Elliott v. Yamamoto FB Engineering, Inc.
MEMORANDUM OPINION AND ORDER by Judge David J. Hale on 2/13/2018. Kelli Elliott's motion to remand (DN 5 ) is DENIED. Yamamoto FB Engineering, Inc.'s motion to dismiss (DN 6 ) is DENIED. Pursuant to 28 U.S.C. § 636(b)(1)(A), this ma tter is hereby referred to U.S. Magistrate Judge Dave Whalin, for resolution of all litigation planning issues, entry of scheduling orders, consideration of amendments thereto, and resolution of all non-dispositive matters, including discovery issues. Judge Whalin is further authorized to conduct a settlement conference in this matter at any time. (KD)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
Civil Action No. 3:17-cv-456-DJH
YAMAMOTO FB ENGINEERING, INC.,
* * * * *
MEMORANDUM OPINION AND ORDER
Plaintiff Kelli Elliott, an employee of Defendant Yamamoto FB Engineering, Inc., alleges
that Yamamoto violated the Kentucky Civil Rights Act (KCRA) by retaliating against her after
she complained about and reported sexual harassment in the workplace. (Docket No. 1-1)
Yamamoto removed this action to federal court on the basis of diversity of citizenship. (D.N. 1)
Elliott moved to remand (D.N. 5), and Yamamoto moved to dismiss (D.N. 6). For the reasons
discussed below, both motions will be denied.
Elliott alleges the following facts in the complaint, which the Court will accept as true for
purposes of the motion to dismiss. See Directv, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir.
2007). She works for the defendant, Yamamoto, as a human-resources administrator. (D.N. 1-1,
PageID # 12) While working for Yamamoto, Elliott was repeatedly subjected to comments of a
sexual nature. (Id.) In compliance with Yamamoto’s policies, Elliott complained about and
reported sexual harassment in the workplace.
In response to Elliott’s complaints,
Yamamoto threatened to terminate her employment. (Id.)
Elliott filed this retaliation and sexual-harassment suit in state court (id., PageID # 1112), and Yamamoto removed the action to this Court on the basis of diversity of citizenship
pursuant to 28 U.S.C. §§ 1441 and 1332. (D.N. 1) Elliott has filed a motion to remand the case
to state court (D.N. 5), stipulating that she will not seek a judgment or request a verdict for an
amount in excess of $74,999. (D.N. 5-1) Yamamoto opposes the motion to remand (D.N. 7) and
has moved to dismiss the case for failure to state a claim pursuant to Federal Rule of Civil
Procedure 12(b)(6). (D.N. 6)
MOTION TO REMAND
28 U.S.C. § 1441 governs the removal of civil actions to federal court. Section 1441
Except as otherwise expressly provided by Act of Congress, any civil action
brought in a State court of which the district courts of the United States have
original jurisdiction, may be removed by the defendant or the defendants, to the
district court of the United States for the district and division embracing the place
where such action is pending.
28 U.S.C. § 1441(a). “The district courts shall have original jurisdiction of all civil actions
where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and
costs, and is between—(1) citizens of different States; [and] (2) citizens of a State and citizens or
subjects of a foreign state . . . .” 28 U.S.C. § 1332(a).
Amount in Controversy
In its notice of removal, Yamamoto alleges that Elliott “seeks an award of non-economic
compensatory damages . . . [that] easily could exceed the $75,000 jurisdictional threshold as the
KCRA places no cap on the amount of compensatory damages that [plaintiffs] may recover.”
