Uriel Arauz Masis v. Tire's Warehouse, LLC, 5:21-cv-01077

Plaintiff Uriel Arauz Masis sued Tire’s Warehouse, U.S. Autoforce, LLC, and Richard Wright in Riverside County Superior Court asserting multiple wage-and-hour claims (unpaid final wages, unpaid overtime, missed meal/rest breaks, inaccurate wage statements, unpaid sick leave).
Plaintiff alleged residence in Stanislaus County and that Wright was the regional manager and Plaintiff’s supervisor; complaint pleads defendants collectively failed to pay wages and provide required breaks and statements.
Defendants Tire’s Warehouse and U.S. Autoforce removed to federal court asserting diversity jurisdiction under 28 U.S.C. § 1332, alleging Plaintiff was a California citizen and that Wright was fraudulently joined.
The removing defendants bore the burden to prove federal jurisdiction; the court reviewed whether Plaintiff’s citizenship was sufficiently pleaded and whether Wright’s joinder was fraudulent.
The court found residence allegations insufficient to establish Plaintiff’s domicile for diversity purposes and concluded defendants failed to carry the heavy burden to show Wright was fraudulently joined or that leave to amend would be denied.
Because complete diversity was not established, the court remanded the action to Riverside County Superior Court for lack of subject matter jurisdiction.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Sufficiency of citizenship allegations for diversity	Complaint shows Plaintiff is a California resident; thus a California citizen	Residence allegation suffices to show citizenship for removal	Held: Residence allegation alone is insufficient; domicile must be affirmatively alleged to establish citizenship
Fraudulent joinder of in-state defendant Wright	Wright was Plaintiff’s supervisor and is plausibly liable under wage-and-hour and wrongful-termination theories	Wright was not personally liable; no specific facts plead to hold him accountable	Held: Defendants failed to meet heavy burden; possibility exists Plaintiff can state claims against Wright; joinder not shown fraudulent
Complete diversity exists between parties	Plaintiff and Wright are non-diverse; thus state court action	Defendants contend Wright is sham/non-diverse and should be ignored to create diversity	Held: Because Plaintiff’s citizenship was not properly alleged and Wright’s joinder not shown fraudulent, complete diversity not established
Proper forum (remand vs. federal jurisdiction)	Remand to state court for lack of subject-matter jurisdiction	Removal to federal court based on asserted diversity jurisdiction	Held: Case remanded to Riverside County Superior Court for lack of subject-matter jurisdiction

Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375 (U.S. 1994) (federal courts are courts of limited jurisdiction)
Prize Frize, Inc. v. Matrix (U.S.) Inc., 167 F.3d 1261 (9th Cir. 1999) (burden of establishing federal jurisdiction on removing party)
Gaus v. Miles, Inc., 980 F.2d 564 (9th Cir. 1992) (removal statute strictly construed; doubts resolved against removal)
Kanter v. Warner-Lambert Co., 265 F.3d 853 (9th Cir. 2001) (domicile, not mere residence, determines citizenship for diversity)
Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894 (9th Cir. 2006) (LLC citizenship follows its members)
Morris v. Princess Cruises, Inc., 236 F.3d 1061 (9th Cir. 2001) (fraudulent-joinder doctrine permits ignoring non-diverse defendants who were sham joinders)
McCabe v. Gen. Foods Corp., 811 F.2d 1336 (9th Cir. 1987) (fraudulent joinder 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) (presumption against fraudulent joinder; heavy burden on removing defendants)