Edwards v. UPS,. ( 2024 )

if: 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 | David Anthony Edwards, No. 2:24-cev-01283-KJM-DMC 12 Plaintiff, ORDER 13 v. 14) ups, et al., IS Defendants. 16 17 Plaintiff David Anthony Edwards argues this court lacks diversity jurisdiction and moves 18 | to remand this matter to state court. Defendant United Parcel Services, Inc. (UPS, Inc.), opposes, 19 | arguing the only forum defendant, Franklin Harris, was not served before removal and is 20 | fraudulently joined. The court grants the motion to remand and denies UPS, Inc.’s motion for 21 | judgment on the pleadings as moot. 22 | I. BACKGROUND 23 Mr. Edwards brought this wrongful termination action against UPS, UPS, Inc., United 24 | Parcel Service General Services Co., Franklin Harris and Does 1 through 100, inclusive,' for 25 | allegedly discriminating against him “on the basis of his disability, specifically, his mental health ' Defendants argues the only proper defendant is United Parcel Service, Inc. and Mr. Edwards “[e]rroneously sued [defendant] as UPS; United Parcel Services, Inc.; and United Parcel Service General Services Co.” See Opp’n at 9, ECF No. 8. The court does resolve this issue in the instant order. 1 conditions, post-traumatic stress disorder, stress, and anxiety.” Remand Mem. at 1, ECF No. 7-1; 2 see Mot. Remand, ECF No. 7. Mr. Edwards’s claims include disability discrimination, failure to 3 engage in the interactive process, failure to provide reasonable accommodation, retaliation, 4 hostile work environment harassment, failure to prevent discrimination, harassment and 5 retaliation, adverse employment action in violation of public policy and negligent infliction of 6 emotional distress (NIED). See id. at 2. Mr. Edwards has brought only one claim against Mr. 7 Harris, for NEID e. See Compl. at 50, Ex. A to Savaso Decl., ECF No. 1-4. Mr. Edwards 8 attempted to serve Mr. Harris on April 17, 2024, without success, and has not reported any further 9 effort to serve him since. See Remand Mem. at 2; Opp’n at 2. 10 UPS, Inc. removed the case to this court based on a claim of complete diversity of 11 citizenship. Notice of Removal, ECF No. 1. The parties agree Mr. Edwards is a citizen of 12 California and Mr. Harris is a resident of California, which would defeat complete diversity and 13 favor remand if Mr. Harris is a proper defendant. However, the parties disagree whether Mr. 14 Harris is a proper defendant. UPS, Inc. argues United Parcel Service, Inc., a citizen of Ohio and 15 Georgia, is “the only proper Defendant.” See id. at 4. Because plaintiff did not complete service 16 on Mr. Harris before removal, UPS, Inc. argues removal was proper under 28 U.S.C. 17 § 1441(b)(2), which states, “[a] civil action otherwise removable solely on the basis of the 18 jurisdiction under section 1332(a) of this title may not be removed if any of the parties in interest 19 properly joined and served as defendants is a citizen of the State in which such action is brought.” 20 28 U.S.C. § 1441(b)(2); see Notice of Removal at 6–7. UPS Inc.’s argument hinges on the 21 “joined and served” language in § 1441(b)(2), and its removal of the case based on this reading is 22 sometimes referred to as “snap removal.” See Casola v. Dexcom, Inc., 98 F.4th 947, 950 (9th Cir. 23 2024) (“[Defendant] was trying to effect what is known as a “snap removal”—filing its notices of 24 removal before service of the summons and complaint.”). Even if service was not required for 25 Mr. Harris’s status as a party to defeat complete diversity and snap removal is not permissible, 26 UPS, Inc. argues Mr. Harris was fraudulently joined and therefore it properly removed the case. 27 See Notice of Removal at 5. 1 UPS, Inc. opposes the motion to remand, see Opp’n, and plaintiff did not file a reply. The 2 court submitted the motion without a hearing. See Min. Order (July 3, 2024), ECF No. 9. UPS, 3 Inc. has since filed a motion for judgment on the pleadings, seeking to dismiss plaintiff’s NIED 4 claim against Mr. Harris. See Mot. J., ECF No. 10. Plaintiff filed a statement of non-opposition 5 to that motion, requesting the court dismiss the claim without prejudice so he could potentially 6 renew the claim in an amended complaint. See Non-Opp., ECF No. 12. The court submitted this 7 matter without a hearing as well. See Min. Order (Sept. 4, 2024), ECF No. 15. The court 8 necessarily resolves the issue of subject matter jurisdiction first, which requires neutral 9 consideration of defendant’s argument in opposition to remand regarding the NIED claim and 10 whether defendant meets its burden in opposing remand. 