Case No. 03-1010-WEB
March 27, 2003
MEMORANDUM AND ORDER
This action was originally filed by plaintiff Angela McPhail in the District Court of the Eighteenth Judicial District of the State of Kansas, Sedgwick County. The defendants filed a Notice of Removal to U.S. District Court, alleging that removal is proper because this court has original jurisdiction under both 28 U.S.C. § 1331 and 1332. The matter is now before the court on the plaintiff's motion to remand the action to state court. The court has reviewed the briefs relating to the motion and concludes that oral argument would not assist in deciding the issues presented. For the reasons stated herein, the court finds that the motion to remand should be granted.
The court has this same issue before it in a nearly-identical companion case styled Nicholas W. Fielden v. Wal-Mart Stores, Inc., et al., No. 03-1009-WEB. The motion to remand in Case No. 03-1009 will likewise be granted for the same reasons set forth in the instant order.
Plaintiff Angela McPhail filed a Petition on December 9, 2002, in the District Court for the Eighteenth Judicial District of the State of Kansas, Sedgwick County. According to the Petition, plaintiff is a resident of Sedgwick County, Kansas, who was employed at a Wal-Mart store in Derby, Kansas. The individually named defendants were managerial or supervisory employees for the store. The individual defendants are Kansas residents. The Petition alleges various state law claims against the defendants, including claims for false imprisonment, fraud, slander, outrageous conduct, wrongful discharge, and intentional infliction of emotional distress.
More particularly, the Petition alleges that on December 10, 2001, the defendants wrongfully restrained plaintiff without legal excuse by placing her in an enclosed room at the Wal-Mart store and by subjecting her to verbal abuse and threats. Plaintiff alleges that the defendants falsely accused her of stealing, wrongfully took money or property from her, and coerced or induced her by fraud into writing a check to Wal-Mart to pay for allegedly stolen goods. The Petition alleges that the defendants terminated plaintiff's employment on December 10, 2001, and that they knowingly conveyed false statements to others on that date to the effect that plaintiff was being fired for stealing.
Count Four of the Petition further alleges that on December 10, 2001, the defendants terminated plaintiff's employment "in retaliation for Plaintiff's reporting of certain and specific instances of `sexual harassment' committed against the Plaintiff by a certain male co-employee. . . ." It asserts that the acts of sexual harassment complained of "were in violation of said Defendant's rules, regulations and published policies and/or laws of the State of Kansas." It further alleges that plaintiff suffered lost wages and emotional distress as a result of the defendants' conduct, and that plaintiff is entitled to damages from the defendants, jointly and severally, in a sum in excess of $75,000. No reference to federal law is made in this count or in any other portion of the Petition.
II. Notice of Removal and Motion to Remand.
The defendants filed a timely Notice of Removal on January 10, 2003. Doc. 1. Although the four individual defendants named in the Petition are Kansas residents, as is the plaintiff, the Notice of Removal alleged that the court has diversity jurisdiction under 28 U.S.C. § 1332 because the non-diverse defendants "have been fraudulently joined to defeat diversity." Doc. 1 at ¶ 8. The defendants allege that the Petition "fails to state a claim against these named Defendants in their individual capacity" and that "[t]here is no reasonable basis for predicting that Plaintiff might establish liability against these individually named Defendants." Id. at ¶ 10. Consequently, the defendants claim, the individual defendants "have been fraudulently joined and must be ignored for purposes of diversity jurisdiction." Id.
The Notice of Removal also alleges that this court has federal question jurisdiction under § 1331 because plaintiff "raises a claim for retaliation as prohibited under 42 U.S.C. § 2000e-3" by alleging that she was terminated for reporting sexual harassment. According to the defendants, "[s]uch a claim presents a federal question in that it arises under Title VII, 42 U.S.C. § 2000e, et seq." Doc. 1 at ¶ 6.
