Annen v. Morgan Technical Ceramics, Certech, Inc.
| Decision Date | 24 January 2019 |
| Docket Number | Civ. No. 18-11197-KM-JBC |
| Parties | GEORGE ANNEN, Plaintiff, v. MORGAN TECHNICAL CERAMICS, CERTECH, INC., MORGANITE INDUSTRIES, INC., and MORGAN ADVANCED CERAMICS, INC., Defendants. |
| Court | U.S. District Court — District of New Jersey |
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This matter comes before the Court on Plaintiff George Annen's motion to amend the complaint pursuant to Fed. R. Civ. P. 15 and to remand this matter to the Superior Court of New Jersey, pursuant to 28 U.S.C. § 1447(e). (DE 10). No federal cause of action is stated; the defendants removed the matter to this Court on the sole basis of diversity jurisdiction, 28 U.S.C. § 1332(a). (DE 1). Annen's amended complaint seeks to add a non-diverse defendant.
For the reasons provided below, the Court grants Plaintiff Annen's motion to amend as of right and to remand the case to state court (DE 10). Defendants' motion to dismiss is denied as moot and may be re-filed in state court upon remand (DE 9).
On May 15, 2018, plaintiff George Annen, a New Jersey resident, filed a complaint in the Law Division of the Superior Court of New Jersey, Morris County against defendants Morgan Technical Ceramics ("MTC"), Morganite Industries, Inc. ("Morganite"), and Morgan Advanced Ceramics, Inc. ("MAC"). This complaint alleges that MTC "registered as Certech, Inc." (Compl. ¶2). Defendant MAC is incorporated in the State of Delaware and has a principal place of business in California. (Compl. ¶3; NOR ¶12). MAC manufactures and markets industrial ceramic components to the medical, telecommunications, and aerospace markets. (NOR. ¶ 23). Defendant Morganite is also incorporated in the State of Delaware, but has a principal place of business in North Carolina. (Compl. ¶4; NOR ¶13).
Annen's complaint alleges that defendant MTC "is a division of Morgan Advanced Materials PLC, with its head office near London." (Compl. ¶2). He further alleges that MTC conducts business in New Jersey, where it "is registered as Certech, Inc." (Id.). Defendants' notice of removal asserts that MTC "is not an actual entity," but is an alternative name for MAC. (NOR ¶14; DE 1-1 (State of New Jersey, Division of Revenue, "Registration of Alternate Name" (Nov. 14, 1991)). Certech is a separate entity, is incorporated in Delaware, and has a principal place of business in New Jersey. (NOR ¶15).
Substantively, Annen's complaint alleges violations of New Jersey state law under the New Jersey Law Against Discrimination ("NJLAD") and the New Jersey Conscientious Employee Protection Act ("CEPA") related to his employment with "defendants." The complaint does not distinguish between the various entity defendants, and instead, refers to them collectively as the "Morgan defendants." As a result, the complaint does not clarify, or factually substantiate, which defendant was Annen's employer, or assert that all of the defendants were "joint employers" under the NJLAD or CEPA. (See Compl. ¶8).
Annen was hired on or about January 20, 2017 as a Global Finance Director for a division of MTC. (Compl. ¶7). Annen alleges that this business unit division of MTC was managed out of Certech's office in Woodbridge, New Jersey. (Id.).
During his one-year employment, Annen was supervised by three different individuals. (Compl. ¶8). He claims that once John Righini was hired and became his supervisor, he was subjected to discrimination on the basis of his age. (Compl. ¶¶10-11). Annen asserts that he was passed over for a promotion in favor of a candidate that was ten years younger than him, and that age played a role in his eventual termination. (Compl. ¶¶11, 18).
Annen's CEPA claim alleges that he objected to financial practices that he believes were fraudulent. (Compl. ¶30). In particular, Annen alleges that he believes that profits that should have been reported in 2017 were deferred to 2018. (Compl. ¶30).
On May 15, 2015, Annen filed his complaint and jury demand in the Superior Court of New Jersey, Morris County. (DE 1-1). On June 28, 2018, defendants removed the action to this Court, on the basis of diversity jurisdiction. (DE 1). There is no dispute that there is no federal cause of action in the complaint.
