Kim Thompson v. 3M Company et al

Filing 22

MINUTES (IN CHAMBERS) Order: (1) GRANTING Plaintiff's Motion to Remand (Dkt. No. 14); (2) REMANDING this action to the California Superior Court, County of Riverside; and (3) VACATING the March 6, 2017 Hearing by Judge Jesus G. Bernal re: 14 MOTION to Remand Case to State Court Case Remanded to Riverside County Superior Court, RIC1615211. (See document for specifics) MD JS-6. Case Terminated. (mrgo)

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

EDCV 17-006 JGB (KKx)

JS-6

Date March 3, 2017

Title Kim Thompson v. 3M Company et al.

Present: The Honorable

JESUS G. BERNAL, UNITED STATES DISTRICT JUDGE

MAYNOR GALVEZ

Not Reported

Deputy Clerk

Court Reporter

Attorney(s) Present for Plaintiff(s):

Attorney(s) Present for Defendant(s):

None Present

None Present

Proceedings:

Order: (1) GRANTING Plaintiff’s Motion to Remand (Dkt. No. 14); (2)
REMANDING this action to the California Superior Court, County of
Riverside; and (3) VACATING the March 6, 2017 Hearing (IN
CHAMBERS)

On November 16, 2016, Kim Thompson (“Plaintiff”) initiated this action against 3M
Company (“3M”) and Ingram Micro, Inc. (“Ingram”) (collectively, “Defendants”) in
California Superior Court for the County of Riverside, alleging that she incurred injuries while
employed as a packer for Ingram. (“Complaint,” Dkt. No. 1-2.) 3M removed the case on
January 4, 2017 on the basis of diversity jurisdiction, asserting that Ingram—the non-diverse
Defendant—was fraudulently joined. (Not. of Removal, Dkt. No. 1.)
On February 3, 2017, Plaintiff filed this motion to remand the action to state court.
(“Motion,” Dkt. No. 14.) Defendants opposed Plaintiff’s Motion on February 13, 2017.
(“Opp’n,” Dkt. No. 18.) Plaintiff filed her reply memorandum on February 17, 2017. (“Reply,”
Dkt. No. 20.)
The Court finds this matter appropriate for resolution without a hearing. See Fed. R.
Civ. P. 78; L.R. 7-15. After consideration of the papers filed in support of and in opposition to the
motion, the Court GRANTS Plaintiff’s Motion to Remand.

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I.

LEGAL STANDARD1

“Federal courts are courts of limited jurisdiction, possessing only that power authorized
by Constitution and statute.” Gunn v. Minton, 133 S. Ct. 1059, 1064 (2013). As such, federal
courts only have original jurisdiction over civil actions in which a federal question exists or in
which complete diversity of citizenship between the parties exists and the amount in controversy
exceeds $75,000. See 28 U.S.C. §§ 1331, 1332. “Complete diversity” means that “each
defendant must be a citizen of a different state from each plaintiff.” In re Digimarc Corp.
Derivative Litigation, 549 F.3d 1223, 1234 (9th Cir. 2008).
Moreover, the Ninth Circuit “strictly construe[s] the removal statute against removal
jurisdiction,” and “[f]ederal jurisdiction must be rejected if there is any doubt as to the right of
removal in the first instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992); see also
Jackson v. Specialized Loan Servicing, LLC, No. CV 14-05981 MMM PLAX, 2014 WL 5514142,
at *6 (C.D. Cal. Oct. 31, 2014) (quoting Gaus). “The strong presumption against removal
jurisdiction means that the defendant always has the burden of establishing that removal is
proper.” Jackson, 2014 WL 5514142, at *6. Doubts as to removability must be resolved in favor
of remanding the case to state court. Id. (internal citations omitted).
But removal is proper despite the presence of a non-diverse defendant where that
defendant is a fraudulently joined or sham defendant. Ritchey v. Upjohn Drug Co., 139 F.3d
1313, 1318 (9th Cir. 1998); see also McCabe v. Gen. Foods Corp., 811 F.2d 1336, 1339 (9th Cir.
1987) (“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.”) As the Ninth Circuit has explained, “fraudulent joinder is a term of art” and
requires courts to look at whether a plaintiff has failed to state a cause of action against a resident
defendant. Id. Thus, the defendant must show that there is no possibility that the plaintiff could
prevail on any cause of action it brought against the non-diverse defendant. Id.; see also Padilla v.
AT & T Corp., 697 F. Supp. 2d 1156, 1159 (C.D. Cal. 2009) (defendant seeking removal based on
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” but 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”); Gloger v. Lynch, No. 2:16-CV-05445-CAS-E, 2016 WL 4770015, at *3 (C.D. Cal.
Sept. 12, 2016) (noting that “the burden of proving a fraudulent joinder is a heavy one” because
“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.”)
1

In reviewing Plaintiff’s discussion of the applicable standards, the Court notes that
Plaintiff’s Motion relies almost entirely on out-of-circuit law. (See Motion at 4, 5, and 7 (citing
only to Fourth, Fifth, Sixth, and Eleventh Circuit cases). It is unclear why Plaintiff avoided citing
to controlling case law, particularly where there is no dearth of relevant cases in this Circuit. The
Court cautions Plaintiff’s counsel to ensure that legal arguments are grounded in relevant and
controlling authority in the future.
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Generally, the rule is that “the propriety of removal is determined solely on the basis of the
pleadings filed in state court.” Williams v. Costco Wholesale Corp., 471 F.3d 975, 976 (9th Cir.
2006). However, in the case of an allegedly fraudulent joinder, “the defendant seeking removal to
the federal court is entitled to present the facts showing the joinder to be fraudulent.” McCabe v.
Gen. Foods Corp., 811 F.2d 1336, 1339 (9th Cir. 1987).
II.

