Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_06-cv-02701/USCOURTS-caed-2_06-cv-02701-1/pdf.json

Nature of Suit Code: 360
Nature of Suit: Other Personal Injury
Cause of Action: 28:1441 Petition for Removal- Labor/Mgmnt. Relations

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

RHONDA C. JOYCE, No. 2:06-cv-02701-MCE-KJM

Plaintiff,

v. MEMORANDUM AND ORDER

WALGREEN CO., an Illinois

corporation dba in California

as WALGREENS; ALISON OSBORN,

Store Manager; IGAL GAFTER,

Pharmacy Manager; and DOES 1-

100, inclusive,

Defendants.

----oo0oo----

Through the present action, Plaintiff Rhonda C. Joyce

(“Plaintiff”) seeks damages for race discrimination, wrongful

termination in violation of public policy, defamation and

intentional infliction of emotional distress. Joyce filed this

action in Superior Court of the State of California in and for

the County of Sacramento. Defendants Walgreen Co., Alison Osborn

and Igal Gafter (“Defendants”) later removed the action to this

Court. Presently before the Court is Plaintiff’s Motion for

Remand and Attorneys’ Fees.

Case 2:06-cv-02701-MCE -KJM Document 17 Filed 07/18/07 Page 1 of 7
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 Plaintiff includes all Defendants in each claim except the 1

Third Cause of Action for Defamation, in which she names

Defendants Walgreen and Osborn, only.

 If Osborn and Gafter’s California citizenship is 2

disregarded, complete diversity exists between Defendant

Walgreen, an Illinois corporation, and Plaintiff.

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BACKGROUND

Plaintiff, a California resident, was briefly employed as a

pharmacy technician in Defendant Walgreen’s Sunrise store located

in Citrus Heights, California. Plaintiff resigned her position

after she claims she was wrongfully accused of stealing money

from the cash register by the Store Manager, Defendant Osborn. 

According to Plaintiff, both Osborn and the Pharmacy Manager,

Defendant Gafter, conspired to fabricate these untrue allegations

because they wanted to force Plaintiff, an African-American

woman, to quit.

Plaintiff subsequently filed a complaint for damages in

Superior Court of the State of California in and for the County of

Sacramento. Plaintiff alleged race discrimination under California

Government Code § 12940, wrongful termination in violation of

public policy under California Government Code § 12920, defamation

and intentional infliction of emotional distress. 

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Defendants removed the action to this Court pursuant to

28 U.S.C. §§ 1332 and 1441 on grounds that Osborn and Gafter,

both California residents, were fraudulently joined. Defendants

assert that the presence of Osborn and Gafter in this litigation

should be ignored in assessing diversity because no viable cause

of action can be sustained against them. 

2

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In now moving to remand, Plaintiff argues first that the

complaint as currently drafted does contain claims as to which

both Osborn and Gafter are potentially liable. Plaintiff

alternatively seeks to amend her complaint to add an additional

racial harassment claim, contending that the inclusion of such a

claim would unequivocally mandate a remand of this matter back to

state court. 

STANDARD

Civil actions not premised upon federal questions are

removable to federal court only if there is complete diversity of

citizenship between the parties. 28 U.S.C. §§ 1332(a)(1), 1441. 

Each of the plaintiffs’ citizenship must be diverse from each of

the defendants’. Caterpillar, Inc. v. Lewis, 519 U.S. 61, 68

(1996). However, if the plaintiff fails to state a cause of

action against a non-diverse defendant, and the failure is

obvious according to settled state law, joinder of the nondiverse defendant is fraudulent and the defendant will be ignored

for the purposes of determining diversity. McCabe v. General

Foods, 811 F.2d 1336, 1339 (9th Cir. 1987).

A defendant is entitled to present facts that prove

fraudulent joinder. Morris v. Princess Cruises, Inc., 236 F.3d

1061, 1067 (9th Cir. 2001) (citing McCabe, 811 F.2d at 1339). 

The court may also consider summary judgment-type evidence, such

as affidavits and deposition testimony. Id. at 1068 (quoting

Cavallini v. State Farm Mutual Auto Ins. Co., 44 F.3d 256, 293

(5th Cir. 1995)).

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If the defendant cannot prove fraudulent joinder and the

federal court lacks jurisdiction, the action is remanded to state

court. 28 U.S.C. § 1447(c). An order remanding a removed case

to state court "may require payment of just costs and any actual

expenses, including attorney fees, incurred as a result of the

removal." Martin v. Franklin Capital Corp., 546 U.S. 132, 134

(2005) (quoting 28 U.S.C. § 1447(c)). Courts may award

attorney’s fees only where the removing party lacks an

objectively reasonable basis for seeking removal. Id. 

