Laman et al v. Wells Fargo & Company et al
Filing
21
ORDER denying 4 Plaintiffs' Emergency Motion to Remand to State Court. The Court will set a hearing as to the 2 Motion for Temporary Restraining Order by later order. Signed by Judge Richard W. Story on 8/17/2016. (bdb)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
MARK LAMAN, et al.,
Plaintiffs,
CIVIL ACTION NO.
v.
1: 16-CV-2841-RWS
WELLS FARGO & COMPANY,
et al.,
Defendants.
ORDER
This matter is before the Court on Plaintiffs' Emergency Motion to Remand
[Doc. No. 4].
I.
Factual Background
Plaintiff Alliant Insurance Services ("Alliant") and Wells Fargo &
Company ("WFC") are both Delaware corporations [Doc. No. 1-1, ,-r,-r 2 and 4].
Defendant Wells Fargo Insurance Services USA ("WFI"), a subsidiary ofWFC,
is a North Carolina corporation [Doc. No. 1-1, ,-r 6].
Alliant and WFI are
competitors in the insurance brokerage industry [Doc. No. 1-1, ,-r 46]. Plaintiff
Laman began providing services to Wells Fargo in 2001 when WFC acquired his
previous employer and integrated it into WFI [Doc. No. 1-1, ,-r 30].
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After joining Wells Fargo, Laman was required to sign a restrictive
covenant agreement ("Agreement") [Doc. No.
1-1, ,-r 32;
Doc. No. 1-1, pp. 22-24].
The Agreement states that it is in consideration for Laman's continued
employment with "a Wells Fargo company and/or any of its past, present, and
future parent companies, subsidiaries, successors, affiliates, and acquisitions"
[Doc. No.
1-1, p.
22]. These related, affiliated, and acquired entities are defined
collectively as "the Company" [Id.]. The Agreement contains post-employment
covenants. The covenants are owed to "the Company."
Laman resigned from Wells Fargo and began working for Alliant on or
about July
18,2016
[Doc. No.
1-1, ,-r,-r
44-45]. Laman is the First Vice President
in Alliant's Alpharetta, Georgia offices [Id.]. Plaintiffs originally filed this action
in the Superior Court ofFulton County on July 18,2016. They seek a declaratory
judgment and injunctive relief as to the enforceability of the restrictive covenants
in the Agreement.
II.
Analysis
Defendants, invoking this Court's diversity jurisdiction, removed the case
to this Court on August 4, 2016 [Doc. No. 1]. Plaintiffs filed their Emergency
Motion to Remand on August 5,
2016
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[Doc. No. 4]. Defendants argue that
complete diversity exists between Laman, Alliant, and WFIS, which provided the
basis for removal.
Defendants ask the Court to disregard WFC's citizenship
because: (1) it is not a properly served party, and (2) it is not an appropriate
Defendant to this action and has been joined for the sole purpose of defeating
diversity jurisdiction.
The Court agrees with Defendants that WFC was fraudulently joined and
thus this Court has subject matter jurisdiction.
Where a plaintiff has no valid
cause of action against a defendant, that defendant is considered "fraudulently
joined" and the citizenship of that defendant cannot defeat diversity jurisdiction.
See Henderson v. Washington Nat'l Ins. Co., 454 F.3d 1278, 1281 (11th Cir.
2006). A defendant's joinder is fraudulent when no "reasonable possibility" exists
that the plaintiff can establish a cause of action against the non-diverse defendant.
Legg v. Wyeth, 428 F.3d 1317, 1324 (11th Cir. 2005).
The standard for fraudulent joinder is akin to the standard for a Rule
12(b)(6) motion, except that the Court can consider "materials other than those
attached to the complaint." Manley v. Ford Motor Co., 17 F.Supp.3d 1375, 1383
(N.D. Ga. 2014) (finding fraudulent joinder because the evidence showed
insufficient grounds for the claims at issue).
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The removing party must
demonstrate that the plaintiff cannot state a claim for relief against the improperly
joined party; thus, the proceeding appropriate "for resolving a claim of fraudulent
joinder is similar to that used for ruling on a motion for summary judgment under
Rule 56(b)." Wyeth, 428 F.3d at 1322-23. The determination is made based on
the pleadings at the time of removal "supplemented by any affidavits and
deposition transcripts submitted by the parties." Id.
The Court finds that Plaintiffs cannot reasonably state a claim for
declaratory relief against WFC.
Plaintiffs theorize that WFC is a party to the
Agreement and is therefore subject to this action. However, the plain language of
the Agreement shows that WFC is not a party.
When Laman executed the
agreement, he was employed directly by WFIS [Doc. No. 1-4, � 12].
Laman
executed the Agreement "in consideration for" his continued employment with
WFIS, a "Wells Fargo company." In this instance, the "Company" refers only to
WFIS, the Wells Fargo company for which Laman's continued employment
supplied the consideration. See also Wells Fargo Tern Member Handbook, Doc.
No. 4-7 at 5 (providing that when language like "Wells Fargo" and "the
Company" is used, "it means the Wells Fargo company that employs you
directly"). The Agreement does not render Laman an employee of any and all
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Wells Fargo companies. Rather, it generalizes Laman's single employer to a form
that can be used across Wells Fargo companies and employees. The use of a
common form by multiple subsidiaries does not mean that the form establishes
Laman's employment with WFC and all its related entities.
Nor is WFC a party to the Agreement by virtue of its status as the "parent"
of WFIS. Absent special allegations about substantial control, a parent entity is
not the employer of a subsidiary's personnel. See Wood v. S. Bell Tel. & Tel. Co.,
725 F. Supp. 1244, 1247-48 (N.D. Ga. 1989) (parent company must exercise
sufficient control such that it is essentially the same entity). Plaintiffs have failed
to allege any basis to disregard the corporate form or pierce the corporate veil.
Accordingly, Plaintiffs can state no possible declaratory judgment claim against
WFC.
To the extent Plaintiffs suggest that WFC is a necessary party to this action,
their position is self-defeating. Plaintiffs maintain that all Wells Fargo entities are
bound to the Agreement. The declaratory judgment action purports to establish
Plaintiffs' rights against all those bound by the Agreement.
Yet, of the many
distinct Wells Fargo affiliates, Plaintiffs join only a single non-diverse entity.
Plaintiffs' procedural choice and their explanation for it are at odds.
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III.
Conclusion
For the reasons stated above, Plaintiffs' Emergency Motion to Remand
[Doc. No. 4] is DENIED.
The Court will set a hearing as to the Motion for
Temporary Restraining Order [Doc. No.2] by later order.
SO ORDERED, this
_L2I!day of August
016.
United States District udge
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