11 II. LEGAL STANDARD 12 When a federal district court would have had original jurisdiction over an action originally 13 filed in state court, the action may be removed to federal court. 28 U.S.C. § 1441(a). The 14 removal statute is strictly construed, and doubts regarding the court’s jurisdiction are resolved in 15 favor of remand. See Luther v. Countrywide Home Loans Servicing, LP, 533 F.3d 1031, 1034 16 (9th Cir. 2008). Removal is proper only when (1) the case presents a federal question or (2) there 17 is diversity of citizenship between the parties and the amount in controversy exceeds $75,000. 18 See 28 U.S.C. §§ 1331, 1332(a). In every case, the threshold question a federal court must 19 answer affirmatively is whether it has jurisdiction. See United Invs. Life Ins. Co. v. Waddell & 20 Reed Inc., 360 F.3d 960, 966 (9th Cir. 2004) (“[A] district court’s duty to establish subject matter 21 jurisdiction is not contingent upon the parties’ arguments.”). A federal district court may remand 22 a case sua sponte where a defendant has not established federal jurisdiction. See 28 U.S.C. 23 § 1447(c) (“If at any time before final judgment it appears that the district court lacks subject 24 matter jurisdiction, the case shall be remanded[.]”); Emrich v. Touche Ross & Co., 846 F.2d 1190, 25 1195 (9th Cir. 1988) (citing Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97 (1921)). 26 Diversity jurisdiction requires complete diversity, meaning each plaintiff has different 27 citizenship than each defendant. See Grancare, LLC v. Thrower by & through Mills, 889 F.3d 28 543, 548 (9th Cir. 2018). “In determining whether there is complete diversity, district courts may 1 disregard the citizenship of a non-diverse defendant who has been fraudulently joined.” Id. 2 (citing Chesapeake & Ohio Ry. Co. v. Cockrell, 232 U.S. 146, 152 (1914)). “There are two ways 3 to establish fraudulent joinder: (1) actual fraud in the pleading of jurisdictional facts, or 4 (2) inability of the plaintiff to establish a cause of action against the non-diverse party in state 5 court.” Id. (citation and marks omitted). The court may find fraudulent joinder only if, “after all 6 disputed questions of fact and all ambiguities in the controlling state law are resolved in the 7 plaintiff’s favor, the plaintiff could not possibly recover against the party whose joinder is 8 questioned.” Nasrawi v. Buck Consultants, LLC, 713 F. Supp. 2d 1080, 1084 (E.D. Cal. 2010) 9 (citing Kruso v. Int’l Tel. & Tel. Corp., 872 F.2d 1416, 1426 (9th Cir. 1989)). “But ‘if there is a 10 possibility that a state court would find that the complaint states a cause of action against any of 11 the resident defendants, the federal court must find that the joinder was proper and remand the 12 case to the state court.’” Grancare, 889 F.3d at 548 (quoting Hunter v. Philip Morris USA, 582 13 F.3d 1039, 1046 (9th Cir. 2009)). The “plaintiff need only have one potentially valid claim 14 against a non-diverse defendant to survive a fraudulent joinder challenge.” Nasrawi, 713 F. 15 Supp. 2d at 1084–85 (citation and marks omitted). 16 “Fraudulent joinder claims may be resolved by ‘piercing the pleadings’ and considering 17 summary judgment-type evidence such as affidavits and deposition testimony.” Morris v. 18 Princess Cruises, Inc., 236 F.3d 1061, 1068 (9th Cir. 2001) (citation and marks omitted). The 19 removing defendant “bears a heavy burden” in attempting to show removal is proper given the 20 “general presumption against fraudulent joinder.” Hunter, 582 F.3d at 1044, 1046. 21 III. ANALYSIS 22 A. Service of Non-Diverse Defendant 23 As an initial matter, the court clarifies whether the fact that plaintiff did not serve Mr. 24 Harris before UPS, Inc. removed the case prevents his status as a forum defendant from defeating 25 diversity jurisdiction. “It is now common practice for in-forum defendants in potential diversity 26 actions to race to file a notice of removal before being served with process and then claim shelter 27 under the ‘properly joined and served’ language in § 1441(b)(2).” Casola v. Dexcom, Inc., 98 28 F.4th 947, 964 & n.17 (9th Cir. 2024). Although the Ninth Circuit has not decided the 1 permissibility of these “snap removals” under § 1441(b)(2), a number of district courts in the 2 circuit have determined “snap removals” should not be permitted. See, e.g., U.S. Bank Nat’l 3 Ass’n, etc. v. Fid. Nat’l Title Grp., Inc., 604 F. Supp. 3d 1052, 1058–59 (D. Nev. 2022); but see 4 Regal Stone Ltd. v. Longs Drug Stores Cal., L.L.C., 881 F. Supp. 2d 1123, 1127 (N.D. Cal. 2012). 