1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA

6

7 MARCELLUS CLARK, Case No. 22-cv-01588-PJH 8 Plaintiff,

9 v. ORDER GRANTING PLAINTIFF’S

MOTION TO REMAND AND

10 WALGREENS CO., et al., TERMINATING DEFENDANTS’

MOTION TO DISMISS

11 Defendants. Re: Dkt. No. 21, 22 12

13 14 Plaintiff’s motion to remand and defendants’ motion to dismiss came on for 15 hearing before this court on May 26, 2022. Plaintiff appeared through his counsel, Allison 16 Norder. Defendants appeared through their counsel, Christopher Archibald. Having read 17 the papers filed by the parties and carefully considered their arguments and the relevant 18 legal authority, and good cause appearing, the court hereby GRANTS plaintiff’s motion to 19 remand and TERMINATES defendants’ motion to dismiss. 20 BACKGROUND 21 This is an employment discrimination lawsuit. Plaintiff Marcellus Clark is a 63- 22 year-old African American man who began working for Walgreens in 1999 as an asset 23 protection manager. Dkt. 16 ¶ 11. Plaintiff alleges that prior to April 2019, when Michael 24 John Hourigan Jr (“Hourigan”) became his supervisor, he consistently received high 25 performance reviews. Id. ¶ 12. Plaintiff further alleges that Hourigan had a reputation for 26 terminating older employees. Id. ¶ 15. Hourigan allegedly mentioned to plaintiff that he 27 was aware of the rumors that he fired older employees but told plaintiff that all his 1 took responsibilities away from plaintiff and gave those responsibilities to a younger 2 employee. Id. In August 2019, Hourigan allegedly fired two white asset protection 3 managers who were around the age of sixty and offered them severance packages. Id. 4 Around October 29, 2019, Hourigan allegedly gave plaintiff a 3.2/5 performance 5 evaluation, and remarked, “Do you really think you can handle this job?” Id. Hourigan 6 also allegedly threatened to place plaintiff on a performance improvement plan without 7 any explanation or reason for doing so. Id. In or around November 2019, Hourigan 8 allegedly scolded plaintiff for low participation and told plaintiff he would be visiting him 9 soon with an HR representative. Id. On or around February 7, 2020, plaintiff allegedly 10 met with Hourigan and HR generalist Namarata Kapadia (“Kapadia”). Id. ¶ 16. During 11 this meeting, Hourigan allegedly told plaintiff that he disagreed with plaintiff’s recent 12 investigation of an employee and that he independently determined the employee was 13 stealing from the store. Id. Hourigan allegedly terminated plaintiff’s employment at the 14 end of the meeting and immediately replaced him with an employee in her early thirties. 15 Id. ¶ 16–17. Plaintiff alleges that, within a year, Hourigan terminated the employment of 16 four asset protection managers over the age of forty and failed to offer severance 17 packages for the three managers that were African American. Id. ¶ 17. 18 On February 3, 2022, plaintiff brought this lawsuit against defendants Kapadia, 19 Walgreens, Walgreen Co., Walgreen National Corporation, Walgreen Pharmacy, and 20 Walgreens Boots Alliance, Inc. in the Superior Court of the State of California for the 21 County of San Mateo.1 Dkt. 1-3 at 6. Plaintiff asserted the following causes of action: (1) 22 discrimination in violation of the Fair Employment and Housing Act (“FEHA”); (2) hostile 23 work environment harassment in violation of FEHA; (3) retaliation in violation of FEHA; 24 (4) failure to prevent discrimination, harassment, or retaliation in violation of FEHA; (5) 25 wrongful termination of employment in violation of public policy; (6) breach of implied-in- 26

