Bonilla–Perez v. Citibank NA, Inc.

• Decision Date: 25 September 2012
• Docket Number: Civil No. 12–1283 (SEC).
• Citation: 892 F.Supp.2d 361
• Parties: Julio BONILLA–PEREZ, Plaintiff, v. CITIBANK NA, INC., et al., Defendants.
• Court: U.S. District Court — District of Puerto Rico

892 F.Supp.2d 361

Julio BONILLA–PEREZ, Plaintiff,

v.CITIBANK NA, INC., et al., Defendants.

Civil No. 12–1283 (SEC).

United States District Court, D. Puerto Rico.

Sept. 25, 2012.

Lillian N. Miranda–Rodriguez, Miranda & Roque, San Juan, PR, for Plaintiff.

Daniel Brown–Saenz, Pedro J. Manzano–Yates, Fiddler, Gonzalez & Rodriguez, P.S.C., San Juan, PR, for Defendants.

OPINION AND ORDER

SALVADOR E. CASELLAS, Senior District Judge.

Before the Court are the plaintiff's motion to remand to state court (Docket # 12), and the defendants' opposition thereto (Docket # 15). After reviewing the filings and the applicable law, the plaintiff's motion is GRANTED.

Factual and Procedural Background

This is a putative diversity action to recover damages stemming from the defendants' alleged discriminatory acts against the plaintiff, Julio Bonilla–Perez (“Bonilla”). A succinct introduction to the facts of this case suffices to set the stage for the analysis.

Bonilla, who had worked for the co-defendant Citibank N.A's Puerto Rico Branch (“Citi”) for seventeen years, alleges that Citi discriminated against him because of his age. The other defendants are Fernando Guzman, Citi's “Operations Manager of the Documentation, Collateral and Custody Area,” Leila Mercado, Bonilla's supervisor, and Magalys Camacho, Citi's Human Resources Manager (collectively, the “Individual Defendants”). As particularly relevant here, Bonilla and the Individual Defendants are citizens of Puerto Rico, while Citi, whose main office is located in North Dakota, is a citizen of that state for § 1348 purposes.¹

According to the complaint, the defendants engaged in a “pattern of harassment ... against employees who were older and had more seniority, among which was [Bonilla].” Docket # 3–1, ¶ 9. Such discriminatory acts, Bonilla maintains, culminated in his illegal dismissal on July 8, 2011. On March 16, 2012, Bonilla filed a complaint against the defendants in Puerto Rico state court, couching his claims (1) on The Puerto Rico Anti–Discrimination Act (“Law 100”), P.R. Laws Ann. tit. 29, § 146 (prohibiting, inter alia, age discrimination); and alternatively, on (2) Puerto Rico Law 80, P.R. Laws Ann. tit. 29, § 185a et seq. (wrongful termination); and (3) Articles 1802 and 1803 of the Puerto Rico Civil Code, P.R. Laws Ann. tit. 31, §§ 5141 and 5142.

In removing the case to this court, Citi contends that “but for the fraudulent joinder of [the Individual Defendants] complete diversity exists and the jurisdictional amount is satisfied.” Docket # 1, p. 12. Bonilla, meanwhile, timely moved to remand to state court, arguing that, because the defendants satisfy neither the complete diversity requisite nor the statutory jurisdictional amount, see28 U.S.C. § 1332(a), removal had been improper. Docket # 12. Bonilla's principal ground for remanding this case to state court is absence of complete diversity of citizenship. He maintains that the Individual Defendants were not fraudulently joined, as he has a “reasonable basis for a claim against these defendants under [Law] 100.” Id., p. 4.

Standard of Review

A motion to remand usually presents a question of federal subject matter jurisdiction. See BIW Deceived v. Local S6, Indus. Union of Marine & Shipbuilding Workers of Am., 132 F.3d 824, 830 (1st Cir.1997). Congress has crafted the statutory framework for removal, providing “that a defendant may remove a civil action from a state court to a federal court sitting in that state only if the federal court has “original jurisdiction” over the action.” Samaan v. St. Joseph Hosp., 670 F.3d 21, 27 (1st Cir.2012) (quoting 28 U.S.C. § 1441(a)); Plumbers' Union Local No. 12 Pension Fund v. Nomura Asset Acceptance Corp., 632 F.3d 762, 767 (1st Cir.2011). The removal of a diversity case by an in-state defendant, however, offends 28 U.S.C. § 1441(b), which provides that unless the suit is one “arising under” federal law, removal is permitted only if “none of the ... defendants is a citizen of the State in which such action is brought.”

It is well settled that the burden of proof on jurisdiction lies with the party seeking removal. E.g., Pruell v. Caritas Christi, 645 F.3d 81, 84 (1st Cir.2011) (citing BIW Deceived 132 F.3d at 831),cert. denied,––– U.S. ––––, 132 S.Ct. 1969, 182 L.Ed.2d 818 (2012). Because removal statutes are narrowly construed against removal, e.g., Esposito v. Home Depot U.S.A., 590 F.3d 72, 76 (1st Cir.2009) (citingShamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108–09, 61 S.Ct. 868, 85 L.Ed. 1214 (1941)), and because of the crucial federalism concerns at play, any ambiguities “as to the source of law relied upon by the ... plaintiffs ought to be resolved against removal.” Rossello–Gonzalez v. Calderon–Serra, 398 F.3d 1, 11 (1st Cir.2004). When the parties clash about jurisdiction, therefore, “[a]ll doubts about federal jurisdiction should be resolved in favor of remand to state court.” Junk v. Terminix Int'l Co., Ltd. P'ship., 628 F.3d 439, 446 (8th Cir.2010) (citation omitted), cert. denied,––– U.S. ––––, 132 S.Ct. 94, 181 L.Ed.2d 24 (2011); accord, e.g., Sheehan v. Broadband Access Services, Inc., 889 F.Supp.2d 284, 288, No. 12–404–ML, 2012 WL 3871522, at *2 (D.R.I. Sept. 6, 2012) (to be published in F.Supp.2d); Padilla–Gonzalez v. Local 1575, Int'l Longshoremen's Ass'n, 635 F.Supp.2d 105, 112 (D.P.R.2009).

