Plaintiff’s Motion to Remand

Plaintiff seeks to have the instant case remanded to the Los Angeles Superior Court
on the basis that this Court lacks subject matter jurisdiction because the diversity of
citizenship requirement is not met. (See Remand Motion at 4.) WFB counters that
WFC’s citizenship is irrelevant for diversity purposes because: (1) WFB was Plaintiff’s
employer; (2) WFC was not Plaintiff’s joint employer; and, (3) WFC should be
disregarded as a sham defendant. As a threshold matter, the Court considers whether
WFB, a non-party, may remove the action between Plaintiff and WFC to federal court.
Thereafter, the Court addresses why remand is appropriate.

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LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 16-07616 BRO (MRWx)

Title

RANA GEBRAN V. WELLS FARGO BANK, N.A.

1.

Date

December 28, 2016

WFB, A Real Party Defendant In Interest, Was Empowered To
File For Removal Of This Action

Plaintiff argues that “[WFC] has attempted to ‘create’ diversity of citizenship by
referring to itself in its Notice of Removal and other pleadings as ‘Wells Fargo Bank,
N.A., erroneously sued as Wells Fargo & Company.” (Remand Motion at 5.) However,
this argument fails to accurately capture WFB’s action. Rather than merely referring to
itself under a different name, WFB, a business entity separate from WFC, has removed
the action to federal court. At this time, WFB has not formally intervened in the instant
action and thus is not a named defendant to the action. Nor does WFB provide any
evidence that it has authority to assert itself and respond on behalf of its parent entity,
WFC. The corporate form is disregarded only when the ends of justice require this result.
Vasquez v. Wells Fargo Bank, Nat'l Ass'n, 77 F. Supp. 3d 911, 922 (N.D. Cal. 2015).
The ends of justice do not require such disregard here; absent formal intervention, WFB
must have a real interest in the action in order to properly remove the action. See La
Russo v. St. George's Univ. Sch. of Med., 747 F.3d 90, 96 (2d Cir. 2014) (affirming that a
real party defendant in interest was entitled to remove the state court suit even though it
had not entered an appearance in state court and had not been served, as neither is a
prerequisite to removal).
In its Removal, WFB argues that it is the proper defendant in this action because
“[WFC]’s only connection to this case is that it is the parent company of Plaintiff’s
employer, [WFB].” (Removal ¶ 9.) WFB contends that “Plaintiff erroneously sued the
wrong entity, Wells Fargo & Company.” For purposes of removal, federal law
determines who is a plaintiff and who is a defendant. Chicago, R.I. & P.R. Co. v. Stude,
346 U.S. 574, 580 (1954). It is a question of the construction of the federal removal
statute, and not the state statute. Id. Under federal law,3 “the concept of a ‘real party
defendant in interest’ is not only entirely valid, it is an important aspect of removal

3

“The forum state's procedural statute or rule defining the real party in interest concept is not applicable,
however, because it only governs who may sue in the state courts; under Rule 17(a), the federal courts
are concerned only with that portion of state law from which the specific right being sued upon stems.”
Allstate Ins. Co. v. Hughes, 358 F.3d 1089, 1091 (9th Cir. 2004) (citing K–B Trucking Co. v. Riss Int'l
Corp., 763 F.2d 1148, 1153 (10th Cir. 1985)).

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LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 16-07616 BRO (MRWx)

Title

RANA GEBRAN V. WELLS FARGO BANK, N.A.

Date

December 28, 2016

jurisprudence, despite the absence of the phrase from Rule 17 or elsewhere in the Federal
Rules of Civil Procedure.” La Russo, 747 F.3d at 97.

