Earl M. Goff v. Dial and Associates PC et al

Filing 18

ORDER Remanding Case to State Court for Improper Removal by Judge David O. Carter. For the foregoing reasons, the Court REMANDS this action to state court. All pending motions and hearing dates are VACATED. The Clerk shall serve this minute order on the parties. (see document for details). Case remanded to Orange County Superior Court, Case number 30-02014-00733320 Case Terminated. Made JS-6 (dro)

JS-6
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL

Case No. SA CV 14-1830-DOC (JCGx)

Date: January 22, 2015

Title: EARL M. GOFF v. DIAL & ASSOCIATES PC, ET AL.

PRESENT:
THE HONORABLE DAVID O. CARTER, JUDGE
Deborah Goltz
Courtroom Clerk

Not Present
Court Reporter

ATTORNEYS PRESENT FOR
PLAINTIFF:
None Present

ATTORNEYS PRESENT FOR
DEFENDANT:
None Present

PROCEEDINGS (IN CHAMBERS): ORDER REMANDING CASE TO
STATE COURT FOR IMPROPER
REMOVAL
Federal courts are courts of limited jurisdiction; they possess only that power
authorized by the Constitution and by statute. See Kokkonen v. Guardian Life Ins. Co. of
Am., 511 U.S. 375 (1994). If at any time a federal court determines that it lacks subjectmatter jurisdiction, it must dismiss or remand the action. See Fed. R. Civ. P. 8(h)(3). A
Court may raise the question of subject-matter jurisdiction sua sponte. See Snell v.
Cleveland, Inc., 316 F.3d 822, 826 (9th Cir. 2002). Having considered the Notice of
Removal (Dkt. 1) and the First Amended Complaint (“FAC”) (Dkt. 1) the Court hereby
REMANDS the case to state court for lack of subject-matter jurisdiction.
I.

Background
A.

Facts

Plaintiff Earl M. Goff was formerly employed by Defendant Dial & Associates PC
as a paralegal. FAC ¶ 9. Both parties are citizens of California. Id. ¶¶ 4-5. Plaintiff alleges
that, during his term of employment, Defendant deprived him of meal breaks, rest breaks,

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 14-1830-DOC (JCGx)

Date: January 22, 2015
Page 2

and overtime compensation because he was incorrectly classified as an exempt employee.
Id. ¶ 10. Plaintiff also alleges that Defendant did not provide him with accurate wage
statements listing the total hours worked and wages earned. Id. ¶¶ 20-21.
On April 25, 2014, Plaintiff and Defendant were at the Dial & Associates office
assisting their client, D.H., with a workers’ compensation claim. Id. ¶ 28. Plaintiff heard
Defendant speaking with O.M., Esq. (“O.M.”) regarding D.H.’s workers’ compensation
Compromise and Release. Id. ¶ 29. During this conversation, Defendant and O.M. agreed
that Dial & Associates would receive $1,575 in attorney fees for a deposition. Id. Plaintiff
later informed Defendant that acceptance of this fee was unethical and a violation of the
law because the deposition never occurred. Id. ¶ 30. For this reason, Plaintiff informed
Defendant that he did not want his commission from the fee. Id.
Shortly thereafter, Plaintiff’s employment was terminated. Id. ¶ 46. Plaintiff
alleges that his termination was retaliatory as the result of his complaint and refusal to
partake in the acceptance of the deposition fee. Id.
B.

Procedural History

On July 10, 2014, Plaintiff filed a complaint in the Orange County Superior Court
for (1) Failure to Pay Overtime Compensation; (2) Failure to Provide Rest Periods (Or
Compensation Therefor); (3) Failure to Provide Meal Periods (Or Compensation
Therefor); (4) Failure to Provide Itemized Wage Statements; (5) Violation of the Unfair
Competition Law, Bus. & Prof. Code § 17200 et seq.; and (6) Common Counts. See
generally Compl. (Dkt. 1).
On November 10, 2014, Plaintiff filed a First Amended Complaint for (1)
Violation of the Unfair Competition Law, Bus. & Prof. Code § 17200 et seq. and (2)
Wrongful Termination. See generally FAC. Plaintiff bases his Unfair Competition Law
(UCL) claim, in part, on alleged violations of the federal Racketeer Influenced and
Corrupt Organizations Act (RICO), 18 U.S.C. § 1961 et seq. FAC ¶ 32. His Wrongful
Termination claim also mentions that Defendant was engaged in racketeering in violation
of 18 U.S.C. § 1862.
On November 17, 2014, Defendant removed the action to this Court. See Notice of
Removal. In its Notice of Removal, Defendant stated that the Court has federal question
jurisdiction over the alleged RICO violations under 28 U.S.C. § 1331 and supplemental
jurisdiction over the state law claims under 28 U.S.C. § 1367. Id. at ¶ 2.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 14-1830-DOC (JCGx)

II.