(D.N. 1, PageID # 5) After removal, Elliott submitted a stipulation stating that (1) “[t]he amount
in controversy in this matter . . . does not exceed the sum or value of $74,999.00, exclusive of
interest and costs; at any time up to and including trial and any subsequent appeals”; and (2)
“[she] will not seek a judgment or request a verdict for an amount in excess of $74,999.00 and
will not seek attorney’s fees for any amount that, together with any judgment or verdict, would
exceed $74,999.” (D.N. 5-1, PageID # 39)
“[A] post-removal stipulation reducing the amount in controversy to below the
jurisdictional limit does not require remand to state court.” Rogers v. Wal-Mart Stores, Inc., 230
F.3d 868, 872 (6th Cir. 2000). However,
where a state prevents a plaintiff from pleading a specific amount of damages—as
is the case in Kentucky—and the plaintiff provides specific information about the
amount in controversy for the first time in a stipulation, this district views such
stipulations as a clarification of the amount in controversy rather than a reduction
Agri-Power, Inc. v. Majestic JC, LLC, No. 5:13-CV-00046-TBR, 2013 WL 3280244, at *3
(W.D. Ky. June 27, 2013). Thus, “a plaintiff may stipulate that it neither seeks, nor will accept,
damages in an amount greater than $75,000, and . . . such a stipulation will destroy the amountin-controversy requirement for § 1332 jurisdiction.” Id. “Still, ‘only where that clarifying
stipulation is unequivocal will it limit the amount of recoverable damages and warrant remand.’”
Id. (quoting Proctor v. Swifty Oil Co., Inc., No. 3:12-CV-00490-TBR, 2012 WL 4593409, at *3
(W.D. Ky. Oct. 1, 2012)).
Another judge in this district recently concluded that a stipulation with language identical
to that used in this case was not sufficiently unequivocal to destroy jurisdiction and warrant
remand. See Stephens v. Charter Commc’ns Holdings, LLC, No. 3:17-cv-00354-JHM, 2017 WL
4273307, at *2 (W.D. Ky. Sept. 26, 2017). In Stephens, the plaintiff stipulated that he “[would]
not seek a judgment or request a verdict for an amount in excess of $74,999.00 and [would] not
seek attorney’s fees for any amount that, together with any judgment or verdict, would exceed
$74,999.” Id. The Court reasoned that although the plaintiff stipulated that he would not seek a
verdict of $75,000 or more, he did not stipulate that he would not accept or seek to enforce a
judgment of that amount. Id. The Court therefore concluded that the stipulation was “less than
unequivocal” and “thus deficient to defeat removal.” Id.
The stipulation in this case is identical to the one found inadequate in Stephens. (See
D.N. 5-1, PageID # 39) See Stephens, 2017 WL 4273307, at *2. Like the plaintiff in Stephens,
Elliott stipulates that she will not seek an amount above the jurisdictional threshold but does not
limit her ability to accept a higher amount. See id. (See D.N. 5-1, PageID # 39) This Court
agrees with Judge McKinley that such a stipulation “does not effectively limit the amount in
controversy to a sum below $75,000.” Stephens, 2017 WL 4273307, at *2. In the absence of
any other challenge to the amount in controversy, the Court finds that it possesses subject-matter
jurisdiction over this case, and the motion to remand will therefore be denied. See id.
Diversity of Citizenship
In response to Yamamoto’s motion to dismiss, Elliott also argues that no diversity of
citizenship exists between the parties because Elliott and Yamamoto are both citizens of
Kentucky.1 (D.N. 8, PageID # 57) In support, Elliott has submitted a copy of Yamamoto’s
annual report, which lists a Louisville, Kentucky address as the organization’s “principal office
address.” (D.N. 8-1, PageID # 64)
Yamamoto asserts that this argument is improper because Elliott did not raise it in her motion
to remand, and “it is akin to raising a new argument for the first time in a reply brief.” (D.N. 9,
PageID # 70) While Yamamoto is correct that Elliott did not raise this diversity argument in her
motion to remand (see D.N. 5), “[t]he existence of subject matter jurisdiction may be raised at
any time, by any party,” In re Lewis, 398 F.3d 735, 739 (6th Cir. 2005), and federal courts have
an “independent obligation to ensure that subject matter jurisdiction exists.” Olden v. LaFarge
Corp., 383 F.3d 495, 498 (6th Cir. 2004).
