Opinion ID: 8312446
Heading Depth: 2
Heading Rank: 2

Heading: Fraudulent Joinder Analysis

Text: The defendants argue for the first time in their reply in support of defendant TriNet's Notice of Removal that even [a]ssuming ... that [the p]laintiff was a California resident at the time the lawsuit was filed and removed, removal is still appropriate because [defendant] TriNet was fraudulently joined and so is not a proper defendant. Defs.' Reply at 3. Judges in this District have repeatedly held that arguments may not be raised for the first time in a party's reply. See, e.g. , Akinsinde v. Not-For-Profit Hosp. Corp. , 216 F.Supp.3d 33 , 41 (D.D.C. 2016) (The court has no obligation to entertain arguments raised for the first time in a reply brief and declines to do so here.); Wright v. Metro. Life Ins. Co. , 618 F.Supp.2d 43 , 47 n.5 (D.D.C. 2009) (Walton, J.) (Courts 'highly disfavor[ ] parties creating new arguments at the reply stage that were not fully briefed during the litigation.'  (alteration in original) (quoting Pub. Citizen Health Research Grp. v. Nat'l Insts. of Health , 209 F.Supp.2d 37 , 43 (D.D.C. 2002) ) ). However, even if this argument had been properly raised earlier, it fails. The fraudulent joinder doctrine allows the Court to 'disregard, for jurisdictional purposes, the citizenship of certain nondiverse defendants, assume jurisdiction over a case, dismiss the nondiverse defendants, and thereby retain jurisdiction.'   Walter E. Campbell Co. v. Hartford Fin. Servs. Grp., Inc. , 959 F.Supp.2d 166 , 170 (D.D.C. 2013) (quoting Mayes v. Rapoport , 198 F.3d 457 , 461 (4th Cir. 1999) ). To demonstrate fraudulent joinder, the removing party must prove that either (1) there is no possibility the plaintiff can establish a cause of action against the [ ] defendant; or (2) the plaintiff has fraudulently pled jurisdictional facts to bring the ... defendant into state court.'  Id. (alteration in original) (quoting In re Tobacco/Governmental Health Care Costs, Litig. , 100 F.Supp.2d 31 , 39 (D.D.C. 2000) ). A removing party's burden to demonstrate fraudulent joinder is a heavy one, In re Tobacco/Governmental Health Care Costs Litig. , 100 F.Supp.2d at 39 (quoting Pacheco de Perez v. AT & T , 139 F.3d 1368 , 1380 (11th Cir.1998) ), and the court must constru[e] all facts and uncertainties in the state substantive law in favor of the plaintiffs, Walter E. Campbell Co. , 959 F.Supp.2d at 170 . Here, defendant TriNet does not argue that the plaintiff fraudulently pleaded jurisdictional facts, but argues that the [p]laintiff has not, and cannot, state a viable claim against [defendant] TriNet under the DCHRA. Defs.' Reply at 4. When assessing an argument of this nature, [t]he [C]ourt's limited role in determining whether a defendant has been fraudulently joined prohibits it from 'delv[ing] into the legal and factual thicket of a merits analysis,' and requires it to 'instead confine its inquiry to whether, on the basis of the claims pled, the plaintiff has shown even a slight possibility of relief.'  Simon v. Hofgard , 172 F.Supp.3d 308 , 316 (D.D.C. 2016) (quoting Boyd v. Kilpatrick Townsend & Stockton, LLP , 79 F.Supp.3d 153 , 157 (D.D.C. 2015) ). If the Court concludes, after construing all of the facts in a plaintiff's favor, that there is even a possibility that a state court would find a cause of action stated against [the defendant] on the facts alleged by the plaintiff, diversity is incomplete and the case must be remanded. Boyd , 79 F.Supp.3d at 157 (internal quotation marks omitted). A plaintiff has a possibility of establishing a cause of action or right to relief against a defendant so long as the plaintiff's claim is not 'wholly nonsensical.'  Hofgard , 172 F.Supp.3d at 315 (quoting Boyd , 79 F.Supp.3d at 157-58 ). The defendants argue that the plaintiff cannot state a claim against defendant TriNet under the DCHRA because, as explained in [defendant] TriNet's Motion to Dismiss and its Reply ..., [defendant] TriNet was never the [p]laintiff's employer in any respect for purposes of these claims. Defs.' Reply at 4. They provide no further discussion of this argument in their reply, but in defendant TriNet's motion to dismiss, it argues that the plaintiff has failed to specifically allege facts sufficient to show that defendant TriNet is a joint employer with defendant Trustify, in part, because the plaintiff does not allege a single interaction or other form of engagement with [defendant] TriNet that in any way relates to his claims of discrimination and retaliation, or otherwise as to any significant event of his employment (such as being hired, fired[,] or promoted) or the day-to-day management of his job. TriNet's Mem. at 4. 