27 1 The court is informed that defendants have requested that plaintiff remove Walgreens 1 fact contract not to terminate employment without good cause; (7) negligent hiring, 2 supervision, and retention; (8) intentional infliction of emotional distress; and (9) 3 whistleblower retaliation pursuant to California Labor Code § 1102.5. Id. at 13–20. The 4 only claim plaintiff asserted against defendant Kapadia was for hostile work environment 5 harassment under FEHA. Id. at 14. 6 On March 14, 2022, defendants timely removed this lawsuit based on diversity 7 jurisdiction, 28 U.S.C. § 1332. Dkt. 1 at 4. Plaintiff and defendant Kapadia are both 8 citizens of California, but defendants asserted that plaintiff fraudulently joined Kapadia to 9 defeat diversity jurisdiction. Id. at 7–14. 10 On April 1, 2022, plaintiff filed his first amended complaint (“FAC”). Dkt. 16. 11 Plaintiff raised the same nine causes of action, and, again, only asserted against Kapadia 12 a hostile work environment claim under FEHA. Id. 13 On April 13, 2022, plaintiff moved to remand this case to state court. Dkt. 22. A 14 day earlier, defendants moved to dismiss plaintiff’s FAC. Dkt. 21. 15 DISCUSSION 16 A. Legal Standard 17 “A motion to remand is the proper procedure for challenging removal.” Moore- 18 Thomas v. Alaska Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir. 2009). A court may 19 remand a case either for lack of subject matter jurisdiction or for any defect in the 20 removal procedure. See 28 U.S.C. § 1447(c). The “strong presumption against removal 21 jurisdiction means that the defendant always has the burden of establishing that removal 22 is proper, and that the court resolves all ambiguity in favor of remand to state court.” 23 Hunter v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009) (internal quotation 24 marks omitted). “If at any time before final judgment it appears that the district court 25 lacks subject matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c). 26 B. Analysis 27 Plaintiff moves to remand this case to state court. Plaintiff argues the parties lack 1 defendants failed to prove that Kapadia was fraudulently joined in this action. 2 A defendant may remove a case to a federal court where the federal court would 3 have had original jurisdiction over the action. See 28 U.S.C. § 1441(a). A federal district 4 court has original jurisdiction over all civil actions where the amount in controversy 5 exceeds $75,000 and is between citizens of different states. See 28 U.S.C. § 1332(a)(1). 6 Diversity of citizenship means “each defendant must be a citizen of a different state from 7 each plaintiff.” In re Digimarc Corp. Derivative Litigation, 549 F.3d 1223, 1234 (9th Cir. 8 2008). A defendant may still seek removal where there is a non-diverse defendant if the 9 defendant proves the non-diverse defendant was fraudulently joined. See Grancare, LLC 10 v. Thrower by & through Mills, 889 F.3d 543, 548 (9th Cir. 2018). 11 “There are two ways to establish fraudulent joinder: (1) actual fraud in the pleading 12 of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against 13 the non-diverse party in state court.” Id. (internal quotation marks omitted). “Fraudulent 14 joinder is established the second way if a defendant shows that an individual joined in the 15 action cannot be liable on any theory.” Id. (internal quotation marks and alteration 16 omitted). A defendant invoking federal diversity jurisdiction on the basis of fraudulent 17 joinder “bears a heavy burden” due to the presumption against the finding of fraudulent 18 joinder. Id. As such, a removing defendant must prove fraudulent joinder by “clear and 19 convincing evidence.” Hamilton Materials, Inc. v. Dow Chem. Corp., 494 F.3d 1203, 20 1206 (9th Cir. 2007). Courts have found fraudulent joinder “where a defendant 21 demonstrates that a plaintiff is barred by the statute of limitations from bringing claims 22 against that defendant” and “where a defendant presents extraordinarily strong evidence 23 or arguments that a plaintiff could not possibly prevail on her claims against the allegedly 24 fraudulently joined defendant.” Grancare, LLC, 889 F.3d at 548. 25 A court may consider summary judgment-type evidence when resolving claims of 26 fraudulent joinder. See Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1068 (9th Cir. 27 2001). If “there is a possibility that a state court would find that the complaint states a 1 the joinder was proper and remand the case to the state court.” Grancare, LLC, 889 F.3d 2 at 548 (internal quotation marks omitted). Indeed, in its analysis, a court must consider 3 “whether a deficiency in the complaint can possibly be cured by granting the plaintiff 4 leave to amend.” Id. at 550. 5 In this instance, plaintiff asserts a FEHA hostile work environment harassment 6 claim based on age, race, color, ancestry, and/or national origin against defendant 7 Kapadia, the alleged sham defendant. See Dkt. 16 at 13. Under FEHA, “it is unlawful for 8 an employer, because of a protected classification, to discriminate against an employee 9 in compensation or in terms, conditions, or privileges of employment.” Galvan v. 10 Dameron Hosp. Assn., 37 Cal. App. 5th 549, 558 (2019) (internal quotation marks 11 omitted). To state a prima facie case for harassment, a plaintiff must show: “(1) she is a 12 member of a protected class; (2) she was subjected to unwelcome harassment; (3) the 13 harassment was based on her protected status; (4) the harassment unreasonably 14 interfered with her work performance by creating an intimidating, hostile, or offensive 15 work environment; and (5) defendants are liable for the harassment.” Id. at 563. 