For purposes of diversity jurisdiction, “a corporation shall be deemed to be a citizen of
every State and foreign state by which it has been incorporated and of the State or foreign state
where it has its principal place of business.” 28 U.S.C. § 1332(c)(1). Yamamoto is incorporated
under the laws of the State of Delaware. (D.N. 1-2, PageID # 30) At issue here is the location of
Yamamoto’s principal place of business.
For purposes of diversity jurisdiction, “principal place of business” refers to “the place
where the corporation’s high level officers direct, control, and coordinate the corporation’s
activities.” Hertz Corp. v. Friend, 559 U.S. 77, 80 (2010). This place is also known as the
“nerve center.” See id. at 80-81.
And in practice it should normally be the place where the corporation maintains
its headquarters—provided that the headquarters is the actual center of direction,
control, and coordination, i.e., the “nerve center,” and not simply an office where
the corporation holds its board meetings (for example, attended by directors and
officers who have traveled there for the occasion).
Id. at 93. The “mere filing of a form . . . listing a corporation’s ‘principal executive offices’ [is
not], without more, . . . sufficient proof to establish a corporation’s ‘nerve center.’” Id. at 97.
Instead, the “nerve center” is “the place of actual direction, control, and coordination.” Id.
According to a sworn declaration by Yamamoto’s human-resources manager, corporate
officers located at Yamamoto’s parent-company headquarters in Japan “exercise ultimate
authority over Yamamoto’s activities in Louisville, Kentucky,” “make significant corporate
decisions pertaining to [Yamamoto],” and “direct and control Yamamoto’s corporate policies.”
(D.N. 1-2, PageID # 30-31) Yet Yamamoto’s annual report, filed with the Kentucky Secretary
of State, lists a Kentucky address as the organization’s “principal office address.” (D.N. 8-1,
PageID # 64)
The Court finds a decision from the Eastern District of Kentucky instructive on this issue.
In Pegasus Industries, Inc. v. Martinrea Heavy Stampings, Inc., the corporate defendant had filed
a certificate of authority with the Kentucky Secretary of State’s Office that listed a Shelbyville,
Kentucky location as “the mailing address of the corporation’s principal office.” No. 3:16-cv00024-GFVT, 2016 WL 3043143, at *2 (E.D. Ky. May 27, 2016). The court determined that the
filing “[was] not conclusive proof of [the defendant’s] nerve center” and relied instead upon an
affidavit submitted by the vice president of the defendant’s parent company explaining the
corporation’s organizational structure.
The affidavit revealed that an executive vice
president of the parent company, whose office was located in Canada, supervised the defendant’s
plant in Kentucky; two other officers directed and controlled the defendant from the parent
company’s corporate headquarters in Canada; and the defendant’s officers directed, controlled,
and coordinated the defendant’s activities from Canada. Id. Therefore, although the defendant
maintained employees and conducted business in Kentucky, “significant corporate policy and
oversight decisions [were] made from [Canada],” making it the “nerve center” under the Hertz
test. Id. at *3.
As in Pegasus Industries, Inc., Yamamoto filed a document with the Kentucky Secretary
of State’s Office in which it listed a Kentucky address as its “principal office address.” (D.N. 81, PageID # 64) But Yamamoto’s human-resources manager also submitted a sworn declaration
explaining the company’s corporate structure. (See D.N. 1-2) According to that declaration,
Yamamoto is an incorporated subsidiary of two parent corporations: Yamamoto Seisakusho,
Inc., located in Japan, and Marubeni-Itochu Steel America, Inc., located in New York. (Id.,
PageID # 30) Yamamoto Seisakusho, Inc. owns ninety percent of Yamamoto’s stock. (Id.)
