Warren v. Dr. Pepper/Seven Up Manufacturing Company et al

Filing 19

MEMORANDUM AND ORDER re: 11 MOTION to Remand Case to State Court to State Court St. Louis County Missouri filed by Plaintiff Kevin S. Warren. Motion is DENIED. Signed by District Judge E. Richard Webber on August 23, 2013. (MCB)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

KEVIN S. WARREN,
Plaintiff,
vs.
DR. PEPPER/SEVEN UP
MANUFACTURING COMPANY, et al.,
Defendants.

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Case No. 4:13CV00526 ERW

MEMORANDUM AND ORDER
This matter comes before the Court on Plaintiff Kevin S. Warren’s Motion to Remand [ECF
No. 11].
I.

PROCEDURAL BACKGROUND
In June 2012, Plaintiff Kevin S. Warren filed a Charge of Discrimination accompanied with

a Complainant Interview Form against Defendant Dr. Pepper/Seven Up Manufacturing Company
(DPSU) with the Missouri Commission on Human Rights (MCHR) and Equal Employment
Opportunity Commission (EEOC). [ECF No. 12-4 at 4-6]. The MCHR subsequently issued a Right
to Sue Letter, referencing a claim against DPSU only. [ECF No. 15-4]. Plaintiff then filed suit in
the Circuit Court of the County of St. Louis, alleging that DPSU violated the Missouri Human Rights
Act (MHRA) by discharging Plaintiff from his employment on the basis of his age. In his Petition,
Plaintiff also named DPSU employees Victoria Wheeler, Chris Stanze, and James Amos (the
Individual Defendants) as defendants. [ECF No. 1-1 at 5]. On March 20, 2013, DPSU removed this
case to this Court pursuant to 28 U.S.C. §§ 1332, 1441, and 1446. [ECF No. 1]. Plaintiff now
moves to remand this case to state court for lack of complete diversity. [ECF No. 11].

II.

STANDARD
Generally, the party seeking removal and opposing remand bears the burden of establishing

federal subject matter jurisdiction. In re Business Men’s Assurance Co. of Am., 992 F.2d 181, 183
(8th Cir. 1993). Federal diversity jurisdiction “requires an amount in controversy greater than
$75,000 and complete diversity of citizenship among the litigants.” In re Prempro Prods. Liabl.
Litig., 591 F.3d 613, 619-20 (8th Cir. 2010). “Complete diversity of citizenship exists where no
defendant holds citizenship in the same state where any plaintiff holds citizenship.” OnePoint
Solutions, LLC v. Borchert, 486 F.3d 342, 346 (8th Cir. 2007). The party asserting federal diversity
jurisdiction has the burden of proving diversity by a preponderance of the evidence. Prempro Prods.
Liab. Litig., 591 F.3d at 620. “All doubts about federal jurisdiction should be resolved in favor of
remand to state court.” Id.
III.

DISCUSSION
Plaintiff argues that this Court lacks subject matter jurisdiction under 28 U.S.C. § 1332.

First, Plaintiff contends that DPSU, like Plaintiff, is a citizen of Missouri, thereby eliminating
complete diversity.1 Second, Plaintiff asserts that the Individual Defendants, as citizens of Missouri,
also invalidate the Court’s diversity jurisdiction.
A.

DPSU Does Not Destroy Complete Diversity, Because It Maintains Its Principal
Place of Business in Texas

Plaintiff maintains that DPSU has its principal place of business in Overland, Missouri,
rendering DPSU a citizen of Missouri and non-diverse from Plaintiff. In support of this assertion,
Plaintiff notes that DPSU lists “Overland, Missouri” as its principal place of business on its
Secretary of State filings. Defendants respond that DPSU is not a Missouri citizen, because it has