An unnamed “real party defendant in interest” may have the authority to remove a
state court action to federal court. La Russo, 747 F3d at 96 (holding that real party
defendant in interest’s removal was proper where plaintiff improperly sued a nonexistent
legal entity); Hillberry v. Wal-Mart Stores E., L.P., No. CIV.A.3:05CV-63-H, 2005 WL
1862087, at *1 (W.D. Ky. Aug. 3, 2005) (“if the proper defendant company is on notice
that the wrong company defendant has been named [the proper defendant company] has a
duty to remove nonetheless”). A real party in interest defendant is not only entitled to
remove, but, if it seeks removal, it must act promptly because the 30–day interval in
which it is permitted to do so, see 28 U.S.C. § 1446(b) (2013), begins when it is on notice
that the wrong company defendant has been named. See La Russo, 747 F.3d at 96–97;
Ware v. Wyndham Worldwide Inc., Civ. No. 09–6420, 2010 WL 2545168, at *2 (D.N.J.
June 18, 2010) (30–day interval started when real party in interest defendant accepted
service of complaint, although complaint named non-existent entity).
Under federal law, a “real party in interest defendant is one who, by the substantive
law, has the duty sought to be enforced or enjoined.” Sun Oil Co. of Pa. v. Pa. Dept. of
Labor & Indus., 365 F. Supp. 1403, 1406 (E.D. Pa. 1973); see also Eichmann v. Hunter
Auto. Mach., Inc., 167 F. Supp. 2d 1070, 1072 (E.D. Wis. 2001). In contrast to a real
party in interest, “a formal or nominal party is one who, in a genuine legal sense, has no
interest in the result of the suit,” Grant Cty. Deposit Bank v. McCampbell, 194 F.2d 469,
472 (6th Cir. 1952); Bedell v. H.R.C. Ltd., 522 F. Supp. 732, 736 (E.D. Ky. 1981), or no
actual interest or control over the subject matter of the litigation, Stonybrook Tenants
Ass'n, Inc. v. Alpert, 194 F. Supp. 552, 556 (D. Conn. 1961).
In her initial Complaint, Plaintiff did not name WFB as a defendant.4 (See
generally Compl.) As of the date of this Order, Plaintiff has not joined Wells Fargo

4

In the Ninth Circuit, “the question of whether a defendant is properly in a case is not resolved by
merely reading the caption of a complaint.” Rice v. Hamilton Air Force Base Commissary, 720 F.2d
1082, 1085 (9th Cir. 1983). Rather, a party may be properly in a case if the allegations in the body of
the complaint make it plain that the party is intended as a defendant.” Id. at 303–04. Accord Tyrolf v.
Veterans Admin., 82 F.R.D. 372, 374–75 (E.D. La. 1979).
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LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 16-07616 BRO (MRWx)

Title

RANA GEBRAN V. WELLS FARGO BANK, N.A.

Date

December 28, 2016

Bank, N.A. as a defendant to the action. But WFB has expressed its interest in Plaintiff’s
action and Plaintiff has been aware of WFB’s interest in the instant action since October
12, 2016. (Remand Mot. at 3.) WFB claims to be the proper defendant here because
WFB employed Plaintiff from 2009 to 2015. (Removal ¶ 9.) WFB’s absence would
impair WFB from protecting its interest in the employment dispute at hand: If WFB
indeed was Plaintiff’s employer during the time period upon which Plaintiff bases her
claims, then WFB may owe a “duty sought to be enforced or enjoined” to Plaintiff. Thus,
based on the evidence provided by WFB, the Court finds that under federal law, WFB is
a real party in interest defendant.5

Consequently, in light of the abovementioned precedent, WFB had an obligation to
remove the action in its own name after notice of the lawsuit faced with the risk of losing
the right to remove. See La Russo, 747 F.3d at 96–97 (“A real party defendant in interest
is not only entitled to remove, but, if it seeks removal, it must act promptly because the
30–day interval in which it is permitted to do so, see 28 U.S.C. § 1446(b) (2013), begins
when it is on notice that the wrong company defendant has been named.”) (internal
citations omitted). Plaintiff served the summons and complaint on WFC on September
13, 2016, at which time WFB claims to also have received notice of the action.
(Removal ¶¶ 1–4.) Thus, any removal must have been filed 30 days from September 13,
2016, the day on which WFB received notice that Plaintiff had sued WFC. WFB timely
removed the action from Los Angeles Superior Court to this District on October 13,
2016. (See Removal.) And WFC “join[ed] [WFB’s] removal of this action6 despite

5

The Court’s finding that WFB has a real interest in the instant action (allowing WFB to remove the
action so long as other defendants joined) should not be read to mean that WFB is the only party with an
interest in defending the action.
The Court also notes that Plaintiff does not appear to dispute that WFB has a real interest in defending
the action. (See Remand Mot. at 5 (“Plaintiff will amend her Complaint to pursue [WFB] as a joint
employer.”).)
6

In the Ninth Circuit, proper removal requires only that at least one attorney of record sign the notice
and certify that the remaining defendants consent to removal. Proctor v. Vishay Intertech. Inc., 584 F.3d
1208, 1225 (9th Cir. 2009) (“[T]he filing of a notice of removal can be effective without individual
consent documents on behalf of each defendant. One defendant's timely removal notice containing an
averment of the other defendants' consent and signed by an attorney of record is sufficient.”).