5 This court agrees with those sister courts who have concluded “[w]hen evaluating whether 6 diversity exists, a court cannot ignore a defendant’s citizenship simply because the defendant has 7 not yet been served.” Greenway Nutrients, Inc. v. Pierce, 2022 WL 17486359, *2 (C.D. Cal. 8 2022) (citation and marks omitted); see, e.g., Martinez v. Siemens Indus., Inc., No. 15-00511, 9 2015 WL 4460863, at *3 (E.D. Cal. July 21, 2015); Wilmington Tr. v. Fid. Nat’l Title Grp., Inc., 10 604 F. Supp. 3d 1044, 1051 (D. Nev. 2022) (citing Gentile v. Biogen Idec, Inc., 934 F. Supp. 2d 11 313, 319 (D. Mass. 2013)) (granting remand in similar case and reasoning goal of removal power 12 and forum-defendant rule, namely “protect[ing] non-forum litigants from possible state court bias 13 in favor of forum-state litigants,” is mitigated with the presence of a forum defendant, whether or 14 not they were served before non-forum defendant removed the case to federal court); Pratt v. 15 Alaska Airlines, Inc., No. 21-84, 2021 WL 1910885, at *5 (W.D. Wash. May 12, 2021) (citations 16 omitted) (collecting cases and explaining, “[i]n sum, this Court now joins the many other courts 17 that have found ‘snap removal’ is not consistent with the text, history, and purpose of the Forum 18 Defendant Rule”). 19 UPS, Inc. also argues the court should deny the motion to remand based on a particular 20 interpretation of three federal appellate court decisions, none of which issued from the Ninth 21 Circuit. See Opp’n at 4 (citing Texas Brine Co. LLC v. Am. Arb. Ass’n. Inc., 955 F.3d 482, 485– 22 87 (5th Cir. 2020); Gibbons v. Bristol-Myers Squibb Co., 919 F.3d 699, 704–07 (2d Cir. 2019); 23 Encompass Ins. Co. v. Stone Mansion Rest. Inc., 902 F.3d 147, 152–54 (3d Cir. 2018)). UPS, 24 Inc. cites these decisions to argue “the forum defendant rule only prevents removal of an action 25 when there is an in-state defendant who has already been served at the time of removal.” Id. 26 Many district courts across the country, including at least one in this circuit, have relied on 27 similar reasoning. See, e.g., Deutsche Bank Nat’l v. Old Republic Title Ins. Grp., 532 F. Supp. 3d 28 1004, 1012 (D. Nev. 2021); Spreitzer Properties, LLC v. Travelers Corp., 599 F. Supp. 3d 774, 1 782 (N.D. Iowa 2022); Great W. Cas. Co. v. CR Express, Inc., No. 23-16942, 2024 WL 3495231, 2 at *2 (N.D. Ill. July 22, 2024); BKL Holdings, Inc. v. Globe Life Inc., No. 22-00170, 2022 WL 3 2119116, at *2 (E.D. Tex. June 13, 2022). This reasoning assumes the parties are completely 4 diverse and the case would otherwise have been removable under § 1332, as was true in the three 5 non-Ninth Circuit decisions. For example, in Texas Brine Co. LLC v. Am. Arbitration 6 Association Inc., the plaintiff was from Texas, the non-forum defendant who removed the action 7 was from New York, and the two defendants the plaintiff had not yet served were from the forum 8 state, Louisiana. See Texas Brine, 955 F.3d at 484–86. Accordingly, within the language of § 9 1441(b)(2), the cases were “otherwise removable.” See 28 U.S.C. § 1441. Only then could it 10 make sense to conclude, as the Fifth Circuit did, that “[a] non-forum defendant may remove an 11 otherwise removable case even when a named defendant who has yet to be ‘properly joined and 12 served’ is a citizen of the forum state.” Texas Brine, 955 F.3d at 487; see also Gibbons, 919 F.3d 13 at 704–07 (holding removal proper where case was otherwise removable); Encompass Ins. Co., 14 902 F.3d at 151–54 (same). By contrast, in this case as with the district court decisions cited in 15 the preceding paragraph, the parties are not completely diverse, so the case was not “otherwise 16 removable,” and the sequence of service and removal does not make a difference. See 28 U.S.C. 17 § 1441. The court next turns to the question of fraudulent joinder to determine if there is 18 complete diversity or if the case should be remanded. 