Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_19-cv-02155/USCOURTS-caed-2_19-cv-02155-0/pdf.json

Parties Involved:
James Bryant
Defendant
Lance Conn
Defendant
Michelle Gonzalez
Plaintiff

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

MICHELLE GONZALEZ, an individual 

person, on behalf of herself and all 

others similarly situated,

Plaintiff,

v.

LANCE CONN, an individual, and 

JAMES BRYANT, an individual,

Defendants.

No. 2:19-cv-02155-MCE-CKD

MEMORANDUM AND ORDER

Plaintiff Michelle Gonzalez (“Plaintiff”) seeks redress from Defendants Lance 

Conn (“Conn”) and James Bryant (“Bryant”) (collectively, “Defendants”) for violations of 

California state law. On September 20, 2019, Plaintiff filed a Class Action Complaint in 

the Superior Court of the State of California, County of Solano, against Defendants, on 

behalf of herself and others similarly situated, alleging claims under the California AntiPhishing Act of 2005, Cal. Bus. & Prof. Code §§ 22948 et seq.; the California False 

Advertising Act, Cal. Bus. & Prof. Code §§ 17500 et seq.; and the California Unfair 

Competition Law, Cal. Bus. & Prof. Code §§ 17200 et seq. Defendants removed the 

case to this Court on October 24, 2019, on diversity grounds pursuant to 28 U.S.C. 

§§ 1332(a) and 1441(a). Defendants claim that Conn’s inclusion as a defendant, which 

would otherwise destroy the requisite diversity, has no legal basis and should be 

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disregarded for jurisdictional purposes. Plaintiff moves for remand, arguing that Conn 

was properly named and his presence in this case made removal to this Court improper. 

ECF No. 4. For the reasons set forth below, Plaintiff’s Motion to Remand is DENIED.1

BACKGROUND

The National Litigation Law Group (“NLLG”) was originally formed under the laws 

of Oklahoma as a professional limited liability company (“PLLC”) of which Bryant was the 

sole member. Ex. A, Leveroni Decl., Defs.’ Opp. Mot. Remand, ECF No. 6-1 (“Leveroni 

Decl.”). On July 10, 2017, Defendants decided to domesticate NLLG in the District of 

Columbia (“D.C.”) and formed NLLG DC, PLLC under the laws of D.C. Ex. B, Leveroni 

Decl. Defendants subsequently merged the Oklahoma and D.C. entities to create NLLG, 

PLLC. Ex. C–D, Leveroni Decl. On September 22, 2017, under the laws of D.C.,

Defendants converted NLLG, PLLC into a limited liability partnership (“LLP”) named 

NLLG, LLP. Ex. E, Leveroni Decl. The following February, Defendants filed an 

application in California to register NLLG, LLP as a foreign LLP and received the 

certificate of filing in December 2018 from the Secretary of State. Ex. G. Leveroni Decl.

According to Plaintiff, beginning on September 23, 2017, Defendants advertised 

they were qualified to render professional legal services in California in their capacity as 

owners of NLLG, PLLC, even though the PLLC ceased to exist only the day before. 

Compl., ECF No. 1, ¶ 7 (“Compl.”). Defendants nevertheless personally solicited Plaintiff 

and putative class members to retain NLLG for legal representation in future debt 

collection lawsuits. Id. ¶ 9. On May 21, 2018, Plaintiff signed a retainer agreement with 

NLLG for this purpose. Ex. 1, Compl.

The following year, Wells Fargo Bank N.A. and American Express National Bank 

separately filed two debt collection actions against Plaintiff in Solano County Superior 

1 Because oral argument would not be of material assistance, the Court ordered this matter 

submitted on the briefs. E.D. Local Rule 230(g).

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Court. Compl. ¶ 10. In response, Defendants allegedly emailed two letters to Plaintiff, 

stating that the firm was qualified to represent her in both actions but she must complete 

the following requirements: (1) advance a “first appearance fee” in order for NLLG to 

make a first appearance on Plaintiff’s behalf; (2) complete and transmit a client financial 

statement; and (3) execute a limited power of attorney authorizing NLLG to settle the 

actions on Plaintiff’s behalf without her further knowledge or consent. Id. ¶ 11. Plaintiff 

complied with all three requirements. Id.

Plaintiff now alleges that Defendants operated a fictitious PLLC as a law firm in 

California when it lacked such authority or approval. Id. ¶ 13. Furthermore, she alleges 

that through the use of a website, email, and the internet, Defendants solicited Plaintiff

and putative class members to provide financial information, which Defendants used to 

obtain access to financial accounts and money under false pretenses. Id. ¶¶ 12, 14.

