Joy Slagel v. Liberty Mutual Insurance Company et al

Filing 22

MINUTES (IN CHAMBERS) ORDER GRANTING PLAINTIFF'S MOTION FOR AN ORDER TO REMAND TO STATE COURT [filed 2/23/18; Docket No. 13 ] by Judge John F. Walter. On February 23, 2018, Plaintiff Joy Slagel filed a Motion for an Order to Remand to State Court. The Court finds that this matter is appropriate for decision without oral argument. The hearing calendared for March 26, 2018 is hereby vacated and the matter taken off calendar. Plaintiff's Motion to Remand is GRANTED. This action is hereby REMANDED to Los Angeles County Superior Court. Plaintiff's request for attorneys' fees and costs is DENIED. MD JS-6. Case Terminated. (iv)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

JS-6

CIVIL MINUTES -- GENERAL
Case No.

CV 18-689-JFW(JEMx)

Title:

Joy Slagel -v- Liberty Mutual Insurance Company, et al.

Date: March 22, 2018

PRESENT:
HONORABLE JOHN F. WALTER, UNITED STATES DISTRICT JUDGE
Shannon Reilly
Courtroom Deputy

None Present
Court Reporter

ATTORNEYS PRESENT FOR PLAINTIFFS:
None
PROCEEDINGS (IN CHAMBERS):

ATTORNEYS PRESENT FOR DEFENDANTS:
None

ORDER GRANTING PLAINTIFF’S MOTION FOR AN
ORDER TO REMAND TO STATE COURT [filed 2/23/18;
Docket No. 13]

On February 23, 2018, Plaintiff Joy Slagel (“Plaintiff”) filed a Motion for an Order to Remand
to State Court (“Motion”). On March 5, 2018, Defendant Liberty Mutual Insurance Company
(“Liberty Mutual”) filed its Opposition. On March 12, 2018, Plaintiff filed a Reply. Pursuant to Rule
78 of the Federal Rules of Civil Procedure and Local Rule 7-15, the Court finds that this matter is
appropriate for decision without oral argument. The hearing calendared for March 26, 2018 is
hereby vacated and the matter taken off calendar. After considering the moving, opposing, and
reply papers, and the arguments therein, the Court rules as follows:
I.

Factual and Procedural Background

On January 26, 2017, Plaintiff filed a Complaint against Liberty Mutual, Ariam Alemseghed
(“Alemseghed”), and Leann Lo (“Lo”) (collectively, “Defendants”) in Los Angeles Superior Court,
alleging causes of action for: (1) discrimination on the basis of age in violation of California Fair
Employment and Housing Act (“FEHA”); (2) harassment on the basis of age in violation of FEHA;
(3) retaliation for complaints of discrimination and/or harassment on the basis of age in violation of
FEHA; (4) discrimination on the basis of taking disability leave in violation of FEHA; (5) retaliation
for taking disability leave in violation of FEHA; (6) failure to provide reasonable accommodation in
violation of FEHA; (7) failure to engage in the interactive process in violation of FEHA; (8) breach
of express oral contract not to terminate employment without good cause; (9) breach of implied-infact contract not to terminate employment without good cause; (10) wrongful termination in
violation of public policy; (11) violation of Labor Code § 1102.5; and (12) intentional infliction of
emotional distress. On March 23, 2017, Defendants each filed an Answer to the Complaint.
On January 26, 2018, Liberty Mutual filed a Notice of Removal of Action to the United
Page 1 of 4

Initials of Deputy Clerk sr

States District Court for the Central District of California Pursuant to 28 U.S.C. §§ 1332, 1441(a)
and (b) Diversity (“Notice of Removal”), alleging that this Court has diversity jurisdiction over this
action pursuant to 28 U.S.C. § 1332(a).
In her Motion, Plaintiff moves to remand this action to Los Angeles County Superior Court,
arguing that this Court does not have diversity jurisdiction because Plaintiff, Alemseghed, and Lo
are all citizens of California and the amount in controversy does not exceed $75,000. In its
Opposition, Liberty Mutual argues that Alemseghed and Lo have been fraudulently joined and the
amount in controversy does exceed $75,000.
II.

Legal Standard

A motion to remand is the proper procedure for challenging removal. See N. Cal. Dist.
Council of Laborers v. Pittsburg-Des Moines Steel Co., 69 F.3d 1034, 1038 (9th Cir.1995). The
removal statute is strictly construed, and any doubt about the right of removal is resolved in favor of
remand. See Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir.1992); see also Prize Frize, Inc. v.
Matrix, Inc., 167 F.3d 1261, 1265 (9th Cir.1999). Consequently, if a plaintiff challenges the
defendant’s removal of a case, the defendant bears the burden of establishing the propriety of the
removal. See Gaus, 980 F.2d at 566; see also Duncan v. Stuetzle, 76 F.3d 1480, 1485 (9th
Cir.1996) (citations and quotations omitted) (“Because of the Congressional purpose to restrict the
jurisdiction of the federal courts on removal, the statute is strictly construed, and federal jurisdiction
must be rejected if there is any doubt as to the right of removal in the first instance.”).
III.