Plaintiff filed a timely motion to remand in which she argued that diversity jurisdiction is lacking. She argued that the individually named defendants could be personally liable for their tortious actions under common law and she denied that these defendants were fraudulently joined to defeat diversity jurisdiction. Plaintiff's motion to remand did not adequately address the issue of federal question jurisdiction, but plaintiff's reply brief asserted that all of her claims, including the claim of retaliation for reporting sexual harassment, were asserted under state common law and not under federal law. See Doc. 17 at 4.
Plaintiff also argued that any dispute about whether Count Four arose under federal law was moot because plaintiff has now filed a motion to dismiss Count Four. See Doc. 14. In view of the court's conclusion the Petition does not allege a federal law claim, the court does not address the motion to dismiss Count Four of the Petition.
Only state court actions that could have been filed in federal court may be removed to federal court by a defendant. Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987); 28 U.S.C. § 1441(a). As the party invoking the federal court's jurisdiction, the defendant carries the burden of demonstrating that the requirements for jurisdiction are present. Martin v. Franklin Capital Corp., 251 F.3d 1284, 1290 (10th Cir. 2001). Federal removal jurisdiction is statutory in nature and is strictly construed. See Shamrock Oil Gas v. Sheets, 313 U.S. 100, 108-09 (1941). There is a presumption against removal jurisdiction, and doubtful cases must be resolved in favor of remand. Laughlin v. Kmart Corp., 50 F.3d 871, 873 (10th Cir. 1995). "If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." § 1447(c).
A. Diversity Jurisdiction.
The district courts of the United States generally have original jurisdiction of all civil actions where the matter in controversy exceeds $75,000 and is between citizens of different states. 28 U.S.C. § 1332. The defendants argue that diversity jurisdiction exists here because the non-diverse individual defendants were fraudulently joined by plaintiff to defeat such jurisdiction. "To establish that a non-diverse defendant has been fraudulently joined for the purpose of defeating diversity jurisdiction, the removing party must prove either that there has been actual fraud in the pleading of jurisdictional facts or that there is absolutely no possibility that the plaintiff will be able to establish a cause of action against that party in state court." See Travis v. Irby, ___ F.3d ___, 2003 WL 23102 (5th Cir., Jan. 17, 2003). In opposing remand, the defendants have filed what is essentially a motion for summary judgment in which they solicit a ruling by the court on the merits of various claims or defenses. See Doc. 11 at 4-13. For example, the individual defendants argue that various items of evidence will show that they reasonably believed plaintiff had wrongfully taken property from the store such that they are protected against claims of false imprisonment by the "merchant's defense." This argument misperceives the standard for determining whether diversity jurisdiction is present. "If the facts set out in plaintiffs' complaint, taken as true and drawing all inferences in the light most favorable to plaintiffs, at least raise the possibility that they could succeed in establishing a claim against the in-state defendant, the defendant's citizenship cannot be disregarded and diversity jurisdiction is absent." See Great Plains Trust Co. v. Morgan Stanley Dean Witter, 313 F.3d 305, 511 (5th Cir. 2002). Under this standard, the defendants have failed to show fraudulent joinder. The facts alleged by plaintiff in the Petition, including her allegation that the defendants acted without legal excuse, may or may not be true — that remains to be determined — but assuming they are true (as this court must for purposes of the motion to remand) they raise at least a possibility of claims against the individual defendants. As such, the court cannot say that the individual defendants were fraudulently joined and cannot disregard their citizenship for purposes of diversity jurisdiction. Under the allegations in the Petition, diversity jurisdiction is lacking. See also 28 U.S.C. § 1441(b) (prohibiting removal in diversity cases where any properly joined defendant is a citizen of the state where the action is brought).
B. Federal Question Jurisdiction.
Federal district courts also have original jurisdiction over "all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. The presence or absence of federal question jurisdiction is governed by the "well-pleaded complaint rule," which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint. Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). This rule "makes the plaintiff the master of the claim; he or she may avoid federal jurisdiction by exclusive reliance on state law." Id.