8 The plaintiff, although he did not have an opportunity to respond to the defendants' fraudulent joinder argument, 9 asserted in his opposition to defendant TriNet's motion to dismiss that he has alleged facts sufficient to show that  defendant TriNet is his joint employer, including defendant TriNet having issued his biweekly pay checks, provided [his] medical insurance, kept [his] employee records[,] [been] listed as his employer on his W-2 form, Pl.'s Opp'n at 5 (citing 2d Am. Compl. ¶¶ 12, 14-17, 20), and set terms and conditions of [his] employment with the TriNet employee handbook, id. (citing 2d Am. Compl. ¶ 22). The DCHRA makes it unlawful for an employer to discriminate against an individual wholly or partially for a discriminatory reason based upon [an] actual or perceived ... disability. D.C. Code § 2-1402.11 (a), (a)(1). This Court has recognized that for purposes of DCHRA liability, an individual may be employed by joint employers, and to determine whether a joint employer relationship exists, the Browning-Ferris and Spirides [ v. Reinhardt , 613 F.2d 826 (D.C. Cir. 1979) tests are the appropriate tests under which to analyze that question. Miles v. Univ. of the Dist. of Columbia , No. 12-cv-378, 2013 WL 5817657 , at  (D.D.C. Oct. 30, 2013) (Walton, J.) ( Miles I ). 10 Although this Circuit has never explicitly rejected one test over the other, this Court and others have observed that the Circuit is more inclined to adopt the Browning-Ferris test when the issue of joint employment arises in the context of the alleged statutory violations here, i.e. , employment discrimination claims under the DCHRA and other similar statutes. Miles v. Howard Univ. , 83 F.Supp.3d 105 , 113 n.9 (D.D.C. 2015) (Walton, J.) ( Miles II ) (collecting cases). For this reason, and because the Court need only decide whether there is a slight possibility of relief, Hofgard , 172 F.Supp.3d at 316 (internal quotation marks omitted), the Court will apply the Browning-Ferris test here. Under the Browning-Ferris test, the Court must determine whether defendant TriNet  'retained for itself sufficient control of the terms and conditions of the [plaintiff's] employment [even though he was] employed by [Trustify],'  Redd v. Summers , 232 F.3d 933 , 938 (D.C. Cir. 2000) (citation omitted), which is essentially a factual issue, Nat'l Labor Relations Bd. v. Browning-Ferris Indus. of Pa., Inc. , 691 F.2d 1117 , 1123 (3d Cir. 1982) (quoting Boire v. Greyhound Corp. , 376 U.S. 473 , 481, 84 S.Ct. 894 , 11 L.Ed.2d 849 (1964) ). Factors for the Court to consider under the Browning-Ferris test include: '[ (1) ] the alleged employer's authority to hire and fire the relevant employees; [ (2) ] the alleged employer's authority to promulgate work rules and assignments and to set the employees' conditions of employment: compensation, benefits, and work schedules, including the rate and method of payment; [ (3) ] the alleged employer's involvement in day-to-day employee supervision, including employee discipline; and [ (4) ] the alleged employer's actual control of employee records, such as payroll, insurance, or taxes.'  Miles II , 83 F.Supp.3d at 117 (alterations in original) (quoting  In re Enter. Rent-A-Car Wage & Hour Emp't Practices Litig. , 683 F.3d 462 , 469 (3d Cir. 2012) ). Based on the facts alleged by the plaintiff, a court could find that several of the Browning-Ferris factors support the plaintiff's position that defendant TriNet is subject to joint employer liability. As to the first factor, which concerns the authority to hire and fire, Miles II , 83 F.Supp.3d at 117 , although the plaintiff does not allege that defendant TriNet hired him or had the authority to hire him, he does allege that TriNet approved the decision of ... [defendant] Trustify to terminate [him], 2d Am. Compl. ¶ 29; see also id. ¶ 39 (TriNet ... permitted the materially adverse action taken against [the plaintiff] ....). Therefore, defendant TriNet is incorrect that there is no