Jones V Greyhound Lines Inc

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Automated Summary

Key Facts

Devonna Jones sued her former employer Greyhound Lines, Inc. and former supervisor Angela Murff for California state law employment claims including whistleblower retaliation under California Labor Code § 1102.5. The case was originally filed in San Francisco County Superior Court and removed to federal district court based on diversity jurisdiction. Defendants argued Murff was a sham defendant for fraudulent joinder purposes, but the court found there was a possibility Jones could state a cause of action against Murff under the whistleblower statute, and ordered the case remanded to state court.

Issues

  • The court must determine if defendant Angela Murff, a California resident, was fraudulently joined to the case to defeat diversity jurisdiction. Defendants argue she is a sham defendant whose citizenship should be disregarded. The burden on defendants to prove fraudulent joinder is heavy, requiring them to show the non-diverse party cannot be liable on any theory.
  • The court must assess whether the plain language of California Labor Code § 1102.5, as amended in 2013, allows for individual liability for whistleblower retaliation claims. Since no California state court has definitively construed this question, the court finds there is a possibility that a state court would allow individual liability, preventing fraudulent joinder.

Holdings

The court ordered remand to the Superior Court of California for the City and County of San Francisco because there is a possibility that the non-diverse defendant, Angela Murff, could be held individually liable under California Labor Code § 1102.5 for whistleblower retaliation. Since the statute's plain language could contemplate individual liability and no California state court has definitively foreclosed this possibility, the fraudulent joinder standard is not met, and federal diversity jurisdiction cannot be established.

Remedies

The case is ordered remanded to the Superior Court of the State of California for the City and County of San Francisco. Each side will bear its own costs and fees in connection with the removal and remand proceedings.

Legal Principles

  • The burden of establishing removal is even heavier when a defendant is said to have been fraudulently joined to defeat jurisdiction. There are two ways to establish fraudulent joinder: (1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against the non-diverse party in state court. A general presumption against finding fraudulent joinder exists.
  • For fraudulent joinder, the inquiry requires only that there is a possibility that a state court would find the complaint states a cause of action against non-diverse defendants. This 'possibility' standard is akin to the 'wholly insubstantial and frivolous' standard for dismissing claims under Rule 12(b)(1). The joinder of a non-diverse party will not necessarily be deemed fraudulent even if the claim could be dismissed.
  • Federal courts have limited jurisdiction as authorized by Constitution and statute. There is a strong presumption against removal jurisdiction, and any doubt about removal weighs in favor of remand. This presumption applies to diversity jurisdiction cases under 28 U.S.C. § 1332(a) and removal jurisdiction under 28 U.S.C. § 1441(a).

Precedent Name

  • Shamrock Oil & Gas Corp. v. Sheets
  • Hawaii ex rel. Louie v. HSBC Bank Nev., N.A.
  • Dole v. Verisk Analytics, Inc.
  • Grancare, LLC v. Thrower by and Through Mills
  • California v. AbbVie Inc.
  • Geisse v. Bayer HealthCare Pharms. Inc.
  • Kokkonen v. Guardian Life Ins. Co. of Am.
  • Carvalho v. Equifax Info. Servs., LLC
  • Ferguson v. Marsh & McLennan Agency LLC
  • Jones v. Lodge at Torrey Pines Partnership
  • Reno v. Baird
  • Hunter v. Philip Morris USA
  • Tan v. InVentiv Health Consulting Inc.
  • Cao v. Bank of Am., N.A.

Cited Statute

  • 28 U.S.C. § 1332(a)
  • California Labor Code Section 1102.5
  • 28 U.S.C. § 1441(a)
  • 28 U.S.C. § 1447(c)

Judge Name

James Donato

Passage Text

  • Consequently, the case is ordered remanded to the Superior Court of the State of California for the City and County of San Francisco. 28 U.S.C § 1447(c). Each side will bear its own costs and fees in connection with the removal and remand proceedings. IT IS SO ORDERED.
  • The burden of establishing removal is even heavier when a defendant is said to have been fraudulently joined to defeat jurisdiction. There are two ways to establish fraudulent joinder: (1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against the non-diverse party in state court. This means that the joinder of a non-diverse party will not necessarily be deemed fraudulent even if the claim could be dismissed.
  • Because the plain language of the statute could be read to contemplate individual liability, and there is no state court decision holding otherwise, the Court cannot say that there is no possibility Jones may state a cause of action against Murff. Other district courts have reached the same conclusion.