Dias v. Burberry Ltd.

Decision Date08 June 2021
Docket NumberCase No. 21-cv-192-MMA (JLB)
PartiesLIUBOV DIAS, Plaintiff, v. BURBERRY LIMITED and BRADLEY MOORE, Defendants.
CourtU.S. District Court — Southern District of California

ORDER DENYING PLAINTIFF'S MOTION TO REMAND AND GRANTING DEFENDANTS' MOTION TO COMPEL ARBITRATION

Liubov Dias ("Plaintiff") alleges that Defendants Burberry Limited ("Burberry") and Bradley Moore ("Moore") (collectively, "Defendants") discriminated and retaliated against Plaintiff. See Doc. No. 1-2 ("Compl.") ¶¶ 10, 20. Defendants removed this action from the Superior Court of California, County of San Diego, to the United States District Court for the Southern District of California pursuant to 28 U.S.C. §§ 1441, 1446 and on the basis of diversity jurisdiction under 28 U.S.C. § 1332. See Doc. No. 1.

Two motions are pending before the Court. See Doc. Nos. 13, 19. Defendants move to compel arbitration pursuant to the Federal Arbitration Act. See Doc. No. 13 at 2.1 Plaintiff filed an opposition to Defendants' motion,2 and Defendants replied. See Doc. Nos. 18, 20. Plaintiff moves to remand the action to state court pursuant to 28 U.S.C. § 1447(d). See Doc. No. at 19. Defendants filed an opposition to Plaintiff's motion, but Plaintiff did not file a reply. See Doc. No. 22. The Court found the matters suitable for determination on the papers and without oral argument pursuant to Federal Rule of Civil Procedure 78(b) and Civil Local Rule 7.1.d.1. See Doc. Nos. 21, 23. For the reasons set forth below, the Court DENIES Plaintiff's motion to remand and GRANTS Defendants' motion to compel arbitration.

I. BACKGROUND

This action arises from an employment dispute where Plaintiff alleges Defendants discriminated and retaliated against Plaintiff. See Compl ¶¶ 10, 20. Plaintiff worked for Defendants from October 2014 until May 20, 2019. Id. ¶ 6. Plaintiff's first position was Sales Associate and her last position was Floor Supervisor. Id. Between her starting and ending positions, Plaintiff had various promotions. Id. ¶¶ 6-8. Plaintiff earned high scores on her yearly reviews and improved upon her areas for growth. Id. ¶ 8.

In May 2018, Plaintiff told Defendants about her pregnancy. Id. ¶ 9. In Fall 2018, Plaintiff was placed under a new acting Manager. Id. ¶ 10. Under the acting manager, "Plaintiff experienced [d]iscrimination and [r]etaliation." Id.3 On November 20, 2018,Plaintiff and Defendants signed an agreement that Plaintiff would be on maternity leave on December 30, 2018 and return June 1, 2019. Id. ¶ 11.

On December 27, 2018, Defendants encouraged Plaintiff to apply for a vacant Assistant Manager position, but Plaintiff was never called or interviewed. Id. ¶ 12. On December 30, 2018, Plaintiff started her maternity leave. On March 11, 2019, Defendants told Plaintiff that the Assistant Manager position was eliminated and, instead, there would be two Department Managers. Id. ¶ 14. Defendants asked Plaintiff if she would like to apply for the new position, and she applied. Id. However, Plaintiff was never called or interviewed regarding her application. Id.

On March 23, 2019, Defendants informed Plaintiff that her position was eliminated and offered her a Service Lead position, which would involve a pay cut. Id. ¶ 15. On April 18, 2019, Plaintiff learned that the Department Manager position that she was encouraged to apply for was filled. Id. ¶ 16. On May 20, 2019, Plaintiff decided not to accept the Service Lead position offer because she had a baby and could not afford to take the pay cut. Id. ¶ 17.

On December 23, 2020, Plaintiff filed her Complaint in Superior Court of California, County of San Diego. See generally id. Plaintiff brings seven causes of action against Defendants: (1) sex discrimination under Cal. Gov't Code § 12940(a), (2) pregnancy discrimination under Cal. Gov't Code § 12945, (3) failure to prevent discrimination under Cal. Gov't Code § 12940(k), (4) failure to engage in an interactive process under Cal. Gov't Code § 12940(n), (5) retaliation under Cal. Lab. Code § 1102.5, (6) intentional infliction of emotional distress, and (7) wrongful termination in violation of public policy. See Compl. ¶¶ 22-65. On February 1, 2021, Burberry removed theaction to this Court. See generally Doc. No. 1. Now, Defendants move to compel arbitration, and Plaintiff moves to remand the action to state court. See Doc. Nos. 13, 19.

