Bowles v. Constellation Brands, Inc.

Decision Date11 March 2020
Docket NumberNo. 1:19-cv-00582-DAD-SKO,1:19-cv-00582-DAD-SKO
Citation444 F.Supp.3d 1161
CourtU.S. District Court — Eastern District of California
Parties Jerry BOWLES, Jr., Plaintiff, v. CONSTELLATION BRANDS, INC., et al. Defendants.

Milton Greg Mullanax, Law Office of M. Greg Mullanax, Fresno, CA, for Plaintiff.

Gabriel Neil Rubin, Kathleen M. Hurly, Jackson Lewis P.C., San Francisco, CA, for Defendants.

ORDER GRANTING PLAINTIFF'S MOTION TO REMAND UNDER 28 U.S.C. § 1447(C) AND DENYING DEFENDANTS' MOTION TO DISMISS UNDER FED. R. CIV. P. 12(b)(6) and 21

Dale A. Drozd, UNITED STATES DISTRICT JUDGE

Plaintiff Jerry Bowles, Jr. initiated this action in the Fresno Superior Court against his former employer, Constellation Brands, Inc. dba Mission Bell Winery ("Constellation"), and his former supervisor there, Ken Putnam ("Putnam") (collectively, "defendants"), asserting claims for defamation and wrongful termination. (Doc. No. 1, Compl.) Although plaintiff and defendant Putnam are citizens of California, defendants removed the action to this federal court on May 2, 2019, based on the theory that defendant Putnam is fraudulently joined and that, therefore, this court has diversity jurisdiction over the action.1 (Doc. No. 1.) Four days later, defendants also brought a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), asking the court to dismiss defendant Putnam from the action on the grounds that he had been fraudulently joined merely for the purpose of defeating diversity jurisdiction.2 (Doc. No. 4 at 1-2.) Plaintiff timely filed a motion to remand on May 22, 2019. (Doc. No. 9); see 28 U.S.C. § 1447 (affording plaintiff 30 days to remand from the date of removal). Therein plaintiff argues that defendant Putnam is properly joined and that diversity jurisdiction is therefore lacking in this court. (Doc. No. 9 at ¶ 25.) Defendants opposed plaintiff's motion to remand on June 18, 2019 and plaintiff replied on June 24, 2019. (Doc. Nos. 11, 12.)

A hearing on the motions was held on July 2, 2019. Attorney Milton Greg Mullanax appeared telephonically on behalf of plaintiff, and attorney Gabriel Rubin appeared telephonically on behalf of defendants. Having considered the parties' briefs and oral arguments, and for the reasons set forth below, the court will grant plaintiff's motion to remand and deny defendants' motion to dismiss as having been rendered moot.

FACTUAL BACKGROUND

Plaintiff's complaint asserts three causes of action under California law: (1) defamation, (2) racial discrimination in violation of California Fair Employment and Housing Act (FEHA), and (3) wrongful termination in violation of public policy. (Doc. No. 1, Compl.) Only the defamation claim is asserted against defendant Putnam and it is that claim that is at the crux of the pending motions. Plaintiff's defamation claim is based on his allegation that defendants "accused plaintiff of failing to ensure the safety of other employees because, defendants falsely claim, plaintiff did not verify that the workers exited the tank safely." (Id. at ¶ 17.)

Plaintiff worked for defendants from 1989 until he was terminated in March 2018. (Id. at ¶¶ 10, 14.) In his role as a sanitation foreman, his responsibilities included supervising other workers tasked with cleaning out tanks3 , verifying that those workers safely exited the tank, and documenting that verification. (Id. at ¶¶ 11-12.) The incident at issue in this action occurred on January 26, 2018, when, according to defendants' investigation, plaintiff neglected to verify that other workers had exited a tank and left the them inside that tank. (Id. at ¶ 14.) Plaintiff claims that although he "forgot" to document his verification, he in fact confirmed that the workers exited the tank, had talked to the workers in the break room, and told them not to get back into the tank. (Id. at ¶¶ 12-13.)

Plaintiff alleges that on March 16, 2018, defendants terminated his employment based on their fabricated investigation and false accusation that he had failed to verify that the workers had exited the tank on January 26, 2018. (Id. at ¶ 14.) Plaintiff claims that defendants' entire investigation was manufactured to conceal the fact that he was terminated because he was African American. (Id. at ¶ 29.) Thus, plaintiff avers that any communication to third parties about his termination based on the findings of defendants' investigation is defamatory. (Id. at ¶¶ 17-24.)

