1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 RON LOMBOY, Case No. 25-cv-05167-HSG

8 Plaintiff, ORDER GRANTING MOTION TO

REMAND AND TERMINATING

9 v. MOTION TO DISMISS AS MOOT

10 WELLS FARGO BANK, N.A., et al., Re: Dkt. Nos. 14, 27 11 Defendants.

12 13 Pending before the Court is Plaintiff Ron Lomboy’s motion to remand, briefing for which 14 is complete. Dkt. Nos. 27 (“Mot.”), 28 (“Opp.”), 30 (“Reply”). The Court finds this matter 15 appropriate for disposition without oral argument and the matter is deemed submitted. See Civil 16 L.R. 7-1(b). For the reasons discussed below, the Court GRANTS the motion to remand. Dkt. 17 No. 27. Accordingly, Defendants Wells Fargo Bank, N.A., and Stephen Hitchcock’s motion to 18 dismiss is TERMINATED AS MOOT. Dkt. No. 14. 19 I. BACKGROUND 20 Plaintiff worked at Wells Fargo from 2007 until he was terminated in January 2024. See 21 Dkt. No. 1-3 (“Compl.”) ¶¶ 7, 44. Plaintiff alleges that Stephen Hitchcock was the top decision- 22 maker in his termination and falsely accused him of fraud relating to an incident where Plaintiff 23 helped an allegedly emancipated minor open a bank account. Id. ¶¶ 34, 46–47. Plaintiff also 24 alleges that he was forced to disclose these false accusations during subsequent job interviews. Id. 25 ¶ 48. Plaintiff claims this behavior was done with oppression, fraud, and/or malice. Id. ¶¶ 52–55. 26 Plaintiff also claims that Defendants’ investigation into the incident with the minor was a pretext 27 for Defendants to terminate Plaintiff because of his disabilities. Id. ¶ 37. 1 discrimination and retaliation claims against Wells Fargo, which Wells Fargo subsequently 2 removed to the Northern District of California. See Notice of Removal, Lomboy v. Wells Fargo, 3 N.A., et al., 24-CV-4168-HSG (N.D. Cal. July 11, 2024). In March 2025, Plaintiff asked Wells 4 Fargo to agree to allow Plaintiff to file an amended complaint adding a defamation claim, as the 5 Court’s January 2025 deadline for amending pleadings had passed. Opp. at 11. Wells Fargo 6 declined. Id. Plaintiff then filed this lawsuit in Contra Costa County alleging a single cause of 7 action for defamation. Compl. ¶ 59. Defendants removed. Dkt. No. 1. Defendants filed a motion 8 to dismiss, Dkt. No. 14, and Plaintiff filed a motion to remand, Dkt. No. 27. 9 II. LEGAL STANDARD 10 A defendant may remove a state court action to federal court on the basis of diversity 11 jurisdiction. See 28 U.S.C § 1441; see also Rodriguez v. AT&T Mobility Servs. LLC, 728 F.3d 12 975, 977 (9th Cir. 2013) (“A defendant may remove to federal district court an action first brought 13 in state court when the district court would have original jurisdiction.”). Diversity jurisdiction 14 exists where the matter in controversy exceeds $75,000 and the dispute is between citizens of 15 different states. 28 U.S.C. § 1332(a). “If a case is improperly removed, the federal court must 16 remand the action because it has no subject-matter jurisdiction to decide the case.” ARCO Env’t 17 Remediation, L.L.C. v. Dep’t of Health & Env’t Quality of Mont., 213 F.3d 1108, 1113 (9th Cir. 18 2000). On a motion to remand, federal courts must presume that a cause of action lies beyond its 19 subject matter jurisdiction, Hunter v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009), and 20 must reject federal jurisdiction “if there is any doubt as to the right of removal in the first 21 instance,” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). The removing party bears the 22 burden of establishing federal jurisdiction. See id. at 566–67. 23 III. DISCUSSION 24 It is undisputed that Plaintiff Lomboy and Defendant Hitchcock are both citizens of 25 California. Section 1332, which enables federal courts to exercise jurisdiction over suits “between 26 . . . citizens of different States,” only applies when “the citizenship of each plaintiff is diverse from 27 the citizenship of each defendant.” Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996). At issue 1 not destroy the parties’ diversity. 2 A. Legal Standard for Fraudulent Joinder 3 “In determining whether there is complete diversity, district courts may disregard the 4 citizenship of a non-diverse defendant who has been fraudulently joined.” Grancare, LLC v. 5 Thrower ex rel. Mills, 889 F.3d 543, 548 (9th Cir. 2018). Joinder is fraudulent “[i]f the plaintiff 6 fails to state a cause of action against a resident defendant, and the failure is obvious according to 7 the settled rules of the state.” Id. at 549 (quotation omitted). Fraudulent joinder is established on 8 that ground if the individuals “joined in the action cannot be liable on any theory.” Id. at 548 9 (quotation omitted). However, “if there is a possibility that a state court would find that the 10 complaint states a cause of action against any of the resident defendants, the federal court must 11 find that the joinder was proper and remand the case to the state court.” Id. (emphasis in original) 12 (quotation omitted). In other words, joinder is only fraudulent if it is “obvious according to the 13 settled rules of the state that [Plaintiff] has failed to state a claim against [Defendant Hitchcock].” 14 Hunter, 582 F.3d at 1046. 