Opinion
3:23-cv-01289-SB
12-28-2023
JOLENE TOLLEFSEN, Plaintiff, v. HOBBY LOBBY STORES, INC.; and ALEXA ENGEL, Defendants.
FINDINGS AND RECOMMENDATION
HON. STACIE F. BECKERMAN, UNITED STATES MAGISTRATE JUDGE.
This matter comes before the Court on Plaintiff Jolene Tollefsen's (“Tollefsen”) motion to remand this case to state court. (Pl.'s Mot. Remand (“Pl.'s Mot.”), ECF No. 6.) Tollefsen, a resident of Yamhill County, Oregon, filed this action against Hobby Lobby Stores, Inc. (“Hobby Lobby”), a corporation with its principal place of business in Oklahoma, and Hobby Lobby managerial employee Alexa Engel (“Engel”) (together, “Defendants”), a resident of Washington County, Oregon, alleging a negligence claim. (Compl. at 1-5, ECF No. 1-1.) The parties have not consented to the jurisdiction of a magistrate judge under 28 U.S.C. § 636.
For the reasons that follow, the Court recommends that the district judge grant Tollefsen's motion to remand.
BACKGROUND
Plaintiff originally filed this case in Washington County Circuit Court on August 7, 2023. (See Compl.) In her complaint, Tollefsen alleges that while she was shopping at Hobby Lobby, she was examining a wreath hanging on a hook when a glass shelf fell onto her foot and caused physical injuries. (Id. at 2.) Tollefsen alleges a single negligence claim against Hobby Lobby and Engel. (Id. at 2-3.)
On September 5, 2023, Defendants timely removed the case to this Court, asserting diversity jurisdiction under 28 U.S.C. § 1332, on the ground that Tollefsen fraudulently joined Engel, a non-diverse defendant. (Defs.' Notice Removal at 3-5, ECF No. 1.) On October 5, 2023, Tollefsen filed a motion to remand, arguing that she properly named Engel as a defendant and therefore this Court lacks diversity jurisdiction and must remand the case to state court. (Pl.'s Mot. at 1-6.)
DISCUSSION
I. LEGAL STANDARDS
A. Removal
“A defendant may remove an action to federal court based on federal question jurisdiction or diversity jurisdiction.” Hunter v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009) (citing 28 U.S.C. § 1441). However, “it is to be presumed that a cause lies outside the limited jurisdiction of the federal courts and the burden of establishing the contrary rests upon the party asserting jurisdiction.” Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676, 684 (9th Cir. 2006) (simplified). This “‘strong presumption against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper,' and that the [district] court resolves all ambiguity in favor of remand to state court.” Hunter, 582 F.3d at 1042 (quoting Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992)). Accordingly, “[f]ederal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance.” Gaus, 980 F.2d at 566 (citing Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979)). The Ninth Circuit has further held that “doubtful question[s] of state law . . . should be tried in the state court and not determined in removal proceedings.” Smith v. S. Pac. Co., 187 F.2d 397, 402 (9th Cir. 1951).
B. Fraudulent Joinder
“There are two ways to establish fraudulent joinder: ‘(1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against the non-diverse party in state court.'” Grancare, LLC v. Thrower, 889 F.3d 543, 548 (9th Cir. 2018) (quoting Hunter, 582 F.3d at 1044). Defendants rely on the second method of establishing fraudulent joinder here. (See Defs.' Notice Removal ¶ 16, asserting that Tollefsen fails to state a plausible claim for relief against Engel.)
