Hector Acuna v. Well Fargo Bank, N.A
2:17-cv-07448
C.D. Cal.Oct 13, 2017Background
- Plaintiff Hector Acuña sued Wells Fargo and employee Hassan Reheem in Los Angeles Superior Court alleging race discrimination (FEHA), violation of public policy, retaliation, and intentional infliction of emotional distress (IIED).
- Wells Fargo removed the case to federal court asserting diversity jurisdiction and claiming Wells Fargo is a South Dakota citizen and Reheem is a sham (fraudulently joined) defendant.
- Complaint pleads residence for both Acuña and Reheem (Los Angeles/California) but does not expressly plead domicile/citizenship.
- Wells Fargo argued removal was proper because Acuña is a California domiciliary (inferred from residence) and Reheem’s IIED claim is barred by California workers’ compensation exclusivity, making Reheem a sham.
- The court evaluated whether Wells Fargo met its burden to establish complete diversity and whether Reheem was fraudulently joined, resolving doubts in favor of the nonremoving party.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff’s citizenship is established for diversity | Complaint alleges Acuña is a California resident; that is sufficient | Wells Fargo contends residence establishes domicile and thus California citizenship | Held: Complaint alleges only residence; Wells Fargo failed to establish Acuña’s citizenship — removal allegation insufficient |
| Whether co-defendant Reheem is fraudulently joined (to be disregarded for diversity) | Reheem is a California resident and IIED claim against him may be viable under exceptions to workers’ comp exclusivity | Wells Fargo argues IIED claim is barred by workers’ compensation and lacks factual support as to an individual manager, so joinder is fraudulent | Held: Wells Fargo failed its heavy burden; there is a non‑fanciful possibility Acuña may state IIED against Reheem (exceptions exist); Reheem not fraudulently joined |
| Whether IIED allegation is preempted by workers’ compensation exclusivity | IIED may fall outside exclusivity when conduct contravenes fundamental public policy or exceeds employment risks | Wells Fargo argues Miklosy preempts IIED so claim cannot proceed against a co‑employee | Held: Court found exceptions may apply and Wells Fargo did not address all exceptions; preemption not established at removal stage |
| Whether federal subject‑matter jurisdiction exists | Acuña’s and Reheem’s California citizenship would defeat diversity, so remand requested | Wells Fargo seeks to retain federal jurisdiction by establishing diversity and fraudulent joinder | Held: Because Wells Fargo did not establish citizenship of parties or fraudulent joinder, federal jurisdiction not shown; case remanded to state court |
Key Cases Cited
- Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (1994) (federal courts are courts of limited jurisdiction)
- Prize Frize, Inc. v. Matrix (U.S.) Inc., 167 F.3d 1261 (9th Cir. 1999) (removal statute strictly construed against removal)
- Gaus v. Miles, Inc., 980 F.2d 564 (9th Cir. 1992) (doubts about right of removal resolved against federal jurisdiction)
- Kantor v. Wellesley Galleries, Ltd., 704 F.2d 1088 (9th Cir. 1983) (citizenship requires domicile)
- Kanter v. Warner-Lambert Co., 265 F.3d 853 (9th Cir. 2001) (residence is not necessarily domicile for diversity purposes)
- Morris v. Princess Cruises, Inc., 236 F.3d 1061 (9th Cir. 2001) (fraudulent joinder doctrine explained)
- McCabe v. Gen. Foods Corp., 811 F.2d 1336 (9th Cir. 1987) (joinder is fraudulent where plaintiff fails to state a cause of action against resident defendant)
- Plute v. Roadway Package Sys., Inc., 141 F. Supp. 2d 1005 (N.D. Cal. 2001) (heavy burden on defendant asserting fraudulent joinder)
- Miklosy v. Regents of Univ. of Cal., 188 P.3d 629 (Cal. 2008) (workers’ compensation exclusivity and its exceptions for public policy and conduct beyond employment risks)