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LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 16-07616 BRO (MRWx)

Title

RANA GEBRAN V. WELLS FARGO BANK, N.A.

Date

December 28, 2016

being improperly named as a defendant.” (Removal at 1.) Thus, procedurally, WFB’s
removal was proper.
2.

WFB Fails To Establish That Plaintiff Fraudulently Joined WFC

WFB avers that remand is inappropriate because Plaintiff fraudulently joined WFC
as a defendant, such that WFC’s citizenship should not be considered for purposes of
removal jurisdiction. (Remand Opp’n at 4.) “Joinder of a non-diverse defendant is
deemed fraudulent, and the defendant’s presence in the lawsuit is ignored for purposes of
determining diversity, if 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.” Morris v.
Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2001) (quoting McCabe v. Gen.
Food Corp., 811 F.2d 1336, 1339 (9th Cir. 1987)) (internal quotation marks omitted).
But because Plaintiff may be able to state a plausible claim under FEHA against WFC,
WFB has failed to establish that WFC’s citizenship should be disregarded for purposes of
removal jurisdiction.
a.

The Existence Of Substantive Defenses Fails To
Demonstrate Fraudulent Joinder

In support of its removal, the removing defendant may submit facts showing that a
resident defendant had “no real connection with the controversy.” Ritchey v. Upjohn
Drug Co., 139 F.3d 1313, 1318–19 (9th Cir. 1998) (citing Wilson, 257 U.S. at 97).
Nonetheless, a court must still look to whether the plaintiff truly had a cause of action
against the alleged sham defendants, rather than inquire whether those defendants could
propound defenses to an otherwise valid cause of action; there is a distinction between
those two concepts.7 See Ritchey, 139 F.3d at 1318–19.
The Supreme Court touched on the distinction in Chesapeake & O. R. Co. v.
Cockrell, 232 U.S. 146, 153 (1914), when it declared that the assertion made by a

7

Martinez v. El Paso Corp., No. EP-11-CV-143-KC, 2011 WL 3606813 (W.D. Tex. Aug. 16, 2011),
provides a good illustration of the distinction between the two concepts. In that case, a non-party,
EPNG, that believed a plaintiff had mistakenly named a different corporation as defendant in a suit,
removed an action to federal court and defended the suit. The non-party argued that removal
jurisdiction was proper because it was diverse from Plaintiff. Plaintiff, however, argued that removal
was improper because the named defendant, EPC, was not fraudulently joined. Id. The district court
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LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 16-07616 BRO (MRWx)

Title

RANA GEBRAN V. WELLS FARGO BANK, N.A.

Date

December 28, 2016

removing defendant “went to the merits of the action as an entirety, and not to the
joinder; that is to say, it indicated that the plaintiff's case was ill founded as to all the
defendants.” Similarly, in Alabama Great S. Ry. Co. v. Thompson, 200 U.S. 206, 218–19
(1906), the Court refused to find fraudulent joinder where a misjoinder of parties was
claimed by the defendant that was trying to remove the action. The Court commented
that, ultimately, the state court might decide the joinder was not proper. In fact, if it had
jurisdiction the Court might have done so itself. “But,” it said, “this does not change the
character of the action which the plaintiff has seen fit to bring . . . .” Id.

Here, WFB contends that Plaintiff mistakenly sued WFC, when Plaintiff should
have sued WFB, Plaintiff’s actual employer. (Remand Opp’n at 1.) And because
Plaintiff persists in her suit against WFC, WFB claims that Plaintiff has “converted
[WFC] from an erroneously sued defendant to a sham defendant.” (Id. (emphasis in
original).)
A court in this district has previously considered a similar issue. In Rider v. Sears
Roebuck & Co., the court evaluated whether a mistakenly named defendant was
fraudulently joined for purposes of removal jurisdiction. See Rider v. Sears Roebuck &
Co., No. CV 11-2700 GAF FMOX, 2011 WL 2222171, at *4 (C.D. Cal. June 7, 2011).
Absent binding Ninth Circuit precedent, the Rider court considered precedent from other
jurisdictions. In particular, the Rider court considered two Florida district court cases,
Shenkar v. Money Warehouse, Inc., and Destefano v. Home Shopping Network, Inc.,
which both held that a defendant is not “fraudulently joined” where the plaintiff had
allegedly named the wrong party as defendant. See Shenkar v. Money Warehouse, Inc.,
No. 07–20634, 2007 WL 3023531, at *2 (S.D. Fla. Oct.15, 2007) (“The fact that a
plaintiff may have mistakenly sued the wrong party is a substantive defense to the merits
of the claim, not an issue that bears on the existence of diversity jurisdiction.”);

