Carter v. GE Engine Services, LLC et al

Filing 27

ORDER granting 6 motion to remand. Signed on 7/23/15 by Chief District Judge Greg Kays. (Francis, Alexandra)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
ST. JOSEPH DIVISION
STEPHEN CARTER,
Plaintiff,
v.
GE TRANSPORTATION a/k/a
GE ENGINE SERVICES, LLC a/k/a
GE TRANSPORTATION
REMANUFACTURING SERVICES,
and
KHERRI HUMMER,
Defendants.

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No. 5:15-cv-06006-DGK

ORDER GRANTING MOTION TO REMAND
This lawsuit arises out of Plaintiff Stephen Carter’s (“Carter”) employment with
Defendant GE Engine Services, LLC (“GE”). Carter alleges GE and his immediate supervisor
there, Kherri Hummer (“Hummer”), violated the Missouri Human Rights Act (“MHRA”) by
discriminating against him on the basis of his race and skin color and by retaliating against him
for reporting this discrimination to authorities. Defendants removed this case from the Circuit
Court of Platte County, Missouri, by invoking the Court’s diversity jurisdiction, 28 U.S.C. §§
1441 and 1446. They claim Carter fraudulently joined Hummer, a Missouri resident, in an effort
to prevent removal.
Now before the Court is Carter’s Motion to Remand (Doc. 6). Finding that Carter may
be able to maintain his MHRA claim against Hummer, the Court holds Defendants have not
carried their substantial burden of proving fraudulent joinder. Consequently, the motion is
GRANTED.

Standard of Review
An action may be removed by the defendant where the case falls within the original
jurisdiction of the district court. 28 U.S.C. § 1441(a). If the case is not within the original
subject matter jurisdiction of the district court, the court must remand the case to the state court
from which it was removed. Id. § 1447(c). To invoke the court’s diversity jurisdiction the
parties must be citizens of different states and the amount in controversy must exceed $75,000.
Id. § 1332(a). Complete diversity between the parties is required; the presence of a single
plaintiff from the same state as a single defendant extinguishes federal jurisdiction. Exxon Mobil
Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 553 (2005). Under the no-local-defendant or
forum-defendant rule, a suit cannot be removed if one of the defendants who is properly joined
and served is a citizen of the state where the lawsuit was filed. 28 U.S.C. § 1441(b)(2).
Under the doctrine of fraudulent joinder, however, a “court may disregard the citizenship
of a non-diverse defendant who was frivolously joined in an effort to defeat removal.” In re
Genetically Modified Rice Litig., 618 F. Supp. 2d 1047, 1052 (E.D. Mo. 2009). Joinder is
fraudulent where the “applicable state precedent precludes the existence of a cause of action
against the defendant.” Filla v. Norfolk & S. Ry., 336 F.3d 806, 810 (8th Cir. 2003). “However,
if there is a colorable cause of action—that is, if the state law might impose liability on the
resident defendant under the facts alleged—then there is no fraudulent joinder.” Id. at 810-11
(citation omitted) (emphasis added).

Thus, “‘joinder is fraudulent when there exists no

reasonable basis in fact and law supporting a claim against the resident defendants.’” Id. at 811
(quoting Wiles v. Capitol Indem. Corp., 280 F.3d 868, 871 (8th Cir. 2002)).
In predicting whether state law might impose liability based upon the facts involved, the
district court “should resolve all facts and ambiguities in the current controlling substantive law

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in the plaintiff’s favor.”

Id.

“[T]he court has no responsibility to definitively settle the

ambiguous question of state law.” Id. “The court must simply determine whether there is a
reasonable basis for predicting that the state’s law might impose liability against the defendant.”
Id. “[W]here the sufficiency of the complaint against the non-diverse defendant is questionable,
the better practice is for the federal court not to decide the doubtful question in connection with a
motion to remand but simply to remand the case and leave the question for the state courts to
decide.” Id. (internal quotation marks omitted). The removing party bears the “substantial”
burden of proving the alleged fraud. Dorsey v. Sekisui Am. Corp., 79 F. Supp. 2d 1089, 1091
(E.D. Mo. 1999).
Factual Background
Defendant GE operates a business in Kansas City, Missouri disassembling, cleaning, and
maintaining traction motor combo wheel sets for locomotives. Plaintiff Carter works for GE as a
remanufacturing production technician. Carter is an African-American male who is darkerskinned than his co-workers. Defendant Hummer has been his immediate supervisor from
February 2013 until the present.
For purposes of determining diversity jurisdiction, GE is a citizen of New York and
Connecticut; Hummer is a Missouri citizen; and Carter is a Kansas citizen.
On September 23, 2013, Carter filed discrimination charges with both the Missouri
Commission on Human Rights (“MCHR”) and the federal Equal Employment Opportunity
Commission (“EEOC”). The charges listed only GE Transportation as the respondent who
allegedly discriminated and retaliated against him. Carter did not name Hummer as a respondent
or follow the MHRA’s procedures for joining Hummer as an unnamed respondent. As a result,
Hummer was never provided a copy of the MHRA charge, never received notice that Carter was

