Lawrence Lorenz v. United Parcel Service, Inc. et al, No. 5:2019cv00281 - Document 18 (C.D. Cal. 2019)

Court Description: ORDER GRANTING PLAINTIFFS MOTION TO REMAND 12 ; and DENYING DEFENDANTS PARTIALMOTION TO DISMISS AS MOOT 8 by Judge Otis D. Wright, II: Case Remanded to State Court Case Remanded to San Bernardino County Superior Court, No. CIVDS1833793. (MD JS-6. Case Terminated) (lc)

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Lawrence Lorenz v. United Parcel Service, Inc. et al Doc. 18 O JS-6 1 2 3 4 5 6 7 United States District Court Central District of California 8 9 10 11 LAWRENCE LORENZ, an individual, Plaintiff, 12 13 Case No. 5:19-cv-00281-ODW(SHKx) ORDER GRANTING PLAINTIFF’S v. 14 UNITED PARCEL SERVICE, INC., a MOTION TO REMAND [12]; and 15 corporation; UPS SUPPLY CHAIN DENYING DEFENDANTS’ PARTIAL 16 SOLUTIONS, INC., a corporation; MOTION TO DISMISS AS MOOT [8] 17 TERESA LEON, an individual; and DOES 18 1 through 20; inclusive, Defendants. 19 20 I. 21 INTRODUCTION 22 On December 28, 2018, Plaintiff Lawrence Lorenz filed this disability 23 discrimination action in the Superior Court of California for the County of San 24 Bernardino. 25 Defendants United Parcel Service, Inc. and UPS Supply Chain Solutions, Inc. 26 (collectively “UPS”) removed this matter based on federal diversity jurisdiction. 27 (Notice, ECF No. 1.) 28 (“Mot.”), ECF No. 12.) After reviewing the papers filed in connection with the (Notice of Removal (“Notice”), Ex. A (“Compl.”), ECF No. 1-1.) Lorenz moves to remand (“Motion”). (Mot. to Remand Dockets.Justia.com 1 Motion and the Notice of Removal, the Court finds that it lacks subject matter 2 jurisdiction. Consequently, the Court REMANDS this action to state court.1 II. 3 FACTUAL BACKGROUND 4 This is a disability discrimination lawsuit arising from UPS’s alleged wrongful 5 termination of Lorenz’s employment. As alleged in the Complaint, in January of 6 2016, while working for UPS, Lorenz sustained a work-related injury that required 7 medical treatment and modified work duty. (Compl. ¶¶ 20–21.) Lorenz then went on 8 temporary disability leave because UPS lacked available modified work opportunities. 9 (Compl. ¶¶ 20–22.) 10 The following year, on or about January 5, 2017, Lorenz’s supervisor, Teresa 11 Leon, offered Lorenz a lower-paying position. (Compl. ¶ 23.) Lorenz interpreted 12 Leon’s offer as a threat, that Lorenz must either accept the lower-paying position or be 13 terminated. (Compl. ¶ 23.) Nevertheless, Lorenz declined Leon’s offer. (Compl. 14 ¶ 24.) UPS terminated Lorenz’s employment shortly thereafter while Lorenz was still 15 on disability leave. (Compl. ¶ 25.) Lorenz claims that UPS and Leon discriminated 16 against him, including by failing to provide a reasonable accommodation for his work- 17 related injury and intentionally terminating his employment because of his resulting 18 physical disability. (See Compl.) On December 28, 2018, Lorenz filed this action in San Bernardino Superior 19 20 Court against Defendants UPS and Leon. 21 California. (Compl. ¶ 4; see Mot. 6.) The UPS Defendants are Ohio and Delaware 22 corporations, with principal places of business in Georgia, and thus citizens of those 23 three states. (Compl. ¶¶ 5–6; Notice ¶ 9.) Leon is a citizen of California. (Compl. 24 ¶ 7; see Mot. 6.) UPS subsequently removed the action to this Court based on federal 25 diversity jurisdiction. (See Notice ¶ 7.) UPS also partially moved to dismiss for 26 failure to state a claim upon which relief can be granted. (Mot. to Dismiss 1, ECF 27 1 28 (See Compl.) Lorenz is a citizen of After carefully considering the papers filed in connection with the Motion and the Notice of Removal, the Court deemed the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. 2 1 No. 8.) 2 (Mot. 3.) 3 Lorenz now moves to remand for lack of federal diversity jurisdiction. III. LEGAL STANDARD 4 Federal courts have subject matter jurisdiction only as authorized by the 5 Constitution and Congress. U.S. Const. art. III, § 2, cl. 1; see also Kokkonen v. 6 Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (“Federal courts are courts of 7 limited jurisdiction. They possess only that power authorized by Constitution and 8 statute.”). A suit filed in state court may be removed to federal court only if the 9 federal court would have had original jurisdiction over the suit. 28 U.S.C. § 1441(a). 