Date: January 22, 2015
Page 3

Legal Standard

Remand may be ordered for lack of subject-matter jurisdiction or any defect in the
removal procedure. 28 U.S.C. § 1447(c). Removal of a case from state to federal court is
governed by 28 U.S.C. § 1441, which provides in pertinent part that “any civil action
brought in a State court of which the district courts of the United States have original
jurisdiction, may be removed . . . to the district court of the United States for the district
and division embracing the place where such action is pending.”
If there is any doubt as to the right of removal in the first instance, remand must be
ordered. See Ethridge v. Harbor House Rest., 861 F.2d 1389, 1393 (9th Cir. 1988). “The
party seeking removal bears the burden of establishing federal jurisdiction.” Id.; McNutt
v. Gen. Motors Acceptance Corp., 298 U.S. 178, 189 (1936).
A court has federal question jurisdiction over a case or controversy when a wellpled complaint establishes either that: (1) federal law creates the cause of action; or (2)
the plaintiff’s right to relief necessarily depends on resolution of a substantial question of
federal law. 28 U.S.C. § 1331; Federal Tax Bd. v. Construction Laborers Vacation
Trust, 463 U.S. 1, 27-28 (1983). The presence or absence of federal question jurisdiction
is governed by the well-pled complaint rule, which provides that federal question
jurisdiction exists only when a federal question is presented on the face of plaintiff’s
properly pled complaint. Wayne v. DHL Worldwide Express, 294 F.3d 1179, 1183 (9th
Cir. 2002). The mere presence of a federal issue in a state law cause of action is not
sufficient in and of itself to confer federal question jurisdiction. See Merrell Dow Pharm.
Inc. v. Thompson, 478 U.S. 804, 810-12 (1986).
III.

Analysis
A.
The Court Lacks Federal Question Jurisdiction Over Plaintiff’s UCL
Claim

Defendant’s removal of this action from state court is based on the alleged RICO
violations stated in Plaintiff’s FAC. Notice of Removal ¶¶ 1-2. Defendant contends that
removal is proper because this Court has federal question jurisdiction over Plaintiff’s
claims arising under 18 U.S.C. § 1962. Id. Plaintiff, however, does not specifically raise a
cause of action for RICO violations in his FAC. In fact, Plaintiff does not bring any
federal causes of action. See generally FAC. Instead, civil RICO violations are alleged as
the basis for Plaintiff’s UCL claim. FAC ¶¶ 31-38. Thus, the Court will resolve whether
alleging a civil RICO claim as a predicate statute for bringing a UCL claim is sufficient
to confer federal question jurisdiction over a lawsuit.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 14-1830-DOC (JCGx)

