Frades v. Zurich American Ins. Co. ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 PAMELA FRADES, No. 2:19-cv-01693-TLN-CKD 12 Plaintiff, 13 v. ORDER 14 ZURICH AMERICAN INSURANCE COMPANY; RORY ANGOLD; and 15 DOES 1 through 10, inclusive, 16 Defendants. 17 18 This matter is before the Court on Plaintiff Pamela Frades’s (“Plaintiff”) Motion to 19 Remand and Request for Attorney’s Fees. (ECF No. 6.) Defendant Zurich American Insurance 20 Company (“Defendant”) opposes the motion. (ECF No. 7.) Plaintiff did not file a reply. For the 21 following reasons, the Court hereby GRANTS in part and DENIES in part Plaintiff’s motion. 22 /// 23 /// 24 /// 25 /// 26 /// 27 /// 28 /// 1 I. FACTUAL AND PROCEDURAL BACKGROUND 2 Defendant is Plaintiff’s former employer. Plaintiff sued Defendant and its officer, Rory 3 Angold (“Angold”), (collectively, “Defendants”) in Sacramento County Superior Court on July 4 17, 2019. (ECF No. 1 at 11.) Plaintiff alleges five causes of action, which include: (1) violation 5 of California Labor Code § 9701; (2) sex discrimination (Cal. Gov’t Code § 12940(a)); (3) hostile 6 work environment harassment (Cal. Gov’t Code § 12940(j)); (4) failure to prevent harassment, 7 discrimination, and retaliation (Cal. Gov’t Code § 12940(k)); and (5) wrongful termination in 8 violation of public policy. (ECF No. 1 at 19–26.) 9 Plaintiff alleges, among other things, that Defendant promised her a position in Seattle, 10 Washington for an indefinite period of time. (ECF No. 1 at 20.) Plaintiff further alleges 11 Defendant terminated Plaintiff’s position shortly after she had relocated and purchased a home 12 near Seattle, Washington. (ECF No. 1 at 18.) Plaintiff alleges she was a resident of California 13 “at all times relevant to his action,” except for a brief period prior to her termination when she 14 was domiciled in Washington State at the directive of Defendant. (ECF No. 1 at 12.) 15 On August 28, 2019, Defendant removed the action based on diversity jurisdiction under 16 28 U.S.C. § 1332(a). (ECF No. 1 at 5.) Defendant contends there is complete diversity between 17 the parties because Plaintiff is a citizen of Washington State, Defendant is a citizen of Illinois and 18 incorporated in New York, and Angold is a citizen of California.2 (ECF No. 1 at 5.) On 19 September 27, 2019, Plaintiff filed the instant Motion to Remand and Request for Attorney’s 20 Fees, asserting there is not complete diversity because she was a California citizen when she filed 21 the Complaint. (ECF No. 6-1.) Defendant opposed and requested the opportunity for 22 jurisdictional discovery. (ECF No. 7.) 23 /// 24 1 California Labor Code § 970 prohibits an employer from influencing or persuading an 25 employee to relocate for a job by making knowingly false representations regarding the nature or 26 duration of the work. Cal. Lab. Code § 970(a), (b). 27 2 Defendant also contends the forum defendant rule does not bar removal because Plaintiff has not “properly joined and served” Angold (the in-state defendant) under 28 U.S.C. § 1441(b). 28 (ECF No. 1 at 6 n.1.) 1 II. STANDARD OF LAW 2 A civil action brought in state court, over which the district court has original jurisdiction, 3 may be removed by the defendant to federal court in the judicial district and division in which the 4 state court action is pending. 28 U.S.C. § 1441(a). The district court has original jurisdiction 5 over civil actions between citizens of different states in which the alleged damages exceed 6 $75,000. 28 U.S.C. § 1332(a)(1). 7 Removal based on diversity requires that the citizenship of each plaintiff be diverse from 8 the citizenship of each defendant (i.e. complete diversity). Caterpillar Inc. v. Lewis, 519 U.S. 61, 9 68 (1996). For purposes of diversity, a corporation is a citizen of any state in which it is 10 incorporated and any state in which it maintains its principal place of business. 28 U.S.C. § 11 1332(c)(1). An individual defendant’s citizenship is determined by the state in which they are 12 domiciled. Weight v Active Network, Inc., 29 F. Supp. 3d 1289, 1292 (S.D. Cal. 2014). 13 Importantly, diversity is determined as of the time the complaint is filed and removal effected. 14 Stroken Corp. v. Air Transp. Ass’n of Am., 300 F.3d 1129, 1131 (9th Cir. 2002). 15 “[I]n a case that has been removed from state court to federal court under 28 U.S.C. § 16 1441 on the basis of diversity jurisdiction, the proponent of federal jurisdiction — typically the 17 defendant in the substantive dispute — has the burden to prove, by a preponderance of the 18 evidence, that removal is proper.” Geographic Expeditions, Inc. v. Estate of Lhotka ex rel. 19 Lhotka, 599 F.3d 1102, 1106–07 (9th Cir. 2010). “The preponderance of the evidence standard 20 applies because removal jurisdiction ousts state-court jurisdiction and ‘must be rejected if there is 21 any doubt as to the right of removal in the first instance.’” Id. (citation omitted). “This gives rise 22 to a ‘strong presumption against removal jurisdiction [which] means that the defendant always 23 has the burden of establishing that removal is proper.’” Id. (citation omitted). “For these reasons, 24 ‘[w]e strictly construe the removal statute against removal jurisdiction.’” Id. (citation omitted). 