15 Courts have found fraudulent joinder “where a defendant presents extraordinarily strong 16 evidence or arguments that a plaintiff could not possibly prevail on [its] claims against the 17 allegedly fraudulently joined defendant,” including where “a plaintiff is barred by the statute of 18 limitations from bringing claims against that defendant.” Grancare, 889 F.3d at 548. By contrast, 19 fraudulent joinder is not established where “a defendant raises a defense that requires a searching 20 inquiry into the merits of the plaintiff’s case, even if that defense, if successful, would prove 21 fatal.” Id. at 548–49 (citing Hunter, 582 F.3d at 1046). There is a “general presumption against 22 fraudulent joinder,” and defendants who assert that a party is fraudulently joined carry a “heavy 23 burden,” Hunter, 582 F.3d at 1046, particularly since “[f]raudulent joinder must be proven by 24 clear and convincing evidence,” Hamilton Materials, Inc. v. Dow Chem. Corp., 494 F.3d 1203, 25 1206 (9th Cir. 2007). 26 Finally, it is important to note that “the test for fraudulent joinder and for failure to state a 27 claim under Rule 12(b)(6) are not equivalent.” Grancare, 889 F.3d at 549. Even “[i]f a defendant 1 Instead, the Court “must consider . . . whether a deficiency in the complaint can possibly be cured 2 by granting the plaintiff leave to amend.” Id. “If the plaintiff could cure this deficiency by 3 amending his or her complaint, then fraudulent joinder does not obtain.” Browand v. Ericsson 4 Inc., No. 18-CV-02380-EMC, 2018 WL 3646445, at *6 (N.D. Cal. Aug. 1, 2018). 5 B. Defendants Fail to Establish Fraudulent Joinder 6 i. Publication to a Third Party 7 Defendants first argue that Plaintiff fails to sufficiently plead publication to a third party, 8 which is necessary to state a claim for defamation under California law. Opp. at 13–14. But the 9 Court’s fraudulent joinder analysis does not ask whether Plaintiff will succeed on the merits of his 10 claim or whether he would survive a motion to dismiss under Federal Rule of Civil Procedure 11 12(b)(6). Instead, the Court simply must determine whether there is any possibility that Plaintiff 12 can state a claim. Plaintiff alleges that Wells Fargo and Mr. Hitchcock published defamatory 13 statements accusing Plaintiff of committing fraud to third parties, including to other employees. 14 See Compl. ¶¶ 47, 59–61. While Plaintiff has not pled his defamation claim in great detail, he has 15 pled sufficient facts to raise at least a possibility that he will be able to state a claim to the 16 satisfaction of the state court. See Kirk v. Gen. Ins. Co. of Am., No. 23-CV-05506-HSG, 2024 WL 17 2304566, at *3 (N.D. Cal. May 20, 2024) (noting that a party “is fraudulently joined for purposes 18 of diversity jurisdiction only if Plaintiff’s claims against her are ‘wholly insubstantial and 19 frivolous,’ such that there is no possibility that Plaintiff could prevail”) (quotation omitted). 20 Even assuming, without deciding, that Plaintiff fails to state a claim against Mr. Hitchcock, 21 it does not follow that it would be impossible for Plaintiff to adequately plead a defamation claim 22 if given leave to amend. “Substantial case law supports the proposition that if a plaintiff could 23 amend a complaint to cure any deficiencies, the removing party’s high burden of proving 24 fraudulent joinder is not met.” Brown v. Beazley USA Servs., Inc., No. 24-CV-09035-SI, 2025 25 WL 436716, at *4 (N.D. Cal. Feb. 7, 2025). Here, Defendants have not established that Plaintiff’s 26 pleading deficiencies cannot “possibly be cured by granting the plaintiff leave to amend.” 27 Grancare, 889 F.3d at 550. Defendants assert that Plaintiff “provides no evidence to support his 1 But Plaintiff could presumably amend his complaint to include more specific details—such as 2 facts learned in the related depositions—that more fully identify what third parties Defendant 3 Hitchcock allegedly published the false statements to.1 See Chemla v. FedEx Corp. Servs., Inc., 4 No. 20-CV-06581-RS, 2021 WL 4497862, at *2 (N.D. Cal. Mar. 29, 2021) (granting remand 5 because defendant had not shown that it would be impossible to amend allegations about 6 publication to a third party). Defendants also argue that Mr. Hitchcock testified in the related 7 Lomboy case that he did not discuss Plaintiff’s termination outside of one meeting. This is a 8 disputable fact that could go to the eventual merits of the case, not a showing that Plaintiff could 9 not possibly state a claim on amendment. See Grancare, 889 F.3d at 551 (noting that “a denial, 10 even a sworn denial, of allegations does not prove their falsity”). 11 ii. Common Interest Privilege 12 Defendants next argue that Plaintiff’s defamation claim fails as a matter of law because 13 employers and employees cannot be held liable for statements regarding workplace conduct, 14 performance, and discipline under the common interest privilege. Opp. at 15–16 (citing Cal. Civ. 15 Code § 47(c)). But, as Defendants acknowledge, the common interest privilege does not apply 16 when statements were made with malice. See King v. U.S. Bank Nat’l Assoc., 53 Cal. App. 5th 17 675, 701 (2020); Cal. Civ. Code § 47(c). As before, the Court cannot say that it is impossible for 18 Plaintiff to adequately plead actual malice. Plaintiff argues that Mr. Hitchcock fabricated a false 19 fraud claim after Plaintiff took disability leave and was motivated by ill will towards Plaintiff’s 20 disabilities and his protected leaves. Mot. at 17. Even if Plaintiff has not adequately alleged these 21 claims in his current complaint, there is at least a possibility that he could do so in an amended 22 complaint.2 See Chemla, 2021 WL 4497862, at 3 (explaining that defendant “fails to show an 23 amended complaint could not sufficiently allege [actual malice]” where plaintiff argued in the 24