“[T]he test for fraudulent joinder and for failure to state a claim under Rule 12(b)6) are not equivalent.” Grancare, 889 F.3d at 549. Rather, “[f]raudulent joinder is established the second way if a defendant shows that an ‘individual[ ] joined in the action cannot be liable on any theory.'” Id. at 548 (quoting Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1318 (9th Cir. 1998)). The Ninth Circuit has “emphasized . . . that a [district] court must find that a defendant was properly joined and remand the case to state court if there is a ‘possibility that a state court would find that the complaint states a cause of action against any of the [non-diverse] defendants.'” Id. at 549 (quoting Hunter, 582 F.3d at 1046); see also Ramirez v. Speltz, No. C 15-03538 WHA, 2015 WL 5882065, at *2 (N.D. Cal. Oct. 8, 2015) (“A mere ‘glimmer of hope' that the plaintiff could establish a claim is sufficient to defeat removal on the basis of fraudulent joinder.”) (citation omitted). Such a possibility exists when the plaintiff could cure a deficiency in the complaint by amendment. See Grancare, 889 F.3d at 550 (explaining that even if the plaintiff fails to state a claim against the non-diverse defendant, “the fraudulent [joinder] inquiry does not end there,” as “the district court must [also] consider . . . whether a deficiency in the complaint can possibly be cured by granting the plaintiff leave to amend”). The “relative stringency” of this “standard accords with the presumption against removal jurisdiction, under which [courts] ‘strictly construe the removal statute,' and reject federal jurisdiction ‘if there is any doubt as to the right of removal in the first instance.'” Id. (quoting Gaus, 980 F.2d at 566).
II. ANALYSIS
The parties dispute whether Tollefsen fraudulently joined Engel as a defendant and whether this Court lacks diversity jurisdiction. The Court concludes that Defendants have failed to meet their burden of demonstrating that Tollefsen fraudulently joined Engel, and therefore the Court lacks subject matter jurisdiction and the district judge should grant Tollefsen's motion to remand.
The parties agree that Tollefsen and Engel are residents of Oregon and therefore not diverse but dispute whether it is possible for Tollefsen to state a claim against Engel under Oregon law. Specifically, the parties disagree as to the viability of a business invitee's negligence claim against a store manager. Neither side cites to any controlling Oregon authority on this issue.
With respect to negligence claims under Oregon law, “unless the parties invoke a status, relationship, or a particular standard of conduct that creates, defines, or limits the defendant's duty, the issue of liability for harm actually resulting from defendant's conduct properly depends on whether that conduct unreasonably created a foreseeable risk to a protected interest of the kind of harm the befell the plaintiff.” Fazzolari v. Portland Sch. Dist., 734 P.2d 1326, 1336 (Or. 1987). Here, Tollefsen invokes premises liability and argues that Defendants had a duty to make the Hobby Lobby premises reasonably safe for her as a business invitee. (Compl. ¶¶ 7-9.) The question of potential liability here turns on whether premises liability under Oregon law extends beyond the owner of the business to a store manager.
Settled Oregon law recognizes a special relationship “between owners of land and persons whom they invite onto their premises.” Piazza v. Kellim, 354 P.3d 698, 705 (Or. App. 2015); Rex v. Albertson's, Inc., 792 P.2d 1248, 1249 (1990) (“Fazzolari did not supplant existing case law concerning premises liability. The obligations of a storekeeper to a customer create a ‘special relationship' that takes the claim out of the general standards of common law negligence.”) (en banc) (citations omitted). Under the business invitee rule, “it is the duty of the possessor of land to make premises reasonably safe for the invitee's visit” and “[t]he possessor must exercise that standard of care either to eliminate the condition creating that risk or to warn any foreseeable invitee of the risks so as to enable the invitee to avoid the harm.” Woolston v. Wells, 687 P.2d 144, 150-51 (Or. 1984) (en banc); Rich v. Tite-Knot Pine Mill, 421 P.2d 370, 374-75 (Or. 1966) (holding that “[a]n invitee is one who comes upon the premises upon business which concerns the occupier, with the occupier's invitation, expressed or implied” and “[t]he occupier not only has the duty to warn of latent dangers, but also has an affirmative duty to protect an invitee against those dangers in the condition of the premises of which he knows or should have known by the exercise of reasonable care”) (citation omitted); Walsh v. C & K Mkt., Inc., 16 P.3d 1179, 1183 (Or. App. 2000) (holding that “a store owner's invitation ordinarily extends to the public at large, because store owners want to encourage as many people as possible to view their goods and to become purchasers”); see also Hoffee v. Walmart, Inc., No. 3:18-cv-01497-AC, 2019 WL 6971039, at *2 (D. Or. Dec. 19, 2019) (“Beyond the ordinary duty of reasonable care, a ‘possessor of land' owes a business invitee a heightened duty of care: ‘to maintain the premises in a reasonably safe condition in order to protect the invitee from conditions that create an unreasonable risk of harm and to exercise that duty by either eliminating any such condition or warning of the risk to enable the invitee to avoid the harm.'” (quoting Ault v. Del Var Props., LLC, 383 P.3d 867, 870 (Or. App. 2016))) (simplified).