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The parties do not dispute that (1) Plaintiff is a citizen of Missouri, (2) DPSU is
incorporated under the laws of Delaware, and (3) the amount in controversy exceeds $75,000.
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its principal place of business in Plano, Texas, where its officers direct, control and coordinate the
corporation’s activities.
For purposes of diversity jurisdiction, “a corporation shall be deemed to be a citizen of every
State . . . where it has its principal place of business[.]” 28 U.S.C. § 1332(c)(1). A corporation
maintains its principal place of business wherever its “officers direct, control, and coordinate [its]
activities.” Hertz Corp. v. Friend, 559 U.S. 77, 92-93 (2010). The principal place of business will
ordinarily “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[.]’”
Id. at 93.
Defendants have established by a preponderance of the evidence that DPSU maintains its
principal place of business in Texas. The Declaration of Brenda Dixon, DPSU’s Human Resource
Business Partner, makes clear that DPSU’s officers direct, control, and coordinate business activities
in Plano, Texas. Specifically, Dixon states,
All of [DPSU’s] officers, including its President and Chief Executive Officer, all
three members of its Board of Directors, all three of its Executive Vice Presidents,
its Secretary, its Chief Financial Officer, all four of its Senior Vice Presidents, its
three Assistant Secretaries, its Controller, and all three of its Vice Presidents are all
located in Plano[,] Texas.
[ECF No. 1-2]. Moreover, “[a]ll of the accounting, financial, legal, quality control, human resource,
and other services for [DPSU] are either directed from Plano, Texas, or other locations outside the
state of Missouri.” Id. Thus, DPSU’s Plano, Texas location constitutes more than “an office where
the corporation holds its board meetings” and truly qualifies as the “nerve center” of the business.
Hertz, 559 U.S. at 93. In contrast, Plaintiff’s reliance on DPSU’s Secretary of State filings lacks

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merit, because these documents have no bearing on where DPSU’s “officers direct, control, and
coordinate [its] activities.”2 Id. at 92-93.
Accordingly, the Court finds that Defendants have proved by a preponderance of the evidence
that DPSU is a citizen of Texas, and therefore diverse from Plaintiff.
B.

Because Plaintiff Fraudulently Joined the Individual Defendants, the Court
Retains Federal Subject Matter Jurisdiction

Plaintiff also contends that the Individual Defendants, as Missouri citizens, destroy complete
diversity. Plaintiff states that while he failed to name the Individual Defendants in his Charge of
Discrimination, they remain properly joined, because the Charge of Discrimination and Complainant
Interview Form sufficiently put the Individual Defendants on notice of a lawsuit against them.
Additionally, Plaintiff asserts that there exists a “substantial identity of interest” between DPSU and
the Individual Defendants, so that joinder is proper, even without naming the Individual Defendants
as parties at the administrative level.
Defendants argue that Plaintiff fraudulently joined the Individual Defendants by failing to
name the them as respondents at the administrative level. Defendants contend that Missouri law
precludes MHRA lawsuits against individuals not named as respondents at the administrative level
unless a “substantial identity of interest” exists between the named and unnamed parties. Defendants
maintain that there exists no substantial identity of interest between DPSU and the Individual
Defendants, and that Plaintiff therefore failed to exhaust his remedies as to the Individual
Defendants.

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In fact, the Secretary of State filings tend to support the notion that DPSU has its
principal place of business in Texas, because the officers all list DPSU’s Plano, Texas location as
their physical address. [ECF No. 12-1].
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To prove that a plaintiff fraudulently joined a diversity-destroying defendant, Defendants
must show that “the plaintiff’s claim against the diversity-destroying defendant has ‘no reasonable
basis in fact and law.’” Knudson v. Systs. Painters, Inc., 634 F.3d 968, 980 (8th Cir. 2011) (quoting
Filla v. Norfolk S. Ry. Co., 336 F.3d 806, 810 (8th Cir. 2003)). Thus, “if it is clear under governing
state law that the complaint does not state a cause of action against the non-diverse defendant, the
joinder is fraudulent and federal jurisdiction of the case should be retained.” Id. (emphasis in
original). Alternatively, fraudulent joinder does not exist when “there is arguably a reasonable basis
for predicting that the state law might impose liability based upon the facts involved.” Id. (quoting
Filla, 336 F.3d at 811). Where fraudulent joinder exists, non-diverse parties will not prevent the
federal courts from exercising diversity jurisdiction. Kan. Pub. Emps. Ret. Syst. v. Reimer & Kroger
Assocs., Inc., 4 F.3d 614, 619 (8th Cir. 1993).
In light of the foregoing, the issue before the Court is whether Missouri law clearly precludes
an MHRA action against the Individual Defendants. Under Missouri law, a person claiming relief
under the MHRA must file an administrative complaint, “which shall state the name and address of
the person alleged to have committed the unlawful discriminatory practice[.]” Mo. Rev. Stat. §
213.075(1). Additionally, “[t]he complaint shall state facts supporting the allegations of unlawful
discriminatory practice and the person against whom the complaint is filed.” Mo. Code Regs. Ann.
8 § 60-2.025(2).
Missouri law also dictates, however, that the purpose of these administrative requirements
is “to give notice to the charged party and to provide an avenue for voluntary compliance without
resort to litigation[.]” Hill v. Ford Motor Co., 277 S.W.3d 659, 669 (Mo. 2009) (en banc). Thus, the
plaintiff satisfies the administrative requirements when a “substantial identity of interest” exists
between the parties sued and the respondents named in the administrative complaint. Hill v. Ford

