Reynolds v. Boeing Co., Case No. 2:15-cv-2846-SVW-AS
| Decision Date | 28 July 2015 |
| Docket Number | Case No. 2:15-cv-2846-SVW-AS |
| Court | U.S. District Court — Central District of California |
| Parties | JAMES REYNOLDS, Plaintiff, v. THE BOEING COMPANY, et al., Defendants. |
The Boeing Company removed this case, which, on its face, involved non-diverse parties. Boeing contended that the non-diverse defendant was fraudulently joined. Because the Court disagrees, it must remand the case.
James Reynolds is a 76 year old employee of the Boeing Company. Compl., ¶ 10, ECF No. 1-1 Exh. A. He alleged that his direct supervisor, Douglas Choi, and other management personnel berated him with ageist comments. Id. at ¶ 11. After concomitant stress, anxiety, and depression then forced him to take a medical leave of absence, id. at ¶ 12, Reynolds sued his employer and Choi, advancing hostile work environment and intentional infliction of emotional distress claims against the latter. Id. at ¶¶ 73-86.
Discovery proceeded and Reynolds was deposed. Reynolds testified that Choi had asked him "numerous times, 'When are you going to retire?'" and told him "You are an elderly employee, and wewant — we are going to get someone younger than you to replace you." Decl. of Andrew K. Haeffle, Exh. B at 38:20-25, 39:4-8, ECF No. 19 ("Reynolds Dep."). But, when asked about the context of the retirement inquiries, Reynolds said that they were made during performance reviews, id. at 44:11-18, Choi was "[j]ust discussing — he wanted to know what my plans were," id. at 40:15-18, and Choi exhibited "no irritation . . . [as] he was just doing his job, just stating what he had to state," id. at 63:15-19. When asked about the context of Choi's replacement comment, Reynolds testified that the remark was made directly to him on only one occasion in "[t]he first part of 2013." Id. at 44:19-45:9. Reynolds also testified that Choi told him during a performance review that he Id. at 41:17-24. And when asked whether his orthopedic symptoms were attributable to prolonged sitting, he said, Id. at 38:5-8. Boeing then removed the case, contending that Choi was a sham defendant. Notice of Removal, ECF No. 1.
About a month later, Reynolds submitted an errata to his deposition. Mot. To Remand, Exh. C, ECF No. 15 ("Dep. Errata"). Apparently, Reynolds had reinvigorated his memory during the intervening time. In the deposition, he said he could not recall problematic comments outside of the reviews, Reynolds Dep. at 44:14-18; in his errata, "there were other times besides the reviews," Dep. Errata. In the deposition, he said Choi referenced replacing him only once, Reynolds Dep. at 45:7-15; in his errata, "there were other times" too, Dep. Errata. In the deposition, he said that he could not recall any other instances of Choi remarking about his retirement, Reynolds Dep. at 45:22-46:10; in his errata, "there were other times and comments," Dep. Errata. In the deposition, he said his colleagues had not commented on his memory, Reynolds Dep. at 47:19-22; in his errata, "there were other similar comments," Dep. Errata. In the deposition, he said Choi never exhibited irritation with him, Reynolds Dep. at 47:13-14, 63:15-19; in his errata, Choi sometimes "got in [Reynolds's] face about [his] age," Dep. Errata. In the deposition, he said he never reported Choi's comments because he "just felt terrible" and "internalized" them, Reynolds Dep. at 49:12-50:3; in his errata, Choi also threatened Reynolds "to not go over his head, 'or else,'" Dep. Errata. And in the deposition, he said Choi had only made condescending comments within the past two years, Reynolds Dep. at 64:1-6; in his errata, Choi had made those kinds of comments for "the past have [sic] a dozen years increasingly," Dep. Errata.
Reynolds moved to remand the case a few weeks later arguing that the parties were not diverse because Choi was not a sham defendant. Mot. to Remand, ECF No. 15. In opposition, Choi swore he never initiated a discussion with Reynolds about retirement — which would be against company policy — and only discussed the topic when Reynolds raised it. Decl. of Douglas Choi, ¶ 9, ECF No. 20. Reading Choi's declaration prompted further memories from Reynolds, which he supplied in a declaration attached to his reply brief. Decl. of James Reynolds, ¶ 2, ECF No. 25. In this declaration, Reynolds's nebulous references to "other times" sprung into specificity: Choi had asked Reynolds about retirement in late 2012 or early 2013; he reiterated this inquiry during a July 25, 2013, performance review (and also said, "[y]ou know I could hire a younger person"); he refused to allow a coworker to tutor Reynolds on necessary computer skills, disparaging Reynolds, "a younger computer whiz could by far outperform you"; he "frowned" at Reynolds every time they passed for eight months between July 2013 and March 2014; and he told a group of engineers that they had "a lot of elderly people" and he would "bring[] down some younger people into the group, probably from Seattle." Id. at ¶¶ 3-8.