Pointing to Count Four of the Petition, defendants argue that the allegations of a retaliatory discharge for reporting sexual harassment could form the basis of a claim under Title VII of the federal civil rights laws. It is also the case, of course, that such a claim can be asserted under Kansas law. See K.S.A. § 44-1009(4). The question here is whether, on the face of the complaint, plaintiff has asserted a federal claim. Nothing in plaintiff's Petition indicates that her claim is based on federal law. No federal laws are cited, no allegation is made regarding exhaustion of EEOC administrative remedies, and no exclusively federal relief is prayed for in the complaint. To the extent Count Four identifies a specific source of law, it indicates that plaintiff is choosing to rely upon state law. See Doc. 1, Exh. A at ¶ 17 (alleging that the reported sexual harassment violated state law). Plaintiff now avers in her reply brief that Count Four is based solely upon state common law and not upon any federal law. There is nothing in the face of plaintiff's complaint to contradict this assertion. See Easton v. Crossland Mortgage Corp., 114 F.3d 979, 982 (9th Cir. 1997); Lamb v. Laird, 907 F. Supp. 1033, 1035 (S.D.Tex. 1995) ("The Court agrees that ambiguity may result from viewing the factual averments of sexual harassment in isolation, but the First Amended Complaint's specific references to the [Texas Commission on Human Rights Act], and not to any federal antidiscrimination statute, clearly indicates that Plaintiffs are pursuing relief under state law only."); and Mathews v. Anderson, 826 F. Supp. 479, 482 (M.D.Ga. 1993) (plaintiff has drafted her complaint so as to avoid federal jurisdiction; defendant cannot remove the action merely because plaintiff could have alleged a Title VII claim). See also Williams v. Pan American Life Ins. Co., No. 02-2815, 2002 WL 31886714 (E.D.La., Dec. 20, 2002) (unpublished) ("the case law is replete" with instances of remand based on findings that plaintiff elected to assert only state law claims, even when the complaint stated facts that would support a Title VII claim). Under the circumstances, the court concludes the defendants have failed to meet their burden of showing that federal question jurisdiction is present. Cf. Acuna v. Brown Root, Inc., 200 F.3d 335, 339 (5th Cir. 2000) (ambiguities are construed against removal because the removal statute should be strictly construed in favor of remand).
Defendants cite an administrative complaint filed by plaintiff as support for their contention that Count Four arises under federal law. Doc. 11, Exh. 2. The administrative complaint itself, however, tends to support plaintiff's position. The complaint filed by plaintiff only referred to the Kansas Act Against Discrimination, it did not cite federal law. The complaint was filed by plaintiff with the Kansas Human Rights Commission and was forwarded by that agency to the EEOC in accordance with "dual filing" regulations.
In view of the foregoing findings, the court will not address plaintiff's Motion to Dismiss the Fourth Cause of Action (Doc. 14) because this court lacks jurisdiction to do so. The court notes the defendants' concern that plaintiff could seek to assert a Title VII claim after remand of this action to state court. As noted in Lamb, supra, ""[i]f and when a claim is asserted under Title VII of the Civil Rights Act of 1964, or any other federal antidiscrimination statute, Defendants will enjoy the right to remove the action to federal court. . . ." Lamb, 907 F. Supp. at 1035. As of now, however, no such claim has been asserted, and no basis for federal jurisdiction appears from the face of the complaint. Merrell Dow Pharm., Inc. v. Thompson, 478 U.S. 804, 809, n. 6 (1986) ("Jurisdiction may not be sustained on a theory that the plaintiff has not advanced.").
The court has considered plaintiff's request for an award of costs and expenses in connection with the remand. See 28 U.S.C. § 1447(c). Given the fact that plaintiff's complaint could have been drafted more clearly to evince plaintiff's choice to rely exclusively upon state law, the court concludes that no fees or expenses are warranted in connection with the remand.
Plaintiff's Motion to Remand (Doc. 7) is GRANTED. The case is hereby remanded to the District Court of the Eighteenth Judicial District of the State of Kansas, Sedgwick County. The clerk is directed to send a certified copy of this order to the clerk of the state district court. IT IS SO ORDERED.