The notice of removal clarified the citizenship status of the defendant corporate entities. (NOR ¶¶12-15). The notice of removal further stressed that Certech, the only entity that shares citizenship with Annen, was not named as a defendant, and to any extent that it would be considered a defendant, it wasfraudulently joined. (NOR ¶ 15). Defendants' argument for fraudulent joinder turns on the fact that only MAC was Annen's employer, and therefore, there is no basis for liability that may be asserted against Certech under the NJLAD and CEPA. (See generally, NOR ¶¶ 27-34).2
On July 25, 2018, Annen filed a motion to amend the complaint and to remand this matter to state court. He has certified that he intended to name Certech as a defendant, and that defendants are so interrelated that it is unclear which particular defendant-entity was his employer. (PBr. at 7-8). Defendants oppose plaintiffs' application.
The Court addresses the motion to amend the complaint first, given that the allegations in the operative complaint will impact the Court's jurisdictional analysis. The plaintiff has submitted a proposed amended complaint, redlined to highlight the amendments. (DE 10-2 at 13-23) A clean copy of the Amended Complaint (cited herein as "AC") may be found as DE 10-2 at 25-35.
Federal Rule of Civil Procedure 15(a) provides that a party may amend its pleading once as a matter of course within:
Fed. R. Civ. P. 15(a)(1). Otherwise, the party must seek leave of court to amend. Fed. R. Civ. P. 15(a)(2).
It is clear that Annen is entitled to file the amended complaint as a matter of right. Rule 15 grants a plaintiff the right to file an amended complaintwithin "21 days after service of a motion under Rule 12(b)," such as a motion to dismiss brought pursuant to Rule 12(b)(6). Fed. R. Civ. P. 15(a)(1)(B); see Kundratic v. Thomas, 407 F. App'x 625, 629 (3d Cir. 2011) ().
Annen sought to amend this complaint on July 25, 2018, or five (5) days after defendants' motion to dismiss was filed on July 20, 2018. (DE 9). The Court concludes that Annen may amend his complaint as of right under Rule 15(a)(1). Thus, the Court does reach the underlying merits of Annen's amendment under Rule 15(a)(2).3
Under 28 U.S.C. § 1441(a), a defendant in a state court civil action may remove the case to federal court if the federal court has original jurisdiction to hear the case. See 28 U.S.C. § 1441(a); Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 107 S. Ct. 2425, 96 L. Ed. 2d 318 (1987). District courts have original jurisdiction over matters in which the amount in controversy exceeds $75,000, and there is complete diversity of citizenship between the parties. 28 U.S.C. § 1332.4 An action may be removed on the basis of diversity jurisdiction only "if there is a complete diversity between all named plaintiffs and defendants, and no defendant is a citizen of the forum State." Lincoln Prop. Co. v. Roche, 546 U.S. 81, 84, 126 S. Ct. 606, 163 L. Ed. 2d 415 (2005). Normally, if any plaintiff shares citizenship with any defendant, complete diversity is defeated. Kaufman v. Allstate N.J. Insur. Co., 561 F.3d 144, 148 (3d Cir. 2009); In re Briscoe, 448 F.3d 201, 215 (3d Cir. 2006) ().
Typically, the burden to prove the existence of jurisdiction is on the plaintiff; however, where a timely challenge to removal has been filed, the burden rests on the removing defendant. Brown v. Jevic, 575 F.3d 322, 326 (3d Cir. 2009); Dukes v. U.S. Healthcare, Inc., 57 F.3d 350, 359 (3d Cir. 1995). Any doubts are resolved in favor of remand. Samuel-Bassett v. KIA Motors America, Inc., 357 F.3d 392, 396 (3d Cir. 2004); see Batoff v. State Farm Ins. Co., 977 F.2d 848, 851 (3d Cir. 1992) .
Courts may permit joinder of a non-diverse party to a removed case. Such joinder, however, may require the court to remand the action to state court for lack of subject matter jurisdiction. 28 U.S.C. § 1447(e). The only limit on that principle is the prohibition of fraudulent joinder. Fraudulent joinder is "an exception to the requirement that removal be predicated solely upon complete diversity." In re Briscoe, 448 F.3d at 215-16. "When a non-diverse party has been joined as a defendant, then in the absence of a substantial federal question the removing defendant may avoid remand only by demonstrating that the non-diverse party was fraudulently joined." Batoff, 977 F.2d at 851. If a defendant's joinder was fraudulent, the court may disregard that defendant's citizenship, assume jurisdiction, dismiss that defendant, and retain jurisdiction over the case. Id. (citing Mayes v. Rapoport, 198 F.3d 457, 461 (4th Cir. 1999)).
The Third Circuit has defined fraudulent joinder in terms of a lack of even "possible" merit:
Joinder is fraudulent where there is no reasonable basis in fact or colorable ground supporting the claim against the joined defendant, or no real intention in good faith to prosecute the action against the defendants or seek a joint judgment. But, if there is even a possibility that a state court would find that the...
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