Defendants cite no authority suggesting that Oregon law would categorically foreclose store manager liability for negligence based on the circumstances present here. Cf. Revay v.Home Depot U.S.A., Inc., No. 2:14-cv-03391-RSWL-AS, 2015 WL 1285287, at *4 (C.D. Cal. Mar. 19, 2015) (“Defendants have not supplied the Court with any California authority supporting the contention that a corporate store manager is immune from liability merely because the corporation may be held vicariously liable for the manager's negligence. Defendants have failed to show by clear and convincing evidence that [the defendant store manager] is fraudulently joined.”) (footnote omitted). In the absence of any authority, the district judge could find that Defendants have failed to meet their heavy burden of demonstrating fraudulent joinder here. See, e.g., id.; see also Nieves v. Costco Wholesale Corp., No. 3:22-cv-00977-JD, 2022 WL 5199904, at *3 (N.D. Cal. Oct. 5, 2022) (“[T]he Court cannot conclude that there is no possibility that [the store manager] may be liable on the claims in the complaint. [Defendant] has not cited a case indicating that California law would categorically foreclose store-manager liability under the circumstances presented here. Consequently, [Defendant] has not met its heavy burden to show that [the store manager] was fraudulently joined as a defendant.”).
Setting aside Defendants' burden, there does not appear to be any Oregon authority directly on point with respect to premises liability of retail store managers. However, Oregon law generally supports premises liability against individuals acting on behalf of a business owner who cause harm to others on the business premises.
In Bryant v. Sherm's Thunderbird Market, 522 P.2d 1383 (Or. 1974), a supermarket customer fell in a trench dug for refrigeration lines in a store aisle and sued both the supermarket owner and the contractor that dug the trench. In evaluating the premises liability of the contractor, the Oregon Supreme Court applied Restatement of Torts 2d § 383, which it “believe[d] to be the correct rule” for individuals who act on behalf of a business owner: “One who does an act or carries on an activity upon land on behalf of the possessor is subject to the same liability, and enjoys the same freedom from liability, for physical harm caused thereby to others upon and outside of the land as though he were possessor of the land.” Bryant, 522 P.2d at 1386 (quoting Restatement of Torts 2d § 383 (1965)); see also Restatement of Torts 2d § 383 (1965), Aug. 2023 Update (same).
“Although, as the Supreme Court has stated, the Restatements are not necessarily authoritative, they provide useful guidance regarding the duty imposed as the result of a special relationship or status, and both th[e Oregon Court of Appeals] and the Supreme Court have consistently turned to them for that purpose[.]” Stewart v. Kids, Inc. of Dall., Or., 261 P.3d 1272, 1279 (Or. App. 2011) (“We see no reason to depart from that practice here. Thus, we conclude that Restatement (Second) of Torts section 344 and comment f state an appropriate rule with respect to a business's liability for physical harm to its business visitors caused by the criminal act of a third party[.]”) (citations omitted).