allegation ... that TriNet [ ] had authority to hire or fire. TriNet's Mem. at 5. And although defendant TriNet asserts that it in fact had no authority to hire or fire Trustify employees, see id. , it does not direct the Court to any evidence to support that assertion. In any event, to the extent that there is a factual dispute on this point, the Court must resolve that dispute in the plaintiff's favor for purposes of assessing the defendants' fraudulent joinder claim. See Walter E. Campbell Co. , 959 F.Supp.2d at 170 . As to the second Browning-Ferris factor, which includes the authority to ... set the [ ] conditions of employment, Miles II , 83 F.Supp.3d at 117 , the plaintiff has alleged facts that suggest that defendant TriNet had some authority to set certain conditions of employment for Trustify employees, including compensation, benefits, and rate and method of payment. See Miles II , 83 F.Supp.3d at 117 . Specifically, the plaintiff has alleged that TriNet provided [him] with an employee handbook, 2d Am. Compl. ¶ 14; TriNet issued [his] biweekly pay checks, id. ¶ 15; Tri-Net is listed as [his] employer on his W-2 form, id. ¶ 16; and TriNet provided [his] medical insurance during the course of his employment with [the d]efendants, id. ¶ 17. And as to the fourth Browning-Ferris factor, which concerns actual control of employee records, Miles II , 83 F.Supp.3d at 117 , the plaintiff has alleged that defendant TriNet maintain[ed] employee records for its 'worksite' employees like [the plaintiff]. 2d Am. Comp. ¶ 19. Notably, defendant TriNet does not dispute these allegations, see TriNet's Mem. at 5 (acknowledging that it provided administrative services to ... [Trustify's] employees, including issuing [the p]laintiff's pay checks and W-2 and administering benefits like health insurance), and these allegations are further supported by the TriNet Employee Handbook, which states that customer companies [who partner with TriNet] elect to share several important employer responsibilities with TriNet[,]... [including that] TriNet has responsibility for paying wages, sponsoring and administering benefits, processing and maintaining certain employee records, and performing other related HR functions, 2d Am. Compl., Ex. 1 (TriNet Employee Handbook) at 7. As to the third Browning-Ferris factor, although defendant TriNet is correct that the plaintiff did not allege that defendant TriNet had day-to-day supervision of [the] plaintiff's ... discipline or control of his schedule, TriNet's Mem. at 5, and that the TriNet Employee Handbook states that a TriNet partner company such as defendant Trustify, is the employer for day-to-day job responsibilities and requirements, 2d Am. Compl., Ex. 1 (TriNet Employee Handbook) at 7; see also TriNet's Mem. at 4, the Court does not find this omission fatal to the plaintiff's claim for purposes of assessing fraudulent joinder. As explained above, the plaintiff has alleged facts that could support three of the four Browning-Ferris factors weighing  in the plaintiff's favor. And defendant TriNet has cited no legal authority which establishes that the third factor, related to day-to-day supervision, is dispositive of the joint employment question. In fact, at least one member of this Court has concluded the opposite, see Coles v. Harvey , 471 F.Supp.2d 46 , 51 (D.D.C. 2007) (in applying Browning-Ferris test, concluding that supervision and evaluation [of employee performance] are [not] determinative of the joint employment question), and this Court agrees with that assessment. The Court is not persuaded that any of defendant TriNet's counterarguments raised in its motion to dismiss completely preclude the plaintiff's claims or render them wholly nonsensical. Hofgard , 172 F.Supp.3d at 315, 318 . Defendant TriNet argues that the plaintiff's claims must fail because he does not allege a single interaction or other form of engagement with [defendant] TriNet that in any way relates to his claims of discrimination and retaliation, or otherwise as to any significant event of his employment ... or the day-to-day management of his job. TriNet's Mem. at 4. However, it cites no legal authority, nor is the Court able to locate any, for the proposition that an employee must directly interact with his joint employer in order to establish joint employer liability. The Browning-Ferris