Corporate officers located at Yamamoto Seisakusho, Inc.’s headquarters in Japan “exercise
ultimate authority over Yamamoto’s activities in Louisville, Kentucky,” “make significant
corporate decisions pertaining to [Yamamoto],” and “direct and control Yamamoto’s corporate
policies.” (Id., PageID # 31) This information shows that Japan is “the place of actual direction,
control, and coordination” for Yamamoto. See Hertz Corp., 559 U.S. at 97. The Court thus
finds that Yamamoto’s principal place of business, or “nerve center,” is in Japan, see id. at 8081, and that Yamamoto is therefore a citizen of Delaware (D.N. 1-2, PageID # 30) and Japan for
See 28 U.S.C. § 1332(c)(1).
Because Plaintiff Elliott is a citizen of
Kentucky (D.N. 1-1, PageID # 11; D.N. 1, PageID # 2), and Defendant Yamamoto is a citizen of
Delaware and Japan, there is complete diversity between the parties, and remand is not
MOTION TO DISMISS
In her response in opposition to Yamamoto’s motion to dismiss, Elliott argues that the
Kentucky Rules of Civil Procedure and the “notice pleading” standard should be applied to
determine the sufficiency of her complaint. (D.N. 8, PageID # 61) But the Federal Rules of
Civil Procedure “apply to a civil action after it is removed from a state court.” Fed. R. Civ. P.
81(c)(1). And as the Sixth Circuit has noted: “In diversity cases, including those removed from
state court, the federal pleading standards apply.” Armstrong v. Shirvell, 596 F. App’x 433, 444
(6th Cir. 2015). The Court thus agrees that “once a complaint is removed to federal court, it is
subject to the federal pleading requirements, including Rule 8 and the Twombly-Iqbal standard.”
Tucker v. Heaton, No. 5:14-CV-00183-TBR, 2015 WL 1884384, at *3 (W.D. Ky. Apr. 24,
2015); see also D.H. v. Matti, No. 3:14-cv-732-CRS, 2015 WL 4530419, at *7 (W.D. Ky. July
27, 2015) (applying the federal pleading standard where complaint was initially filed in state
court). “Therefore, the Court will consider [Elliott’s] complaint according to federal pleading
standards rather than those of the Commonwealth.” Tucker, 2015 WL 1884384, at *3.
To survive a motion to dismiss for failure to state a claim, “a complaint must contain
sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007)). A claim is plausible on its face “when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Id. Factual allegations are essential; “[t]hreadbare recitals of the elements of a cause
of action, supported by mere conclusory statements, do not suffice,” and the Court need not
accept such statements as true. Id. A complaint whose “well-pleaded facts do not permit the
court to infer more than the mere possibility of misconduct” does not satisfy the pleading
requirements of Rule 8 and will not withstand a motion to dismiss. Id. at 679.
Elliott brings a claim for “actionable wrongful retaliation” in violation of section 344.280
of the KCRA. (D.N. 1-1, PageID # 12) “Retaliation claims under the KCRA are evaluated
under the same standard as . . . federal Title VII claims.” Montell v. Diversified Clinical Servs.,
Inc., 757 F.3d 497, 504 (6th Cir. 2014). “The liberal pleading standard applicable to civil
complaints does not require that a retaliation complaint set forth specific facts establishing a
prima facie case, but it must allege facts that establish a plausible claim to relief.” Carrethers v.
Speer, 698 F. App’x 266, 270 (6th Cir. 2017). To establish a plausible claim for retaliation,
Elliott’s complaint must show that “(1) she engaged in protected activity under Title VII, (2) the
defendant was aware of this activity, (3) she was subjected to an adverse employment action by
the defendant, and (4) there was a causal connection between the protected activity and the
adverse employment action.” Id. Yamamoto argues that Elliott’s “retaliation claim fails as a
matter of law because she has failed to allege facts sufficient to demonstrate that [it] took an
action against her that legally qualifies as an adverse employment action.” (D.N. 6, PageID #
Elliott alleges that she “complained about and reported sexual harassment in the work
place” and that, in response to her complaints, “Yamamoto retaliated against [her] by threatening
her position with a notice of intent to terminate.”2 (D.N. 1-1, PageID # 12) These allegations
allow the Court to draw the “reasonable inference” that Elliott engaged in protected activity;
Yamamoto threatened to terminate Elliott’s employment; and the threat resulted from her
protected activity. See Carrethers, 698 F. App’x at 271; see also Laporte v. B.L. Harbert Int’l,
LLC, No. 5:09-CV-219, 2010 WL 2541154, at *3 (W.D. Ky. June 18, 2010) (finding allegation
that defendants retaliated against plaintiff “in response to his [racial-discrimination] complaints”
sufficient to show causation). Although Elliott does not specify the manner in which she
complained of sexual harassment, her allegation that she complained to Yamamoto, prompting a
threat to terminate her, “necessarily implies” that Yamamoto was aware of her complaints. See
Carrethers, 698 F. App’x at 271.