 

ANALYSIS

1. Fraudulent Joinder

The Court first must determine whether Plaintiff has stated

a cause of action against Defendants Osborn and Gafter

individually. As mentioned above, if the Plaintiff’s failure to

state a cause of action against the individual defendants is

obvious according to settled rules of state law, the Court will

find their joinder to be fraudulent. 

Defendants present a persuasive argument that Plaintiff’s

first two causes of action cannot be brought against the

individual defendants under the California Fair Employment and

Housing Act (“FEHA”). CAL. GOV’T CODE §§ 12900 et seq. (Deering

2007). Under FEHA, individual employees cannot be held

personally liable for discrimination. Reno v. Baird, 18 Cal. 4th

640, 645-46 (1998). 

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In addition, claims of wrongful termination in violation of

public policy must be brought against an employer, as opposed to

a manager or supervisor. Phillips v. Gemini Moving Specialists,

63 Cal. App. 4th 563, 576 (1998). 

The Court is nonetheless not required to rule on the

plausibility of Plaintiff’s first two causes of action since it

concludes that Defendants cannot definitively discount the

plausibility of Plaintiff’s Third Cause of Action, for

Defamation, against Defendant Osborn. Plaintiff alleges that

Defendant Osborn falsely, and repeatedly, accused her of stealing

money from the cash register in front of store customers, and

that she and Defendant Gafter conspired together in fabricating

such untrue statements for reasons of racial animus. While

Defendants claim that the defamatory statements cannot result in

liability upon an individual employee, citing Farmers Ins.

Group v. County of Santa Clara, 11 Cal. 4th 992 (1995), the

present action is distinguishable, as the immunity provided in

Farmers is only available to public entity employees. Id. at

997. Defendant Walgreen is a private entity, and its employees

cannot invoke the protections of California’s Tort Claims Act. 

CAL. GOV’T CODE §§ 810 et seq. (Deering 2007).

Defendants also argue that Plaintiff’s defamation claim is

barred because the defamatory statements are conduct related to

personnel decisions and cannot yield individual liability under

Sheppard v. Freeman, 67 Cal. App. 4th 339, 346 (1998). This

Court is unwilling to conclude that Defendants’ accusation of

theft is related to a subsequent personnel decision. 

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The Sheppard court asserted that personnel decisions are, among

other things, “termination, discipline, transfers, compensation

setting, work assignments and/or performance appraisals.” Id. at

343. Had Defendants incorporated their alleged accusations into

a decision to discipline or terminate Plaintiff, their claim to

immunity under Sheppard would be more strongly supported. Here,

however, Plaintiff resigned following Defendants’ accusations and

those accusations do not clearly mesh with the carefully-defined

concept of “personnel decision” as defined by Sheppard. 

Defendants consequently have not definitively shown, as they

must, that the defamation cause of action obviously fails against

Defendant Osborn according to settled California law.

Because Plaintiff’s defamation cause of action against

Defendant Osborn is not obviously unsupported by settled state

law, Defendants have not proven fraudulent joinder. Accordingly,

Plaintiff’s Motion for Remand must be granted on that basis

alone. It is not necessary to address whether Plaintiff’s Fourth

Cause of Action, for Intentional Infliction of Emotional

Distress, is viable against the individual Defendants. Nor is it

necessary for the Court to entertain Plaintiff’s request that the

Complaint be amended to add a claim for racial harassment since

the Court concludes it has no jurisdiction over the complaint as

it currently stands.

2. Attorney’s Fees

An award of Attorney’s fees is discretionary and does not

issue automatically upon remand. Martin, 546 U.S. at 552. 

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 Because oral argument will not be of material assistance, 3

the Court ordered this matter submitted on the briefs. E.D. Cal.

Local Rule 78-230(h).

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Rather, the court will only award fees upon remand when doing so

is just, and the removing party has done so unreasonably. 

Id. at 554-55. This Court’s own difficulty in determining the

degree to which state law is settled as to individual liability

for defamatory statements in an employment context yields the

conclusion that Defendants’ removal was not unreasonable. Thus,

Plaintiff’s Motion for Order Awarding Costs and Fees is DENIED. 

CONCLUSION

For the reasons stated above, Plaintiff’s Motion to Remand

is GRANTED, and Plaintiff’s Motion for Costs and Attorneys Fees

is DENIED. The case is hereby remanded to the Superior Court of 3

the State of California in and for the County of Sacramento for

all further proceedings.

IT IS SO ORDERED.

Dated: July 17, 2007

_____________________________

MORRISON C. ENGLAND, JR.

UNITED STATES DISTRICT JUDGE

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