found that even assuming “EPNG was correct that Plaintiff has no possibility of recovering against EPC,
that impossibility does not create a situation of fraudulent joinder. It just means Plaintiff's case will not
succeed.” Martinez, 2011 WL 3606813, at *2 (citing Smallwood v. Ill. Cent. R. Co., 385 F.3d 568, 574
(5th Cir. 2004) (en banc) (holding that where an allegation of fraudulent joinder is based on an argument
of impossibility of recovery against the non-diverse defendants, but that argument would also serve to
defeat a plaintiff's claims against the diverse defendants, there is no fraudulent joinder)).

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LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 16-07616 BRO (MRWx)

Title

RANA GEBRAN V. WELLS FARGO BANK, N.A.

Date

December 28, 2016

Destefano v. Home Shopping Network, Inc., No. 805CV1299T23MSS, 2006 WL 539542,
at *2 (M.D. Fla. Mar. 6, 2006) (“[T]hat the plaintiff may have mistakenly sued the wrong
party is a substantive defense to the merits of the plaintiff's claim and otherwise fails to
inform whether diversity jurisdiction exists between the named parties to the action.”).8

In Shenkar and Destefano, the respective plaintiffs had not admitted that they had
sued the wrong party or could not recover against the respective named defendants. The
Rider court explained that a “plaintiff's testimony that shows that she could not recover
from the non-diverse defendant triggers removability under the fraudulent joinder
doctrine.” Rider, 2011 WL 2222171, at *5. Unlike the plaintiffs in Shenkar and
Destefano, Ms. Rider had “admitted that [the named defendant] had done nothing wrong
and that she knew of no reason to bring a claim against [the named defendant]. This
admission established that [the named defendant] had been fraudulently joined in the
innocent sense of the term.” Rider, 2011 WL 2222171, at *4. As a result, the court
found the Shenkar and Destefano precedents distinguishable and unpersuasive. See
Rider, 2011 WL 2222171, at *5.
Instead, the Rider court followed Delaney v. Viking Freight, Inc. See Rider, 2011
WL 2222171, at *5. In Delaney v. Viking Freight, Inc., a Texas district court held that a
case became removable on fraudulent joinder grounds, because the plaintiff testified at a
deposition that he had never been employed by the non-diverse defendant, testimony that
“was tantamount to an admission that Plaintiffs had named the wrong party and could not
recover from [the non-diverse defendant].” Delaney v. Viking Freight, Inc., 41 F. Supp.
2d 672, 677 (E.D. Tex. 1999).
In the instant case, this Court is similarly confronted with an allegation that the
Plaintiff has mistakenly sued the wrong party. (See Removal ¶ 9; Remand Opp’n at 1.)
But unlike the plaintiffs in Rider and Delaney (and like the plaintiffs in Shenkar and
Destefano), Gebran has not admitted that she has no claim against WFC. WFB offers no
evidence of such an admission by Plaintiff. To the contrary, Plaintiff asserts that she has
viable claims against both WFC and WFB on a joint-employer theory. (Remand Mot. at
3–4.) Absent evidence of an admission by Plaintiff that she has sued WFC in error, or
otherwise has no claim against WFC, WFB’s argument that Plaintiff sued WFC in error

8

See also Smallwood, 385 F.3d at 574–75 (“[A] meritless claim against an in-state defendant is not the
equivalent of improper joinder.”)
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LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 16-07616 BRO (MRWx)

Title

RANA GEBRAN V. WELLS FARGO BANK, N.A.

Date

December 28, 2016

fails to trigger removability under fraudulent joinder doctrine. Rather, WFB’s contention
that Plaintiff sued WFC in error represents a substantive defense, which WFC itself may
raise.
b.