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asserting a charge against her personally, never had an opportunity to present a written statement
of her personal position before the MCHR, and never had notice that he would attempt to hold
her personally liable. She was, however, interviewed by the MCHR and gave her account of the
events. On or about September 16, 2014, the MCHR issued Carter a right to sue letter.
A few months later, on December 11, 2014, Carter filed this lawsuit in the Circuit Court
of Platte County, Missouri. The Petition seeks actual damages, attorneys’ fees and costs, and
punitive damages, the combined cost of which could exceed $75,000.

Defendants timely

removed this case to federal court.
In relevant part, the Petition alleges Hummer demeaned Carter by using stereotypical
derogatory language when talking to him1 and treating him differently than similarly situated
white coworkers.2 Hummer also disciplined Carter for rules violations for which she did not
discipline white employees. As a result of Hummer’s discriminatory treatment, GE eventually
placed Carter on a “final review” status which placed him in danger of being terminated.
Hummer’s actions caused Carter so much stress that he sought medical treatment.
The Petition does not allege that Carter exhausted his administrative remedies against
Hummer, or that Hummer falls within a limited exception to the administrative exhaustion
requirement.

1

For example, Hummer allegedly referred to Carter as “slow” even though he worked at the same pace as his white
co-workers, and she did not refer to his white co-workers as “slow.”

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For example, Hummer did not allow Carter to wear a certain pair of steel-toed boots even though she allowed other
white employees to change into different boots, and she wrote him up for attending a funeral even though he
telephoned and left a message explaining why he would be absent.

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Discussion
Because Hummer is a citizen of Missouri, the forum-defendant rule would ordinarily
compel this Missouri-based Court to remand the case. Defendants contend that Hummer was
fraudulently joined to this lawsuit to prevent removal to federal court, and so the Court should
ignore her citizenship. Defendants argue Carter cannot bring an MHRA claims against Hummer
because he did not file a discrimination charge against her with the MCHR before filing suit, and
that an exception to this exhaustion requirement does not apply here.
In response, Carter argues an exception to the exhaustion requirement does apply, and
that a state court judge should make this determination. Accordingly, this case should be
remanded to state court.
As a general rule, a plaintiff cannot sue a defendant under the MHRA without first
exhausting his administrative remedies by filing a discrimination charge with the MCHR against
that defendant. Mo. Rev. Stat. § 213.075(1). This charge must be filed within 180 days of the
allegedly discriminatory act and must state “the name and address of the person alleged to have
committed the unlawful discriminatory practice.” Id. Failure to name an individual in an
administrative charge may preclude bringing a subsequent civil action against that person. Hill
v. Ford Motor Co., 277 S.W.3d 659, 669-70 (Mo. 2009). Thus, if Carter’s failure to name
Hummer in his discrimination charge bars his MHRA claim against her, there is no reasonable
basis in fact or law supporting a claim against Hummer, and the Court should find she has been
fraudulently joined.
Missouri law, however, is very forgiving in finding that the MHRA’s procedural
requirements have been met. See Alhalabi v. Mo. Dept. of Nat. Res., 300 S.W.3d 518, 525 (Mo.
Ct. App. 2009) (“The Missouri Supreme Court has indicated that it takes a liberal approach to the

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fulfillment of procedural requirements under the MHRA.”). The Missouri Supreme Court has
held that “the importance of maintaining the availability of complete redress of legitimate
grievances without undue encumbrance” outweighs the interests served by the statute’s
procedural requirements, “especially [where] demanding full and technical compliance would”
not advance the underlying purposes of the procedural requirements. Hill, 277 S.W.3d at 670.
These purposes include giving notice to the charged party and providing an avenue for voluntary
compliance without resort to litigation. Id. at 669.
A court considers four factors in deciding whether the failure to name an individual in an
administrative charge bars a subsequent MHRA claim against that individual:
1.

Whether the complainant could have ascertained the role of
the unnamed party through reasonable efforts at the time of
the filing of the charge;

2.

Whether the interest of the unnamed party and the
respondents are so similar that, for the purpose of obtaining
voluntary reconciliation and compliance, including the
unnamed party was unnecessary;

3.

Whether the failure to include the unnamed party in the
charge resulted in actual prejudice; and

4.

Whether the unnamed party had somehow represented to
the complainant that its relationship with the complainant is
to be through the named party.