DISCUSSION

Plaintiff is a resident of Riverside, California, while 3M is incorporated in Delaware, with
its principal place of business in Minnesota. (See Complaint & Not. of Removal.) Accordingly,
there is diversity between these two Parties for purposes of removal.2 However, the Parties agree
that Ingram is a local defendant and therefore non-diverse from Plaintiff. (Id.) In its Notice of
Removal, 3M contends that Ingram is a sham defendant, joined by Plaintiff only to destroy
diversity. (Not. of Removal.) It makes this argument by relying on California Labor Code
section 3602, which provides that a workers’ compensation claim is the exclusive remedy against
an employer for injuries sustained in the course of employment. (Id. at 2.) Plaintiff is an
“employee” of Ingram for purposes of the statute, 3M argues, and so is bound by the exclusive
remedy rule—which means Ingram is immune from suit. (Id. at 2-3.) Thus, it concludes that
Ingram is fraudulently joined because Plaintiff cannot state a cause of action against it. (Id. at 3.)
The exclusive remedy provision in the Labor Code states: “Where the conditions of
compensation set forth in Section 3600 concur, the right to recover compensation is, except as
specifically provided in this section and Sections 3706 and 4558, the sole and exclusive remedy of
the employee or his or her dependents against the employer.” Cal. Lab. Code § 3602.
Accordingly, under this provision, when an injury occurs at the worksite, “in the normal course
of the employer-employee relationship workers' compensation is plaintiffs' exclusive remedy for
any injury that may have resulted.” Bohnert v. Roman Catholic Archbishop of San Francisco,
136 F. Supp. 3d 1094, 1124 (N.D. Cal. 2015) (internal marks and citations omitted); see also
Enslow Through Enslow v. United States, 42 F.3d 1399 (9th Cir. 1994) (“In California, worker's
compensation payment is the exclusive remedy available against an employer for a work-related
injury sustained by an employee.”); Angelotti v. Walt Disney Co., 192 Cal. App. 4th 1394, 1403
(2011) (“Workers' compensation provides the exclusive remedy against an employer for an injury
sustained by an employee in the course of employment and compensable under the workers'