WFB Fails To Show That Plaintiff Cannot Possibly State A
Cause Of Action Against Defendant Wells Fargo &
Company

Under conventional fraudulent joinder doctrine, WFB also fails to establish that
Plaintiff fraudulently joined WFC; WFB fails to show that Plaintiff cannot possibly state
a claim against WFC under settled California law. “Fraudulent joinder is a term of art. If
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, the joinder of the resident defendant is
fraudulent.” Ritchey, 139 F.3d at 1318; McCabe, 811 F.2d at 1339. “Where fraudulent
joinder is an issue, we will go somewhat further. ‘The defendant seeking removal to the
federal court is entitled to present the facts showing the joinder to be fraudulent.’”
Ritchey, 139 F.3d at 1318 (quoting McCabe, 811 F.2d at 1339).
WFB properly relies on McCabe in framing its argument that WFC is a sham
defendant. District courts in the Ninth Circuit have interpreted McCabe’s requirement of
“obvious[ness] under settled state law” as setting a very high mark for a finding of
fraudulent joinder. Diaz v. Allstate Ins. Grp., 185 F.R.D. 581, 586 (C.D. Cal. 1998) (“it
must appear to “a near certainty” that joinder was fraudulent. Lewis v. Time, Inc., 83
F.R.D. 455, 466 (E.D. Cal.1979), aff'd, 710 F.2d 549 (9th Cir.1983). This occurs if the
plaintiff has no actual intention to prosecute an action against those particular resident
defendants.” (citation omitted)).
“[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.” Padilla v. AT & T Corp., 697 F. Supp. 2d 1156, 1159 (C.D. Cal.
2009). Rather, “[f]or a defendant to succeed on this argument, the defendant must
convince the court that after resolving ‘all disputed questions of fact and all ambiguities
in the controlling state law ... in the plaintiff's favor, the plaintiff could not possibly
recover against the party whose joinder is questioned.’” Warner v. Select Portfolio

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LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 16-07616 BRO (MRWx)

Title

RANA GEBRAN V. WELLS FARGO BANK, N.A.

Date

December 28, 2016

Servicing, No. SACV160753AGRAOX, 2016 WL 4492828, at *2 (C.D. Cal. June 24,
2016) (quoting Padilla, 697 F. Supp. 2d at 1158.

“The defendant must also show that there is no possibility that the plaintiff could
prevail on any cause of action it brought against the non-diverse defendant.” Padilla,
697 F. Supp. 2d at 1159 (emphasis added) (internal quotation marks omitted); see also
Hattox v. State Farm Mut. Auto. Ins. Co., No. 12CV2597-AJB KSC, 2013 WL 314953, at
*4 (S.D. Cal. Jan. 25, 2013) (citing Briano v. Conseco Life Ins. Co., 126 F. Supp. 2d
1293, 1296 (C.D. Cal. 2000); Hunter v. Phillip Morris, 582 F.3d 1039, 1044–46 (9th Cir.
2009)) (“[A finding of fraudulent joinder] requires the court to find that ‘there is
absolutely no possibility that the plaintiff will be able to establish a cause of action
against the non-diverse defendant in state court.’”).
“[A] defendant must essentially show that the plaintiff cannot assert a claim
against the non-diverse party as a matter of law.” Amarant v. Home Depot U.S.A., Inc.,
No. 1:13-CV-00245-LJO-SK, 2013 WL 3146809, at *4 (E.D. Cal. June 18, 2013)
(emphasis added) (citation omitted). In other words, “[r]emand must be granted unless
the defendant shows that the plaintiff would not be afforded leave to amend his complaint
to cure the purported deficiency.” Nasrawi v. Buck Consultants, LLC, 776 F. Supp. 2d
1166, 1170 (E.D. Cal. 2011) (alterations and internal quotation marks omitted). If there
is a possibility that the plaintiff could amend his pleading to state a cause of action
against the allegedly sham defendant, then remand is warranted. See Padilla, 697 F.
Supp. 2d at 1159.
WFB has offered evidence that it was Plaintiff’s employer from 2009 to 2015 and
that WFC is a holding company that owns shares of WFB. (Remand Opp’n at 2.) WFB
also argues that Plaintiff has provided no basis for this Court not to follow “similar cases
that have concluded the proper employer and defendant in lawsuits such as this arising
out of employment at Wells Fargo retail banks is Wells Fargo Bank, N.A., and not Wells
Fargo & Company.” (Remand Opp’n at 2 (citing Vasquez, 77 F. Supp. 3d at 923).)
Plaintiff claims that she “has a good faith belief that under California law there is a viable
claim against both [WFB] and [WFC] as Plaintiff’s joint employers.” (Remand Mot. at
3–4.) As discussed below, under settled California law, it is not obvious that Plaintiff
cannot possibly state a claim against WFC on a joint employer theory.

