Opinion
No. 2:06-cv-02701-MCE-KJM.
July 17, 2007
MEMORANDUM AND ORDER
Through the present action, Plaintiff Rhonda C. Joyce ("Plaintiff") seeks damages for race discrimination, wrongful termination in violation of public policy, defamation and intentional infliction of emotional distress. Joyce filed this action in Superior Court of the State of California in and for the County of Sacramento. Defendants Walgreen Co., Alison Osborn and Igal Gafter ("Defendants") later removed the action to this Court. Presently before the Court is Plaintiff's Motion for Remand and Attorneys' Fees.
BACKGROUND
Plaintiff, a California resident, was briefly employed as a pharmacy technician in Defendant Walgreen's Sunrise store located in Citrus Heights, California. Plaintiff resigned her position after she claims she was wrongfully accused of stealing money from the cash register by the Store Manager, Defendant Osborn. According to Plaintiff, both Osborn and the Pharmacy Manager, Defendant Gafter, conspired to fabricate these untrue allegations because they wanted to force Plaintiff, an African-American woman, to quit.Plaintiff subsequently filed a complaint for damages in Superior Court of the State of California in and for the County of Sacramento. Plaintiff alleged race discrimination under California Government Code § 12940, wrongful termination in violation of public policy under California Government Code § 12920, defamation and intentional infliction of emotional distress.
Plaintiff includes all Defendants in each claim except the Third Cause of Action for Defamation, in which she names Defendants Walgreen and Osborn, only.
Defendants removed the action to this Court pursuant to 28 U.S.C. §§ 1332 and 1441 on grounds that Osborn and Gafter, both California residents, were fraudulently joined. Defendants assert that the presence of Osborn and Gafter in this litigation should be ignored in assessing diversity because no viable cause of action can be sustained against them.
If Osborn and Gafter's California citizenship is disregarded, complete diversity exists between Defendant Walgreen, an Illinois corporation, and Plaintiff.
In now moving to remand, Plaintiff argues first that the complaint as currently drafted does contain claims as to which both Osborn and Gafter are potentially liable. Plaintiff alternatively seeks to amend her complaint to add an additional racial harassment claim, contending that the inclusion of such a claim would unequivocally mandate a remand of this matter back to state court.
STANDARD
Civil actions not premised upon federal questions are removable to federal court only if there is complete diversity of citizenship between the parties. 28 U.S.C. §§ 1332(a)(1), 1441. Each of the plaintiffs' citizenship must be diverse from each of the defendants'. Caterpillar, Inc. v. Lewis, 519 U.S. 61, 68 (1996). However, if the plaintiff fails to state a cause of action against a non-diverse defendant, and the failure is obvious according to settled state law, joinder of the non-diverse defendant is fraudulent and the defendant will be ignored for the purposes of determining diversity. McCabe v. General Foods, 811 F.2d 1336, 1339 (9th Cir. 1987).
A defendant is entitled to present facts that prove fraudulent joinder. Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2001) (citing McCabe, 811 F.2d at 1339). The court may also consider summary judgment-type evidence, such as affidavits and deposition testimony. Id. at 1068 (quoting Cavallini v. State Farm Mutual Auto Ins. Co., 44 F.3d 256, 293 (5th Cir. 1995)).
If the defendant cannot prove fraudulent joinder and the federal court lacks jurisdiction, the action is remanded to state court. 28 U.S.C. § 1447(c). An order remanding a removed case to state court "may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal." Martin v. Franklin Capital Corp., 546 U.S. 132, 134 (2005) (quoting 28 U.S.C. § 1447(c)). Courts may award attorney's fees only where the removing party lacks an objectively reasonable basis for seeking removal. Id.
ANALYSIS
1. Fraudulent JoinderThe Court first must determine whether Plaintiff has stated a cause of action against Defendants Osborn and Gafter individually. As mentioned above, if the Plaintiff's failure to state a cause of action against the individual defendants is obvious according to settled rules of state law, the Court will find their joinder to be fraudulent.