test is concerned with control of the terms and conditions of [the plaintiff's] employment, Redd , 232 F.3d at 938 , and although an employee's direct interactions with a joint employer could be probative of the joint employer's control over that employee, it does not necessarily follow that such interactions are required to establish control. Defendant TriNet also argues that the administrative services it provided to the plaintiff and to defendant Trustify cannot serve as a basis for [the p]laintiff's claims against [defendant] TriNet because the plaintiff fails to allege that defendant TriNet had the authority to hire or fire, promulgate work rules, or set conditions[,] [ ] day-to-day supervision of [the] plaintiff's employment including discipline or control of his schedule[,] or [ ] control of his pay, TriNet's Mem. at 5, and without those hallmarks of joint or co-employment ..., a defendant is not a joint employer for purposes of statutory claims like those raised here. Id. As already explained, the plaintiff has alleged facts that support his argument that some of these hallmarks existed. Furthermore, none of the decisions defendant TriNet cites compel the conclusion that each of these hallmarks must be present for joint employer liability to exist. Importantly, none of these decisions is controlling authority, nor do any explicitly apply the Browning-Ferris factors. 11 Although two of these decisions underscore the importance of whether a joint employer has a right to terminate an employee, see Sandoval v. City of Boulder, Colo. , 388 F.3d 1312 , 1324 (10th Cir. 2004) (Most important to control over the terms and conditions of an employment relationship is the right to terminate it under certain circumstances. (internal quotations omitted) ), as well as the right to hire and supervise employees, see EEOC v. Pac. Maritime Ass'n , 351 F.3d 1270 , 1277 (9th Cir. 2003) (Numerous courts have considered the key to joint employment to be the right to hire, supervise[,] and fire employees.), neither forecloses the possibility that an entity could be deemed a joint employer absent one or more of these attributes. Moreover, these cases were decided on summary judgment or motions for judgment as a matter of law, see Sandoval , 388 F.3d at 1324 (summary judgment);  Pac. Maritime Ass'n , 351 F.3d at 1277 (motion for judgment as a matter of law), and therefore, they have limited value in determining whether the plaintiff can state a claim for purposes of fraudulent joinder, which is a burden [ ] much lighter than a plaintiff's burden on summary judgment or a judgment as a matter of law, Crowe v. Coleman , 113 F.3d 1536 , 1542 (11th Cir. 1997) ([T]here need only be 'a reasonable basis for predicting that the state law might impose liability on the facts involved.'  (quoting B, Inc. v. Miller Brewing Co. , 663 F.2d 545 , 550 (5th Cir. 1981) ). Defendant TriNet also cites two decisions from other district courts that have concluded that professional employer organizations like defendant TriNet are not joint employers. See Adams v. Valega's Prof. Home Cleaning, Inc. , No. 12-cv-644, 2012 WL 5386028 , at -15 (N.D. Ohio Nov. 2, 2012) ; Coldwell v. RiteCorp Env. Prop. Solutions , No. 16-cv-1998, 2017 WL 1737715 , at  (D. Colo. May 4, 2017). Again, these decisions are not controlling authority, but even if they were, they do not foreclose the plaintiff's claims. Indeed, Coldwell explicitly recognizes that it in no way concludes that a [professional employer organization] ... would never qualify as an employer. Coldwell , 2017 WL 1737715 , at . And again, these cases have limited relevance to the fraudulent joinder analysis because they were applying the more rigorous summary judgment standard. See Adams , 2012 WL 5386028 , at , 4 ; Coldwell , 2017 WL 1737715 , at -2, 10. 