Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-04207/USCOURTS-cand-3_06-cv-04207-1/pdf.json

Nature of Suit Code: 790
Nature of Suit: Other Labor Litigation
Cause of Action: 28:1441 Petition for Removal- Labor/Mgmnt. Relations

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United States District Court

For the Northern District of California

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

ZOE BARBARA WALSH,

Plaintiff,

v.

HOME DEPOT U.S.A., INC., DOES 1

thru 50, 

 Defendants. 

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No. C-06-4207 SC

ORDER GRANTING

PLAINTIFF'S MOTION TO

AMEND AND REMAND 

I. INTRODUCTION

Before the Court is a Motion by Plaintiff Zoe Barbara Walsh

("Plaintiff" or "Walsh") for Leave to Amend Complaint and Remand

Action to the California Superior Court. Defendant Home Depot

U.S.A., Inc. ("Defendant" or "Home Depot") has opposed the Motion. 

For the reasons stated herein, the Court GRANTS the Motion to

Amend and Remand.

II. BACKGROUND

On January 23, 2006, Walsh filed a Complaint against Home

Depot in Alameda County Superior Court. See Compl., Not. Of

Removal, Ex. A. The Complaint alleges eight causes of action in

four general categories: that Home Depot (1) violated the

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California Labor Code, §§ 201, 203, 219, 226, 512, 558, by

failing to pay Walsh for working overtime and during her lunch

period, (2) violated the California Fair Employment and Housing

Act (“FEHA”), Cal. Gov’t Code § 12900 et seq., by creating a

hostile work environment, (3) wrongfully terminated Walsh, and (4)

violated the California Business and Professions Code § 17200, by

repeatedly breaching state law. See Compl., Not. of Removal, Ex.

A at ¶¶ 13, 17, 23-26, 30, 34-36, 46, 49-50. All claims are state

law claims. Defendant answered the complaint on February 10,

2006. See Answer, Not. Of Removal, Ex. B. On March 21, 2006,

Plaintiff dismissed the Complaint as to co-defendant Greg Ulhorn,

one of her supervisors. See Not. of Removal, Ex. E. On July 7,

2006, Defendant removed the case to this Court. See Not. of

Removal. On August 7, 2006, Plaintiff moved to amend the

complaint and remand the case to state court. See Mot. to Amend

and Remand.

In her Motion to Amend, Plaintiff seeks to substitute Steve

Nordstrom for Doe No. 1 and add several causes of action,

including one against Nordstrom and Home Depot for retaliation. 

Plaintiff states that discovery has revealed that Nordstrom, not

Ulhorn, is the manager responsible for creating the hostile work

environment and firing her in retaliation for complaining about

the conditions at Home Depot. See Proposed First Amended

Complaint ¶¶ 33-37, 44-46. Walsh contends that after amendment,

this matter must be remanded to state court because Plaintiff and

Nordstrom are both residents of California, which destroys

complete diversity. See Mot. to Amend and Remand.

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III. PLAINTIFF'S MOTION TO AMEND COMPLAINT

A. Legal Standard

A plaintiff may amend a complaint once as a matter of course

at any time before a responsive pleading is served. Fed.R.Civ.P.

15(a). If a defendant has already answered the complaint,

plaintiff may amend the complaint only by leave of court or by

written consent of the other party; “and leave shall be freely

given when justice so requires.” Id. After a responsive pleading

has been served, Plaintiff’s motion to amend is governed by 28

U.S.C. § 1447(e), which states: 

If after removal the plaintiff seeks to join

additional defendants whose joinder would destroy

subject matter jurisdiction, the court may deny

joinder, or permit joinder and remand the action to

the State court.

Congress added subsection (e) to § 1447 with the express purpose

of taking advantage of the opportunity to permit remand if a

plaintiff seeks to join a diversity-destroying defendant after

removal. See H.R.Rep. No. 889, 100th Cong., 2d Sess. 72-73,

reprinted in 1988 U.S.C.C.A.N. 6033. In practice, “[j]oinder

coupled with remand may be more attractive than either dismissal

under civil rule 19(b) or denial of joinder.” Righetti v. Shell

Oil Co., 711 F.Supp. 531, 534 (N.D. Cal. 1989). Section 1447(e)

is permissive and “clearly gives the district court the discretion

to deny [or permit] joinder.” Newcombe v. Adolf Coors Co., 157

F.3d 686, 691 (9th Cir. 1998).