LEGAL STANDARD FOR REMAND

For reasons that will become clear, the court will first consider plaintiff's motion to remand this action to state court. "A motion to remand is the proper procedure for challenging removal." Moore-Thomas v. Alaska Airlines, Inc. , 553 F.3d 1241, 1244 (9th Cir. 2009). Under 28 U.S.C. § 1447(c), the court must remand a case "any time before final judgment it appears that [it] lacks subject matter jurisdiction." 28 U.S.C. § 1447(c). "In civil cases, subject matter jurisdiction is generally conferred upon federal district courts either through diversity jurisdiction, 28 U.S.C. § 1332, or federal question jurisdiction, 28 U.S.C. § 1331." Peralta v. Hispanic Bus., Inc. , 419 F.3d 1064, 1068 (9th Cir. 2005). As relevant here, diversity jurisdiction requires the court to "have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000...and is between...citizens of different States." 28 U.S.C. § 1332. Whether diversity jurisdiction exists "depends upon the state of things at the time of the action brought." Grupo Dataflux v. Atlas Glob. Grp., L.P. , 541 U.S. 567, 570, 124 S.Ct. 1920, 158 L.Ed.2d 866 (2004) (internal quotation marks and citation omitted).

Courts must "strictly construe the removal statute against removal jurisdiction. Federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance." Gaus v. Miles, Inc. , 980 F.2d 564, 566 (9th Cir. 1992) (citations omitted). "The ‘strong presumption’ against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper." Id. (citations omitted). "Subject matter jurisdiction may not be waived, and, indeed, we have held that the district court must remand if it lacks jurisdiction." Kelton Arms Condo. Owners Ass'n, Inc. v. Homestead Ins. Co. , 346 F.3d 1190, 1192 (9th Cir. 2003) (citation omitted).

ANALYSIS

Defendants' notice of removal is based solely on diversity jurisdiction under 28 U.S.C. § 1332(a). (Doc. No. 1 at ¶ I.1.) "Diversity removal requires complete diversity, meaning that each plaintiff must be of a different citizenship from each defendant." GranCare, LLC v. Thrower by & through Mills , 889 F.3d 543, 548 (9th Cir. 2018). As asserted in defendants' notice of removal and pled in plaintiff's complaint, plaintiff and defendant Putnam are citizens of California, while Constellation is a citizen of a different state. (Doc. No. 1 at ¶¶ V.10, 12, VI.15-17; Compl. at ¶¶ 1, 3.) According to these allegations and on first appearance, the court lacks diversity jurisdiction over this case because diversity of citizenship is not complete. Defendants, however, contend that defendant Putnam is fraudulently joined in this action and should be disregarded for purposes of this court's exercise of its diversity jurisdiction. (Doc. No. 1 at ¶¶ 15-17.) "In determining whether there is complete diversity, district courts may disregard the citizenship of a non-diverse defendant who has been fraudulently joined." GranCare , 889 F.3d at 548.

In assessing fraudulent joinder, the court is mindful that "[s]tate courts enjoy a ‘deeply rooted presumption’ that they have jurisdiction to adjudicate all claims arising under state or federal law." Hansen v. Grp. Health Coop. , 902 F.3d 1051, 1056 (9th Cir. 2018) (emphasis added). "By contrast, [w]e presume that federal courts lack jurisdiction unless the contrary appears affirmatively from the record." Id. (internal quotation marks omitted).

A. Fraudulent Joinder

The "right of removal cannot be defeated by a fraudulent joinder of a resident defendant having no real connection with the controversy." Chesapeake & O. R. Co. v. Cockrell , 232 U.S. 146, 152, 34 S.Ct. 278, 58 L.Ed. 544 (1914). A fraudulently joined defendant has no real connection to an action where (1) there is "actual fraud in the pleading of jurisdictional facts" or (2) the plaintiff is unable "to establish a cause of action against the non-diverse party in state court." GranCare , 889 F.3d at 548. In addition, the fraudulent joinder must be "obvious according to the settled rules of the state." Hunter v. Philip Morris USA , 582 F.3d 1039, 1043 (9th Cir. 2009). The purpose of the rule prohibiting fraudulent joinder is "to strike a balance between the plaintiff's right to select a particular forum and the defendant's right to remove the case to federal court." Knudson v. Sys. Painters, Inc. , 634 F.3d 968, 976 (8th Cir. 2011).

Here, defendants argue that plaintiff is unable to state a cognizable cause of action under state law against the non-diverse party, defendant Putnam. (Doc. No. 11 at 2-4.) To prevail on this argument, defendants must show that plaintiff could not "state a reasonable or colorable" defamation claim against defendant Putnam "under the applicable substantive law." Weeping Hollow Ave. Tr. v. Spencer , 831 F.3d 1110, 1113 (9th Cir. 2016). "[I]f there is a possibility that a state court would find that the complaint states a cause of action against any of the resident defendants, the federal court must find that the joinder was proper and remand the case to the state court." GranCare , 889 F.3d at 548 (emphasis added) (internal quotation marks and citation omitted); see also Pool v. F. Hoffman-La Roche, Ltd. , 386 F. Supp.3d 1202, 1209–10, 1215 (N.D. Cal. 2019). Despite this governing legal standard, defendants understate their burden of establishing fraudulent joinder by arguing that plaintiff's motion to remand "will necessarily rise or fall depending on...

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