II. MOTION TO REMAND

The Court proceeds by first addressing Plaintiff's motion to remand because it challenges the Court's subject matter jurisdiction.

A. Legal Standard

"Federal courts are courts of limited jurisdiction." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). "They possess only that power authorized by Constitution and statute." Id. at 377. "A federal court is presumed to lack jurisdiction in a particular case unless the contrary affirmatively appears." Stock West, Inc. v. Confederated Tribes, 873 F.2d 1221, 1225 (9th Cir. 1989). The party seeking federal jurisdiction bears the burden to establish jurisdiction. Kokkonen, 511 U.S. at 377 (citing McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 182-83 (1936)). Generally, subject matter jurisdiction is based on the presence of a federal question, see 28 U.S.C. § 1331, or on complete diversity between the parties, see 28 U.S.C. § 1332.

Pursuant to 28 U.S.C. § 1331, a federal district court has jurisdiction over "all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. The existence of federal question jurisdiction exists "only when a federal question is presented on the face of the plaintiff's properly pleaded complaint." Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). A well pleaded complaint must establish "either that federal law creates the cause of action or that the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal law." Franchise Tax Bd. of State of Cal. v. Constr. Laborers Vacation Tr. for S. California, 463 U.S. 1, 27 (1983).

Pursuant to 28 U.S.C. § 1332(a)(1), a federal district court has jurisdiction over "all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs," and the dispute is between citizens of different states. 28 U.S.C. § 1332(a)(1). The Supreme Court has interpreted § 1332 to require "completediversity of citizenship," meaning each plaintiff must be diverse from each defendant. Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996). If a matter is removable solely on the basis of diversity jurisdiction pursuant to § 1332, the action may not be removed if any properly joined and served defendant is a citizen of the forum state. See 28 U.S.C. § 1441(b)(2).

Additionally, 28 U.S.C. § 1441(a) provides for removal of a civil action from state to federal court if the case could have originated in federal court. The removal statute is construed strictly against removal, and "[f]ederal 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) (citing Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979)).

B. Discussion

Arguing that removal was improper because Plaintiff and Moore are California residents, Plaintiff contends that she makes factual, actionable allegations against Moore. See Doc. No. 19 at 8, 15. Plaintiff asserts that Defendants have not met their burden to show that Moore is fraudulently joined in this action. See id. at 16, 17. As to the amount in controversy requirement, Plaintiff claims that Defendants do not establish the requisite amount in their Notice of Removal. See id. at 17. Curiously, Plaintiff also argues that there would be no prejudice to Defendants to try the case in state court under a personal jurisdiction framework. See id. at 19. Defendants respond that Plaintiff's motion "relies on conclusory and sometimes patently false statements and high-level, non-specific arguments." Doc. No. 22 at 8. Defendants contend that the Court should disregard Moore's citizenship because of fraudulent joinder and that the amount in controversy requirement is satisfied. See id. at 11, 14-23, 23-30. Plaintiff does not respond directly to Defendants' claim-specific arguments presented in the Notice of Removal or opposition brief.

1. Whether Moore Was Fraudulently Joined

"In determining whether there is complete diversity, district courts may disregard the citizenship of a non-diverse defendant who has been fraudulently joined." GranCare, LLC v. Thrower, 889 F.3d 543, 548 (9th Cir. 2018) (citing Chesapeake & Ohio Ry. Co. v. Cockerell, 232 U.S. 146, 152 (1914)). "There are two ways to establish fraudulent joinder: '(1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against the non-diverse party in state court.'" Id. (quoting Hunter v. Philip Morris USA, 582 F.3d 1039, 1044 (9th Cir. 2009)). The fraudulent joinder analysis is a "jurisdictional inquiry," not an adjudication on the merits. Id. at 549. In GranCare, the Ninth Circuit drew attention to the difference between the standard for a Rule 12(b)(6) motion and fraudulent joinder. See id. The court explained, "the test for fraudulent joinder and for failure to state a claim under Rule 12(b)(6) are not equivalent. A claim against a defendant may fail under Rule 12(b)(6), but that defendant has not necessarily been fraudulently joined." Id.

A federal court must find joinder proper and remand the case to state court "if there is a possibility that a state court would find that the complaint states a cause of action against any of the resident defendants." Id. at 548 (quoting Hunter, 582 F.3d at 1046). Furthermore, "[f]raudulent joinder must be proven by clear and convincing evidence." Hamilton Materials, Inc. v. Dow Chemical Corp., 494 F.3d 1203, 1206 (9th Cir. 2007). "[T]he district court must...

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