25 1 Because Plaintiff could amend his pleadings as described, the Court does not consider whether he could amend his pleadings to adequately state a claim for his alternative theory that he was 26 defamed because he was forced to tell potential employers about these false accusations. See Opp. at 14 (discussing this theory). 27 2 Defendants claim that “[e]ven if [Plaintiff] had alleged actual malice . . . he has not introduced 1 motion for remand that defendant’s behavior was “motivated by ill will . . . because [plaintiff] was 2 || taking leave’). 3 Since Defendants here have not carried their “heavy burden” of establishing that Plaintiff 4 || cannot possibly state a claim against Mr. Hitchcock for defamation, his joinder is not fraudulent as 5 a matter of law. Grancare, 889 F.3d at 548.° Because there is not complete diversity of 6 || citizenship, the Court lacks subject-matter jurisdiction and GRANTS the motion to remand. Dkt. 7 || No. 27. 8 || Iv. CONCLUSION 9 The Court GRANTS Plaintiffs motion to remand, Dkt. No. 27, and REMANDS the case 10 || to the Superior Court of Contra Costa County. Defendants’ motion to dismiss, Dkt. No. 14, is 11 TERMINATED AS MOOT. The Clerk is directed to remand the case and close the file. a 12

IT IS SO ORDERED.

14 |} Dated: 10/6/2025

15 Atnpurrl 3 Sdbl_ □□ 2 HAYWOOD S. GILLIAM, JR. a 16 United States District Judge

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19 20 21 22 23 24 29 | 3 Defendants observe that “Plaintiff made several questionable decisions which suggest that he 26 || added Mr. Hitchcock as a sham defendant,” including (1) Plaintiff's choice not to join the employee relations consultant who told Plaintiff's supervisor that he was being terminated for 7 fraud (and who would not have destroyed diversity); and (2) Plaintiff's failure to cite the deposition testimony that allegedly prompted Mr. Hitchcock’s inclusion in this suit. Opp. at 16— 28 17. These observations do not change the fact that Defendants have not met their burden for showing fraudulent joinder.