Hill, 277 S.W.3d at 669-70. The third factor is essential. Id. at 662.
Federal district courts adjudicating similar motions to remand where the plaintiff has
allegedly brought an invalid MHRA claim against a diversity-destroying local defendant have
handled motions to remand in different ways. Some courts, including this one, have considered
the merits of the defendants’ fraudulent joinder argument and then ruled accordingly. That is,

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they use the Hill factors to determine if the exception to the MHRA’s exhaustion requirement
applies.3 If the court holds the exception cannot apply and that joinder of the local defendant is
fraudulent, then the motion to remand is denied.
Other courts have declined to perform the Hill analysis, instead remanding the case back
to state court.4

These courts reason that because applying the Hill factors can involve

adjudicating disputed questions of fact, and because a federal court must possess subject matter
jurisdiction to hear a case before it can resolve a disputed question of fact, the court should
remand the case and let a state court decide the question. See, e.g., Eggerstedt v. Papa John’s
USA, Inc., No. 14-095-CV-W-ODS, 2014 WL 2013335, at *2 (W.D. Mo. May 16, 2014). They
maintain that because an exception to the administrative exhaustion requirement exists, there is a
reasonable basis for predicting that the state’s law might impose liability against the defendant,
regardless of whether the exception actually applies in the particular case. See Parker, 2014 WL
3827232, at *2. They note the defendants can present their Hill arguments to the state court after
remand. “If they prevail, and if time permits,” they can remove the case back to federal court.5
See Adamson v. Durham D&M, LLC, No. 4:09-0523-cv-ODS, 2009 U.S. Dist. LEXIS 60749, at
*7 (W.D. Mo. July 15, 2009).

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See, e.g., Moore v. Helget Gas Prods., Inc., No. 4:14-cv-1292-CEJ, 2014 WL 6632342, at *2 (E.D. Mo. Nov. 21,
2014) (applying four Hill factors and finding plaintiff had not shown the exhaustion requirement was satisfied);
Stoker v. LaFarge N. Am., Inc., No. 4:12-cv-0504-DGK, 2013 WL 434949, at 4-5 (W.D. Mo. Feb. 5, 2013) (holding
the exception did not apply because all four Hill factors weighed in favor of barring the MHRA claim); Borders v.
Trinity Marine Prods., No. 1:10-cv-146-HEA, 2010 WL 5139343, at *2-3 (E.D. Mo. Dec. 9, 2010) (applying the
Hill factors and barring MHRA claims against three individuals not named in the MHRC charge); see also Jackson
v. Mills Props., No. 4:11-cv-419-SNLJ, 2011 WL 3607920, at *3 (E.D. Mo. Aug. 12, 2011) (applying the Hill
factors and granting the individual defendant’s motion to dismiss).
4

See, e.g., Parker v. Pinnacle Entm’t, No. 4:14-cv-791-RWS, 2014 WL 3827232, at *2 (E.D. Mo. Aug. 4, 2014);
Bock v. Liberty Rest. Grp., No. 4:13cv0781AGF, 2013 WL 4504375, at *3 (E.D. Mo. Aug. 23, 2013).

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Under 28 U.S.C. § 1446(c), a case may not be removed more than one year after the commencement of the action
unless the district court finds that the plaintiff acted in bad faith to prevent removal.

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Plaintiff urges the Court to adopt this latter approach. The Court declines because
although applying the Hill factors sometimes requires resolving disputed questions of fact,6 this
does not compel remand. Federal courts may resolve disputed questions of fact to determine
subject matter jurisdiction. See, e.g., Johnson v. United States, 534 F.3d 958, 962 (8th Cir. 2008)
(noting the court may dismiss an action for lack of subject matter jurisdiction based on, among
other things, “the court’s resolution of disputed facts”) In resolving questions of fraudulent
joinder, federal courts often make determinations involving disputed questions of fact. They are
analogous to those factual determinations involved in ascertaining other elements of diversity
jurisdiction, such as where a corporation’s “nerve center” is located or whether the amount in
dispute could exceed $75,000. Wells’ Dairy, Inc. v. Am. Indus. Refrigeration, Inc., 157 F. Supp.
2d 1018, 1036-38 (N.D. Iowa 2001). “[T]he facts at issue in such cases can still properly be
described as ‘jurisdictional,’ because they go to the question of whether the purportedly nondiverse defendant is a proper party to the action, rather than going to the ‘merits’ of the
allegations concerning the defendant’s allegedly wrongful conduct.” Id. at 1037. Before making
a determination as to fraudulent joinder, a federal court may even allow defendants to conduct
discovery into the underlying facts. Id. at 1036-39; see Viasystems, Inc. v. EBM-Pabst St.
Georgen GmbH & Co., KG, 646 F.3d 589, 598 (8th Cir. 2011) (observing allowing jurisdictional
discovery is warranted where “certain facts necessary to resolv[e] the jurisdictional inquiry are
either unknown or disputed”); Johnson, 534 F.3d at 965 (observing Rule 56 provides guidance
on when to allow discovery on jurisdictional facts).
Of course, as the proponents of federal jurisdiction, Defendants bear the burden of
establishing these facts by a preponderance of the evidence. See Hertz Corp. v. Friend, 559 U.S.
6

In most cases, at least some of the relevant facts are undisputed. For example, in this case, Carter concedes he
knew of Hummer’s role in the discrimination against him at the time he filed his MHRC charge. Suggestions in
Supp. (Doc. 7) at 11.

