Fraser v. Wells Fargo Bank, N.A., et al

Filing 13

Order by Hon. James Donato granting 11 Motion to Remand. (jdlc2S, COURT STAFF) (Filed on 4/28/2015)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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COLIN FRASER,

Case No. 15-cv-00772-JD

Plaintiff,
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v.

ORDER GRANTING MOTION TO
REMAND

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WELLS FARGO BANK, N.A., et al.,

Re: Dkt. No. 11

Defendants.

United States District Court
Northern District of California

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This is an employment action that was initially filed in California state court by plaintiff

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Colin Fraser against defendants Wells Fargo Bank, National Association and Wells Fargo Bank,

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Ltd., alleging causes of action for violation of the California Family Rights Act, wrongful

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termination in violation of public policy, racial discrimination and retaliation. Dkt. No. 1-1.

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Defendants removed the action to this Court on February 19, 2015, invoking the Court’s diversity

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jurisdiction. Dkt. No. 1.

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Before the Court is plaintiff’s motion for leave to amend complaint and to join defendant

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and motion to remand to state court. Dkt. No. 11. The Court finds the motion suitable for

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decision on the papers pursuant to Civil Local Rule 7-1(b), vacates the hearing that was set for

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April 29, 2015, and grants the motion.

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DISCUSSION

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Plaintiff seeks remand on the basis that diversity jurisdiction does not exist because

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“defendant Wells Fargo Bank, Ltd. is a California entity.” Dkt. No. 11-1 at 6. In response,

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defendants do not dispute that Wells Fargo Bank, Ltd. is a California citizen, but they argue that

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its citizenship can be ignored for purposes of the jurisdictional inquiry because that entity is a

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“sham defendant.” Dkt. No. 12 at 4. Defendants have submitted two single-page declarations in

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support of that argument. One states that “Mr. Fraser was employed by Wells Fargo Bank, N.A.

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from September 5, 2003 to May 24, 2012,” and the other states that Wells Fargo Bank, N.A. and

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Wells Fargo Bank, Ltd. “are separate corporate entities that were established at different times and

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have different headquarters and principle [sic] places of business.” Dkt. Nos. 12-1, 12-2.

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As a preliminary matter, the removal statute is to be strictly construed against removal

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jurisdiction, and the party seeking removal bears the burden of establishing its propriety. See, e.g.,

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California ex rel. Lockyer v. Dynegy, Inc., 375 F.3d 831, 838 (9th Cir. 2004). Furthermore, “any

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doubt about the right of removal requires resolution in favor of remand.” Moore-Thomas v.

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Alaska Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir. 2009).

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A key question here is whether Wells Fargo Bank, Ltd. can properly be considered a sham
defendant. To show that the joinder was fraudulent, the burden is on defendants to establish that

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United States District Court
Northern District of California

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“the plaintiff fails to state a cause of action against a resident defendant, and the failure is obvious

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according to the settled rules of the state.” McCabe v. Gen. Foods Corp., 811 F.2d 1336, 1339

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(9th Cir. 1987). In other words, “[t]he removing party must prove that ‘there is absolutely no

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possibility that the plaintiff will be able to establish a cause of action against the in-state defendant

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in state court.’” Blazek v. ADESA California, LLC, No. 09cv1509 BTM (BLM), 2009 WL

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2905972, at *1 (S.D. Cal. Sept. 8, 2009) (quoting Green v. Amerada Hess Corp., 707 F.2d 201,

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205 (5th Cir. 1983)).

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Defendants have failed to meet their heavy burden here. Although defendants argue that

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Wells Fargo Bank, Ltd. should be disregarded as a sham defendant because only Wells Fargo

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Bank, N.A. employed plaintiff, defendants themselves acknowledge that any of the following can

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be considered an “employer” for purposes of California law: “one who: (a) exercises control over

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the wages, hours or working conditions of an employee, (b) suffers or permits an employee to

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work, or (c) engages an employee, thereby creating a common law, or ‘regular,’ employment

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relationship.” Dkt. No. 12 at 4 (citing Martinez v. Combs, 49 Cal. 4th 35, 64 (2010)). The two

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perfunctory declarations submitted by defendants hardly remove all possibility that any of these

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avenues could be found to apply here to Wells Fargo Bank, Ltd. Moreover, “there are several

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theories under which a corporate entity separate from the corporate entity that officially employs

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the plaintiff may be deemed the plaintiff’s employer as well.” Blazek, 2009 WL 2905972, at *2
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(noting, for example, the “integrated enterprise” test under California law). Those theories, too,

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are left wide open by the materials submitted by defendants.
CONCLUSION

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There is simply no way the Court could conclude based on the record before it that there is

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no possibility that plaintiff can establish that Wells Fargo Bank, Ltd. is his employer. Under these

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circumstances, the Court cannot disregard that defendant as a “sham defendant.” Defendants have

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not carried their burden of establishing that the Court has removal jurisdiction over this action.

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The Court consequently grants plaintiff’s motion to remand on that basis, declines to reach the

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other arguments presented by the motion, and remands the action to the California Superior Court

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United States District Court
Northern District of California

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for the County of Contra Costa.
IT IS SO ORDERED.
Dated: April 28, 2015

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________________________
JAMES DONATO
United States District Judge

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