Date: January 22, 2015
Page 4

California’s UCL prohibits any “unlawful, unfair, or fraudulent business act or
practice.” Cal. Bus. & Prof. Code § 17200. Violation of a federal, state, or local law may
serve as the basis for a UCL claim. See Chabner v. United of Omaha Life Ins. Co., 225
F.3d 1042, 1048 (9th Cir. 2000) (citations omitted). However, Plaintiff’s allegation that
Defendant committed a RICO violation under the UCL does not automatically mean that
Plaintiff has alleged a federal cause of action. A case arises under federal jurisdiction
only when “the federal law does more than just shape a court’s interpretation of state law;
the federal law must be at issue.” Int’l Union of Operating Engineers v. Cnty. of Plumas,
559 F.3d 1041, 1045 (9th Cir. 2009). Furthermore, “where a violation of a federal statute
is one of several independent allegations supporting a state law cause of action, the state
law cause of action does not ‘necessarily turn’ on the construction of the federal statute.”
Sanchez v. Am. Brokers Conduit, No. 5:10-CV-01291-JHN, 2011 WL 164634, at *3
(C.D. Cal. Jan. 14, 2011) (citing Rains v. Criterion Systems, Inc., 80 F.3d 339, 345-46
(9th Cir. 1996)). Therefore, “the mere fact that the UCL claims could be derivative of . . .
RICO claims does not establish [federal question] jurisdiction.” Pelloni v. WE: Women’s
Entm’t Network, No. CV 08-05612, 2008 WL 4501845, at *6 (C.D. Cal. Oct. 5, 2008).
Plaintiff has alleged civil RICO violations as one way in which Defendant has
violated the UCL. This claim stems from Plaintiff’s belief that Defendant engaged in mail
and/or wire fraud by attempting to charge and collect the deposition fee from O.M. FAC
¶¶ 31-38. The civil RICO violations, however, are not the only alleged basis for
Plaintiff’s UCL claim. Plaintiff’s First Cause of Action also states that Defendant failed
to provide rest breaks, meal breaks, and overtime compensation. These are state law
violations which would all be alternative reasons for Defendant’s violation of the UCL.
FAC ¶¶ 24-27. Since any of these alleged unlawful business practices may give rise to
liability under the UCL, a jury could find that Defendant violated the UCL without also
finding that it violated the federal RICO statute. See Pope v. Wells Fargo Bank, N.A., No.
CIV. 2:10-2807 WBS, 2010 WL 8388301, at *3 (E.D. Cal. Nov. 29, 2010). Therefore,
the federal law is not a necessary element of Plaintiff’s claim. Federal question
jurisdiction over a UCL claim is typically “based on either the violation of a federal
statute over which federal courts have exclusive jurisdiction or the violation of a single
federal statute with no allegations of state law violations.” Id. Because Plaintiff has
alleged viable non-federal alternatives to support his UCL claim, federal question
jurisdiction is not established.
Accordingly, the Court lacks federal question jurisdiction over Plaintiff’s UCL
claim and must remand the claim back to state court.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 14-1830-DOC (JCGx)

Date: January 22, 2015
Page 5

B.
The Court Lacks Federal Question Jurisdiction Over Plaintiff’s
Wrongful Termination Claim
The Court must determine whether federal jurisdiction remains over the Wrongful
Termination claim. This claim is also a state cause of action, similar to Plaintiff’s UCL
claim. Defendant removed this claim on the basis that RICO violations are also “core
allegations” of this Wrongful Termination claim. Notice of Removal ¶ 1.Therefore, the
Court will apply the same analysis used to assess the UCL claim.
Plaintiff does not invoke federal law as the reason for which he alleges Wrongful
Termination. Plaintiff complained to his employer because he believed his employer had
violated federal law 18 §§ U.S.C. 1962, et. seq. However, his employer’s federal law
violation is not the direct reason why Plaintiff’s termination is allegedly wrongful. FAC ¶
46. Instead, Plaintiff pleads that his termination was motivated by retaliation, which is a
violation of California law. Id. ¶ 46-50. Retaliation can be established without
determining whether Defendant actually violated federal law. Plaintiff only needs to have
“reasonable cause to believe” that Defendant did so. See Cal. Labor Code § 1102.5(b),
(c). Because the resolution of Plaintiff’s wrongful termination claim does not turn on a
federal question, federal question jurisdiction is not established.
Even reading Plaintiff’s complaint as claiming that his termination directly
violated 18 §§ U.S.C. 1962, et. seq., federal question jurisdiction still would not apply.
Similar to the UCL claim, Plaintiff also states theft (Cal. Pen. Code §§ 484, 487) and
fraud (Cal. Civ. Code §§ 1572, 1709; Cal. Ins. Code §§ 1871, et. seq.) as additional
independent allegations supporting his state law wrongful termination cause of action.
FAC ¶ 46, 50. Therefore, the federal racketeering allegation would not be a necessary
element to his Wrongful Termination claim.
Accordingly, the Court lacks federal question jurisdiction over Plaintiff’s
Wrongful Termination claim.
C.
The Court Lacks Supplemental Jurisdiction Over Plaintiff’s State Law
Claims
Because the Court does not have federal jurisdiction over either of Plaintiff’s
claims, the Court does not have supplemental jurisdiction over Plaintiff’s state law
claims.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 14-1830-DOC (JCGx)

IV.

Date: January 22, 2015
Page 6

Disposition

For the foregoing reasons, the Court REMANDS this action to state court. All
pending motions and hearing dates are VACATED.
The Clerk shall serve this minute order on the parties.
MINUTES FORM 11
CIVIL-GEN

Initials of Deputy Clerk: djg