C.T. v. Fosberg
| Decision Date | 22 September 2022 |
| Docket Number | 3:22-cv-00637 |
| Parties | C.T., an individual, Plaintiff, v. JASON FOSBERG, an individual; RED ROBIN INTERNATIONAL, INC., a Nevada corporation, Defendants. |
| Court | U.S. District Court — District of Oregon |
Adam A. Kiel
Gregory Kafoury
Jason L. Kafoury
Kafoury & McDougal
Attorneys for Plaintiff
Anthony Copple
Jackson Lewis P.C.
April L. Upchurch Fredrickson
Miller Nash LLP
Attorneys for Defendants
Plaintiff C.T., an individual and resident of Oregon, brought action in state court against Defendants claiming sexual battery, negligence, breach of implied warranty of fitness, and racial discrimination. Defendant Jason Fosberg is a citizen of Oregon and Defendant Red Robin International, Inc. (Red Robin) is a Nevada corporation with its principal place of business in Colorado. Defendants removed the case based on diversity jurisdiction. To avoid the forum defendant rule and lack of complete diversity between parties-which would otherwise deprive the Court of subject matter jurisdiction, Defendants argue that Plaintiff fraudulently joined Defendant Fosberg and that the Court should ignore that defendant's presence for purposes of diversity jurisdiction. Before the Court is Plaintiff's Motion to Remand and request for payment of costs and fees incurred as a result of removal. For the reasons below, the Court grants the Motion to Remand.
Defendant Red Robin owns and operates several restaurants in Multnomah County. Compl. ¶ 3. Defendant Fosberg is employed by Red Robin as a General Manager and was on duty as General Manager at the Clackamas location at the time of the alleged incident. Compl. ¶ 2. Plaintiff, an African American man, visited a Red Robin restaurant in Clackamas, Oregon on March 24, 2021 with a group of family and friends. Compl. ¶ 3-4, ECF 1 . Plaintiff alleges that the party, who included predominately African Americans, was divided when other large, predominately white, groups were seated together. Compl. ¶ 5. Defendants allege that the party was split between two tables because of the COVID-19 regulations in place in Clackamas County at the time. Defs.' Resp. to Pl.'s Mot. (Defs.' Resp.) at 2, ECF 9. Plaintiff also alleges that Defendant Fosberg called the party a “big gang.” Compl. ¶ 5. Defendant Fosberg denies making this statement. Defs.' Answer to Compl. ¶ 5, ECF 4.
Plaintiff ordered a salad, and while eating it discovered a foreign substance that Plaintiff believed was semen. Compl. ¶ 6. Plaintiff brought the substance to the Associate Manager's attention, who called over Defendant Fosberg to discuss the situation. Defs.' Resp. at 3. Plaintiff placed the substance in a container provided by the restaurant and alleges that a laboratory later confirmed it was semen. Compl. ¶ 7. Defendant Fosberg completed a report of the incident, and the Associate Manager comped the meal for the entire party. Defs.' Resp. at 3.
The Associate Manager and the Plaintiffs Server both submitted declarations stating that Defendant Fosberg was in the kitchen throughout the night and did not interact with the Plaintiff until the Associate Manager asked for assistance with the situation. Decl. of Christian O'Conner ¶ 2, ECF 12; Decl. of Destiny Holmes ¶ 3, ECF 11. Police investigated the incident but could not obtain work schedules or DNA samples from Defendants and their employees because Defendants had experienced a data hack. Compl. ¶ 8.
Plaintiff brought claims in Multnomah County Circuit Court for sexual battery, negligence, breach of implied warranty of fitness, and discrimination under ORS 659A.400. Compl. ¶¶ 11-13. Plaintiff seeks $1,000,000 in noneconomic damages for all claims. Compl. ¶ 13. Defendants removed the case based on diversity jurisdiction, alleging that the non-diverse forum Defendant was fraudulently joined. Notice of Removal ¶¶ 1-2. Plaintiff moved to remand and requests fees and costs incurred in the process of removal. Pl.'s Mot. to Remand at 2, ECF 5.
“Federal courts are courts of limited jurisdiction and possess only that power authorized by the Constitution and statute.” Sandpiper Vill. Condo. Ass'n., Inc. v. Louisiana-Pac. Corp., 428 F.3d 831, 841 (9th Cir. 2005) (internal quotation omitted). Subject matter jurisdiction is generally conferred upon federal district courts either through diversity jurisdiction, 28 U.S.C. § 1332, or federal question jurisdiction, Id. § 1331; Peralta v. Hisp. Bus., Inc., 419 F.3d 1064, 1068 (9th Cir. 2005). Diversity jurisdiction exists when the parties are completely diverse and the amount in controversy exceeds $75,000. 28 U.S.C. § 1332. Usually, plaintiffs must affirmatively demonstrate the citizenship of all parties because there must be complete diversity of citizenship between the parties opposed in interest. Kuntz v. Lamar Corp., 385 F.3d 1177, 1181 (9th Cir. 2004). Each of the plaintiffs in an action must be a citizen of a different state than each of the defendants. Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2001).