19 B. Fraudulent Joinder 20 UPS, Inc. argues Mr. Edwards’s allegations in his complaint meet the statutory 21 requirements for the amount in controversy, and plaintiff does not disagree. See Notice of 22 Remand ¶¶ 25–30; Remand Mem. at 5; see generally Opp’n. It also is undisputed that only Mr. 23 Harris shares California citizenship with plaintiff. See Notice of Removal ¶¶ 1, 25–30. Thus, the 24 only remaining question with respect to remand is whether UPS, Inc. has shown plaintiff 25 fraudulently joined Mr. Harris — if plaintiff did, then the case should not be remanded. UPS, 26 Inc. does not argue plaintiff committed actual fraud in the pleading of jurisdictional facts. See 27 generally Opp’n. Rather, UPS, Inc. argues Mr. Harris is fraudulently joined as a defendant under 28 the second prong of the test articulated in Grancare, supra, because Mr. Edwards cannot state a 1 claim against Mr. Harris. Id. at 9. To establish fraudulent joinder under the second prong, the 2 court must consider whether there is “a possibility that a state court would find that the complaint 3 states a cause of action” against him. Grancare, 889 F.3d at 548 (quoting Hunter, 582 F.3d at 4 1046). A defendant is fraudulently joined when “it is abundantly obvious that [a plaintiff] could 5 not possibly prevail” in his claim against the defendant in question. Carrick v. Peloton 6 Interactive, Inc., No. 24-00212, 2024 WL 3378332, at *4 (N.D. Cal. July 10, 2024) (citing Morris 7 v. Princess Cruises, Inc., 236 F.3d 1061, 1068 (9th Cir. 2001)). 8 UPS, Inc. argues Mr. Edwards’s single NEID claim against Mr. Harris for his actions 9 “while acting within the scope of his employment with UPS,” Opp’n at 8, is barred. See Compl. 10 ¶¶ 263–73, ECF No. 1. UPS, Inc. explains Mr. Edwards “has already filed a claim with the 11 Workers’ Compensation Appeals Board years before bringing this action,” and state law provides 12 that recovery by way of workers’ compensation is “the exclusive remedy for injury or death of an 13 employee against any other employee of the employer acting within the scope of his or her 14 employment.” See Opp’n at 7 (alteration and citation omitted). However, it is not “abundantly 15 obvious” to the court that Mr. Edwards’s claim is barred by the California Workers’ 16 Compensation Act such that he cannot prevail. Carrick, 2024 WL 3378332, at *4; see Cal. Lab. 17 Code §§ 3600, 3601. Mr. Edwards alleges Mr. Harris’s conduct “was extreme, outrageous, and 18 beyond that which a person in a civilized society should be forced to bear,” Compl. ¶ 265, and 19 Mr. Harris “intended to and did vex, harass, annoy, and cause Plaintiff to suffer and continue to 20 suffer emotional distress, and did so with malice entitling Plaintiff to punitive damages,” id. 21 ¶ 266. 22 Though plaintiff did not reply to UPS, Inc.’s opposition, the court need not rely solely on 23 the parties’ arguments in resolving contested jurisdiction. See United Invs. Life Ins. Co., 360 F.3d 24 at 966. Given the phrasing of plaintiff’s allegations, it is plausible that “[t]he purportedly 25 inappropriate conduct here appears to be outside the normal scope of employment” — and thus 26 not covered by Mr. Edwards’s separate Workers’ Compensation claim — “because the factual 27 allegations suggest that such discrimination and harassment” was not necessarily approved of by 28 the employer. See Carrick, 2024 WL 3378332, at *4–5; see also Vanderhule v. Amerisource 1 | Bergen Drug Corp., No. 16-2104, 2017 WL 168911, at *4 (C.D. Cal. Jan. 17, 2017). As in 2 | Carrick, “[a]t a minimum, any ‘deficiency in the complaint can possibly be cured by granting the 3 | plaintiff leave to amend,” precluding this court from finding Mr. Harris is a fraudulently joined 4 | defendant. See Carrick, 2024 WL 3378332, at *5 (citing Granacre, 889 F.3d at 550). 5 | Notwithstanding plaintiffs not filing a reply, UPS, Inc. has not met its burden of showing 6 | plaintiff cannot prevail on this claim in state court. IV. CONCLUSION 8 Because diversity of citizenship is lacking, the court lacks subject matter jurisdiction and 9 | grants plaintiff's motion to remand. Accordingly, the court denies UPS Inc.’s motion for 10 | judgment on the pleadings as moot. 11 This order resolves ECF No. 7 and 10. 12 IT IS SO ORDERED. 13 DATED: September 9, 2024. CHIEF ED STATES DISTRICT JUDGE