10 Federal courts have original jurisdiction where an action arises under federal law or 11 where each plaintiff’s citizenship is diverse from each defendant’s citizenship and the 12 amount in controversy exceeds $75,000. Id. §§ 1331, 1332(a). 13 The removal statute is strictly construed against removal, and “[f]ederal 14 jurisdiction must be rejected if there is any doubt as to the right of removal in the first 15 instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). The party seeking 16 removal bears the burden of establishing federal jurisdiction. Id. 17 IV. DISCUSSION 18 UPS invokes diversity jurisdiction as grounds for this Court’s subject matter 19 jurisdiction. (Notice ¶ 7.) The Supreme Court “ha[s] consistently interpreted § 1332 20 as requiring complete diversity: In a case with multiple plaintiffs and multiple 21 defendants, the presence in the action of a single plaintiff from the same State as a 22 single defendant deprives the district court of original diversity jurisdiction over the 23 entire action.” Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 553 24 (2005). The parties do not dispute the requisite amount in controversy. Accordingly, 25 this Motion turns on whether complete diversity exists. 26 Lorenz argues that complete diversity does not exist because both he and Leon 27 are citizens of California. (Mot. 1.) UPS does not dispute that Leon is a citizen of 28 3 1 California. (Opp’n to Mot. (“Opp’n”) 7, ECF No. 13; see also Notice ¶ 3.) Thus, 2 Leon’s citizenship destroys complete diversity. 3 Instead, UPS argues that the Court should disregard Leon’s citizenship because 4 she was fraudulently joined to the Complaint and is, therefore, a “sham” defendant. 5 (Opp’n 7; Notice ¶¶ 10–12.) Complete diversity of citizenship is required to remove 6 an action to federal court, except for “where a non-diverse defendant has been 7 ‘fraudulently joined.’” Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 8 2001). A non-diverse defendant is fraudulently joined “[i]f the plaintiff fails to state a 9 cause of action against a resident defendant, and the failure is obvious according to the 10 settled rules of the state.” McCabe v. Gen. Foods Corp., 811 F.2d 1336, 1339 (9th 11 Cir. 1987); see also Padilla v. AT & T Corp., 697 F. Supp. 2d 1156, 1158 (C.D. Cal. 12 2009) (citing Kruso v. Int’l Tel. & Tel. Corp., 872 F.2d 1416, 1426 (9th Cir. 1989) 13 (“[A] non-diverse defendant is deemed a sham defendant if, after all disputed 14 questions of fact and all ambiguities in the controlling state law are resolved in the 15 plaintiff’s favor, the plaintiff could not possibly recover against the party whose 16 joinder is questioned.”). 17 Courts recognize a strong presumption against fraudulent joinder, which must 18 be “proven by clear and convincing evidence.” Hamilton Materials, Inc. v. Dow 19 Chem. Corp., 494 F.3d 1203, 1206 (9th Cir. 2007). Consequently, the standard for 20 establishing fraudulent joinder is more exacting than for dismissal for failure to state a 21 claim. Grancare, LLC v. Thrower ex rel. Mills, 889 F.3d 543, 549–50 (9th Cir. 2018); 22 see also Revay v. Home Depot U.S.A., Inc., No. 2:14-CV-03391-RSWL-AS, 2015 WL 23 1285287, at *3 (C.D. Cal. Mar. 19, 2015) (“Merely showing that an action is likely to 24 be dismissed against the alleged sham defendant does not demonstrate fraudulent 25 joinder.”). Thus, remand is necessary “[i]f there is any possibility that the state law 26 might impose liability on a resident defendant under the circumstances alleged in the 27 complaint, or in a future amended complaint.” Revay, 2015 WL 1285287, at *3 (C.D. 28 Cal. Mar. 19, 2015) (internal quotation marks omitted); see also Barsell v. Urban 4 1 Outfitters, Inc., No. CV 09-02604 MMM (RZx), 2009 WL 1916495, at *3 (C.D. Cal. 2 July 1, 2009) (“[I]f there is a non-fanciful possibility that plaintiff can state a claim 3 under [state] law against the non-diverse defendants[,] the court must remand.”). 4 Courts should decline to find fraudulent joinder where “a defendant raises a defense 5 that requires a searching inquiry into the merits of the plaintiff’s case, even if that 6 defense, if successful, would prove fatal.” Grancare, 889 F.3d at 549–50. 7 Here, Lorenz asserts two claims against Leon in his Complaint: (1) intentional 8 infliction of emotional distress (“IIED”); and (2) negligent infliction of emotional 9 distress (“NIED”). (Compl. ¶¶ 82–87, 88–93.) Both claims relate to Leon’s alleged 10 discrimination against Lorenz based on Lorenz’s physical disability. Thus, if a “non- 11 fanciful possibility” exists that Lorenz can state a claim against Leon for IIED and 12 NIED, then she is not a sham defendant. 