McDonald v. Forest Laboratories, Inc. et al

Filing 39

ORDER by Judge Yvonne Gonzalez Rogers denying without prejudice to refile in state court 11 Motion to Dismiss; granting 26 Motion to Remand to Superior Court for the County of Alameda. The Court VACATES the hearing set for May 14, 2013. (fs, COURT STAFF) (Filed on 5/9/2013)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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AMY MCDONALD,

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Plaintiff,

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vs.

United States District Court
Northern District of California

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ORDER GRANTING MOTION OF PLAINTIFF TO
REMAND; AND DENYING WITHOUT
PREJUDICE TO RENEW MOTION OF
DEFENDANT TO DISMISS

FOREST LABORATORIES, INC. et al.,

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Case No.: 13-CV-00819 YGR

Defendant(s).

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On February 6, 2013, plaintiff Amy McDonald filed her lawsuit in California Superior

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Court for the County of Alameda alleging state law claims for employment discrimination and

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retaliation against her former employer Defendants Forest Laboratories, Inc. and Forest

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Pharmaceuticals, Inc. (“Defendants” or “Forest Labs”). On February 22, 2013, before the

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summons and complaint could be served, Forest Labs removed this action invoking this Court’s

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diversity jurisdiction pursuant to 28 U.S.C. § 1332. On March 1, 2013, Plaintiff amended her

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complaint to add a non-diverse defendant, her former supervisor Brian Maeyama.
Mr. Maeyama filed a motion to dismiss on the grounds that Plaintiff’s Amended Complaint

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fails to state a claim upon which relief can be granted. Plaintiff filed a motion to remand on the

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grounds that the addition of Mr. Maeyama as a defendant in the lawsuit destroyed subject matter

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jurisdiction.
Having carefully considered the papers submitted, the pleadings, for the reasons set forth

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below, the Court hereby GRANTS the Motion to Remand.1

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Pursuant to Federal Rule of Civil Procedure 78(b) and Civil Local Rule 7-1(b), the Court finds
this motion appropriate for decision without oral argument. Accordingly, the Court VACATES the
hearing set for May 14, 2013.

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District courts have original jurisdiction over all civil actions “where the matter in

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controversy exceeds the sum or value of $75,000, exclusive of interests and costs, and is between

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… citizens of different States.” 28 U.S.C. § 1332(a). Federal subject matter jurisdiction based on

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diversity citizenship requires “complete diversity” between the opposing parties. Owen Equip. &

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Erection Co. v. Kroger, 437 U.S. 365, 373-74 (1978). If at any time before final judgment it

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appears that the court lacks subject matter jurisdiction, the case shall be remanded. 28 U.S.C. §

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1447(c). There is a “strong presumption” against removal jurisdiction. Gaus v. Miles. Inc., 980

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F.2d 564, 566 (9th Cir. 1992). The burden of establishing federal jurisdiction for purposes of

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removal is on the party seeking removal. Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th

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Cir. 2004).

United States District Court
Northern District of California

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Title 28 U.S.C. § 1447(e) provides that “[i]f after removal the plaintiff seeks to join

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additional defendants whose joinder would destroy subject matter jurisdiction,” the Court has two

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options: “[1] deny joinder, or [2] permit joinder and remand the action to the State court.” 28

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U.S.C. § 1447(e); see Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1068 (9th Cir. 2001).

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“Congress added subsection (e) to § 1447 with the express purpose of taking advantage of the

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opportunity opened by removal from a state court to permit remand if a plaintiff seeks to join a

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diversity-destroying defendant after removal.” IBC Aviation Servs., Inc. v. Compania Mexicana de

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Aviacion, S.A. de C.V., 125 F. Supp. 2d 1008, 1011 (N.D. Cal. 2000) (citing H.R. Rep. No. 889 at

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72-73). In these circumstances, “[t]he decision regarding joinder of a diversity destroying-

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defendant is left to the discretion of the district court.” Newcombe v. Adolf Coors Co., 157 F.3d

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686, 691 (9th Cir. 1998).
The Court will exercise its discretion and permit joinder. The factors courts generally

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consider in exercising their discretion weigh decidedly in favor of allowing plaintiff to amend.2

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These factors include:
(1) whether the party sought to be joined is needed for just adjudication and would
be joined under Federal Rule of Civil Procedure 19(a); (2) whether the statute of
limitations would preclude an original action against the new defendants in state
court; (3) whether there has been unexplained delay in requesting joinder; (4)
whether joinder is intended solely to defeat federal jurisdiction; (5) whether the
claims against the new defendant appear valid; and (6) whether denial of joinder will
prejudice the plaintiff.
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Defendants oppose remand on the grounds that Mr. Maeyama was fraudulently joined to the

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lawsuit in order to defeat diversity jurisdiction. Fraudulent joinder is an exception to the

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requirement of complete diversity that permits a district court to disregard the citizenship of a non-

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diverse defendant when examining the propriety of removal on diversity jurisdiction grounds.

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Hunter v. Philip Morris USA, 582 F.3d 1039, 1043 (9th Cir. 2009). “[T]he core inquiry in a

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fraudulent joinder analysis, i.e., whether there is any possibility of recovery against the non-diverse

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defendant, is subsumed in the consideration in a section 1447(e) analysis of whether plaintiff can

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state a valid claim against the party sought to be joined.” Taylor v. Honeywell Corp., 09-CV-4947

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SBA, 2010 WL 1881459, at *2 n.1 (N.D. Cal. May 10, 2010)

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Here, Plaintiff alleges a significant factual basis regarding Mr. Maeyama’s active

United States District Court
Northern District of California

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participation in the circumstances giving rise to this lawsuit. Further, she need only state one valid

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claim for purposes of this motion. The Court finds that Defendants have not met their burden of

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establishing jurisdiction. Accordingly, the joinder of Mr. Maeyama destroys diversity and divests

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this Court of subject matter jurisdiction. The action must be remanded to the state court.

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Plaintiff’s Motion to Remand is GRANTED.

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The Motion to Dismiss is DENIED WITHOUT PREJUDICE to refile in state court.

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The Clerk of Court is DIRECTED to REMAND this action to the Superior Court for the

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County of Alameda.

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This terminates Docket Nos. 11 & 26.

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IT IS SO ORDERED.

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Date: May 9, 2013

_______________________________________
YVONNE GONZALEZ ROGERS
UNITED STATES DISTRICT COURT JUDGE

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IBC Aviation Servs., supra, 125 F. Supp. 2d at 1011 (citing Palestini v. General Dynamics Corp.,
193 F.R.D. 654, 658 (C.D. Cal. 2000)). Not all factors need be considered, any “factor[] might
prove decisive, and none is an absolutely necessary condition for joinder.” Yang v. Swissport USA,
Inc., 09-CV-03823 SI, 2010 WL 2680800, at *3 (N.D. Cal. Jul. 6, 2010).

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