Adriana Rubalcaba v. Arthur J. Gallagher & Co., 2:19-cv-04972

Plaintiff Adriana Rubalcaba sued Arthur Gallagher & Co. and California citizen supervisor Alexandra Glickman in Los Angeles Superior Court alleging FEHA disability harassment, aiding/abetting, and emotional distress claims related to her termination.
Arthur Gallagher (Delaware and Illinois citizen) removed the case to federal court based on diversity jurisdiction, asserting Glickman was a sham (fraudulently joined) defendant whose citizenship should be ignored.
It is undisputed both Rubalcaba and Glickman are California citizens; removal therefore depended on proving fraudulent joinder.
The pivotal dispute concerned whether Rubalcaba exhausted administrative remedies under FEHA as to Glickman: she received a right-to-sue letter on April 4, 2019 and worked through May 2, 2018, and alleges communications with Glickman while on medical leave that could fall within the one-year DFEH filing window.
The Court applied the heavy burden on defendants to prove fraudulent joinder, resolving all ambiguities and factual disputes in the plaintiff’s favor.
The Court remanded the case to state court, finding defendants did not show there was no possibility Rubalcaba could prevail against Glickman; attorneys’ fees were denied because removal was not objectively unreasonable.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether removal is proper given alleged fraudulent joinder of in-state defendant	Rubalcaba argues exhaustion may be satisfied as alleged communications with Glickman occurred within the DFEH one-year window	Arthur Gallagher contends Glickman was fraudulently joined and FEHA claims against her are time-barred, destroying diversity	Court held removal improper; defendants failed to prove fraudulent joinder
Whether FEHA claim against Glickman is time-barred (exhaustion)	Claims may be timely because plaintiff worked and allegedly communicated with Glickman during the DFEH window after right-to-sue letter	Defendants say alleged unlawful conduct falls outside the one-year administrative period	Court found it possible plaintiff exhausted administrative remedies as to Glickman, so time-bar defense insufficient at pleading stage
Standard and burden for proving fraudulent joinder	Rubalcaba emphasizes doubts resolved in plaintiff’s favor and leave to amend should be allowed	Defendants must prove by clear and convincing evidence no possibility plaintiff could prevail and that amendment would be futile	Court reiterated defendants bear heavy burden; they did not meet it
Award of attorneys’ fees for improper removal	Rubalcaba requested fees under 28 U.S.C. § 1447(c)	Defendants argued removal was reasonable given disputed facts	Court denied fees because removal was not objectively unreasonable despite remand

Gunn v. Minton, 568 U.S. 251 (2013) (federal courts have limited jurisdiction)
City of Chicago v. Int’l Coll. of Surgeons, 522 U.S. 156 (1997) (propriety of removal depends on whether case could have been filed in federal court)
Hunter v. Philip Morris USA, 582 F.3d 1039 (9th Cir. 2009) (court may ignore fraudulently joined defendant for jurisdictional purposes)
Hamilton Materials, Inc. v. Dow Chem. Co., 494 F.3d 1203 (9th Cir. 2007) (fraudulent joinder must be proven by clear and convincing evidence)
Martin v. Franklin Capital Corp., 546 U.S. 132 (2005) (attorney’s fees under § 1447(c) limited to situations where removal lacked an objectively reasonable basis)
Romano v. Rockwell Int’l, Inc., 14 Cal.4th 479 (1996) (failure to exhaust FEHA administrative remedies deprives court of jurisdiction)