13 UPS argues that Lorenz cannot plausibly state a claim against Leon because her 14 “alleged conduct occurred within the course and scope of employment and is thereby 15 protected by the managerial privilege.” (Opp’n 15–16.) Additionally, UPS argues 16 that workers’ compensation exclusivity bars Lorenz’s IIED and NIED claims. 17 (Opp’n 14–15.) The Court will address these arguments in turn. 18 UPS cites several cases to support its assertion that managerial privilege 19 precludes Lorenz’s IIED and NIED claims against Leon. However, Defendants’ cases 20 are inapposite. Managerial conduct can give rise to IIED claims when it is “extreme 21 and outrageous” and “goes beyond the act of termination.” Onelum v. Best Buy Stores 22 L.P., 948 F. Supp. 2d 1048, 1053 (C.D. Cal. 2013). Moreover, managerial immunity 23 “has no place in a case where an employee alleges that a manager acted with 24 discriminatory intent.” Morris v. Mass. Elec. Constr. Co., No. CV 15-7804 DMG 25 (GJSx), 2015 WL 6697260, at *2 (C.D. Cal. Nov. 3, 2015). Here, Lorenz claims that 26 Leon acted with discriminatory intent and in an extreme and outrageous manner. 27 (Compl. ¶¶ 31, 83.) Taking all reasonable inferences in favor of Lorenz, there is a 28 non-fanciful possibility that he can state a claim against Leon for IIED. Thus, UPS 5 1 has not met its burden of demonstrating that managerial immunity bars Lorenz’s 2 claims against Leon. 3 UPS also argues that workers’ compensation exclusivity precludes Lorenz’s 4 claims against Leon. However, discriminatory conduct “exceeds the risks inherent in 5 the employment relationship and, as such, is not subject to the exclusive remedy 6 provisions of the Workers’ Compensation Act.” Gibson v. Am. Airlines, No. C 96- 7 1444 FMS, 1996 WL 329632, at *5 (N.D. Cal. June 6, 1996); see also Onelum, 948 F. 8 Supp. 2d at 1054 (finding emotional distress damages not preempted where the 9 plaintiff contends “the employer’s conduct is outside the normal risks of the 10 employment relation.”). “The Legislature . . . did not intend that an employer be 11 allowed to raise the exclusivity rule for the purpose of deflecting a claim of 12 discriminatory practices.” Murray v. Oceanside Unified Sch. Dist., 79 Cal. App. 4th 13 1338, 1362 (2000). 14 discriminated against him due to his disability. Thus, UPS has not met its burden of 15 demonstrating that workers’ compensation exclusivity bars Lorenz’s claims against 16 Leon. As with managerial privilege, Lorenz claims that Leon 17 Additionally, “if there is any possibility that the state law might impose liability 18 on a resident . . . in a future amended complaint, the federal court cannot find that 19 joinder of the resident defendant was fraudulent, and remand is necessary.” Revay, 20 2015 WL 1285287, at *3 (internal quotation marks omitted). Thus, even if Lorenz’s 21 Complaint lacked sufficient factual allegations amounting to discrimination or 22 harassment, it is possible that Lorenz could provide additional evidence to support 23 such claims through amendment. See, e.g., Padilla, 697 F. Supp. 2d at 1159 (“Even if 24 [the plaintiff] did not plead facts sufficient to state a claim against [the resident 25 defendant], [the defendants] have not established that [the plaintiff] could not amend 26 her pleadings and ultimately recover.”). 27 Thus, UPS has not met its burden of demonstrating by clear and convincing 28 evidence that a jury could not possibly find Leon liable under at least one of the 6 1 theories raised. Leon is therefore not a sham defendant and the Court cannot 2 disregard her citizenship. Accordingly, complete diversity is lacking and the Court 3 lacks subject matter jurisdiction. V. 4 CONCLUSION 5 For the reasons discussed above, the Court GRANTS Plaintiff’s Motion to 6 Remand (ECF No. 12) and REMANDS the action to the Superior Court of California, 7 County of San Bernardino, Case No. CIVDS1833793, 247 West Third Street, San 8 Bernardino, California 92415. 9 Defendant’s Partial Motion to Dismiss. (ECF No. 8.) Consequently, the Court DENIES AS MOOT 10 11 IT IS SO ORDERED. 12 13 July 19, 2019 14 15 16 17 ____________________________________ OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE 18 19 20 21 22 23 24 25 26 27 28 7

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