STANDARD

When a case “of which the district courts of the United States have original

jurisdiction” is initially brought in state court, the defendant may remove it to federal court 

“embracing the place where such action is pending.” 28 U.S.C. § 1441(a). There are 

two bases for federal subject matter jurisdiction: (1) federal question jurisdiction under 

28 U.S.C. § 1331, and (2) diversity jurisdiction under 28 U.S.C. § 1332. A district court 

has federal question jurisdiction in “all civil actions arising under the Constitution, laws, 

or treaties of the United States.” Id. § 1331. A district court has diversity jurisdiction 

“where the matter in controversy exceeds the sum or value of $75,000, . . . and is 

between citizens of different states, or citizens of a State and citizens or subjects of a 

foreign state . . . .” Id. § 1332(a)(1)–(2).

A defendant may remove any civil action from state court to federal district court if 

the district court has original jurisdiction over the matter. 28 U.S.C. § 1441(a). “The 

party invoking the removal statute bears the burden of establishing federal jurisdiction.” 

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Ethridge v. Harbor House Rest., 861 F.2d 1389, 1393 (9th Cir. 1988) (citing Williams v. 

Caterpillar Tractor Co., 786 F.2d 928, 940 (9th Cir. 1986)). Courts “strictly construe the 

removal statute against removal jurisdiction.” Gaus v. Miles, Inc., 980 F.2d 564, 566 

(9th Cir. 1992) (internal citations omitted). “[I]f there is any doubt as to the right of 

removal in the first instance,” the motion for remand must be granted. Id. Therefore, “[i]f 

at any time before final judgment it appears that the district court lacks subject matter 

jurisdiction, the case shall be remanded” to state court. 28 U.S.C. § 1447(c).

If the district court determines that removal was improper, then the court may also 

award the plaintiff costs and attorney fees accrued in response to the defendant’s 

removal. 28 U.S.C. § 1447(c). The court has broad discretion to award costs and fees 

whenever it finds that removal was wrong as a matter of law. Balcorta v. TwentiethCentury Fox Film Corp., 208 F.3d 1102, 1106 n.6 (9th Cir. 2000).

ANALYSIS

In the present case, Defendants removed this action based on its claim that there 

is complete diversity of citizenship between the parties. There is no dispute that Plaintiff 

is a California resident and that Bryant, an Oklahoma resident, is diverse from Plaintiff. 

There is also no dispute that Conn is a California resident. On the face of the complaint, 

Plaintiff is therefore not diverse from all Defendants and diversity jurisdiction does not 

exist. Defendants nonetheless contend that Conn was fraudulently joined and, as a 

result, his citizenship should be ignored for purposes of determining diversity.

“[F]raudulently joined defendants will not defeat removal on diversity grounds.” 

Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1318 (9th Cir. 1998). In assessing whether 

the joinder of a party is fraudulent and a “sham” intended only to defeat diversity, courts 

look to whether the plaintiff has failed to “state a cause of action against a resident 

defendant, and whether that failure is obvious according to the settled rules of the state.” 

Hunter v. Philip Morris USA, 582 F.3d 1039, 1043 (9th Cir. 2009) (citing Hamilton 

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Materials, Inc. v. Dow Chem. Corp., 494 F.3d 1203, 1206 (9th Cir. 2007)). Where 

plaintiff has obviously failed to state any claim under such settled law, remand for lack of 

diversity would be improper. Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067–68 

(9th Cir. 2001).

Defendants are entitled to present facts showing fraudulent joinder. Ritchey, 

139 F.3d at 1318. There is a general presumption against fraudulent joinder, however, 

and it is the defendant’s burden to prove it by clear and convincing evidence. Hamilton 

Materials, Inc., 494 F.3d at 1206. Simply alleging that a plaintiff has not pleaded 

sufficient facts to state a claim does not necessarily suffice if plaintiff could potentially 

amend the complaint to allege a viable claim. Birkhead v. Parker, No. C 12-2264 CW, 

2012 WL 4902695, at *2–3 (N.D. Cal. Oct. 15, 2012). Nonetheless, if it is clear under 

state law that under no circumstance identified by a plaintiff could a viable claim be 

made against the defendant alleged to have been fraudulently joined, dismissal can still 

be appropriate. See Good v. Prudential, 5 F. Supp. 2d 804, 807 (N.D. Cal. 1998) (“[T]he 

defendant must demonstrate that there is no possibility the plaintiff will be able to 

establish a cause of action in State court against the alleged sham defendant.”). In other 

words, if there “exists ‘a non-fanciful possibility’ that plaintiff can state a claim under 

California law against the non-diverse defendant, the court must remand.” Hernandez v. 