2

The Court notes that the Complaint states only that 3M is a “Delaware corporation”
“doing business” in California. (Complaint ¶ 4.) The mere fact that a corporation is doing
business in a state does not make it a citizen of that state for purposes of diversity jurisdiction.
See 28 U.S.C. § 1332(c)(1) (corporation is citizen of its state of its incorporation and state where
it has its “principal place of business”); Thomas v. Thomas, No. SACV141096JLSRNBX, 2015
WL 12697636, at *1 (C.D. Cal. Jan. 20, 2015) (noting that “[w]here a corporation ‘does business’
is irrelevant”). Neither does Plaintiff challenge 3M’s statement that it is incorporated in
Delaware and has its principal place of business in Minnesota. Accordingly, the Court is satisfied
that 3M is diverse from Plaintiff.
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compensation law . . . This precludes a tort remedy against the employer if the conditions of
compensation are present.”)
Plaintiff’s Motion challenges the argument that she is bound by the exclusive remedy rule
in bringing claims against Ingram in two ways. First, she argues that Ingram is not clearly her
“employer” under the terms of the Labor Code. (Motion at 6.) Second, she argues that, even if
Ingram were her employer, she may invoke the “power press” exception set forth in the Labor
Code to avoid application of the exclusive remedy rule. (Id.)
With regard to her first argument, Plaintiff states in the Complaint that she “was
employed at the ‘facility’ of [Ingram] . . . and was the operator and/or user of box
taping/labeling/packaging machine system and its component parts.” (Complaint ¶ 6.) Later,
she states: “On or about November 21, 2014, Plaintiff Kim Thompson was an employee of
defendants Ingram Micro, Inc. . . . At that time and location, [Plaintiff] was working for said
defendants as a packer.” (Complaint ¶¶ 29 & 30.) However, Plaintiff now argues that “the legal
characterization of the relationship between Defendant Ingram Micro and Plaintiff Thompson,
and specifically whether or not she was legally considered to be an employee thereof, remains
unclear.” (Motion at 6.) Instead, she suggests that her employer was, instead, “the temporary
agency that assigned Plaintiff to Ingram Micro’s facility,” explaining that her workers’
compensation documents “appear to be filed against the temporary agency,” not against Ingram.
(Id.) To the extent that Ingram is involved in her claims, she explains that it manufactures and
supplies the machines that she used in her work. (Id.; see also Complaint ¶ 20.)
Plaintiff is correct that only an employer who has entered into an employment
relationship with its employee is entitled to the workers' compensation exclusivity rule.
McLandrich By & Through McLandrich v. S. California Edison Co., 917 F. Supp. 723, 727 (S.D.
Cal. 1996) (citing to Arriaga v. County of Alameda, 9 Cal. 4th 1055, 1060 (1995)). In turn,
whether an employment relationship exists is generally “a question of fact which becomes a
question of law only when but one inference can reasonably be drawn from the facts.”
McLandrich By & Through McLandrich v. S. California Edison Co., 917 F. Supp. 723, 727 (S.D.
Cal. 1996).
3M argues that there is a presumption in favor of finding an employee relationship,
asserting that an employee is broadly defined as “every person in the service of an employer
under any appointment or contract of hire or apprenticeship, express or implied, oral or written.”
(Opp’n at 3.) However, the Ninth Circuit has made clear that the presumption applies only when
invoked by the plaintiff in a claim seeking worker's compensation. Enslow Through Enslow v.
United States, 42 F.3d 1399 (9th Cir. 1994). When, as here, the defendant seeks to invoke the
presumption as a defense to state law claims, “courts generally are more exacting in requiring
proof of an employment relationship.” Id. (internal quotation marks omitted.) In a case like this,
“the mere fact that [the plaintiff] provided services to the [defendant] cannot give rise to the
presumption of employment as a defense to suit, even if the [plaintiff] was an ‘employee’ of the
[defendant].” Id. Instead, to prove employment, the Ninth Circuit explained that the defendant
must meet the “more exacting” standard set forth in Kowalski v. Shell Oil Co., 23 Cal. 3d 168
(1979).
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The Kowalski test requires a court to consider a number of factors. The “paramount
consideration” is whether the alleged employer exercises control over the details of an
employee’s work, but other factors include: whether the alleged employer has the power to
discharge a worker; whether it is responsible for the employee’s payment of wages; whether the
work is part of the employer's regular business, the duration of the employment period; who
supplies the work tools; whether the worker consented to the employment relationship, either
expressly or impliedly; and whether the parties believed they were creating the employeremployee relationship. Kowalski, 23 Cal. 3d at 176–78.
Reviewing these factors leads the Court to the conclusion that Defendants have not
overcome the heavy burden to show fraudulent joinder. Under the “more exacting” standard of
Kowalski, there are simply insufficient facts before this Court that would confirm whether
Ingram exercised control over the details of Plaintiff’s work, whether Ingram had the power to
discharge Plaintiff, or whether Ingram was responsible for the payment of her wages. And, with
the exception of whether Ingram supplied the work tools—that question, at least, may be
answered in the affirmative—the Court has no information as to the rest of the factors either.3
For its part, 3M does not provide any argument or facts to show that Ingram is Plaintiff’s
employer: rather, it relies entirely on an incorrect standard of proof to assert that Plaintiff is
simply presumed to be an employee. (Motion at 3.)4 For the reasons noted above, that standard
does not apply here. Under the applicable test, 3M has not definitively shown that Ingram is
Plaintiff’s employer, such that the exclusive remedy rule would apply to bar her claims against it.
While the Court acknowledges that discovery could ultimately resolve the employeeemployer relationship question in Ingram’s favor, the procedural posture here requires
Defendant to prove that there is absolutely no possibility that Plaintiff could establish a cause of
action against the in-state defendant in state court. That it has not done, and it would be
overreaching for this Court to make a determination as to what a California court might do when
faced with this issue for the first time. See Lieberman v. Meshkin, Mazandarani, No. C-96-3344
SI, 1996 WL 732506, at *3 (N.D. Cal. Dec. 11, 1996) (“Fraudulent joinder is not shown merely
because the action is likely to be dismissed against that defendant. 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.”) Remand is required on this basis alone. The Court therefore does not
reach the alternative issue pressed by both sides—whether Plaintiff has sufficiently alleged that
she qualified for the “power press” exception from the exclusive remedy rule.
//

3

In fact, 3M’s motion only seems to suggest that Ingram did not sign Plaintiff’s
paychecks. (See Motion at 3 (“Who signed her paycheck is irrelevant.”))
4

The Court is also unpersuaded that Plaintiff’s reference to being an employee of
Ingram’s in her Complaint settles the matter: whether she is an employee is a legal question that
cannot be determined by an allegation in the Complaint.
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III.

CONCLUSION

For the foregoing reasons, the Court finds that complete diversity does not exist
between Plaintiff and Defendants, as Plaintiff may be able to assert a claim against 3M, a nondiverse defendant. Accordingly, the Court GRANTS Plaintiff’s Motion and REMANDS this
action to the California Superior Court, County of Riverside.
The March 6, 2017 hearing is VACATED.
IT IS SO ORDERED.

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