Opinion
2:24-cv-01434-WLH-KS
05-17-2024
SASHA MINERVA CANU MIRANDA, Plaintiff, v. CATCH OF LA OPERATING COMPANY LLC, a Delaware Corporation; and DOES 1 through 50; inclusive, Defendants.
ORDER DENYING PLAINTIFF'S MOTION FOR REMAND AND GRANTING LEAVE TO AMEND DEFENDANT'S NOTICE OF REMOVAL [15]
Hon. Wesley L. Hsu, United States District Judge
This matter comes before the Court on Plaintiff Sasha Minerva Canu Miranda's (“Plaintiff”) Motion to Remand (the “Motion”). (Mot. to Remand, Docket No. 15). Defendant Catch of LA Operating Company, LLC (“Defendant”) filed its Opposition to Plaintiff's Motion (the “Opposition”). (Opp'n., Docket No. 17). Plaintiff subsequently filed her Reply in Support of the Motion (the “Reply”). (Reply, Docket No. 18). This matter is fully briefed.
On May 17, 2024, the Court held a hearing and heard oral arguments from both parties.
For the reasons discussed below, the Court DENIES Plaintiff's Motion without prejudice and GRANTS Defendant leave to amend its Notice of Removal.
I. BACKGROUND
A. Procedural Background
On January 19, 2024, Plaintiff filed this action in Los Angeles County Superior Court (“LASC”) against Defendant and Does 1 through 10. (Parker Decl., Compl., Docket No. 3-1, Exh. 1). The Complaint alleges the following causes of action for various state law claims related to Plaintiff's alleged wrongful termination: (1) disability discrimination in violation of California Government Code § 12940, et seq; (2) failure to provide reasonable accommodation under California Government Code § 12940, et seq; (3) failure to engage in good faith interactive process under California Government Code § 12940, et seq; (4) retaliation in violation of California Government Code § 12940, et seq; and (5) wrongful termination in violation of public policy. (See generally id.).
On February 21, 2024, Defendant removed the case invoking this Court's diversity jurisdiction pursuant to 28 U.S.C. § 1332. (See Not. of Removal (“NOR”), Docket No. 1). Based on Defendant's state of incorporation and principal place of business Defendant alleged that it is a foreign corporation headquartered in either “Houston, Texas or New York City, New York” for purposes of diversity jurisdiction. (Id. ¶ 13).
On March 28, 2024, Plaintiff filed the instant Motion seeking to remand this matter to LASC. (Docket No. 15). Plaintiff also seeks attorneys' fees in the amount of $10,125 for work related to the instant Motion. (Decl. of Joshua M. Mohrsaz (“Mohrsaz Decl.”), Docket No. 15-1 ¶ 9). Defendant filed its Opposition on April 26, 2024. (Docket No. 17). Subsequently, on May 1, 2024, Plaintiff filed her Reply. (Docket No. 18).
B. Factual Background
Plaintiff is a resident of California who was formerly employed by Defendant in Los Angeles County as a dishwasher from March 5, 2020, until on or about May 2021. (Docket No. 3-1 ¶ 1). Defendant is a limited liability company incorporated in Delaware. (Id. ¶ 2). The parties dispute Defendant's citizenship for purposes of jurisdiction. According to Plaintiff, a review of the California Secretary of State records indicates that Defendant's sole member and manager is an entity named Top Shelf, LLC. (Mohrsaz Decl., Exh. B). Plaintiff further contends that a review of the California Secretary of State records for the entity Top Shelf, LLC shows that its members are Angelo and Kathleen Orciuoli, who are both citizens of Palo Alto, California. (Id., Exh. C). Conversely, Defendant contends that its members consist of a chain of eight entities--seven limited liability corporations and one corporation- starting with Top Shelf, LLC, a New York limited liability company and ending with a Texas corporation called Fertitta Entertainment, Inc., with a principal place of business in Texas. (Decl. of Dashiell Kohlhausen (“Kohlhausen Decl.”), Docket No. 17-2 ¶¶ 3-12). Defendant thus claims that it is a citizen of Texas for jurisdiction purposes.
There appears to be a discrepancy regarding Plaintiff's last date of employment with Defendant. While the Complaint alleges that Plaintiff's last date of employment with Defendant was in May 2021, the NOR and attached declarations state that Plaintiff's last date of employment was April 14, 2022. (Compare Compl., Docket No. 3-1 ¶ 1 with NOR, Docket No. 1 ¶ 22). Because this is not relevant to the Court's analysis in the instant Motion, the Court will ignore this discrepancy.
