Geppert v. The Church of Jesus Christ of Latter-day Saints, Inc. ( 2024 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ROHNO GEPPERT, Case No. 23-cv-05763-JSW 8 Plaintiff, ORDER GRANTING MOTION TO 9 v. REMAND 10 THE CHURCH OF JESUS CHRIST OF Re: Dkt. No. 15 LATTER-DAY SAINTS, INC., et al., 11 Defendants. 12 13 Now before the Court is the motion to remand filed by Plaintiff Rohno Geppert 14 (“Plaintiff”). The Court has considered the parties’ papers, relevant legal authority, and the record 15 in the case, and it finds this matter suitable for disposition without oral argument. See N.D. Civ. 16 L.R. 7-1(b). For the following reasons, the Court GRANTS the motion to remand. 17 BACKGROUND 18 Plaintiff originally filed this action in the Santa Clara County Superior Court against ten 19 Doe Defendants pursuant to California Code of Civil Procedure section 340.1(l). Although only 20 Doe Defendants were named, Plaintiff served the Church of Jesus Christ of Latter-Day Saints, Inc. 21 (the “Church”), the Corporation of the Presiding Bishop of the Church of Jesus Christ of Latter- 22 Day Saints, Inc. (“CPB”), and the Corporation of the President of the San Jose Stake of the 23 Church of Jesus Christ of Latter-Day Saints (“CPSJS” and, collectively, “Defendants”). The 24 Church and CPB are Utah residents, and CPSJS is a California resident. CPB removed the action, 25 claiming diversity jurisdiction. (Dkt. 19-1, Pipkin Decl., ¶ 3.) Judge van Keulen remanded the 26 action to state court, reasoning that “Doe” defendants do not create diversity. Geppert v. Doe 1, 27 No. 23-cv-03257-SVK, 2023 WL 5804156, at *3 (N.D. Cal. Sept. 7, 2023). 1 Defendants for Does 1 through 3. (Pipkin Decl., ¶ 4.) The SAC alleges causes of action for 2 negligence and intentional infliction of emotional distress (“IIED”) against all three named 3 Defendants. (Dkt. No. 19-1, Ex. C, SAC.) 4 The Church removed the action a second time, again claiming diversity jurisdiction. (Dkt. 5 No. 1.) The Church claims that CPSJS is a sham defendant with no connection to the allegations 6 in the case, and that CPSJS’s citizenship should thus not be considered for removal purposes. (Id. 7 ¶¶ 15-17.) According to a declaration submitted by the Church’s Director of Risk Management, 8 Branden Wilson, CPSJS exists for the sole purpose of holding property and does not have any 9 connection to the Milpitas Ward referred to in Plaintiff’s Complaint. (Dkt. No. 19-2, Wilson 10 Decl., ¶ 19.) Wilson denies that CPSJS ever employed Kenneth Jenks, a former teacher, executive 11 secretary, librarian, and church leader in the Milpitas Ward of the Church who allegedly used his 12 position to sexually abuse children, including Plaintiff. (Id.; Dkt. No. 15-1, SAC, ¶ 32.) 13 The Church also provides a copy of CPSJS’s Articles of Incorporation, which includes the 14 following relevant language: 15 The purposes for which this corporation is formed are: (a) The specific and primary purposes are to acquire, hold and dispose of church or 16 religious society property for the benefit of religion, for works of charity, and for public worship. 17 (b) The general purposes and powers are to administer and manage the affairs, property 18 and temporalities of the corporation, and to carry on any business whatsoever which this corporation may deem proper and convenient in connection with any of the 19 foregoing purposes or otherwise, or which may be calculated, directly or indirectly, to promote the interest of this corporation to the extent permitted by Section 501(e)(3) of 20 the Internal Revenue Code. 21 (Dkt. No. 19-2, Articles of Incorporation of Corporation of the President of the San Jose Stake 22 Church of Jesus Christ of Latter-Day Saints, ¶ II.) 23 Plaintiff moves to remand on the basis that the Church has not met its burden to show that 24 CPSJS was fraudulently joined. Plaintiff contends that CPSJS operated, managed, and controlled 25 the Milpitas Ward and its agents. (Dkt. No. 15, Mot. to Remand, 12:4-8.) He further argues that 26 discovery would be required to determine the relationship between Jenks and CPSJS. (Dkt. No. 27 21, Reply, 6:5-9.) Plaintiff provides screen captures from the Milpitas Ward website advertising 1 The Court will address other relevant facts as necessary in the remainder of this order. 