Defendants present a persuasive argument that Plaintiff's first two causes of action cannot be brought against the individual defendants under the California Fair Employment and Housing Act ("FEHA"). CAL. GOV'T CODE §§ 12900 et seq. (Deering 2007). Under FEHA, individual employees cannot be held personally liable for discrimination. Reno v. Baird, 18 Cal. 4th 640, 645-46 (1998). In addition, claims of wrongful termination in violation of public policy must be brought against an employer, as opposed to a manager or supervisor. Phillips v. Gemini Moving Specialists, 63 Cal. App. 4th 563, 576 (1998).
The Court is nonetheless not required to rule on the plausibility of Plaintiff's first two causes of action since it concludes that Defendants cannot definitively discount the plausibility of Plaintiff's Third Cause of Action, for Defamation, against Defendant Osborn. Plaintiff alleges that Defendant Osborn falsely, and repeatedly, accused her of stealing money from the cash register in front of store customers, and that she and Defendant Gafter conspired together in fabricating such untrue statements for reasons of racial animus. While Defendants claim that the defamatory statements cannot result in liability upon an individual employee, citing Farmers Ins. Group v. County of Santa Clara, 11 Cal. 4th 992 (1995), the present action is distinguishable, as the immunity provided in Farmers is only available to public entity employees. Id. at 997. Defendant Walgreen is a private entity, and its employees cannot invoke the protections of California's Tort Claims Act. CAL. GOV'T CODE §§ 810 et seq. (Deering 2007).
Defendants also argue that Plaintiff's defamation claim is barred because the defamatory statements are conduct related to personnel decisions and cannot yield individual liability under Sheppard v. Freeman, 67 Cal. App. 4th 339, 346 (1998). This Court is unwilling to conclude that Defendants' accusation of theft is related to a subsequent personnel decision. The Sheppard court asserted that personnel decisions are, among other things, "termination, discipline, transfers, compensation setting, work assignments and/or performance appraisals." Id. at 343. Had Defendants incorporated their alleged accusations into a decision to discipline or terminate Plaintiff, their claim to immunity under Sheppard would be more strongly supported. Here, however, Plaintiff resigned following Defendants' accusations and those accusations do not clearly mesh with the carefully-defined concept of "personnel decision" as defined by Sheppard. Defendants consequently have not definitively shown, as they must, that the defamation cause of action obviously fails against Defendant Osborn according to settled California law.
Because Plaintiff's defamation cause of action against Defendant Osborn is not obviously unsupported by settled state law, Defendants have not proven fraudulent joinder. Accordingly, Plaintiff's Motion for Remand must be granted on that basis alone. It is not necessary to address whether Plaintiff's Fourth Cause of Action, for Intentional Infliction of Emotional Distress, is viable against the individual Defendants. Nor is it necessary for the Court to entertain Plaintiff's request that the Complaint be amended to add a claim for racial harassment since the Court concludes it has no jurisdiction over the complaint as it currently stands.
2. Attorney's Fees
An award of Attorney's fees is discretionary and does not issue automatically upon remand. Martin, 546 U.S. at 552. Rather, the court will only award fees upon remand when doing so is just, and the removing party has done so unreasonably. Id. at 554-55. This Court's own difficulty in determining the degree to which state law is settled as to individual liability for defamatory statements in an employment context yields the conclusion that Defendants' removal was not unreasonable. Thus, Plaintiff's Motion for Order Awarding Costs and Fees is DENIED.
CONCLUSION
For the reasons stated above, Plaintiff's Motion to Remand is GRANTED, and Plaintiff's Motion for Costs and Attorneys Fees is DENIED. The case is hereby remanded to the Superior Court of the State of California in and for the County of Sacramento for all further proceedings.
Because oral argument will not be of material assistance, the Court ordered this matter submitted on the briefs. E.D. Cal. Local Rule 78-230(h).
IT IS SO ORDERED.