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LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 16-07616 BRO (MRWx)

Title

RANA GEBRAN V. WELLS FARGO BANK, N.A.

i.

Date

December 28, 2016

Plaintiff Alleges Facts Indicating Exhaustion Of
Administrative Remedies With Respect To WFC

FEHA prohibits workplace harassment on various bases, including race, age,
disability, and medical condition. Cal. Gov't Code § 12940(j)(1). However, pursuant to
FEHA, before filing a lawsuit, employees must exhaust administrative remedies by filing
a complaint with California's DFEH. See Wills v. Superior Court, 195 Cal. App. 4th 143,
153 (Cal. Ct. App. 2011) (“Before filing a civil action alleging FEHA violations, an
employee must exhaust his or her administrative remedies with DFEH.”); accord Ortiz v.
Sodexho, Inc., No. 10–CV–2224 JLS RBB, 2011 WL 3204842, at *3 (S.D. Cal. July 26,
2011).
Here, Plaintiff has alleged facts that she has exhausted her administrative remedies
with respect to WFC. In her Complaint, Plaintiff states that she has “complied with all
administrative remedies in that on January 13, 2016, she filed a Complaint of
Discrimination with the [DFEH] which on January 13, 2016 issued [Plaintiff] an
immediate “Right to Sue Notice” authorizing her to bring this civil action . . . .” (Compl.
¶ 18.) Plaintiff’s statement regarding administrative exhaustion with regard to WFC
supports her position that she may state a claim against WFC.
ii.

WFB Fails To Demonstrate That Plaintiff Cannot
Possibly State A Claim Against WFC On A Joint
Employer Theory

Even assuming that Plaintiff's operative Complaint currently fails to adequately
allege that WFC is Plaintiff’s joint employer, WFB has not met its burden of establishing
that Plaintiff is incapable of amending her Complaint to state a valid claim against WFC
on a joint-employer theory under the integrated enterprise test.9

9

This test requires an employee to establish that the parent entity exercised day-to-day control over the
subsidiary’s employment decisions to a degree that exceeds the control normally exercised by a parent
corporation, including decisions regarding hiring, firing, and rate of pay. See Laird, 68 Cal. App. 4th at
737; Vernon, 116 Cal. App. 4th at 126.

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LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 16-07616 BRO (MRWx)

Title

RANA GEBRAN V. WELLS FARGO BANK, N.A.

Date

December 28, 2016

Under California law, a plaintiff may assert claims for unpaid wages only against
their employer.10 Vasquez, 77 F. Supp. 3d at 922–23 (citing Futrell v. Payday Ca., Inc.,
190 Cal. App. 4th 1419, 1423 (2010)). Although under some circumstances two
corporations may be treated as a single employer, there is a strong presumption against
holding a parent corporation liable for the acts or omissions of the subsidiary on the
theory that the two corporate entities constitute a single employer. Id. (citing Laird v.
Capital Cities/ABC, 68 Cal. App. 4th 727, 737 (1998)). This presumption is based on the
principle that corporate entities have separate existences. Id. Consequently, the
corporate form is disregarded only when the ends of justice require this result. Id.
(citations omitted).

In determining whether a defendant is a joint employer for the purposes of FEHA,
California courts consider the “‘totality of circumstances’ that reflect upon the nature of
the work relationship of the parties.” Kasperzyk v. Shetler Sec. Servs., Inc., No. C-133358 EMC, 2014 WL 1760040, at *6 (N.D. Cal. May 2, 2014) (citing Vernon v. State,
116 Cal. App. 4th 114, 124 (2004)). The key factor to consider in analyzing whether an
entity is an employer is “the right to control and direct the activities of the person
rendering service, or the manner and method in which the work is performed.” Doe I v.
Wal-Mart Stores, Inc., 572 F.3d 677, 682 (9th Cir. 2009) (citing Serv. Emps. Int'l Union
v. Cty. of L.A., 225 Cal. App. 3d 761 (1990) (internal quotations and citation omitted)).
“A finding of the right to control employment requires . . . a comprehensive and
immediate level of ‘day-to-day’ authority over employment decisions.” Id. (citing
Vernon, 116 Cal. App. 4th at 114.
WFB argues that “Plaintiff cannot establish [WFC] was her joint employer because
there is no evidence that [WFC] exercised day-to-day control over [WFB]’s employment
decisions to a degree that exceeds the control normally exercised by a parent
corporation.” (Remand Opp’n at 4.) WFB further contends that, “the terms and
conditions of Plaintiff’s employment was [sic], like that of all Wells Fargo retail bank
employees, exclusively controlled by Wells Fargo Bank.” (Id.) Here, even assuming that

10

An employer is defined as one who: (1) exercises control over the wages, hours and working
conditions of an employee; (2) suffers or permits an employee to work; or (3) engages an employee,
thereby creating a common law employment relationship. Vasquez, 77 F. Supp. 3d at 922–23 (citing
Martinez v. Combs, 49 Cal. 4th 35, 64 (2010)).