16 “Harassment sufficient to support a FEHA claim must be severe and pervasive—it cannot 17 be occasional, isolated, sporadic, or trivial.” Green v. Miyashiro, No. D077540, 2021 WL 18 1624266, at *4 (Cal. Ct. App. Apr. 27, 2021) (internal quotation marks omitted). A “single 19 incident of harassing conduct is sufficient to create a triable issue regarding the existence 20 of a hostile work environment if the harassing conduct has unreasonably interfered with 21 the plaintiff’s work performance or created an intimidating, hostile, or offensive working 22 environment.” Cal. Gov’t Code § 12923(b). 23 As alleged, plaintiff does not state a viable claim for harassment against defendant 24 Kapadia. Based on the FAC, plaintiff infers that Kapadia approved Hourigan’s decision to 25 terminate him. He does so by alleging Kapadia attended his termination meeting and 26 alleging it was “common practice” for supervisors to consult higher level managers with 27 authority to approve terminations. Dkt. 16 ¶ 15. But these sparse allegations do not 1 Kapadia’s conduct was severe or pervasive or that Kapadia’s conduct contributed to a 2 hostile work environment. 3 Nonetheless, defendants have not met their burden of proving that plaintiff could 4 not possibly prevail on a harassment claim against Kapadia if given leave to amend. In 5 this respect, defendants note that Kapadia declares she only interacted with plaintiff on “a 6 handful of occasions” and that she was “100% certain” she “never made any comments” 7 regarding plaintiff’s age, race, color, ancestry, or national origin and “never engaged in 8 any conduct” related to plaintiff’s age, race, color, ancestry, or national origin that could 9 be interpreted as “meanness or bigotry.” Dkt. 4 (Kapadia Decl.) ¶¶ 5, 10–11. But a 10 declaration of this sort does not prove fraudulent joinder by clear and convincing 11 evidence. A “denial, even a sworn denial, of allegations does not prove their falsity.” 12 Grancare, LLC, 889 F.3d at 551. 13 Defendants also argue that Kapadia’s attendance in plaintiff’s termination hearing 14 qualifies as management activities, which are activities shielded from FEHA harassment 15 claims. True, generally harassment under FEHA consists of “conduct outside the scope 16 of necessary job performance, conduct presumably engaged in for personal gratification, 17 because of meanness or bigotry, or for other personal motives.” Hiraishi v. DeLeon, No. 18 2D CIV. B310395, 2022 WL 761930, at *3 (Cal. Ct. App. Mar. 14, 2022) (internal 19 quotation marks omitted); see Lawler v. Montblanc N. Am., LLC, 704 F.3d 1235, 1244 20 (9th Cir. 2013). But “some official employment actions done in furtherance of a 21 supervisor’s managerial role can also have a secondary effect of communicating a hostile 22 message.” Roby v. McKesson Corp., 47 Cal. 4th 686, 709 (2009). On this point, 23 defendants assert plaintiff fails to allege or show that Kapadia acted in a manner to 24 communicate a hostile message. First, the burden is on defendants, not plaintiff, to show 25 that it is not possible for plaintiff to amend his complaint to make such allegations. 26 Second, in his briefing, plaintiff states that Kapadia was directly involved in his 27 termination, that Kapadia ratified Hourigan’s decision to terminate him, and that Kapadia 1 American employees over the age of forty. See Dkt. 22 at 16; Dkt. 27 at 7–8. If alleged 2 in a subsequent complaint with other facts, plaintiff could possibly assert a claim against 3 Kapadia. This is particularly true in light of Kapadia’s alleged attendance of plaintiff’s 4 termination meeting, Hourigan’s declaration stating Kapadia was not involved in the 5 decision to terminate plaintiff, and Kapadia’s declaration stating she did not 6 communicate, or work with, asset protection managers like plaintiff as part of her day-to- 7 day duties. Dkt. 25-2 (Hourigan Decl.) ¶ 3; Dkt. 4 ¶ 3; see Lowe v. Michaels Stores, Inc., 8 No. 222CV00026SVWRAO, 2022 WL 558249, at *2 (C.D. Cal. Feb. 24, 2022) (noting 9 defendants did “not address the possibility that Plaintiff’s harassment may have occurred 10 outside the scope of the Manager Defendant’s necessary job performance”). 11 Accordingly, the court GRANTS plaintiff’s motion to remand. Because it lacks 12 subject matter jurisdiction, the court does not reach defendants’ motion to dismiss. 13 CONCLUSION 14 Based on the foregoing, defendants have failed to establish that the court has 15 subject matter jurisdiction over this action. Accordingly, plaintiff’s motion to remand is 16 GRANTED (Dkt. 22), and defendants’ motion to dismiss is TERMINATED (Dkt. 21). The 17 Clerk of Court is instructed to REMAND this case to San Mateo County Superior Court, 18 as case number 22-CIV-00385. 19 IT IS SO ORDERED. 20 Dated: June 27, 2022 21 /s/ Phyllis J. Hamilton

PHYLLIS J. HAMILTON

22 United States District Judge 23 24 25 26 27