In Bryant, the Oregon Supreme Court held that the duty of an individual acting on behalf of a business owner “includes the duty of the owner of a self-service store to keep passageways used by customers in a reasonably safe condition for customers whose attention may be diverted.” Bryant, 522 P.2d at 1386 (citing Miller v. Safeway Stores, 219 Or. 139, 153 (1959)). The Supreme Court concluded that a contractor performing work on behalf of the store owner “shared responsibility” with the owner to keep the premises safe for customers as though it was the possessor of the land. Id. The Supreme Court remanded the case for a jury to decide whether the contractor's “employees did or did not properly replace th[e] covering over the trench at the place where the accident occurred and whether, if they did not do so, the trench and its covering continued in that condition until the time of the accident two days later.” Id. at 597.
Defendants argue that Tollefsen has failed to state a claim against Engel because the complaint “makes only general allegations of negligence against Engel, without sufficient detail to state any viable claim.” (Defs.' Opp'n Pl.'s Mot. Remand at 6, ECF No. 8.) However, the Ninth Circuit has clearly held that courts must evaluate the possible viability of a claim against the non-diverse defendant when evaluating fraudulent joinder, and that pleading deficiencies alone do not establish fraudulent joinder. See Grancare, 889 F.3d at 552 (“[Defendant] argues that [Plaintiffs] erred in ‘lumping' [the non-diverse defendant] with other defendants by alleging misconduct against all defendants collectively, that [Plaintiffs] did not plead their claims with sufficient particularity, and that [Plaintiffs] did not sufficiently allege negligence. Because these arguments go to the sufficiency of the complaint, rather than to the possible viability of [Plaintiffs'] claims against [the non-diverse defendant], they do not establish fraudulent joinder.”); Garey v. Abbott Labs., No. 19-cv-7777-DSF (SKX), 2019 WL 6875342, at *5 (C.D. Cal. Dec. 16, 2019) (“The Court recognizes that the Complaint as it stands provides minimal factual allegations linking the alleged negligence to [the plaintiff's] death. However, ‘[b]ecause these arguments go to the sufficiency of the complaint, rather than to the possible viability of the [plaintiff's] claims . . . they do not establish fraudulent joinder.'” (quoting Grancare, 889 F.3d at 552)).
In her complaint, Tollefsen alleges that Engel managed the Hobby Lobby store at issue, failed to secure the glass shelf at issue, failed to discover that the glass shelf posed a hazard to invitees, failed to take reasonable steps to remedy the potential hazard that the glass shelf posed to invitees, placed the glass shelf in an unsafe location, failed to remove the glass shelf from its unsafe location, and failed to warn Tollefsen of the presence of the glass shelf. (Compl. ¶¶ 3, 810.) Based on these facts and the Oregon authorities discussed above, the Court finds that it is possible for Tollefsen to state a negligence claim against Engel on a premises liability theory based on allegations that Engel was acting on behalf of Hobby Lobby as its manager and failed to maintain the premises in a reasonably safe condition or warn invitees of the risk. See Grancare, 889 F.3d at 551 (“[Defendant] has not demonstrated that there is no possibility that Plaintiffs could prevail against [the non-diverse defendant].”); see also Hagler v. Coastal Farm Holdings, Inc., 309 P.3d 1073, 1081-82 (Or. 2013) (“The likelihood that a particular display will cause harm to others will depend on the circumstances of each case-among them, the nature of the goods and the manner in which they are shelved. To the extent that [prior case law] suggests a hard-and-fast rule that there can be no claim for negligent display of merchandise, the suggestion conflicts with the general rule of landowner liability that we have described, and we disavow it.”).
In light of the Court's conclusion that Tollefsen can state a negligence claim against Engel under Oregon law, it does not address the cases on which Defendants rely applying the laws of other states.
Further, even if Oregon courts would not extend premises liability to store managers consistent with Restatement of Torts 2d § 383 and therefore Engel owed no special duty to Tollefsen under Oregon law, it is nevertheless possible that Tollefsen could state an ordinary negligence claim against Engel based on allegations that Engel's placement of the glass shelf in an unsafe manner or location created a foreseeable risk of harm to store customers. See Fazzolari, 734 P.2d at 1336 (“[U]nless the parties invoke a status, relationship, or a particular standard of conduct that creates, defines, or limits the defendant's duty, the issue of liability for harm actually resulting from defendant's conduct properly depends on whether that conduct unreasonably created a foreseeable risk to a protected interest of the kind of harm the befell the plaintiff.”); Towe v. Sacagawea, Inc., 347 P.3d 766, 775 (Or. 2015) (“[W]hen asserting an ordinary negligence claim, a plaintiff does not need to prove that the defendant owed the plaintiff a duty, because-as a general proposition-everyone owes each other the duty to act reasonably in light of foreseeable risks of harm.”).