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LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 16-07616 BRO (MRWx)

Title

RANA GEBRAN V. WELLS FARGO BANK, N.A.

Date

December 28, 2016

Plaintiff's operative Complaint currently fails to adequately allege that WFC is Plaintiff’s
joint employer, WFB has not met its burden of establishing that Plaintiff is incapable of
amending her Complaint to state a valid claim against WFC on a joint-employer theory.

First, Plaintiff’s failure to allege facts or offer evidence to show that WFC is her
joint employer, does not conclusively show that Plaintiff could not possibly state a claim
against WFC based on a theory of joint-employer status.11 Second, even assuming the
terms and conditions of Plaintiff’s employment were contractually controlled by WFB,12
this does not mean that it is impossible for WFC to exercise control over Plaintiff’s
employment at WFB’s in practice.13
Finally, WFB fails to demonstrate that Plaintiff has failed to exhaust her
administrative remedies against WFC under FEHA, such that Plaintiff would be barred

11

WFB argues that “Plaintiff has failed to offer any factual or legal basis to support her joint employer
theory.” (Remand Opp’n at 1.) In Amarant, 2013 WL 3146809, at *10, the court explained that:
[E]ven successfully dismissing a claim against a purported fraudulent defendant on
summary judgment does not necessarily equate to a finding that there is no possibility
that the plaintiff could have established a claim. Here, there is no state court decision
assessing the sufficiency of the evidence, and . . . there remains both a possibility that
Plaintiff's harassment claim as to Teruya is sufficient to survive summary judgment, and
that further evidence could strengthen Plaintiff's claim on the merits.
The Amarant court noted that “[it was] not reasoning that a plaintiff could resist removal where
absolutely no factual allegations were stated to support a claim against a purported sham
defendant . . . .” Id. (emphasis added).
In the instant case, Plaintiff has affirmatively made factual allegations that support a claim against WFC,
such as the allegation of exhaustion of administrative remedies. (Compl. ¶ 18.)
12

WFB offers the Declaration of Cathy Tautkus in support of its position. Tautkus declares that “Ms.
Gebran’s employment records [do not] show that Wells Fargo & Company played a controlling role in
her employment with Wells Fargo Bank, N.A.” Tautkus further states that “Wells Fargo & Company
does not exercise control over the terms of our employment, as [Tautkus] and all Wells Fargo retail bank
employees are employed solely by Wells Fargo Bank, N.A.” (See Dkt. No. 18-1, Tautkus Decl. ¶ 4.)

13

Although California courts have expressed that the “right to control” is central to whether an entity
maybe considered an employer (or joint-employer), courts have interpreted such a right to be
demonstrable not only by formal agreements showing actual authority to control, but also through
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LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 16-07616 BRO (MRWx)

Title

RANA GEBRAN V. WELLS FARGO BANK, N.A.

Date

December 28, 2016

from stating a claim against WFC on that basis. To the contrary, as explained above,
Plaintiff appears to have exhausted her administrative remedies with regard to WFC and
secured a Right to Sue Notice. (Compl. ¶ 18.) Therefore, under settled California law, it
is not obvious that Plaintiff’s claim against WFC must fail.

Thus, Plaintiff may still be able to amend her Complaint and offer evidence that
WFC qualifies as a joint employer under the integrated enterprise test. Accordingly, the
Court declines to find that Plaintiff fraudulently joined WFC.
3.