Courts have discretion to consider the following factors when

deciding whether to allow amended complaints that add non-diverse

defendants: (1) whether the party sought to be joined is needed

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for just adjudication and would be joined under Federal Rule of

Civil Procedure 19(a); (2) whether the statute of limitations

would preclude an original action against the new defendants in

state court; (3) whether there has been an unexplained delay in

requesting joinder; (4) whether joinder is intended solely to

defeat federal jurisdiction; (5) whether the claims against the

new defendant appear valid; and (6) whether denial of joinder will

prejudice the plaintiff. See Lopez v. General Motors Corp., 697

F.2d 1328, 1332 (9th Cir. 1983) (discussing both Rule 19 and the

timeliness of the motion); Carnegie-Mellon Univ. v. Cohill, 484

U.S. 343, 351-52 (1988) (discussing statute of limitations

issues); Clinco v. Roberts, 41 F.Supp.2d 1080, 1082-83 (C.D. Cal.

1999) (considering whether the new claims seem valid); Desert

Empire Bank v. Ins. Co. of N. Am., 623 F.2d 1371, 1376 (9th Cir.

1980) (analyzing plaintiff’s motive for seeking joinder);

Newcombe, 157 F.3d at 691 (discussing potential prejudice to the

plaintiff); IBC Aviation Serv., Inc. v. Compania Mexicana de

Aviacion, 125 F.Supp.2d 1008, 1011-13 (N.D. Cal. 2000) (presenting

a complete § 1447(e) analysis); Palestini v. General Dynamics

Corp., 193 F.R.D. 654, 657-58 (S.D. Cal. 2000) (same).

B. Analysis

1. Whether Nordstrom should be joined

Federal Rule of Civil Procedure 19(a) requires joinder of

persons whose absence would preclude the grant of complete relief,

or whose absence would impede their ability to protect their

interests or would subject any of the parties to the danger of

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inconsistent obligations. Necessary parties are those “having an

interest in the controversy, and who ought to be made parties, in

order that the court may act on that rule which requires it to

decide on and finally determine the entire controversy, and do

complete justice, by adjusting all the rights involved in it.” CP

Nat'l. Corp. v. Bonneville Power Admin., 928 F.2d 905, 912 (9th

Cir. 1991) (quoting Shields v. Barrow, 58 U.S. (17 How.) 130, 139,

(1854)). An entity's status as a necessary party is determined in

the context of the particular litigation. Id. This standard is

met when failure to join will lead to “unnecessary and repetitive

litigation.” Id. 

Although courts consider whether a party would meet the Rule

19 standard for a necessary party, the standard for amendment

under § 1447(e) is less restrictive than for joinder under Rule

19. See Righetti, 711 F.Supp. at 535 (discussing Congress’ intent

to create a more flexible doctrine). Yet, under § 1447(e) courts

do not allow joinder of non-diverse defendants where those

defendants are only tangentially related to the cause of action or

their absence would not prevent complete relief. See, e.g., Red

Buttons v. National Broadcasting Co., 858 F.Supp. 1025, 1027 (C.D.

Cal. 1994) (disallowing amendment to add non-diverse defendants

who were not involved with the production).

Walsh asserts that Steve Nordstrom was the Home Depot

supervisor responsible for creating a hostile work environment and

firing Walsh in retaliation for complaints about the allegedly

discriminatory workplace. Walsh contends that Nordstrom and his

subordinates made derogatory jokes and comments of a sexual nature

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that harmed Walsh. As regional manager, Nordstrom supervised the

employees allegedly engaging in this conduct. He also had the

authority to control their behavior and to fire Walsh. 

Nordstrom's absence would likely cause repetitive litigation

because he is related to the cause of action. Denying Plaintiff’s

Motion to Amend would hinder Plaintiff from asserting her rights

against an employee directly involved in the alleged

discriminatory conduct. 

2. The statute of limitations

"[A] remand generally will be preferable to a dismissal when

the statute of limitations on the plaintiff's state-law claims has

expired before the federal court has determined that it should

relinquish jurisdiction over the case." Carnegie-Mellon, 484 U.S.

at 351-52. Even though Plaintiff does not argue that a separate

action against Nordstrom in state court would be time-barred,

requiring Plaintiff to litigate essentially the same issues in

state and federal court would waste judicial resources and risk

inconsistent results.

3. Whether the motion is timely

When determining whether to allow amendment to add a nondiverse party, courts consider whether the amendment was attempted

in a timely fashion. See Lopez, 697 F.2d at 1332 (discussing the

circumstances and timing of plaintiff’s motion to amend). In this

case, Walsh filed the Complaint on January 23, 2006 and dismissed

Ulhorn on March 21, 2006. Defendant answered interrogatories on

May 5, 2006 and then filed for removal on July 7, 2006. Plaintiff

filed the Motion to Amend on August 7, 2006, asserting that

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“investigation and discovery has revealed” the identity of the

supervisor who created the hostile environment. Mot. to Amend and

Remand. Defendant contends that Plaintiff has not provided an

explanation for the seven-month delay between the filing of the

Complaint and the Motion to Amend. See Def.’s Opp’n to Pl.’s Mot.

to Amend. 