12 Finally, to the extent that the Court would require the plaintiff to show that defendant TriNet knew or should have known of the [alleged unlawful] conduct and that it failed to take [ ] corrective measures within its control, Caldwell v. ServiceMaster Corp. , 966 F.Supp. 33 , 46 (D.D.C. 1997) -a showing that at least one member of this Court has required a plaintiff to demonstrate in order to prevail on a theory of joint employer liability against a temporary agency, see id. -the Court finds that the plaintiff has alleged facts sufficient to demonstrate the possibility that the plaintiff has satisfied this requirement. The plaintiff alleges that defendant TriNet not only knew of the alleged discriminatory and retaliatory conduct, see 2d Am. Compl. ¶ 54, but that it permitted, approved, and, in one instance, joined in it, see id. ¶ 39 (TriNet ... permitted the materially adverse action[s] taken against [the plaintiff] when [defendant] Trustify refused to provide ... the requested reasonable accommodation ... and when Trustify terminated [the plaintiff's] employment.); id. ¶ 29 (TriNet approved the decision ... to terminate [the plaintiff].); id. ¶ 40 (TriNet [ ] joined Trustify in opposing [the plaintiff] obtaining unemployment benefits.). Furthermore, the plaintiff has alleged facts suggesting that defendant TriNet possessed authority with respect to requests for reasonable accommodations, see id. ¶ 22 (quoting instruction from TriNet Employee Handbook that [a]ll [Trustify] managers should immediately report ... matters [regarding concerns about accommodation requests] to a TriNet HR Representative), as well as employee termination, see id. ¶ 29 (TriNet approved the decision ... to terminate [the plaintiff].), which suggests that corrective measures [were] within its control, Caldwell , 966 F.Supp. at 46 . Defendant TriNet argues that the plaintiff has not satisfied Caldwell 's standard  because the plaintiff does not allege ... that he [contacted defendant TriNet about an accommodation] (and in fact he did not), and in any event, [defendant] TriNet [does not] control[ ] such decisions ... [because] it does not dictate the essential functions of the jobs designed by and performed for [defendant Trustify] or determine what may be a hardship ... to accommodate. TriNet's Reply at 2-3. First, the Court cannot agree that the absence of an allegation that the plaintiff directly contacted defendant TriNet regarding his accommodation requests forecloses the plaintiff's ability to show that defendant TriNet knew about the requests. As already explained, the plaintiff has alleged that defendant TriNet not only knew of his accommodations requests, but also permitted defendant Trustify to refuse to satisfy those requests. See 2d Am. Compl. ¶ 39. Furthermore, the allegation that defendant TriNet knew about the requests is made plausible by the instruction in the TriNet Employee Handbook that [a]ll [Trustify] managers should immediately report ... matters [regarding concerns about accommodation requests] to a TriNet HR Representative. Id. ¶ 22. 13 Second, the issue of whether defendant TriNet had control over decisions related to the plaintiff's accommodation requests and other terms of employment is a factual one that must be resolved in the plaintiff's favor for purposes of assessing a fraudulent joinder claim. See Walter E. Campbell Co. , 959 F.Supp.2d at 170 . In sum, it could be that the plaintiff's claims against defendant TriNet may not ultimately be successful; however, the Court simply cannot conclude that the plaintiff's claims against defendant TriNet are wholly nonsensical, Hofgard , 172 F.Supp.3d at 315 , or completely preclude[d], id. at 318 . As the plaintiff points out, see Pl.'s Opp'n at 4, the joint employer inquiry is heavily dependent on the facts of a particular case, and therefore, it is ill-suited to resolve prior to summary judgment, see Brown v. Corr. Corp. of Am. , 603 F.Supp.2d 73 , 79 (D.D.C. 2009) (concluding that [d]etermining whether [two defendants] were [the] plaintiff's joint employers ... is [ ] a factual issue .. [that] is plainly inappropriate to resolve on a motion to dismiss for failure to state a claim (internal citation and quotation marks omitted) ); see also Browning-Ferris , 691 F.2d at 1123 (explaining that the issue of whether an employer has sufficient indicia of control ... is essentially a factual issue (internal quotation marks omitted) ). Ultimately, any further inquiry by this Court into the joint employment question presented here would [ ] force[ ] [it] to enter into the legal and factual thicket that comprises the merits of this case[, and t]his is not terrain upon which a court uncertain of its jurisdiction should tread. Brown v. Brown & Williamson Tobacco Corp. , 26 F.Supp.2d 74 , 77 (D.D.C. 1998) (internal quotation marks omitted) (second alteration in original).