2 ANALYSIS 3 A. Legal Standard on a Motion to Remand. 4 “[A]ny civil action brought in a State court of which the district courts of the United States 5 have original jurisdiction, may be removed by the defendant . . . to the district court of the United 6 States for the district and division embracing the place where such action is pending.” Franchise 7 Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 7-8 (1983) (citation omitted); see also 28 8 U.S.C. § 1441(a). However, federal courts are courts of limited jurisdiction. See, e.g., Kokkonen 9 v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Accordingly, the burden of 10 establishing federal jurisdiction for purposes of removal is on the party seeking removal, and the 11 removal statute is strictly construed against removal jurisdiction. Valdez v. Allstate Ins. Co., 372 12 F.3d 1115, 1117 (9th Cir. 2004); see also Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). 13 “Federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first 14 instance.” Gaus, 980 F.2d at 566. A federal court has jurisdiction where the case concerns an 15 issue of federal law or there is complete diversity between the parties and the amount in 16 controversy exceeds $75,000. 28 U.S.C. § 1332. 17 “Diversity removal requires complete diversity, meaning that each plaintiff must be of a 18 different citizenship from each defendant.” Grancare, LLC v. Thrower by & through Mills, 889 19 F.3d 543, 548 (9th Cir. 2018) (citing Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996)). “In 20 determining whether there is complete diversity, district courts may disregard the citizenship of a 21 non-diverse defendant who has been fraudulently joined.” Id. (citing Chesapeake & Ohio Ry. Co. 22 v. Cockrell, 232 U.S. 146, 152 (1914)). 23 “Where fraudulent joinder is an issue, … [t]he defendant seeking removal to the federal 24 court is entitled to present the facts showing the joinder to be fraudulent.” Ritchey v. Upjohn Drug 25 Co., 139 F.3d 1313, 1318 (9th Cir. 1998) (internal citations omitted). “Joinder is fraudulent ‘if the 26 plaintiff fails to state a cause of action against a resident defendant, and the failure is obvious 27 according to the settled rules of the state.” Hunter v. Philip Morris USA, 582 F.3d 1039, 1043 (9th 1 2007)). 2 B. Defendants Have Not Met Their Burden to Show CPSJS Is a Sham Defendant. 3 The burden required to prevail on the fraudulent joinder theory is heavy. Defendants need 4 to show either (2) actual fraud in the pleading or (2) “present[] extraordinarily strong evidence or 5 arguments that [Plaintiff] could not possibly prevail on [his] claims” against CPSJS. Grancare, 6 889 F.3d at 548. There must be “no possibility” of a cause of action against the sham defendant. 7 Rader v. Sun Life Assur. Co. of Canada, 941 F. Supp. 2d 1191, 1194 (N.D. Cal. 2013). The 8 Church’s evidence that CPSJS is a sham defendant is insufficient to meet the Church’s heavy 9 burden. 10 1. The Church Has Not Shown Actual Fraud. 11 The Church claims actual fraud via an unsupported accusation that Plaintiff fraudulently 12 joined CPSJS after his attorneys searched California records for any entity with citizenship 13 regardless of connection to his claims. (Dkt. No. 19, Opp., 5:10-11.) Plaintiff has alleged that 14 CPSJS jointly operated the Milpitas Ward with the Church and CPB. The Milpitas Ward is a 15 subunit of the San Jose Stake, as demonstrated through Wilson’s declaration and the documents 16 produced by Plaintiff. (See Wilson Decl., ¶ 7 (explaining that Stakes consist of Wards).) CPSJS’s 17 corporate purpose is to both hold property for the Stake and to “administer and manage the affairs” 18 of CPSJS. (Articles, ¶ II.) 19 Given the Church’s own explanation that the Church can interact with the secular world 20 only through incorporation, (see Dkt. No. 19, 6:1-8), it is logical that a plaintiff harmed by an 21 agent of the San Jose Stake would seek recovery from CPSJS. Unlike “most” wards and stakes, 22 the San Jose Stake has a corporate existence and owns property via CPSJS. (See Wilson Decl., ¶ 23 8.) It is not clear from the evidence before the Court that CPSJS and the San Jose Stake are 24 separate entities or that Plaintiffs intentionally added CPSJS as a sham defendant. Accordingly, 25 Defendants have not shown actual fraud in Plaintiff’s pleading of jurisdictional facts. 