II. LEGAL STANDARD
A defendant may remove an action from state court to federal court if the plaintiff could have originally filed the action in federal court. See 28 U.S.C. § 1441(a). Under 28 U.S.C. § 1332, a district court has original jurisdiction over a civil action where (1) the amount in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and (2) the dispute is between “citizens of different States.” Id.
Courts strictly construe the removal statutes, rejecting removal jurisdiction in favor of remand to the state court if any doubts as to the right of removal exist. Nevada v. Bank of Am. Corp., 672 F.3d 661, 667 (9th Cir. 2012). The party seeking removal bears the burden of establishing federal jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). “If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c).
III. DISCUSSION
A. Diversity of Citizenship
Plaintiff challenges the removal of this matter on the sole ground that Defendant has not established diversity of citizenship between the parties. Plaintiff first argues that Defendant applied the wrong standard in its NOR to determine the diversity of the parties. Next, Plaintiff brings a factual challenge to Defendant's citizenship and argues that based on a review of California Secretary of State documents, Defendant is in fact a California resident. The Court addresses both arguments in turn.
i. Establishing Diversity of Citizenship
Plaintiff argues that Defendant's NOR erroneously applied the standard for determining citizenship of corporations, and not limited liability corporations. For purposes of diversity jurisdiction, a corporation's principal place of business is defined as the place “where a corporation's officers direct, control, and coordinate the corporation's activities,” i.e., “the corporation's ‘nerve center.'” Hertz Corp. v. Friend, 559 U.S. 77, 92-93 (2010); see also Harris v. Rand, 682 F.3d 846, 851 (9th Cir. 2012) (“[A] principal place of business ‘should normally be the place where the corporation maintains its headquarters-provided that the headquarters is the actual center of direction, control, and coordination...”) (quoting Hertz, 559 U.S. at 92). Conversely, limited liability corporations are treated “like a partnership,” and as such are “citizen[s] of every state of which its owners/members are citizens.” Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894 (9th Cir. 2006).
Here, Defendant is alleged to be a limited liability corporation. Plaintiff is correct in that Defendant's NOR erroneously applies the standard for determining citizenship of corporations and alleges that jurisdictional diversity exists because Defendant was incorporated in Delaware and its principal place of business is in Texas. (Docket No. 1 ¶¶ 13-14). As such, the Court finds that Defendant failed to apply the appropriate standard, which would have required analyzing the citizenship of each of the limited liability corporation's members.
The Court's analysis does not end here, however. A court may also consider supplemental evidence proffered by a removing defendant, which was not originally included in the NOR. Cohn v. Petsmart, Inc., 281 F.3d 837, 840 n.1 (9th Cir. 2002). Defendant's Opposition seeks to remedy the above-identified deficiency by providing a declaration from Dashiell Kohlhausen, deputy general counsel to Fertitta Entertainment, LLC-an entity affiliated with Defendant-attesting to Defendant's corporate structure. (Kohlhausen Decl., Docket No. 17-2 ¶ 3). Specifically, the declaration explains that Defendant's corporate structure is comprised of a series of related entities including seven limited liability corporations and one corporation starting with Top Shelf, LLC, a New York limited liability company and ending with a Texas corporation called Fertitta Entertainment, Inc. (Id. ¶¶ 3-12). Defendant further alleges that because Fertitta Entertainment, LLC. is incorporated in Texas and has a principal place of business in Texas, for diversity purposes, Defendant is a Texas corporation. (Id. at 5).
ii. Plaintiff's Factual Challenge
Plaintiff presents a factual challenge to Defendant's purported foreign citizenship by submitting a declaration from its counsel, Joshua M. Mohrsaz, containing California Secretary of State filings, which indicate that Defendant is in fact a California citizen. (Mohrsaz Decl. ¶ 5, Exhs. B-C). The document states that Defendant's sole manager or member is an entity called Top Shelf Holdings, LLC. (Id.). Plaintiff also provides a second Statement of Intention filing from the California Secretary of State for an entity called Top Shelf Holdings, LLC, which states that its sole members are two individuals located in Palo Alto, California. (Id., Exh. C). Based on these two filings, Plaintiff argues that Defendant is in fact a California citizen and thus lacks diversity of citizenship. Plaintiff's attempt to rebut Defendant's claimed foreign citizenship contains flawed logic and is unsupported by the record. Plaintiff assumes, without any support, that the California Secretary of State filing for the entity Top Shelf Holding, LLC is the same entity as the Top Shelf Holding, LLC entity listed in Defendant's filings. The filing for Defendant's company, however, lists on its Statement of Information that Top Shelf Holdings, LLC has an address located in Texas, which is consistent with Defendant's contention that the ultimate member for Top Shelf Holdings, LLC is Fertitta Entertainment, a Texas corporation. (Docket No. 15-1, Exh. B).