Moreover, the Sixth Circuit has found an employer’s
recommendation that an employee be terminated to be sufficiently adverse for purposes of the
adverse-employment-action element of a Title VII retaliation claim. See Sanford v. Main St.
Elliott’s complaint also confusingly refers to Yamamoto’s “actions in terminating [her]
employment” after stating that she “is [a] current employee of [Yamamoto].” (See D.N. 1-1,
PageID # 12) The Court assumes that the reference to Elliott’s termination is a typographical
error given that (1) the complaint states that she is a current employee of Yamamoto; and (2) the
“unlawful retaliation” section of the complaint refers to Yamamoto’s “actions in threatening
[her] employment.” (Id. (emphasis added)) However, Elliott should consider requesting leave to
amend her complaint to clarify the alleged facts and the nature of her claims.
Baptist Church Manor, Inc., 327 F. App’x 587, 599 (6th Cir. 2009). Construing the facts in the
light most favorable to Elliott, see Directv, Inc., 487 F.3d at 476, the Court concludes that she
has pleaded sufficient facts to establish a plausible retaliation claim, and the motion to dismiss
this claim will be denied.
Elliott also brings a claim titled “sexual harassment” in which she states that Yamamoto’s
actions “constitute an actionable wrongful retaliation in violation of KRS 344.280.” (D.N. 1-1,
PageID # 12) She thus appears to conflate her sexual-harassment claim with her retaliation
claim. In any event, her complaint also alleges that she was “repeatedly subjected to comments
of a sexual nature about graphic sexual content.” (Id.) The Court therefore assumes that Elliott
intended to bring a separate sexual-harassment claim under the KCRA.3
“A sexual harassment claim brought under the Kentucky Civil Rights Act (‘KCRA’) is
analyzed in the same manner as a claim brought under Title VII, its federal counterpart.” Porter
v. United Parcel Serv., Inc., No. 4:13-CV-00065-JHM, 2014 WL 12573675, at *5 (W.D. Ky.
Dec. 30, 2014) (citing Clark v. United Parcel Serv., Inc., 400 F.3d 341, 347 (6th Cir. 2005)).
Title VII “‘affords employees the right to work in an environment free from discriminatory
Yamamoto argues that Elliott’s sexual-harassment claim is “confusing and ambiguous” and
therefore fails to provide Yamamoto with “fair notice” of the claim. (D.N. 6, PageID # 44-45)
Yamamoto is correct that a complaint “must provide the defendant with ‘fair notice of what
the . . . claim is and the grounds upon which it rests.’” Mellentine v. Ameriquest Mortg. Co., 515
F. App’x 419, 423-24 (6th Cir. 2013) (quoting Twombly, 550 U.S. at 555). The complaint here,
however, lists “sexual harassment” as the first cause of action and alleges facts (i.e., allegations
of repeated sexual comments) to support such a claim. (See D.N. 1-1, PageID # 12) This was
sufficient to give Yamamoto “fair notice” of the sexual-harassment claim. See Mills v. Barnard,
869 F.3d 473, 484-85 (6th Cir. 2017) (finding that complaint gave defendant “fair notice” of
fabrication-of-evidence claim where complaint did not specifically assert such a claim but
alleged facts to support the claim); cf. Rushing v. Chase Auto Fin. Corp., No. 5:11-cv-419-JMH,
2012 WL 1752393, at *4 n.3 (E.D. Ky. May 15, 2012) (finding that complaint gave defendants
“fair notice” of defamation claim where such a claim was not included in a heading but was
clearly stated elsewhere in the complaint).