Defendant’s argument that the delay in this case is analogous

to the delay in Lopez is unfounded. In Lopez, the filing of the

motion to amend was “more than six months after the action was

removed” and nine months after the original complaint. 697 F.2d

at 1332. In this case, the filing of the Motion to Amend was only

one month after removal and seven months after the original

complaint. In light of Lopez, this Court finds that Plaintiff did

not delay unreasonably in filing the Motion to Amend.

4. Plaintiff’s motive for joinder

“[T]he motive of a plaintiff in seeking the joinder of an

additional defendant is relevant to a trial court’s decision to

grant the plaintiff leave to amend his original complaint.” 

Desert Empire Bank, 623 F.2d at 1376. However, courts view

plaintiffs’ motives with less suspicion in light of § 1447(e),

which “takes advantage of the opportunity opened by removal from a

state court to permit remand if a plaintiff seeks to join a

diversity-destroying defendant after removal.” Righetti, 711

F.Supp at 534. Defendant has not produced evidence demonstrating

that Plaintiff’s motive is improper. Plaintiff asserts that only

recently did she discover that Nordstrom was responsible for the

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allegedly hostile work environment. This motive is reasonable in

light of the facts of the case. 

5. Validity of the new claims

Under the § 1447(e) analysis, courts evaluate whether the new

claims seem to have merit. See Goodman v. Travelers Ins. Co., 561

F.Supp. 1111, 1113-14 (N.D. Cal. 1983) (discussing the validity of

new claims against previously unnamed defendants). Defendant

insists that Plaintiff’s new claims are not valid. First,

Defendant asserts that Plaintiff failed to exhaust her

administrative remedies because she did not receive a right to sue

letter specifically naming Steve Nordstrom from the Department of

Fair Employment and Housing. See Def.’s Opp’n to Pl.’s Mot. to

Amend. However, courts liberally construe administrative charges,

especially when parties should have anticipated their involvement

in a suit. See Chung v. Pomona Valley Cmty. Hosp., 667 F.2d 788,

792 (9th Cir. 1982). In this case, Nordstrom should have been

able to anticipate being named in a suit by Walsh against Home

Depot and Ulhorn because Nordstrom was one of Walsh's supervisors

and was involved in the decision to fire her. Thus, Plaintiff has

fulfilled her administrative obligation. Second, under the facts

as alleged, Plaintiff has stated valid claims against Nordstrom

for sexual harassment and retaliation under California Government

Code § 12940. Her allegations contain the requisite elements of

these causes of action. Third, Plaintiff’s claims that Home Depot

and Nordstrom committed breach of contract and breach of the

covenant of good faith and fair dealing seem valid. Courts

analyze these claims based on "the totality of the circumstances

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‘to determine whether the parties' conduct, considered in the

context of surrounding circumstances, gave rise to an

implied-in-fact contract limiting the employer's termination

rights.’” Brother Records, Inc. v. Jardine, 318 F.3d 900, 910

(9th Cir. 2003) (quoting Guz v. Bechtel Nat'l, Inc., 8 P.3d 1089,

1101 (Cal. 2000)). Based on the allegations contained in the

proposed First Amended Complaint, Plaintiff has stated valid

claims for these causes of action because she asserts that

"written, oral and implied agreements" dictated that she would

only be fired for cause. Pl.'s Reply to Opp'n to Mot. to Amend. 

In light of the circumstances, Plaintiff’s new claims against

Nordstrom and Home Depot seem to have merit. 

6. Prejudice to Plaintiff’s case

Denying Plaintiff’s Motion to Amend would require her either

to abandon the potential claims against Nordstrom or to commence

redundant litigation in state court. Furthermore, allowing

Plaintiff’s Motion would not prejudice Home Depot because

discovery is still at an early stage.

IV. PLAINTIFF'S MOTION TO REMAND

Once this Court grants the Motion to Amend, remand is

mandatory. "[A]lthough the district court's decision to allow

joinder of the non-diverse defendants was a discretionary

decision, once the non-diverse defendants were joined remand

became mandatory." Stevens v. Brink's Home Security, 378 F.3d

944, 949. The addition of Steve Nordstrom, a California resident,

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as a defendant destroys complete diversity. Thus, this court must

remand the action under 28 U.S.C. § 1447(c). 

V. CONCLUSION

For the foregoing reasons, Plaintiff’s Motion for Leave to

Amend Complaint and Remand Action to the California Superior Court

is GRANTED. The court orders that this matter be REMANDED to the

Superior Court of California, County of Alameda. 

IT IS SO ORDERED.

Dated: October 6, 2006

 

UNITED STATES DISTRICT JUDGE

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