Plaintiff improperly seeks to admit extrinsic evidence-i.e., the California Secretary of State filings-without first requesting judicial notice of these documents. Despite this misstep, the Court will sua sponte take judicial notice of these documents as the documents are purportedly from the California Secretary of State's website, which is a government publication, part of the public record, and not subject to reasonable dispute. See e.g. L'Garde, Inc. v. Raytheon Space & Airborne Sys., 805 F.Supp.2d 932, 938 (C.D. Cal. 2011) (“[T]he accuracy of the results of records searches from the Secretary of State for the State of California corporate search website can be determined by readily accessible resources whose accuracy cannot reasonably be questioned.”). Further, Defendant does not directly dispute the accuracy of these records.
“When the plaintiffs' motion to remand raises a factual challenge by ‘contesting] the truth of the [remover's] factual allegations, usually by introducing evidence outside the pleadings,' however, the remover ‘must support her jurisdictional allegations with ‘competent proof' ... under the same evidentiary standard that governs in the summary judgment context.'” DeFiore v. SOCLLC, 85 F.4th 546, 552-53 (9th Cir. 2023) (citing Leite v. Crane Co., 749 F.3d 1117, 1121-22 (9th Cir. 2014)). Rule 56, which governs motions for summary judgment provides that “[a]n affidavit or declaration used to support or oppose a motion [for summary judgment] must be made on personal knowledge [and] set out facts that would be admissible in evidence....” Fed. R. Civ. P. 56(c)(4).
Here, Defendant's declaration constitutes competent proof as it is a declaration from corporate counsel for an entity that controls Defendant, made under oath and based on the individual's personal knowledge of Defendant's affiliated entity's corporate structure and filings. See, e.g. Morse v. G4S Secure Sols. (USA), Inc., No. 21-CV-413-CAB-BLM, 2021 WL 1625160, at *1 (S.D. Cal. Apr. 27, 2021) (finding that a declaration from a human resources director stating that a defendant's headquarters is in Jupiter, Florida was competent proof); see also Petropolous v. FCA US, LLC, No. 17-CV-0398 W (KSC), 2017 WL 2889303, at *3 (S.D. Cal. July 7, 2017) (finding that a declaration from a senior in-house counsel regarding the corporate structure of a parent company had sufficient foundation as the attorney “knows under which laws his employer's sole member was incorporated” and was not hearsay).
Plaintiff objects to Defendant's declaration as inadmissible hearsay and improper under California Rule of Evidence § 412. (Docket No. 18 at 3). The Court overrules Plaintiff's objections. Pursuant to the Federal Rules of Evidence 801(c), hearsay “means a statement that: (1) the declarant does not make while testifying at the current trial or hearing; and (2) a party offers in evidence to prove the truth of the matter asserted in the statement.” Mr. Kohlhausen's statements regarding Defendant's company structure are not hearsay and are instead based on personal knowledge gained through Mr. Kohlhausen's role as deputy general counsel. (Kohlhausen Decl. ¶ 2). The declaration explains that due to his position, Mr. Kohlhausen has “knowledge of [Defendant] and its affiliated entities corporate structure and fillings [sic].” (Id.). As to Plaintiffs objection under Cal. R. of Evid. § 412, the Court finds this unavailing. Plaintiff fails to explain why California's evidentiary rules apply in the instant matter. Notably, even at this phase of the proceedings, evidence that is not “presented in an admissible form in the context of a motion for summary judgment... but may be presented in an admissible form at trial, a court may still consider that evidence.” Fraser v. Goodale, 342 F.3d 1032, 1037 (9th Cir. 2003). Accordingly, the Court DENIES Plaintiff's Motion because Defendant has provided competent evidence to establish that diversity of citizenship between the parties exists.
