Ramisetty v. The Western Union Company

Filing 20

Order by Magistrate Judge Donna M. Ryu denying 9 Motion to Remand without prejudice. Plaintiff's Amended Complaint due by 10/19/2015. Plaintiff's may file a renewed Motion to Remand by 10/19/2015.(dmrlc3, COURT STAFF) (Filed on 10/16/2015)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SREE RAMISETTY,

Case No. 15-cv-03171-DMR

Plaintiff,
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v.

ORDER DENYING MOTION TO
REMAND WITHOUT PREJUDICE

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THE WESTERN UNION COMPANY, et
al.,

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United States District Court
Northern District of California

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Defendants.

Re: Dkt. No. 9

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Plaintiff Sree Ramisetty filed this employment action in San Francisco Superior Court

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against Defendants The Western Union Company (“TWUC”) and her former supervisor, Frederick

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Crosby. Defendants removed the action on the basis of diversity jurisdiction, claiming that there

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is complete diversity between the parties because Crosby was fraudulently joined in the case.

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Notice of Removal, [Docket No. 1] ¶¶19-20. Ramisetty now moves to remand the action. The

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court held a hearing on October 8, 2015. As set forth at the hearing and below, Plaintiff’s motion

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is denied without prejudice.

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Under 28 U.S.C. § 1441(a), a defendant may remove to federal court any matter that

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originally could have been filed in federal court. Caterpillar Inc. v. Williams, 482 U.S. 386, 392

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(1987). Federal courts are courts of limited jurisdiction and possess subject matter jurisdiction in

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civil cases based only on federal question or diversity jurisdiction. Id.; see 28 U.S.C. §§ 1331,

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1332. To invoke diversity jurisdiction in an action involving United States citizens, the complaint

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must allege that “the matter in controversy exceeds the sum or value of $75,000, exclusive of

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interest and costs, and is between ... citizens of different States....” 28 U.S.C. § 1332(a)(1).

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Here, Defendants contend, and Ramisetty does not dispute, that the case meets the amount

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in controversy requirement for diversity jurisdiction. The parties do dispute whether the action is

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between citizens of different states. The Supreme Court has interpreted section 1332(a) to require

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“complete diversity of citizenship”—that is, each of the plaintiffs must be a citizen of a different

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state than each of the defendants. Caterpillar, 519 U.S. at 68; see Morris v. Princess Cruises, Inc.,

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236 F.3d 1061, 1067 (9th Cir. 2001).

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“Although an action may be removed to federal court only where there is complete
diversity of citizenship, 28 U.S.C. §§ 1332(a), 1441(b), one exception to the requirement for

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complete diversity is where a non-diverse defendant has been ‘fraudulently joined.’” Hunter v.

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Philip Morris USA, 582 F.3d 1039, 1043 (9th Cir. 2009). In this circuit, the joinder of a non-

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diverse defendant is deemed fraudulent when a plaintiff's failure to state a cause of action against

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the resident defendant is obvious according to the applicable state law. Hunter, 582 F.3d at 1042-

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United States District Court
Northern District of California

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43. In such cases, the court may ignore the presence of the non-diverse defendant for purposes of

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determining diversity. Morris, 236 F.3d at 1067. There is a strong presumption against fraudulent

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joinder, which means that the court resolves all ambiguity in favor of remand to state court.

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Hunter, 582 F.3d at 1042. The removing defendants bear the “heavy burden of proving that the

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joinder of the in-state party was improper.” Allen v. Boeing Co., 784 F.3d 625, 634 (9th Cir.

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2015). The defendants must prove fraudulent joinder by “clear and convincing evidence.”

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Hamilton Materials, Inc. v. Dow Chem. Corp., 494 F.3d 1203, 1206 (9th Cir. 2007).

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Defendants argue that removal is proper because Ramisetty’s failure to state a cause of

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action against Crosby in his individual capacity is obvious according to applicable state law.

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Ramisetty alleges nine causes of action: 1) wrongful termination in violation of public policy

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(Lab. Code § 98.6, 232.5, 1102.5); 2) unlawful retaliation (Gov’t Code § 12940 et seq.); 3) failure

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to investigate and prevent discrimination (Gov’t Code § 12940 et seq.); 4) fraud and deceit (Civ.

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Code §§ 1571-1574 and 1709-1710); 5) failure to pay PTO upon termination (Lab. Code §§ 201-

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203, 227.3); 6) disability discrimination (Gov’t Code § 12940 et seq.); 7) failure to provide

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reasonable accommodation (Gov’t Code § 12940 et seq.); 8) failure to engage in the interactive

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process (Gov’t Code § 12940 et seq.); and 9) unfair business practices (Bus. & Prof. Code §§

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17200 et seq.).

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As an initial matter, Ramisetty’s complaint does not specify which claims she is bringing
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against Crosby. At the hearing, Plaintiff conceded that the only claims she could potentially bring

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against Crosby in his individual capacity would be for harassment or fraud. Plaintiff further

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conceded that her current complaint does not include a cause of action against Crosby for

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harassment pursuant to Gov’t Code § 12940(j). Although the complaint does contain a cause of

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action for fraud, it does not include specific allegations about the alleged fraud, and does not

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mention Crosby. Plaintiff’s counsel was unable to clearly articulate the contours of a harassment

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or fraud claim against Crosby at the hearing, but believed he could do so if given an opportunity to

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consult the case file and amend the complaint. Defendants did not object to providing Plaintiff

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with an opportunity to amend, and also agreed that the propriety of remand could be appropriately

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reanalyzed based on the amended pleading.

United States District Court
Northern District of California

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The court thus granted Plaintiff leave to amend her complaint within 10 days of the hearing

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(i.e., by October 19, 2015). The court also ordered that if Plaintiff wishes to file a renewed motion

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to remand based on the amended complaint, she must do so by October 19, 2015.

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Plaintiff’s motion to remand [Docket No. 9.] is denied without prejudice. Plaintiff’s
request for sanctions is denied.

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IT IS SO ORDERED.
Dated: October 16, 2015
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Donna M. Ryu
United States Magistrate Judge

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