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77, 96 (2010) (noting that when federal jurisdiction is challenged, the parties asserting diversity
jurisdiction “must support their allegations by competent proof”). If they cannot meet their
burden, or if the determination of these facts is intertwined with the merits of the case, the court
should remand. See Cent. Iowa Power Co-op. v. Midwest Indep. Transmission Sys. Operator,
Inc., 561 F.3d 904, 912 (8th Cir. 2009); Johnson, 534 F.3d at 963.
Applying Hill to the present case, the Court finds Defendants have not demonstrated that
a Missouri court would rule that the Hill exception does not apply, therefore they have not shown
Carter fraudulently joined Hummer. The Court finds as follows with respect to the Hill factors:
First, Carter concedes he had notice of Hummer’s role in this matter before filing his
administrative charge.
With respect to the second factor, Hummer’s interests and GE’s interests were not so
similar that for the purpose of obtaining voluntary reconciliation and compliance it was
unnecessary to include Hummer in the MCHR proceedings. Carter argues he viewed Hummer as
indistinguishable from his employer; therefore it was unnecessary to include her in the
proceedings. But the issue is not how Carter viewed things, but whether Hummer’s interests
were actually similar to GE’s. They were not. An individual in Hummer’s position does not
view legal liability the same way a large corporate entity like GE does. Hummer is not an
owner, a controlling shareholder, or even a high ranking corporate officer of GE such that she is
likely to feel a loss suffered by GE. Her economic position and ability to tolerate financial risk
are not comparable to GE’s. A judgment against GE can be executed against its corporate assets
only. A judgment against Hummer puts her personal assets at risk. See Eckerman v. KMBC-TV,
No. 08-0994-CV-W-DGK, 2009 WL 9837587, at *3 (W.D. Mo. July 17, 2009) (observing that
an individual at risk of losing his or her life savings has a different interest in conciliation than a

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large corporation); see also Jackson v. Mills Props., No. 4:11CV419SNLJ, 2011 WL 3607920, at
*3 (E.D. Mo. August 12, 2011). Furthermore, a large corporation may have policy reasons for
resisting or embracing conciliation, such as not wanting to be viewed as an easy target for
discrimination claims. An individual, on the other hand, may have separate moral or personal
reasons motivating her to participate in conciliation which a large corporation does not have.
Thus, GE and Hummer’s interests are not sufficiently similar.
Defendants have not satisfied the third factor in the analysis by showing that Carter’s
failure to name Hummer in the MCHR charge prejudiced her. Hummer claims it prevented her
from advocating her personal interests in the proceedings, but she does not explain how this
harmed her in some way. What exactly did she lose by not being able to advocate her personal
interests? She was aware of the proceedings and interviewed as part of the process, and her
truthful account of the events would not have been any different whether she was personally
named in the charge or not.
The fourth factor—whether Hummer somehow represented to Carter that her relationship
with him was to be through GE—also weighs against Carter. Hummer never communicated to
Carter (at least before he filed suit) that with respect to any personal liability she might have, GE
represented her. Nor did Hummer ever communicate that she was one and the same entity as
GE.
Although Defendants have established three of the factors, the failure to establish
prejudice to Hummer is fatal. The Missouri Supreme Court has ruled that the failure to make a
party a respondent at the administrative action before the MCHR will bar suit against the
unnamed party “only if it resulted in prejudice.” Hill, 277 S.W.3d at 662. Because Defendants
have not shown prejudice to Hummer, a Missouri court might allow Plaintiff’s MHRA claim

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against her to go forward. Thus, joinder is not fraudulent. Without fraudulent joinder, the localdefendant rule applies, and the Court must remand. See 28 U.S.C. § 1441(b)(2).
Conclusion
For the reasons discussed above, the Court holds Defendants have not carried their
substantial burden of proving fraudulent joinder. Plaintiff’s Motion to Remand (Doc. 6) is
GRANTED.
IT IS SO ORDERED.
Date: July 23, 2015

/s/ Greg Kays
GREG KAYS, CHIEF JUDGE
UNITED STATES DISTRICT COURT

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