Casias v. Wal–mart Stores Inc.

• Decision Date: 11 February 2011
• Docket Number: Case No. 1:10–CV–781.
• Citation: 764 F.Supp.2d 914
• Parties: Joseph CASIAS, Plaintiff,v.WAL–MART STORES, INC., and Troy Estill, Defendants.
• Court: U.S. District Court — Western District of Michigan

764 F.Supp.2d 914

Joseph CASIAS, Plaintiff,
v.
WAL–MART STORES, INC., and Troy Estill, Defendants.

Case No. 1:10–CV–781.

United States District Court, W.D. Michigan, Southern Division.

Feb. 11, 2011.

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Daniel W. Grow, Daniel W. Grow PLLC, St. Joseph, MI, Daniel Stewart Korobkin, Michael J. Steinberg, Aclu Fund of Michigan, Detroit, MI, Scott Matthew Michelman, Aclu Foundation, Santa Cruz, CA, for Plaintiff.Kelly Ann Petrocelli, Barnes & Thornburg LLP, Grand Rapids, MI, Michael P. Palmer, Barnes & Thornburg LLP, South Bend, IN, Susan McCaffery Zoeller, Barnes & Thornburg LLP, Indianapolis, IN, for Defendants.

OPINION AND ORDER ROBERT J. JONKER, District Judge.

Plaintiff Joseph Casias used to work as an at-will employee for a Wal–Mart store in Battle Creek, Michigan. The company fired him under its drug use policy after he tested positive for marijuana. Mr. Casias sued Wal–Mart Stores East, L.P.¹ in state court for wrongful discharge, claiming that Wal–Mart's application of its drug use policy to him violated the Michigan Medical Marihuana Act (“MMMA”).² Plaintiff joined Troy Estill, the individual store manager, as a defendant in the case. Defendant Estill, like Plaintiff Casias, is a Michigan resident, and if Defendant Estill is a proper defendant, there is no diversity jurisdiction here. The defendants removed the matter to this Court and claim

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Defendant Estill needs to be disregarded in the diversity calculus. Mr. Casias moves to remand the matter back to the state court. The defendants move to dismiss the case for failure to state a claim. To rule on these motions, the Court must determine whether it has jurisdiction, and if so, whether the MMMA—whatever else it may do—eliminates the normal rule of at-will employment and creates a new protected class for certain marijuana users in Michigan.

FACTS

Joseph Casias, a resident of Battle Creek, Michigan, worked in a variety of positions at a Wal–Mart store in Battle Creek from 2004 until 2009. (Def. Notice of Removal, Docket # 1, Ex. A2, Complaint ¶¶ 14, 22–23.) Troy Estill, also a citizen of Michigan, managed the store during the period in question. (Docket # 1, Ex. B, Estill Decl. ¶ 5.) Mr. Casias was by all accounts a good employee. Wal–Mart promoted him to inventory control manager after three and a half years and named him “associate of the year” in 2008. (Compl., ¶¶ 2, 23.) The relationship between Wal–Mart and Mr. Casias was that of a normal employer and employee in Michigan. Nothing in the record indicates that Mr. Casias entered into a particular employment contract with Wal–Mart that guaranteed additional protections beyond those provided under Michigan law.

During Mr. Casias's employment, Wal–Mart had a drug use policy for employees. The policy required testing in some situations. Wal–Mart required Mr. Casias to take a drug test when it hired him in 2004, and Mr. Casias passed. (Compl., ¶ 22.) In accordance with its policy, Wal–Mart tested Mr. Casias again in November 2009 after Mr. Casias was injured while at work. ( Id., ¶ 37.) The record indicates that drug testing after a workplace injury was mandatory and not left to the discretion of a particular store manager or supervisor. Consistent with its policy, Wal–Mart tested Mr. Casias for numerous drugs, including but not limited to marijuana. ( Id., ¶¶ 37–38.) Mr. Casias tested positive for marijuana. ( Id., ¶ 40.) One week after Mr. Casias was notified that he tested positive, Mr. Estill informed him that Wal–Mart had terminated his employment. ( Id., ¶ 41.) Wal–Mart's corporate office in Arkansas, not Mr. Estill, made the decision to terminate Mr. Casias. (Estill Decl., ¶ 10.) In fact, Wal–Mart employed a specific drug screening department at its corporate headquarters for precisely this type of situation. ( Id.) Neither Mr. Estill nor any other individual store manager had the authority or the discretion to vary from the decisions made by Wal–Mart's Drug Screening department in Arkansas. ( Id.)

Mr. Casias admits that he used marijuana for medical purposes beginning in 2009. (Compl., ¶ 34.) Under a state law passed in 2008, the Michigan Medical Marihuana Act (“MMMA” or “the Act”), Mr. Casias qualified for a registry card, which would protect his use of marijuana from certain adverse state actions against conduct that would be illegal in Michigan but for the registry card. ( Id., ¶ 33.) Mr. Casias received his registry card on June 15, 2009, and he began to use marijuana after work. ( Id., ¶¶ 33, 35.) When he was drug tested after the accident, he showed the card to the drug-testing staff and his shift manager at Wal–Mart. ( Id., ¶¶ 37–40.) He also told Mr. Estill about it when Mr. Estill informed him of Wal–Mart's termination decision, but Mr. Estill informed Mr. Casias that Wal–Mart's drug use policy has no exception for the MMMA. ( Id., ¶ 41.)