The parties dispute two issues: first, was Reynolds's motion to remand timely; second, are the parties completely diverse? The answers are yes and no, respectively, so the Court must remand the case. Reynolds also applies for sanctions against Boeing, which the Court denies.
After a defendant removes a case, the plaintiff can move to remand on either procedural or substantive grounds. See 28 U.S.C. § 1447(c). Procedural challenges — those arguing that the defendant failed to comply with the formalities of removing a case — are subject to a thirty day time limit. Id. Substantive challenges — those concerning the existence of subject matter jurisdiction itself — can be raised at any time. Id.
Reynolds moved to remand the case because one defendant, Choi, is a California citizen. That fact raises two conceivable bases for remand. First, the challenge could be procedural. The forum-defendant rule prevents a group of defendants from removing a case if one of them is a citizen of theforum state. 28 U.S.C. § 1441(b)(2).1 Because the case previously resided in California Superior Court, Reynolds could have objected to removal based on the forum-defendant rule. Second, the challenge could be substantive. Federal diversity jurisdiction requires complete diversity. Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996). Because Reynolds and Choi are California citizens, Reynolds could have argued that Choi's presence destroyed diversity.
This duality led the parties to debate timeliness, and, in a sense, both are correct. Reynolds moved to remand fifty-seven days after removal. As a result, he waived all procedural challenges, including any objection premised on the forum defendant rule. Smith v. Mylan Inc., 761 F.3d 1042, 1046 (9th Cir. 2014). He did not, nor could he, waive his right to argue that the Court lacked jurisdiction due to incomplete diversity. Attorneys Trust v. Videotape Computer Products, Inc., 93 F.3d 593, 595 (9th Cir. 1996). Indeed, the Court is duty-bound to investigate this issue at any time. United Investors Life Ins. Co. v. Waddell & Reed Inc., 360 F.3d 960, 966-67 (9th Cir. 2004). Reynolds's motion is therefore timely to the extent he argues that Choi's participation in the case precludes complete diversity. See Behrazfar v. Unisys Corp., 687 F. Supp. 2d 999, 1001-04 (C.D. Cal. 2009).
Federal diversity jurisdiction requires complete diversity of citizenship. Caterpillar, 519 U.S. at 68. The burden of establishing jurisdiction rests on the removing party. Scott v. Breeland, 792 F.2d 925, 927 (9th Cir. 1986). And the removing party must carry that burden in spite of the strong presumption against removal jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992).
Courts, however, disregard the citizenship of sham defendants — those fraudulently joined — when assessing diversity. Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1318 (9th Cir. 1998). To prove fraudulent joinder, the removing defendant must show that settled law obviously precludes the liability against the nondiverse defendant. Id.; see also Lujan v. Girardi Keese, No. CIV. 09-00017, 2009 WL 5216906, at *6 (D. Guam Dec. 29, 2009) (). The removing party must establish fraudulent joinder by clear and convincing evidence. Hamilton Materials, Inc. v. Dow Chemical Corp., 494 F.3d 1203, 1206 (9th Cir.2007). And it must overcome an additional presumption against fraudulent joinder. Hunter v. Philip Morris USA, 582 F.3d 1039, 1042, 1046 (9th Cir. 2009).
The crucial lever in this case is whether the Court can consider and credit Reynolds's errata and declaration to the extent they contradict his deposition testimony. It is well established that courts may "pierce the pleadings," Travis v. Irby, 326 F.3d 644, 649 (5th Cir. 2003), and examine evidence, Ritchie, 139 F.3d at 1318. It is also well established that courts ought to construe facts in favor of the plaintiff where there is disputed evidence. Travis, 326 F.3d at 649. The question here is somewhat different, and it appears to be an issue of first impression in this circuit: can a court consider an errata and declaration contradicting sworn deposition testimony when determining whether a party is a sham defendant?
The parties have not identified any relevant cases, and the Court has found only one, TKI, Inc. v. Nichols Research Corp., 191 F. Supp. 2d 1307 (M.D. Ala. 2002). There, the plaintiffs sued three defendants in Alabama state court for breach of contract and negligent misrepresentation. Id. at 1309. The defendants removed the case, contending that the non-diverse defendant was fraudulently joined. Id. The plaintiff moved to remand and submitted an affidavit in support. Id. at 1310....
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