Discussion

Diversity jurisdiction founded under 28 U.S.C. § 1332(a) requires that (1) all plaintiffs be of
different citizenship than all defendants, and (2) the amount in controversy exceed $75,000. See 28
U.S.C. § 1332. Because Liberty Mutual has not met its burden of demonstrating that the parties are
completely diverse, this action must be remanded.
Although Plaintiff, Alemseghed, and Lo are all citizens of California, Liberty Mutual contends
that Alemseghed and Lo have been fraudulently joined, and, thus, their presence in this action
should be ignored. “Although an action may be removed to federal court only where there is
complete diversity of citizenship, . . . one exception to the requirement for complete diversity is
where a non-diverse defendant has been ‘fraudulently joined.’” Hunter v. Philip Morris USA, 582
F.3d 1039, 1043 (9th Cir. 2009) (quotations and citations omitted). “Fraudulent joinder is a term of
art and does not implicate a plaintiff's subjective intent.” Health Pro Dental Corp. v. Travelers Prop.
Cas. Co. of Am., 2017 WL 1033970, at *3 (C.D. Cal. Mar. 17, 2017). 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.” McCabe v. Gen. Foods Corp.,
811 F.2d 1336, 1339 (9th Cir. 1987) (emphasis added). If the Court finds that the joinder of a nondiverse defendant is fraudulent, that defendant’s presence in the lawsuit is ignored for the purposes
of determining diversity. See, e.g., Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir.
2001).

“There is a presumption against finding fraudulent joinder, and defendants who assert that
plaintiff has fraudulently joined a party carry a heavy burden of persuasion.” Plute v. Roadway

Page 2 of 4

Initials of Deputy Clerk sr

Package Sys., Inc., 141 F. Supp. 2d 1005, 1008 (N.D. Cal. 2001). Indeed, “[f]raudulent joinder must
be proven by clear and convincing evidence.” Hamilton Materials, Inc. v. Dow Chemical Corp., 494
F.3d 1203, 1206 (9th Cir. 2007). A claim of fraudulent joinder should be denied if there is any
possibility that the plaintiffs may prevail on the cause of action against the non-diverse defendant.
See Plute, 141 F. Supp. 2d at 1008. “The standard is not whether plaintiffs will actually or even
probably prevail on the merits, but whether there is a possibility that they may do so.” Lieberman v.
Meshkin, Mazandarani, 1996 WL 732506, at *3 (N.D. Cal. Dec. 11, 1996) (emphasis added). “In
determining whether a defendant was joined fraudulently, the court must resolve ‘all disputed
questions of fact and all ambiguities in the controlling state law in favor of the non-removing party.’”
Plute, 141 F. Supp. 2d at 1008 (quoting Dodson v. Spiliada Maritime Corp., 951 F.2d 40, 42-43 (5th
Cir. 1992)). Moreover, any doubts concerning the sufficiency of a cause of action due to inartful,
ambiguous, or technically defective pleading must be resolved in favor of remand. See id. “[A]
removing defendant alleging 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. Rather, the defendant must
establish that plaintiff could not amend his complaint to add additional allegations correcting any
deficiencies.” Martinez v. Michaels, 2015 WL 4337059, at *5 (C.D. Cal. July 15, 2015) (quotations
and citations omitted).

The Court concludes that Liberty Mutual has failed to meet its heavy burden of
demonstrating fraudulent joinder.1 In her Complaint, Plaintiff alleges claims for harassment on the
basis of age and intentional infliction of emotional distress against Alemseghed and Lo. Although
Liberty Mutual argues that Plaintiff cannot possibly prevail on her claims against Alemseghed and
Lo, the Court cannot conclude that Plaintiff has no possibility of prevailing on her claims against
Alemseghed and Lo, and Liberty Mutual’s argument is better raised in a demurrer or motion to
dismiss rather than in a notice of removal or in its Opposition to Plaintiff’s Motion. See Vincent v.
First Republic Bank Inc., 2010 WL 1980223, at *4 (N.D. Cal. May 17, 2010) (“While plaintiff’s
allegations may fall short of proving outrageous conduct, this order cannot conclude that plaintiff
has absolutely no possibility of stating a claim, if afforded an opportunity to amend”); see also
Ramirez v. Speltz, 2015 WL 5882065, at *3 (N.D. Cal. Oct, 8, 2015) (holding that “[u]nlike a
discrimination claim, for which only an employer may be liable, an individual employee may be liable
for workplace harassment (in addition to the employer)”); Barsell v. Urban Outfitters, Inc., 2009 WL
1916495, at *5 (C.D. Cal. Jul. 1, 2009) (quotations and citations omitted) (“There is no authority for
the proposition that [a manager] may not be liable in tort for the intentional infliction of emotional
distress providing all of the elements of that tort are satisfied. Indeed, California case law is
replete with cases where conduct of the employer or one of its agents or employees is so outside
the bounds of conduct tolerated by a decent society that it may give rise to a claim for intentional
infliction of emotional distress.”); Landucci v. State Farm Insurance Company, 65 F.Supp. 3d 694,
703 (N.D. Cal. 2014) (“The FEHA specifically makes harassment by an employee unlawful”).
IV.

Conclusion

For the foregoing reasons, Plaintiff’s Motion to Remand is GRANTED. This action is hereby
REMANDED to Los Angeles County Superior Court. Plaintiff’s request for attorneys’ fees and
1

Because the Court concludes that Liberty Mutual has failed to meet its burden of
demonstrating fraudulent joinder, the Court need not address Plaintiff’s argument that Liberty
Mutual failed to demonstrate that the amount in controversy exceeds $75,000.
Page 3 of 4

Initials of Deputy Clerk sr

costs is DENIED.
IT IS SO ORDERED.

Page 4 of 4

Initials of Deputy Clerk sr