This Court Lacks Subject Matter Jurisdiction

Removal was improper (and remand is appropriate) because this Court lacks
subject matter jurisdiction over this action. Pursuant to 28 U.S.C. § 1332(a)(1), a federal
district court has jurisdiction over “all civil actions where the matter in controversy
exceeds the sum or value of $75,00014, exclusive of interest and costs,” and the dispute is
between citizens of different states. The Supreme Court has interpreted § 1332 to require
“complete diversity of citizenship,” meaning each plaintiff must be diverse from each
defendant. Caterpillar, 519 U.S. at 67–68.
The diversity of citizenship requirement is not met because Plaintiff is not
completely diverse from both WFC and WFB. In the Ninth Circuit, if a court finds that
parties were fraudulently joined, the court may ignore the citizenship of the parties joined
in state court and retain jurisdiction over the removed action. See Ritchey, 139 F.3d at
1320; see also Navarro Sav. Ass'n v. Lee, 446 US 458, 460–61 (1980) (“[A] federal court
must disregard nominal or formal parties and rest jurisdiction only upon the citizenship of
real parties to the controversy.”); Chinn v. Am. Airlines, Inc., 843 F.2d 501 (9th Cir.
1988) (quoting Wilsey v. Eddingfield, 780 F.2d 614, 615 (7th Cir. 1985)) (“The focus of
the jurisdictional inquiry is on the real party in interest; ‘the citizenship of the real party

practical acts of control that indicate apparent authority to control. See Vernon, 116 Cal. App. 4th at 127
(considering whether defendant had apparent authority to control plaintiff in deciding whether defendant
was plaintiff’s joint employer).
14

The Court need not address whether the amount in controversy exceeds $75,000 because the
requirement of complete diversity is not met, as explained below.
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LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 16-07616 BRO (MRWx)

Title

RANA GEBRAN V. WELLS FARGO BANK, N.A.

Date

December 28, 2016

in interest is determinative in deciding whether the district court has diversity
jurisdiction.’”); Boon v. Allstate Ins. Co., 229 F. Supp. 2d 1016, 1020 (C.D. Cal. 2002).

WFB argues that this Court should disregard the citizenship of WFC for purposes
of determining whether the Court has removal jurisdiction over Plaintiff’s action. As
explained above, the Court finds WFB has failed to establish that WFC was joined as a
sham defendant. Because WFB failed to establish that WFC is a nominal or formal party,
WFC’s citizenship may not be disregarded for purposes of diversity of citizenship in this
case. Accordingly, the Court considers both WFB and WFC’s citizenship for removal
jurisdiction purposes.
A party is a citizen of the state in which they are domiciled. Gilbert v. David, 235
U.S. 561, 569 (1915). “A person’s domicile is her permanent home, where she resides
with the intention to remain or to which she intends to return.” Kanter v. Warner
Lambert Co., 265 F.3d 853, 857 (9th Cir. 2001). “For diversity jurisdiction
purposes, . . . Congress has discretely provided that national banks ‘shall . . . be deemed
citizens of the States in which they are respectively located.’” Wachovia Bank v.
Schmidt, 546 U.S. 303, 306 (2006) (quoting 28 U.S.C. § 1348). For diversity purposes,
“a corporation shall be deemed to be a citizen of every State and foreign state by which it
has been incorporated and of the State or foreign state where it has its principal place of
business . . . .” 28 U.S.C. § 1332(c)(1). When determining a corporation’s principal
place of business for purposes of diversity jurisdiction, courts refer to the place where a
corporation’s officers direct, control, and coordinate the corporation’s activities. Hertz
Corp. v. Friend, 559 U.S. 77, 92–93 (2010). A corporation’s principal place of business
is where the corporation “maintains its headquarters—provided that the headquarters is
the actual center of direction, control and coordination.” Id.
The Court finds that: (1) WFB is a citizen of South Dakota, the state in which its
main office is located, (see Removal ¶ 10); (2) WFC is a citizen of Delaware and
California, the states in which WFC is incorporated and maintains its and principal place
of business, respectively, (Compl. ¶ 3); and, (3) Plaintiff is domiciled in California, the
state in which Plaintiff worked for years and continues to reside, and thus, has maintained
her domicile, (Compl. ¶ 3; Removal ¶ 8). Because both Plaintiff and WFC are citizens of
California, the Court finds that the diversity of citizenship requirement for removal

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LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 16-07616 BRO (MRWx)

Title

RANA GEBRAN V. WELLS FARGO BANK, N.A.

Date

December 28, 2016

jurisdiction is not met. Thus, this Court does not have subject matter jurisdiction over
Plaintiff’s action and remand is appropriate.

CONCLUSION
For the foregoing reasons, the Court hereby GRANTS Plaintiff’s Motion to
Remand and DENIES as moot WFB’s Motion to Dismiss.
:

IT IS SO ORDERED.
Initials of
Preparer

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