Farwana v. Tesla, Inc.
5:24-cv-07518
N.D. Cal.Apr 14, 2025Background
- Plaintiff Ghazi Farwana sued Tesla, Inc. in California state court for workplace discrimination, retaliation, wrongful termination, and related state law claims stemming from his termination after requests for reasonable disability accommodations.
- Tesla removed the case to federal court based on diversity jurisdiction.
- Farwana sought leave to amend to join his supervisor, Xinye Bai (a likely California citizen), as an individual defendant, and to add a new California Fair Employment and Housing Act (FEHA) claim for harassment/hostile work environment.
- Granting the amendment would destroy diversity, potentially requiring remand to state court.
- Tesla filed a competing motion to compel arbitration and stay the litigation, asserting an arbitration agreement applied.
- The court considered which motion to address first and whether amendment to add Bai was proper under 28 U.S.C. § 1447(e).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standard for amendment to add non-diverse defendant post-removal | § 1447(e) applies; factors favor amendment | Rule 15 or more restrictive standard should apply | § 1447(e) is the proper standard |
| Whether to grant leave to amend to join Bai | Necessary for complete relief and judicial efficiency | Solely intended to defeat diversity; not necessary | Leave to amend is granted; Bai is a necessary party |
| Whether amendment is in bad faith to defeat jurisdiction | Amendment is made in good faith, not solely to defeat jurisdiction | Amendment is a tactic to defeat federal jurisdiction | No bad faith; purpose of amendment is not solely to defeat federal jurisdiction |
| Whether to decide arbitration or amendment motion first | Amendment and jurisdiction should be considered first | Arbitration should be considered first | Amendment motion considered first; arbitration motion deferred |
Key Cases Cited
- Stevens v. Brink’s Home Sec., Inc., 378 F.3d 944 (9th Cir. 2004) (court must either deny joinder of non-diverse defendant or permit joinder and remand to state court)
- Kanter v. Warner-Lambert Co., 265 F.3d 853 (9th Cir. 2001) (citizenship for diversity purposes is determined by domicile)
- Leeson v. Transamerica Disability Income Plan, 671 F.3d 969 (9th Cir. 2012) (federal courts have ongoing obligation to ensure subject matter jurisdiction)
- Lawler v. Montblanc N. Am., LLC, 704 F.3d 1235 (9th Cir. 2013) (elements for FEHA harassment/hostile work environment claim)