intimidation, ridicule, and insult,’ and, to enforce this right, prohibits conduct that creates a
‘hostile environment.’” Id. (quoting Meritor Sav. Bank, FSB v. Vinson, 477 U.S. 57, 65 (1986)).
To establish a hostile work environment claim, a plaintiff must show that “(1) she
is a member of a protected class (female); (2) she was subjected to harassment,
either through words or actions, based on sex; (3) the harassment had the effect of
unreasonably interfering with her work performance and creating an objectively
intimidating, hostile, or offensive work environment; and (4) there exists some
basis for liability on the part of the employer.”
Moore v. Humana, Inc., No. 3:10-CV-26-S, 2010 WL 2961205, at *2 (W.D. Ky. July 26, 2010)
(quoting Gallagher v. C.H. Robinson Worldwide, Inc., 567 F.3d 263, 270 (6th Cir. 2009)).
Elliott does not have to plead a prima facie case to survive dismissal, but she must “produce
‘sufficient factual content from which a court, informed by its judicial experience and common
sense, could draw the reasonable inference’ that her work environment was both objectively and
subjectively hostile due to sexually or racially-charged harassment.” Keys v. Humana, Inc., No.
3:09-CV-00834-CRS, 2013 WL 5740109, at *5 (W.D. Ky. Oct. 22, 2013) (quoting Keys v.
Humana, Inc., 684 F.3d 605, 610 (6th Cir. 2012)).
Elliott’s complaint alleges that she “was repeatedly subjected to comments of a sexual
nature about graphic sexual content.” (D.N. 1-1, PageID # 12) She further alleges that she
“complained about and reported sexual harassment in the work place” in accordance with
Yamamoto’s policies. (Id.) In response to those complaints, Yamamoto allegedly threatened
Elliott’s position. (Id.) The Court concludes that these alleged facts are sufficient at this stage
for Elliott’s sexual-harassment claim to survive. See Halcomb v. Black Mountain Res., LLC, No.
13-141-DLB, 2015 WL 1757919, at *5 (E.D. Ky. Apr. 17, 2015) (concluding that plaintiff’s
allegation that defendant employers did not “satisfactorily resolve” his sexual-harassment
complaints created a reasonable inference that defendants failed to properly respond to the
harassment, thus making it plausible that they were liable); Sullivan v. Paycor, Inc., No. 3:1311
CV-00028-H, 2013 WL 2286069, at *2 (W.D. Ky. May 23, 2013) (denying motion to dismiss
hostile-work-environment claim even though severity of sexual comments was not well
established because a complaint “need not state every fact in support of a claim” at this stage);
Moore, 2010 WL 2961205, at *2 (finding it plausible that defendant’s alleged conduct created a
hostile work environment where the plaintiff “[went] so far as to complain about it”). The
motion to dismiss this claim will therefore be denied.
For the reasons discussed above, and the Court being otherwise sufficiently advised, it is
hereby ORDERED as follows:
Kelli Elliott’s motion to remand (D.N. 5) is DENIED.
Yamamoto FB Engineering, Inc.’s motion to dismiss (D.N. 6) is DENIED.
Pursuant to 28 U.S.C. § 636(b)(1)(A), this matter is hereby referred to U.S.
Magistrate Judge Dave Whalin, for resolution of all litigation planning issues, entry of
scheduling orders, consideration of amendments thereto, and resolution of all non-dispositive
matters, including discovery issues. Judge Whalin is further authorized to conduct a settlement
conference in this matter at any time.
February 13, 2018
David J. Hale, Judge
United States District Court
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?