Mr. Casias filed a complaint in Calhoun County Circuit Court on June 29, 2010, alleging wrongful discharge in violation of public policy and a violation of the MMMA against Wal–Mart and Mr. Estill. The

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defendants removed the action to this Court (docket # 1). Before the Court are two motions: Mr. Casias's motion to remand to state court for lack of diversity jurisdiction (docket # 9) and the defendants' motion to dismiss (docket # 16). The defendants responded to Mr. Casias's motion to remand (docket # 15) and Mr. Casias replied (docket # 23). Mr. Casias also responded to the defendants' motion to dismiss (docket # 25) and the defendants replied (docket # 28). The Court heard oral argument on the motions on November 12, 2010.

DISCUSSION I. Mr. Casias's Motion to Remand

Defendants removed this action from state court based on diversity jurisdiction under 28 U.S.C. §§ 1332, 1441(a). Yet Defendant Estill, like Plaintiff, is a Michigan citizen. This would normally defeat subject matter jurisdiction and also preclude removal under the forum defendant rule. See 28 U.S.C. § 1332(a)(1) (the action must be between citizens of different states); 28 U.S.C. § 1441(b) (actions based on diversity jurisdiction may be removed only if none of the properly joined and served defendants is a citizen of the state in which the action was brought). To overcome these hurdles, Defendants rely on the theory that Plaintiff fraudulently joined Mr. Estill to defeat the Court's jurisdiction. “Fraudulent joinder” is a term of art in federal jurisdictional analysis and does not require any sort of intentional wrongdoing or deceitful intentions. It is simply legal shorthand for deciding whether a particular party's citizenship should be disregarded in assessing subject matter jurisdiction.

A. Legal Principles of Removal, Fraudulent Joinder and Remand

As the removing party, the defendants bear the burden of proving the Court's subject matter jurisdiction. See Alexander v. Elec. Data Sys. Corp., 13 F.3d 940, 948–49 (6th Cir.1994); 14B Charles Alan Wright, Arthur R. Miller, Edward H. Cooper & Joan E. Steinman, Federal Practice and Procedure § 3721 (4th ed. 2009). The Court has diversity jurisdiction over the matter only when all opposing parties are completely diverse and the amount in controversy exceeds $75,000.00. 28 U.S.C. § 1332(a). Here, the parties agree that the amount in controversy prong is satisfied, that Mr. Casias and Wal–Mart are diverse, and that Wal–Mart is not a Michigan citizen. Accordingly, removal was proper and this Court has subject matter jurisdiction if the only proper parties are Mr. Casias and Wal–Mart. Defendant Estill, however, is a Michigan citizen, and if he is a proper defendant, then this Court does not have subject matter jurisdiction, and removal was improper. The question, then, is whether Defendant Estill is fraudulently joined to destroy the Court's diversity jurisdiction.

“The removing party bears the burden of demonstrating fraudulent joinder.” Alexander, 13 F.3d at 949. The defendants' burden is heavy, since the fraudulent joinder standard is “even more favorable to plaintiffs than the standard for ruling on a motion to dismiss for failure to state a claim under Fed.R.Civ.P. 12(b)(6).” Wolf v. Bankers Life & Cas. Co., 519 F.Supp.2d 674, 683 (W.D.Mich.2007) (quoting Hartley v. CSX Transp., Inc., 187 F.3d 422, 424 (4th Cir.1999)). “To prove fraudulent joinder, the removing party must present sufficient evidence that a plaintiff could not have established a cause of action against non-diverse defendants under state law.” Coyne v. American Tobacco Co., 183 F.3d 488, 493 (1999). Unless it is clear that “there can be no recovery under the law of the state on the cause alleged or on the facts in view of the

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law,” fraudulent joinder does not apply. Alexander, 13 F.3d at 949. Moreover, all disputed questions of fact and ambiguities in the controlling state law must be resolved in favor of the non-removing party. Coyne, 183 F.3d at 493; Alexander, 13 F.3d at 949. Finally, “[a]ll doubts as to the propriety of removal are resolved in favor of remand.” Boladian v. UMG Recordings, Inc., 123 Fed.Appx. 165, 168 (6th Cir.2005).

When the district court's subject matter jurisdiction is in dispute on a Rule 12 motion, the court may consider evidence outside of the complaint. See Bennett v. MIS Corp., 607 F.3d 1076, 1087, n. 11 (6th Cir.2010) (“When a district court's subject matter jurisdiction is in question, it is empowered to review extra-complaint evidence and resolve factual disputes.”); see also Wright, Miller, Cooper & Steinman, supra, § 3723. When a party makes an allegation of fraudulent joinder, the court may be required to “pierce the pleadings” and consider summary-judgment type evidence, including affidavits and declarations. Dodd v. Fawcett Publications, Inc., 329 F.2d 82, 85 (10th Cir.1964); Miller v. PPG Indus., Inc., 237 F.Supp.2d 756, 759, n. 5 (W.D.Ky.2002). All parties have had the opportunity to submit evidence under this rule, and Defendants submitted a declaration...