Ignite Rest. Grp., Inc., 917 F. Supp. 2d 1086, 1091–92 (E.D. Cal. 2013) (quoting 

Nasrawi v. Buck Consultants, LLC, 776 F. Supp. 2d 1166, 1169–70 (E.D. Cal. 2011)). In 

sum, “‘a non-diverse defendant is deemed a sham defendant if, after all disputed 

questions of fact and all ambiguities in the controlling state law are resolved in the 

plaintiff’s favor, the plaintiff could not possibly recover against the party whose joinder is 

questioned.’” Id.

Although a defendant must show that there is virtually no chance that the plaintiff 

can state a viable claim in order to invoke fraudulent removal, that assessment must still 

be based largely on the allegations of the plaintiff’s complaint. Removability is therefore 

generally determined by the “four corners of the applicable pleadings, not through the 

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subjective knowledge or a duty to make further inquiry.” Harris v. Bankers Life and Cas. 

Co., 425 F.3d 689, 694 (9th Cir. 2005). Diversity jurisdiction should consequently be 

analyzed at the time the complaint is filed and removal is effectuated. Strotek Corp. v. 

Air Transp., Ass’n of Am., 300 F.3d 1129, 1131 (9th Cir. 2002); Toth v. Guardian Indus. 

Corp., No. 1:12cv0001 LJO DLB, 2012 WL 468244, at *5 (E.D. Cal. Feb. 13, 2012) 

(“[T]he weight of authority holds that review of the complaint, even in fraudulent joinder 

cases, is constrained to the facts actually alleged therein.”).

Here, Plaintiff sued Defendants in their individual capacities rather than NLLG. 

Plaintiff alleges that Defendants—a phrase which Plaintiff defines to include Conn—

falsely advertised that NLLG, PLLC was qualified to render professional legal services in 

California despite its non-existence after September 22, 2017. Compl., ¶ 13. Ultimately, 

Plaintiff claims NLLG, PLLC is a fictitious law firm and thus not authorized to practice law 

in California.2 Id. If true, then Plaintiff would have valid claims against Conn in his 

individual capacity.

The problem, however, is Defendants provided documentation confirming NLLG’s 

status as a validly formed legal entity.3 See Exs. C–E, Leveroni Decl. Notably, the 

documentation shows that Defendants converted NLLG, PLLC into a LLP and registered 

NLLG, LLP as a foreign LLP to practice law in California. Exs. E and G, Leveroni Decl. 

Therefore, Defendants’ documentation contradicts Plaintiff’s fictitious law firm theory and 

it is unlikely that Plaintiff can amend her three causes of action to show otherwise. 

Because NLLG is a valid entity, it appears that Plaintiff should have sued NLLG instead 

of Defendants, including Conn, in their individual capacities.

4

2 Both Plaintiff and Defendants recognize that PLLCs are not permitted to practice law in 

California. See Cal. Corp. Code § 17701.04(e); Defs.’ Opp., ECF No. 6, at 7–8 (“Given that PLLCs are not 

permitted to practice law in California, NLLG was converted from PLLC to an LLP in order to practice law 

in California.”).

3 While Defendants bear the burden of proving fraudulent joinder, the Court notes that Plaintiff 

submitted many of the same documents as Defendants, which again illustrate that NLLG was a validly 

formed entity. See Exs. 6–10, McGrane Decl., Mot. Remand, ECF No. 4-2.

4 As Defendants point out, the Complaint fails to address an alter ego theory of liability or justify 

piercing the corporate veil in order to hold either Defendant liable in their individual capacities.

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Regardless, Plaintiff fails to connect any specific conduct to Conn. For example, 

Plaintiff alleges that “Defendants” personally solicited retainer agreements from Plaintiff 

and putative class members. Compl., ¶ 9. Plaintiff also asserts that “Defendants” 

emailed her two letters stating NLLG, PLLC was qualified to represent her in the debt 

collection actions. Id. ¶ 10. However, neither Conn’s name nor signature appear on the 

retainer agreement or the letters. See Exs. 1–4, Compl. Nor is there any indication that 

Conn actually sent the emails on which Plaintiff relies. Thus, it appears that the only 

specific allegation against Conn is that he is co-owner of NLLG, which is insufficient. 

In sum, the Court holds that there is no possibility that Plaintiff can state a viable 

or non-fanciful claim against Conn under the circumstances present here. Accordingly, 

the Court finds that Conn is fraudulently joined and consequently, complete diversity 

exists. 

CONCLUSION

For the foregoing reasons, Plaintiff’s Motion to Remand, ECF No. 4, is DENIED. 

IT IS SO ORDERED.

DATED: March 23, 2020

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