25 III. ANALYSIS 26 A. Diversity of Citizenship 27 In moving to remand, Plaintiff argues there is not complete diversity — and therefore 28 removal was improper — because both she and Angold are citizens of California. (ECF No. 6-1 1 at 3–4.) Plaintiff also submits a declaration attesting: (1) she was domiciled in California when 2 she filed the Complaint in July 2019; (2) she continues to be domiciled in California; and (3) she 3 intends to remain in California. (ECF No. 6-3 at 1.) Plaintiff also clarifies that she only resided 4 in Washington State for a brief period of time and not at the time she filed the Complaint. (Id.) 5 In opposition, Defendant argues there is complete diversity — and therefore removal was 6 proper — because Plaintiff is a citizen of Washington State. More specifically, Defendant points 7 to the following evidence: (1) Plaintiff alleges in her Complaint that in November 2017, she 8 bought a house in Seattle, moved to Washington, and was domiciled in Washington “briefly 9 prior” to her termination (ECF No. 1 at 18); (2) on July 19, 2018, and January 2, 2019, Plaintiff 10 filed administrative charges with the California Department of Fair Employment and Housing 11 which state that Plaintiff resides in Washington (ECF No. 7 at 4.); and (3) publicly available real 12 estate records indicate Plaintiff owns a home in Washington. (ECF No. 7 at 5.) Defendant also 13 argues that should the Court have doubts, it should grant jurisdictional discovery rather than 14 remand the case. (Id.) 15 To be clear, it is undisputed that there is complete diversity if Plaintiff was a citizen of 16 Washington when she filed her Complaint, but there is not complete diversity if Plaintiff was a 17 citizen of California when she filed her Complaint. A person’s citizenship is “determined by her 18 state of domicile, not her state of residence.” Kanter v. Warner-Lambert Co., 265 F.3d 853, 857 19 (9th Cir. 2001). “A person’s domicile is her permanent home, where she resides with the 20 intention to remain or to which she intends to return.” Id. In Lew v. Moss, the Ninth Circuit 21 listed factors that are relevant in determining domicile, including residence, voting registration 22 and voting practices, location of real and personal property, location of bank accounts, location of 23 spouse and family, membership in unions and other organizations, place of employment or 24 business, driver’s license and automobile registration, and payment of taxes. 797 F.3d at 749– 25 750 (9th Cir. 1986). 26 At the outset, the Court notes that both parties provide minimal evidence and Plaintiff 27 could have greatly simplified the Court’s inquiry by submitting public records to prove her 28 citizenship in California. Ultimately, however, Defendant bears the burden of proof as the party 1 seeking federal jurisdiction. Geographic Expeditions, Inc., 599 F.3d at 1106–07; Emrich v. 2 Touche Ross & Co., 846 F.2d 1190, 1195 (9th Cir. 1988). 3 Looking to Defendant’s evidence, Defendant claimed in its notice of removal that Plaintiff 4 alleges she is an “adult domiciled in Washington [State].” (ECF No. 1 at 5). But Defendant 5 misrepresents Plaintiff’s Complaint. Paragraph 1 of Plaintiff’s Complaint reads as follows: 6 “Pamela Frades (“Plaintiff” or “Ms. Frades”) was at all times relevant to this action, 7 a recruit, employee, or wrongfully terminated employee of Defendant Zurich American Insurance Company. While employed by Defendant, and at all times 8 relevant to this action, Plaintiff was a resident of California, or briefly prior to her termination, domiciled in Washington State at the directive of Defendant.” (Id.) 9 (emphasis added.) 10 11 When viewed in context, the Complaint implies Plaintiff returned to California after 12 Defendant eliminated her position. Plaintiff also clarifies any perceived ambiguity by 13 stating in her declaration that she only resided for a brief period of time in Washington 14 State and resided in California with the intent to stay when she filed her Complaint in 15 July 2019. (ECF No. 6-3 at 1.) 16 Defendant next cites two administrative charges that list Washington State as 17 Plaintiff’s residence. (ECF No. 1 at 5.) The administrative charges are unpersuasive for 18 two reasons. First, the charges may list Washington State as Plaintiff’s residence at the 19 time, “[b]ut the diversity jurisdiction statute . . . speaks of citizenship, not of residency.” 