Padilla v. AT & T CORP.
2009 U.S. Dist. LEXIS 126129, 697 F.Supp.2d 1156, 2009 WL 6093337 (2009)
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Rule of Law:
A non-diverse defendant is deemed fraudulently joined only if, after resolving all disputed facts and legal ambiguities in the plaintiff's favor, it is impossible for the plaintiff to state a cause of action against that defendant under state law.
Facts:
- Laura Padilla was employed by AT&T and Cingular for over eight years as a Business Customer Service Specialist.
- Robin Hinojosa, a California citizen, was Padilla's direct manager at Cingular.
- Padilla took medical leave due to physical and mental disabilities.
- Padilla alleges that Hinojosa, motivated by Padilla's disabilities, harassed her by intentionally issuing false write-ups.
- The false write-ups accused Padilla of 'falsifying documents and stealing time.'
- Padilla was subsequently terminated from her employment.
Procedural Posture:
- Plaintiff Laura Padilla filed a lawsuit against AT&T Corp., Cingular Wireless Employee Services, and Robin Hinojosa in the California Superior Court, a state court of first instance.
- Defendants AT&T and Cingular removed the case to the United States District Court, asserting federal diversity jurisdiction.
- Defendants argued that Hinojosa, the only non-diverse defendant, was a sham defendant fraudulently joined to defeat federal jurisdiction.
- Plaintiff Padilla filed a motion to remand the case back to state court.
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Issue:
Does the fraudulent joinder doctrine permit a federal court to disregard a non-diverse defendant, thereby creating diversity jurisdiction, when the removing party fails to prove that it is impossible for the plaintiff to state a valid claim against that defendant under state law?
Opinions:
Majority - Guilford
No. The fraudulent joinder doctrine does not permit disregarding a non-diverse defendant unless the removing party meets its heavy burden of proving there is no possibility the plaintiff can establish a cause of action against that defendant. A defendant seeking removal based on fraudulent joinder must show more than the complaint's failure to state a claim; they must demonstrate that the plaintiff could not be afforded leave to amend the complaint to cure the deficiency. The court reasoned that there is a 'strong presumption' against removal jurisdiction and any doubt must be resolved in favor of remanding the case to state court. Here, AT&T and Cingular failed to show that Padilla could not possibly recover against her supervisor, Hinojosa, on a harassment claim under California's FEHA. The court concluded that including a direct supervisor who was integral to the termination in a lawsuit is a common pleading strategy, not a sham or fraud designed to defeat diversity jurisdiction.
Analysis:
This case reinforces the high threshold for proving fraudulent joinder in the Ninth Circuit, making it more difficult for out-of-state defendants to remove cases to federal court. By emphasizing that a defendant must prove the impossibility of a plaintiff's claim, not just its current deficiency, the court protects a plaintiff's ability to litigate in their chosen state forum. This decision signals to corporate defendants that they cannot easily disregard the inclusion of local managers or employees as defendants to manufacture diversity jurisdiction, especially when those individuals played a direct role in the underlying dispute. It affirms the principle of strict construction of removal statutes in favor of state court jurisdiction.
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