Reed v. Gulf Coast Enters., the Ginn Grp., Inc., CIVIL ACTION NO. 3:15-CV-00295-JHM

CourtUnited States District Courts. 6th Circuit. United States District Court of Western District of Kentucky
PartiesROBERT RAY REED PLAINTIFF v. GULF COAST ENTERPRISES, THE GINN GROUP, INC., SOURCEAMERICA, INC., and GARY MATTHEWS DEFENDANTS
Docket NumberCIVIL ACTION NO. 3:15-CV-00295-JHM
Decision Date06 January 2016

ROBERT RAY REED PLAINTIFF
v.
GULF COAST ENTERPRISES, THE GINN GROUP, INC.,
SOURCEAMERICA, INC., and GARY MATTHEWS DEFENDANTS

CIVIL ACTION NO. 3:15-CV-00295-JHM

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF KENTUCKY LOUISVILLE DIVISION

January 6, 2016


MEMORANDUM OPINION & ORDER

This matter is before the Court on a motion by Defendant SourceAmerica, Inc. ("SourceAmerica") for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c), or for summary judgment pursuant to Rule 56, with respect to all claims asserted against it by Plaintiff Robert Ray Reed ("Reed") [DN 9]. Fully briefed, this matter is ripe for decision. For the following reasons, the Motion is GRANTED.

I. BACKGROUND

This case arises out of Reed's employment with and subsequent termination from Defendant Gulf Coast Enterprises ("GCE"). According to the Complaint, from November 2010 to November 2012, Reed, who is disabled, was employed by Defendant GCE through the AbilityOne Program, a government-contracting program. (See Compl. [DN 1-2] ¶¶ 2-3, 17-18, 37.) On March 16, 2015, Reed, a resident of Kentucky, filed a complaint in state court against GCE, The Ginn Group, Inc. ("Ginn Group"), SourceAmerica, and Gary Matthews ("Matthews"), an employee of GCE. Reed asserted claims for (1) disability discrimination in violation of the Kentucky Civil Rights Act ("KCRA") under KRS 344.040; (2) negligent hire/retention/supervision; (3) promissory estoppel; (4) failure to protect; (5) civil conspiracy; (6)

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civil conspiracy (retaliation); in violation of KRS 344.280; (7) retaliation (EEOC), in violation of KRS 344.280; and (8) negligent infliction of emotional distress.

On April 20, 2015, Defendants SourceAmerica, GCE, and Ginn Group (collectively, the "Removing Defendants") removed the case from state court to this Court based on diversity jurisdiction under 28 U.S.C. § 1332.1 Diversity jurisdiction requires "complete diversity of citizenship both at the time that the case is commenced and at the time that the notice of removal is filed." Jerome-Duncan, Inc. v. Auto-By-Tel, L.L.C., 176 F.3d 904, 907 (6th Cir. 1999). In determining whether there is diversity of citizenship, the Court must disregard nondiverse parties that are fraudulently joined. Id. at 907-09. It appears that Plaintiff Reed and Defendant Matthews are both citizens of Kentucky. (See Removal Notice [DN 1] ¶¶ 7, 11; Compl. [DN 1-2] ¶ 1.) Thus, it appears there is not complete diversity and, given there is no federal question involved, it would seem this Court lacks subject matter jurisdiction over the action. Removing Defendants argue in their Notice of Removal that the Court nonetheless has subject matter jurisdiction over the matter under 28 U.S.C. § 1332 because the non-diverse Matthews was fraudulently joined.

To address its subject matter jurisdiction over this action, the Court sua sponte ordered supplemental briefing to address whether Matthews had been fraudulently joined. (See Order Sept. 8, 2015 [DN 17].) The Court noted that only Count V (civil conspiracy) and Count VI

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(retaliation under KRS 344.280)2 in the Complaint have been asserted against Matthews. (See id. 5 n.3.) The Court requested supplemental briefing with respect to whether Matthews was fraudulently joined with respect to Count VI and allowed Reed the opportunity to "contest Removing Defendants' assertion that there is no colorable claim stated against Matthews in Count V," if he wished to do so, "[o]therwise, the Court will accept the Removing Defendants' assertion." (Id.) Removing Defendants submitted a Supplement Brief in support of removal of this matter on September 25, 2015 [DN 18]. Reed did not file a response. The Court first addresses its subject matter jurisdiction.

II. SUBJECT MATTER JURISDICTION - FRAUDULENT JOINDER OF MATTHEWS

The issue is whether Defendant Matthews has been fraudulently joined. "Fraudulent joinder occurs when the non-removing party joins a party against whom there is no colorable cause of action." Saginaw Hous. Comm'n v. Bannum, Inc., 576 F.3d 620, 624 (6th Cir. 2009). "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. Am. Tobacco Co., 183 F.3d 488, 493 (6th Cir. 1999) (citing Alexander v. Elec. Data Sys. Corp., 13 F.3d 940, 949 (6th Cir. 1994)). Stated differently, "the question is whether there is arguably a reasonable basis for predicting that the state law might impose liability on the facts involved." Probus v. Charter Commc'ns, LLC, 234 F. App'x 404, 407 (6th Cir. 2007) (quoting Alexander, 13 F.3d at 949). In making such a prediction, the district court must resolve all disputed questions of fact and all ambiguities in the controlling state law in the non-removing party's favor. Coyne, 183 F.3d at 493. Removal statutes are strictly construed against removal,