A civil action may be removed from state court to federal court if the federal court would have original subject matter jurisdiction over the case, based on either federal question jurisdiction or diversity jurisdiction. 28 U.S.C. §§ 1441(a), 1331, 1332. The burden of establishing federal jurisdiction is on the removing party and there is a strong presumption against removal jurisdiction. Hunter v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009). A civil action may not be removed if any of the parties properly joined as defendants are citizens of the state in which the action is brought. 28 U.S.C. § 1441(b)(2); Ekeya v. Shriners Hosp. For Child., Portland, 258 F.Supp.3d 1192, 1195 (D. Or. 2017). This is known as the forum defendant rule. Id.
A plaintiff may challenge removal with a motion to remand. 28 U.S.C. § 1447. Because federal courts are courts of limited jurisdiction, the removal statute is construed in favor of remand. Ekeya, 258 F.Supp.3d at 1195. For a case removed from state court, if at any time before final judgment the district court determines that it lacks subject matter jurisdiction, the case must be remanded. 28 U.S.C. § 1447(c).
There is an exception to the complete diversity requirement where a non-diverse defendant has been fraudulently joined. Hunter, 582 F.3d at 1043 (citing Morris, 236 F.3d at 1067). If a defendant has been fraudulently joined, the district court may ignore that defendant's presence for diversity purposes. Id. at 1043. Like the strong presumption against removal jurisdiction, there is a strong presumption against fraudulent joinder. Grancare, LLC v. Thrower, 889 F.3d 543, 548 (9th Cir. 2018). The defendant must meet the burden of demonstrating fraudulent joinder by “clear and convincing evidence.” Hamilton Materials, Inc., v. Dow Chem.Corp., 494 F.3d 1203, 1206 (9th Cir. 2007).
“Fraudulent joinder” is a term of art that does not necessarily imply any intention to deceive by plaintiffs or their counsel. McCabe v. Gen. Foods Corp., 811 F.2d 1336, 1339 (9th Cir. 1987). Courts may find fraudulent joinder where there is actual fraud in the pleading or when a plaintiff fails to state a cause of action against a resident defendant. Grancare, 889 F.3d at 548. In the other words, if the defendant cannot be found liable under any theory, the defendant has been fraudulently joined. Id.
Courts may consider evidence beyond the pleadings to determine whether joinder is fraudulent, including conducting a “summary inquiry” and allowing the defendant to present facts showing that joinder is fraudulent. Ekeya, 258 F.Supp.3d at 1196. That said, the Ninth Circuit has explained that the standard for fraudulent joinder and Rule 12(b)(6) are not equivalent. Grancare, 889 F.3d at 549. “A standard that equates fraudulent joinder with Rule 12(b)(6) conflates a jurisdictional inquiry with an adjudication on the merits.” Id. (). The standard for fraudulent joinder is more lenient than the standard for a motion to dismiss, and the court must remand if there is a “possibility that a state court would find that the complaint states a cause of action against any of the [non-diverse] defendants.” Id. (quoting Hunter, 582 F.3d at 1046). This standard is similar to the “wholly insubstantial and frivolous” standard for dismissing claims under Rule 12(b)(1) for lack of federal question jurisdiction. Id.
Plaintiff brought claims in state court for negligence, battery discrimination, and breach of implied warranty of fitness. Defendants removed based on diversity jurisdiction. Plaintiff argues that removal is improper under 28 U.S.C. § 1441(b) because Defendant Fosberg is a citizen of Oregon and thus the forum defendant rule applies. Defendants argue that Defendant Fosberg was fraudulently joined to defeat diversity jurisdiction and consequently this matter is removable because the properly joined parties are completely diverse and the amount in controversy exceeds $75,000.
Because Defendant Fosberg is a resident of Oregon, there is not complete diversity and this Court lacks subject matter jurisdiction over this case unless Defendant Fosberg was fraudulently joined. 28 U.S.C. § 1332. But if the defendant was fraudulently joined, the Court may ignore that defendant for diversity purposes and exercise diversity jurisdiction. Hunter, 582 F.3d at 1043. Plaintiff seeks an order remanding this case to the Circuit Court of Multnomah County, Oregon and...
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