26 2. The Church Has Not Shown that Plaintiff Has No Possibility of Prevailing Against CPSJS. 27 1 the basis of liability and that Plaintiff has not alleged a plausible connection between CPSJS and 2 Plaintiff’s injury. The Church also asserts that there is no possibility Plaintiff will recover against 3 CPSJS because CPSJS exists only to hold property and any award would be paid by the Church. 4 The Church’s primary argument is that it, not CPSJS, is the proper defendant for torts 5 committed by its leaders or agents. The Church offers as evidence its own articles of 6 incorporation and merger documents with CPB, which include language stating that the Church 7 and its agents should be sued via the Church corporation. (Dkt. No. 19-2, Amended and Restated 8 Articles of Incorporation of the Church of Jesus Christ of Latter-Day Saints, Section Third, ¶ B.) 9 As Plaintiff points out, however, it is Plaintiff who is master of the complaint, regardless of the 10 Church’s preference that it be sued in place of its agents. Accordingly, the action must be 11 remanded if there is “any possibility” that CPSJS could be liable to Plaintiff. 12 Plaintiff brings claims against CPSJS for negligence and IIED. Because Plaintiff needs 13 only one possible cause of action, the Court addresses only the negligence claim. Under 14 California law, the elements for negligence are duty, breach, causation, and injury. John B. v. 15 Superior Ct., 38 Cal. 4th 1177, 1188, 137 P.3d 153, 159 (2006). 16 Plaintiff has alleged that CPSJS owed a duty to, among other things, prevent Jenks from 17 using the “tasks, premises, and instrumentalities of his position” to abuse Plaintiff. (SAC ¶ 66.) 18 The Church’s evidence that CPSJS did not own any of the “premises or instrumentalities” used by 19 Jenks falls far short of the “clear and convincing evidence” standard. Its only support is Wilson’s 20 declaration that, at some unspecified time, CPSJS did not own real property or camps and did not 21 employ Jenks. (Wilson Decl., ¶ 19.) While the Church avers that it, not CPSJS, owned the 22 meetinghouses where the Milpitas Ward met at the time Jenks allegedly abused Plaintiff, the 23 Church does not address which entity owned the swimming pool at which Plaintiff was molested 24 or which entity organized the youth swimming excursion. (See id.) 25 Plaintiff further alleges that CPSJS breached its duty because it knew or should have 26 known that Jenks would use his position to sexually abuse children and nevertheless permitted 27 Jenks to have access to children. (SAC ¶¶ 54-56.) CPSJS could not have breached this duty if ] not an agent of CPSJS: Wilson’s conclusory declaration that CPSJS did not “employ” Jenks or 2 || have any “clergy, teachers, librarians, executive secretaries, or parishioners.” (Wilson Decl., § 3 19.) No agent or officer of CPSJS offers a declaration to the same effect, and it is unclear on what 4 || basis Wilson offers this statement. Moreover, Plaintiff alleges that Jenks was an “agent” of 5 CPSJS, and that Jenks “served as an employee, volunteer, or other individual who performed 6 || services on behalf of [Defendants].” (SAC {ff 33, 36.) Wilson’s declaration does not address 7 || whether Jenks volunteered or otherwise served on behalf of CPSJS. 8 For the same reasons, the Church has not established that there is no possibility of harm 9 || proximately caused by CPSJS’s conduct. If Jenks used CPSJS’s property or authority to groom 10 || and sexually abuse Plaintiff, then it is possible that Plaintiff was harmed as a result. 11 The Court concludes that the Church has not met its heavy burden of demonstrating 12 || fraudulent joinder of CPSJS. Accordingly, complete diversity does not exist in this action, and the 13 matter must be remanded to state court. CONCLUSION 3 15 For the foregoing reasons, the Court GRANTS Plaintiffs motion to remand. The Clerk a 16 || shall close this Court’s file. 7 IT IS SO ORDERED. Z 18 || Dated: February 8, 2024 f / Ke 19 i rs 20 us ot abs t Judge 21 22 23 24 25 26 27 28