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Alexander, 13 F.3d at 949, and all doubts as to the propriety of removal are resolved in favor of remand, Brierly v. Alusuisse Flexible Packaging, Inc., 184 F.3d 527, 534 (6th Cir. 1999). A plaintiff's motive in joining a non-diverse defendant is immaterial to the Court's determination regarding fraudulent joinder. Jerome-Duncan, 176 F.3d at 907. "[I]f there is a colorable basis for predicting that [Reed] may recover against non-diverse [Defendant Matthews], the Court must remand the action to state court." Coyne, 183 F.3d at 493.

As the Court noted, only Count V (civil conspiracy) and Count VI (retaliation under KRS 344.280) in the Complaint have been asserted against Matthews. As Reed did not file a supplemental brief in response to the Court's Order or otherwise contest the assertion of the Removing Defendants in their Notice of Removal, the Court accepts the Removing Defendants' assertion that there is no colorable claim stated against Matthews in Count V. Thus, the Court must determine only whether the facts alleged in Reed's Complaint support a colorable cause of action for retaliation against Matthews.

Removing Defendants contend that the facts alleged in Reed's Complaint do not provide any reasonable basis for predicting that Matthews might be liable for retaliation under KRS 344.280. Under KRS 344.280, it is unlawful "for a person, or for two (2) or more persons to conspire: (1) [t]o retaliate or discriminate in any manner against a person because he has opposed a practice declared unlawful by this chapter, or because he has made a charge, filed a complaint, testified, assisted, or participated in any manner in any investigation, proceeding, or hearing under [the KCRA]." KRS 344.280(1). To state a prima facie case of retaliation under KRS 344.280, a plaintiff must establish that: (1) he engaged in an activity protected by Title VII; (2) the exercise of his civil rights was known by the defendant; (3) thereafter, the defendant took an employment action adverse to the plaintiff; and (4) there was a causal connection between the

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protected activity and the adverse employment action. Brooks v. Lexington-Fayette Urban Cnty. Hous. Auth., 132 S.W.3d 790, 803 (Ky. 2004). Although KCRA claims cannot typically be asserted against individuals, an individual can be liable for retaliation. Morris v. Oldham Cnty. Fiscal Ct., 201 F.3d 784, 793-94 (6th Cir. 2000). If a plaintiff fails to allege facts to support each element of a prima facie claim for retaliation against the non-diverse defendant, a finding of fraudulent joinder may be warranted. See Mills v. Woodford Nat'l Bank, No. 3:14-CV-00639-TBR, 2015 WL 1136502, at *3, 2015 U.S. Dist. LEXIS 30222, at *9 (W.D. Ky. Mar. 11, 2015).

Removing Defendants argue that, although Reed does allege that he engaged in protected conduct by requesting reasonable accommodation and opposing and complaining "about the unlawful practices of Defendants," (Compl. [DN 1-2] ¶¶ 98-100), Reed failed to plead the second and third elements of the prima facie case and did not allege facts to support that Matthews knew about Reed's alleged protected activity or that Matthews was responsible for the alleged retaliatory conduct. Removing Defendants point out that Reed's failure to allege that Matthews was aware of his protected conduct in Count VI "stands in marked contrast to Plaintiff's allegations in Count VII," (Removing Defs.' Suppl. Br. [DN 18] 6 n.4), where Reed expressly alleges that the exercise of his civil rights "was known by Defendants Gulf Coast, Ginn Group, and SourceAmerica," (Compl. [DN 1-2] ¶ 108). Additionally, Reed alleges only that he asked GCE—not Matthews—for reasonable accommodations. (Id. ¶ 22.) However, Reed does allege that Matthews "stated that Plaintiff should be careful to 'not accommodate himself out of a job.'" (Id. ¶ 36.) This would seem to provide support for an inference that Matthews knew of Reed's requesting reasonable accommodations, a protected activity.

However, the Court finds that there is not a colorable basis for predicting that Reed may recover against Matthews for retaliation because Reed does not allege that Matthews was

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responsible for any alleged retaliatory action and thus does not allege that Matthews took an adverse employment action. Throughout the Complaint, Reed specifically alleges that GCE, Ginn Group, and SourceAmerica--not Matthews--were responsible for the alleged retaliatory conduct. (See Compl. [DN 1-2] ¶¶ 24 (GCE "failed to provide reasonable accommodations"), 35 (GCE "started the 'look back program', wherein they changed doctor's visits against unearned, future vacation time"), 62-63 (GCE "used contrived evaluations to target Plaintiff for termination" and "targeted Plaintiff because of his need and requests for accommodations"), 65 (GCE failed to accommodate Plaintiff), 109 (GCE, Ginn Group, and SourceAmerica took adverse employment action adverse to Plaintiff, including retaliatory negative scoring on performance evaluations), and 113 (GCE, Ginn...

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