20 Kanter, 265 F.3d at 857. Second, the letters are dated July 19, 2018 and January 2, 2019. 21 (ECF No. 1-2 at 30, 36.) Plaintiff filed her Complaint on July 17, 2019, more than six 22 months after the January 2, 2019 letter and approximately eighteen months after 23 Defendant terminated Plaintiff. (ECF No. 1 at 11.) As such, Defendant fails to persuade 24 the Court that the administrative charges are evidence that Plaintiff still resided in 25 Washington and intended to stay there when she filed her Complaint six months later. 26 Nor do the administrative charges rebut Plaintiff’s declaration that she was domiciled in 27 California when she filed her Complaint. (ECF No. 6-3 at 1.) 28 1 Defendant’s argument that Plaintiff owns a home in Washington similarly fails. 2 Even assuming Plaintiff still owns the home, the location of real property is only one 3 relevant factor set forth in Lew. In other words, the fact that Plaintiff owns real estate in 4 Washington does not mean that she lived there and intended to stay when she filed her 5 Complaint, especially in light of Plaintiff’s specific declaration to the contrary. 6 For these reasons and in light of the strong presumption against removal, the 7 Court finds Defendant fails to meet its burden to show that Plaintiff was a Washington 8 citizen when she filed her Complaint. See Geographic Expeditions, Inc., 599 F.3d at 9 1106–07; see also Hunter v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009) 10 (“[T]he court resolves all ambiguity in favor of remand to state court.”). 11 B. Jurisdictional Discovery 12 Defendant argues the Court should permit jurisdictional discovery if there is any 13 doubt as to diversity jurisdiction. (ECF No. 7 at 5.) The Court may grant jurisdictional 14 discovery “where pertinent facts bearing on the question of jurisdiction are controverted 15 or where a more satisfactory showing of the facts is necessary.” Boschetto v. Hansing, 16 539 F.3d 1011, 1020 (9th Cir. 2008). However, where a claim of “jurisdiction appears to 17 be both attenuated and based on bare allegations in the face of specific denials, . . . the 18 Court need not permit even limited discovery.” Getz v. Boeing Co., 654 F.3d 852, 860 19 (9th Cir. 2011) (citation and quotations omitted); see also Boschetto, 539 F.3d at 1020 20 (affirming a district court’s denial of jurisdictional discovery when the request was 21 “based on little more than a hunch that it might yield jurisdictionally relevant facts”). 22 Further, a district court’s decision denial of jurisdictional discovery will not be reversed 23 except “upon the clearest showing that denial of discovery results in actual and 24 substantial prejudice to the complaining litigant.” Butcher’s Union Local No. 498, 25 United Food & Commercial Workers v. SDC Inv., Inc., 788 F.2d 535, 540 (9th Cir. 1986) 26 (citation and quotations omitted). 27 For the reasons already discussed, Defendant’s claim that Plaintiff is a 28 Washington citizen is “attenuated and based on bare allegations in the face of [Plaintiff’s] 1 specific denials.” Terracom v. Valley Nat. Bank, 49 F.3d 555, 562 (9th Cir. 1995). 2 Moreover, Defendant has not argued that denial of further discovery will result in “actual 3 and substantial prejudice.” Butcher’s Union, 788 F.2d at 540. The Court therefore 4 DENIES Defendant’s request to conduct jurisdictional discovery. See id. 5 C. Attorney’s Fees Under 28 U.S.C. § 1447 6 Lastly, Plaintiff argues she is entitled to attorney fees. (ECF No. 6-1 at 5.) “An 7 order remanding the case may require payment of just costs and any actual expenses, 8 including attorney fees, incurred as a result of removal.” 28 U.S.C § 1447(c). “Absent 9 unusual circumstances, courts may award attorney’s fees under § 1447(c) only where the 10 removing party lacked an objectively reasonable basis for seeking removal.” Martin v. 11 Franklin Capital Corp., 546 U.S. 132, 141 (2005). 12 Here, the Court cannot say that Defendant “lacked an objectively reasonable basis 13 for seeking removal.” Id. Plaintiff’s Complaint could have been clearer, and 14 Defendant’s arguments were not completely unfounded. Moreover, Plaintiff could have 15 easily settled this jurisdictional dispute by providing more evidence to guide the Court’s 16 analysis. As such, the Court DENIES Plaintiff’s request for attorney’s fees under 28 17 U.S.C. § 1447(c). 18 IV. CONCLUSION 19 For the reasons discussed above, the Court GRANTS Plaintiff’s motion in part and 20 REMANDS the case to Sacramento County Superior Court. However, the Court DENIES 21 Plaintiff’s request for attorney’s fees. (ECF No. 6.) 22 IT IS SO ORDERED. 23 DATED: October 6, 2020 24 25 26 27 28