Applicable Law and Analysis“ Fraudulent Joinder ”

As stated previously, the defendants contend that the Individual Defendants, who, as Puerto Rico residents would destroy complete diversity of citizenship, see Exxon Mobil Corp. v. Allapattah Servs., 545 U.S. 546, 553, 125 S.Ct. 2611, 162 L.Ed.2d 502 (2005), were “fraudulently joined” in order to deprive Citi of its removal rights. The joinder was fraudulent, they say, because “under applicable Puerto Rico law, individual liability cannot attach for the damages allegedly arising from [Bonilla's] termination of employment.” Docket # 1, p. 6. For the reasons laid out below, the defendants fail to shoulder their heavy burden under this legal doctrine.

The term “fraudulent joinder” is something of a misnomer, as this legal doctrine “requires neither a showing of fraud nor joinder in one sense.” 16 Moore's Federal Practice § 107.14[iv][A]. Fraudulent joinder occurs when a nondiverse defendant is joined “[s]imply to defeat removal, as might be inferred from a demonstration that the claim against that defendant had no possible merit.” Walton v. Bayer Corp., 643 F.3d 994, 999 (7th Cir.2011) (Posner, J.,); accord Polyplastics, Inc. v. Transconex, Inc., 713 F.2d 875, 877 (1st Cir.1983) (“[A] finding of fraudulent joinder bears an implicit finding that the plaintiff has failed to state a cause of action against the fraudulently joined defendant.”). Because this legal doctrine bars removal to state court, Walton, 643 F.3d at 999, courts have described it as an exception to the requirement of complete diversity. E.g., Schur v. L.A. Weight Loss Centers, Inc., 577 F.3d 752, 763 n. 9 (7th Cir.2009). Therefore, “[a] party fraudulently joined to defeat removal ... is disregarded in determining diversity of citizenship.” Polyplastics, Inc., 713 F.2d at 877.

The First Circuit has yet to adopt a framework for deciding fraudulent joinder cases. See Alpha Biomedical & Diagnostic Corp. v. Philips Med. Sys. Netherland BV, 828 F.Supp.2d 425, 432 (D.P.R.2011) (stating lack of First Circuit guidance) (citing Mills v. Allegiance Healthcare Corp., 178 F.Supp.2d 1, 4–5 (D.Mass.2001)). Nevertheless, most circuits as well as courts in this district have held that, in order to establish that an in-state defendant has been fraudulently joined, the removing party must show (1) that “there is no possibility that the plaintiff would be able to establish a cause of action against the in-state defendant in state court”; or (2) that “there has been outright fraud in the plaintiff's pleadings of jurisdictional facts.” 16 Moore's Federal Practice § 107.14[B] (collecting circuit case law on this point); see also, e.g., Alpha Biomedical & Diagnostic Corp., 828 F.Supp.2d at 432;Renaissance Mktg. v. Monitronics Int'l, Inc., 606 F.Supp.2d 201, 208 (D.P.R.2009).

The second formulation is not at play here: the defendants make no allegations regarding fraud. The inquiry, then, boils down to whether Bonilla can establish a valid state-law claim against the Individual Defendants (the nondiverse defendants) in state court. This, in turn, questions whether a reasonable basis exists for predicting that Bonilla might be able to establish the Individual Defendants' liability on the pleaded claims in state court. See Schur, 577 F.3d at 764–766 (finding joinder not fraudulent because court could not say that plaintiff had no reasonable possibility of success against joined defendants); Knudson v. Systems Painters, Inc., 634 F.3d 968, 977 (8th Cir.2011) (reaffirming that the “no reasonable basis in fact and law” is the standard for determining whether defendant was fraudulently joined); Great Plains Trust Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305, 311–312 (5th Cir.2002) (same), reh'g and reh'g en banc denied,62 Fed.Appx. 559 (5th Cir.2003).

Two additional remarks are in order before turning to the facts of this case. First, courts have imposed a heavy burden on defendants who remove on the basis of alleged fraudulent joinder. E.g., Renaissance Mktg., 606 F.Supp.2d at 208 (“[A] defendant seeking to prove that a co-defendant was fraudulently joined bears an extremely heavy burden.” (citing Ponce Super Center, Inc. v. Glenwood Holdings, Inc., 359 F.Supp.2d 27, 30 (D.P.R.2005)) (citing in turn Chesapeake & Ohio Ry. Co. v. Cockrell, 232 U.S. 146, 152, 34 S.Ct. 278, 58 L.Ed. 544 (1914))); see also 14B Wright, A. Miller, E. Cooper, & R. Freer, Federal Practice and Procedure § 3723, at 841 (4th ed. 2009) (hereinafter “Wright & Miller”) (collecting cases placing heavy burden on removing party). And second, a federal court must resolve any...