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Motor Co., 277 S.W.3d 659, 669 (Mo. 2009) (en banc). In determining whether a substantial
identity of interest exists, Missouri courts examine four factors:
1) whether the role of the unnamed party could through reasonable effort by the
complainant be ascertained at the time of the filing of the EEOC [or MCHR]
complaint; 2) whether, under the circumstances, the interests of a named are so
similar as the unnamed party’s that for the purpose of obtaining voluntary
conciliation and compliance it would be unnecessary to include the unnamed party
in the EEOC [or MCHR] proceedings; 3) whether its absence from the EEOC [or
MCHR] proceedings resulting in actual prejudice to the interests of the unnamed
party; 4) whether the unnamed party has in some way represented to the complainant
that its relationship with the complainant is to be through the named party.
Id. at 669-70; Jackson v. Mills Props., No. 4:11CV419SNLJ, 2011 WL 3607920, at *2 (E.D. Mo.
Aug. 12, 2011). Because Plaintiff’s administrative filings list only DPSU as a respondent, [ECF No.
12-4 at 4-6], the Court must examine these factors to determine whether a substantial identity of
interest arguably exists between DPSU and the Individual Defendants.
As to the first factor, it is clear that Plaintiff could have ascertained the Individual
Defendants’ personal information and named them in his administrative complaint, as Plaintiff’s
state court petition details the frequency and regularity with which Plaintiff interacted with the
Individual Defendants.3 [ECF No. 6 at ¶¶ 14-18, 25, 29]. Second, nothing in the record indicates
that DPSU and the Individual Defendants have similar interests that render naming the Individual
Defendants in the administrative filings unnecessary for purposes of obtaining voluntary compliance
and conciliation. Rather, given the vast difference in economic positions between DSPU and the
Individual Defendants, the Individual Defendants clearly have a greater incentive to initiate
conciliatory proceedings or voluntarily correct any allegedly illegal behavior. Third, the Individual

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Additionally, pursuant to Mo. Rev. Stat. § 213.075(4), Plaintiff could have added
additional respondents at the administrative level by properly identifying and notifying such
individuals. The Court also notes that at some point during his administrative proceedings,
Plaintiff retained counsel, [ECF No. 15-7], making literal compliance with the MHRA statutes
and regulations more practicable.
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Defendants’ absence from the administrative filings resulted in actual prejudice. As set forth in their
affidavits, the Individual Defendants had no actual knowledge that Plaintiff would pursue a claim
against them individually,4 no opportunity to submit responsive documents at the administrative
level, and no opportunity to participate in conciliatory proceedings. [ECF Nos. 15-1, 15-2, 15-3].
Finally, nothing in the record suggests that Plaintiff in some way represented to the Individual
Defendants that he intended to sue them personally.
The Court therefore finds that the Individual Defendants were fraudulently joined, as there
exists no reasonable basis in law and fact to believe Plaintiff complied with the administrative
requirements of the MHRA as interpreted by Missouri courts. Plaintiff did not abide by the MCHR
regulations. Moreover, under Missouri law, DPSU and the Individual Defendants clearly lack a
substantial identity of interest.
Accordingly,
IT IS HEREBY ORDERED that Plaintiff’s Motion to Remand [ECF No. 11] is DENIED.
Dated this 23rd day of August, 2013.

E. RICHARD WEBBER
SENIOR UNITED STATES DISTRICT JUDGE

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In fact, even when Plaintiff filed his state court claim, he “only request[ed] service [of
process] on the Defendant corporation via its Registered Agent[.]” [ECF No. 1-1 at 4]. Plaintiff
did not serve the Individual Defendants.
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