For these reasons, the Court finds that it is possible for Tollefsen to state a claim against Engel and therefore Tollefsen did not fraudulently join Engel as a defendant, this Court lacks subject matter jurisdiction because Engel is a non-diverse forum defendant, and the district judge should grant Tollefsen's motion to remand this case to state court.
III. ATTORNEY'S FEES
Tollefsen moves for an award of attorney's fees. (Pl.'s Mot. at 6.) The Court recommends that the district judge deny Tollefsen's request.
A. Legal Standards
“An order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal.” 28 U.S.C. § 1447(c). “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.” Martin v. FranklinCap. Corp., 546 U.S. 132, 141 (2005); Grancare, 889 F.3d at 552 (“Costs and attorney's fees may be awarded . . . if its decision to remove was objectively unreasonable. Absent unusual circumstances, a court may award costs and attorney's fees under § 1447(c) only where the removing party lacked an objectively reasonable basis for seeking removal.” (citing Martin, 546 U.S. at 141)).
“[R]emoval is not objectively unreasonable solely because the removing party's arguments lack merit[.]” Lussier v. Dollar Tree Stores, Inc., 518 F.3d 1062, 1065 (9th Cir. 2008) (finding that removal is not objectively unreasonable “solely because the removing party's arguments lack merit, or else attorney's fees would always be awarded whenever remand is granted”); see also Burkholder v. Asbestos Claim Mgmt. Corp., No. 07-cv-781-BR, 2007 WL 2463307, at *5 (D. Or. Aug. 28, 2007) (explaining that a court's granting of a motion to remand does not mean the action was removed “without an objectively reasonable basis”). Further, “[r]emoval is not objectively reasonable when relevant case law at the time clearly forecloses the removing party's asserted basis for removal.” Powell v. Healy, No. 21-55477, 2022 WL 4181717, at *1 (9th Cir. Sept. 13, 2022) (citing Lussier, 518 F.3d at 1066).
B. Analysis
Defendants removed this case on the ground that Oregon law does not support a negligence claim against Engel based on her role as a store manager. (Defs.' Notice Removal ¶¶ 15-16.) As discussed above, there does not appear to be any Oregon case law squarely addressing the viability of Tollefsen's negligence claim against Engel based on a theory of premises liability. In the absence of any on-point case law, the Court finds that Defendants had an objectively reasonable basis for removal, and the Court recommends that the district judge deny Tollefsen's request for a fee award. See, e.g., Castillo v. Tamara Mellon Brand, Inc., No. CV 19-10466-GW-MRWx, 2020 WL 703693, at *3 (C.D. Cal. Feb. 10, 2020) (denying fee award because removal was not objectively unreasonable “in the absence of binding precedent”); Holloway v. Gilead Scis., Inc., No. 16-cv-02320-VC, 2016 WL 3526060, at *2 (N.D. Cal. June 23, 2016) (holding that the defendants did not lack an objectively reasonable basis for removal in “the absence of directly on-point case law in this circuit”).
CONCLUSION
For the reasons stated, the Court recommends that the district judge GRANT Tollefsen's motion to remand (ECF No. 6), and remand this action to Washington County Circuit Court.
SCHEDULING ORDER
The Court will refer its Findings and Recommendation to a district judge. Objections, if any, are due within fourteen (14) days. If no objections are filed, the Findings and Recommendation will go under advisement on that date. If objections are filed, a response is due within fourteen (14) days. When the response is due or filed, whichever date is earlier, the Findings and Recommendation will go under advisement.