As to Cal. Evid. Code § 412, Plaintiff argues that Defendant's failure to provide any evidence to rebut Plaintiff's claims presumes that Defendant lacks any evidence to support its claims. Specifically, Cal. Evid. Code § 412 states, “[i]f weaker and less satisfactory evidence is offered when it was within the power of the party to produce stronger and more satisfactory evidence, the evidence offered should be viewed with distrust.” Notably, Defendant did not provide any other evidence of Defendant's corporate structure including the articles of incorporation or other filings, which would have aided in Defendant's jurisdictional allegations. Nevertheless, the Court finds that Mr. Kohlhausen's declaration is sufficient to establish jurisdiction for the instant Motion.
B. Amendment of NOR
While Defendant did apply the wrong standard in its NOR, Defendant argues that the proper remedy is not remand, but rather an amendment of its NOR. (Id. at 6). Plaintiff argues that Defendant should not be granted leave to amend its NOR to remedy this defect because it would allow Defendant to impermissibly change the entire basis of Defendant's diversity jurisdiction allegations. (Docket No. 18 at 6-7). Pursuant to 28 U.S.C. § 1446, a removing defendant may freely amend a notice of removal before the expiration of the initial thirty-day period. See, e.g. Smiley v. Citibank (S.Dakota), N .A., 863 F.Supp. 1156, 1158 (C.D.Cal.1993). “After the first thirty days, however, the cases indicate that the petition may be amended only to set out more specifically grounds for removal that already have been stated, albeit imperfectly, in the original petition; new grounds may not be added and missing allegations may not be furnished.” Id. at 1159 (citing 14A C. Wright, A. Miller, E. Cooper, Federal Practice & Procedure § 3733 (2d ed.1985)). “The majority of courts, for example, allow defendants to amend ‘defective allegations of jurisdiction' in their notice as long as the initial notice of removal was timely filed and sets forth the same legal grounds for removal.” Id. (citing Barrow Dev. Co. v. Fulton Ins. Co., 418 F.2d 316, 318 (9th Cir.1969) (permitting amendment of removal petition to cure inadequate allegation of the citizenship of the defendant corporation)).
Here, Defendant timely removed this matter based on diversity jurisdiction but misstated the citizenship of all of its members consistent with Ninth Circuit requirements for diversity jurisdiction involving limited liability corporations. Several cases in this district have similarly permitted defendants to amend their removal allegations to cure similar defects. See, e.g., Luehrs v. Utah Home Fire Ins. Co., 450 F.2d 452, 454 (9th Cir. 1971) (granting leave to amend removal petition, where defendant corporation removed on the basis of diversity jurisdiction, but failed to state plaintiff's state of citizenship and principal place of business); Barrow Dev., 418 F.2d at 318 (allowing amendment where defendant corporation removed on the basis of diversity jurisdiction and merely stated that it was a citizen of New York, rather than disclosing its state of incorporation and principal place of business); London v. Standard Oil Co. of California, 417 F.2d 820, 822 (9th Cir. 1969) (permitting amendment of removal petition to cure inadequate allegation of the citizenship of the defendant corporation). Accordingly, the Court GRANTS Defendant leave to amend its NOR.
C. Attorneys' Fees
In conjunction with his Motion for Remand, Plaintiff seeks attorneys' fees pursuant to 28 U.S.C. § 1447(c). Under 28 U.S.C. § 1447(c), “[a]n order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal.” “Absent unusual circumstances, courts may award attorney's fees under § 1447(c) only where the removing party lacked an objectively reasonable basis for seeking removal. Conversely, when an objectively reasonable basis exists, fees should be denied.” Martin v. Franklin Capital Corp., 546 U.S. 132, 141, 126 S.Ct. 704, 163 L.Ed.2d 547 (2005). Here, the Court has denied Plaintiff's Motion, so it must deny Plaintiff's attorney's fees request as well. Cf. Johnson v. Wells Fargo & Co., No. CV 14-06708 MMM JCX, 2014 WL 6475128, at *13 (C.D. Cal. Nov. 19, 2014) (“Removal is not objectively unreasonable solely because the removing party's arguments lack merit and the removal is ultimately unsuccessful.”) (internal quotation marks and citations omitted). Accordingly, the Court DENIES Plaintiff's request for attorneys' fees.
IV. CONCLUSION
For the foregoing reasons, the Court DENIES Plaintiff's Motion without prejudice and GRANTS leaveforDefendanttoamenditsNOR.
IT IS SO ORDERED.