Cynthia Padock v. Amazon.com, Inc.

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UNITED STATES DISTRICT COURT

JS-6

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES – GENERAL

Case No.: 8:24-cv-00890-FWS-JDE Date: July 2, 2024

Title: Cynthia Padock v. Amazon.com, Inc., et al.

Present: HONORABLE FRED W. SLAUGHTER, UNITED STATES DISTRICT JUDGE

Melissa H. Kunig N/A

Deputy Clerk Court Reporter

Attorneys Present for Plaintiff: Attorneys Present for Defendants:

Not Present Not Present

PROCEEDINGS: ORDER GRANTING MOTION TO REMAND [15] AND

REMANDING CASE TO ORANGE COUNTY SUPERIOR COURT

Before the court is Plaintiff Cynthia Padock’s (“Plaintiff”) Motion to Remand (“Motion”

or “Mot.”). (Dkt. 15.) Defendants Amazon.com, Inc. (“Amazon”), Prime Now, LLC (“Prime

Now”), and Whole Foods Market California, Inc. (“Whole Foods”) (collectively, “Defendants”)

oppose the Motion (“Opposition” or “Opp.”). (Dkt. 24.) Plaintiff also filed a Reply in support

of the Motion (“Reply”). (Dkt. 25.) The court finds this matter appropriate for resolution

without oral argument. See Fed. R. Civ. P. 78(b) (“By rule or order, the court may provide for

submitting and determining motions on briefs, without oral hearings.”); C.D. Cal. L.R. 7-15

(authorizing courts to “dispense with oral argument on any motion except where an oral hearing

is required by statute”). Accordingly, the hearing set for July 11, 2024, is VACATED and off

calendar. Based on the state of the record, as applied to the applicable law, the court GRANTS

the Motion and REMANDS this case to Orange County Superior Court.

I. Background

Plaintiff “physically worked at [a] Whole Foods Market” location in Laguna Niguel,

California, “shop[ping] the store for various items, [and] fulfilling pre-designated orders”

customers made through Amazon and Prime Now. (Dkt. 1-2 (Complaint, “Compl.”) ¶ 8; see

Dkt. 24-1 (Declaration of Jennifer Sorace, “Sorace Decl.”) ¶ 7, Ex. A (Plaintiff’s Job

Description).) “For instance, if someone had a shopping list of 30 items – [Plaintiff] would

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES – GENERAL

Case No.: 8:24-cv-00890-FWS-JDE Date: July 2, 2024

Title: Cynthia Padock v. Amazon.com, Inc., et al.

shop for those 30 items, bag them, and prepare them for either pick up or delivery.” (Compl.

¶ 8.) After her employment was terminated, Plaintiff filed this case in Orange County Superior

Court, asserting claims including wrongful discharge, disability discrimination, and retaliation

against Amazon, Prime Now, and Whole Foods. (See generally Compl.)

Amazon and Prime Now removed the case to this court, arguing that complete diversity

exists because: (1) Plaintiff is a resident of California; (2) Amazon and Prime Now are citizens

of Delaware and Washington; and (3) Whole Foods was fraudulently joined such that its

California citizenship should be disregarded. (Dkt. 1 ¶¶ 11-29.) Plaintiff argues in the Motion

that Whole Foods was not fraudulently joined and thus the court lacks subject matter

jurisdiction over this action. (See generally Mot.) The crux of the parties’ dispute is whether

Plaintiff could possibly state a claim against Whole Foods—a party that destroys otherwise

complete diversity—as an employer. (See generally Mot.; Opp.)

II. Legal Standard

Federal courts are courts of limited jurisdiction with subject matter jurisdiction over only

those suits authorized by the Constitution or Congress. Kokkonen v. Guardian Life Ins. Co.,

511 U.S. 375, 377 (1994). When a suit originates in state court, a defendant may remove to

federal court only when the suit could have been filed in federal court originally. 28 U.S.C.

§ 1441(a). “In civil cases, subject matter jurisdiction is generally conferred upon federal district

courts either through diversity jurisdiction, 28 U.S.C. § 1332, or federal question jurisdiction,

28 U.S.C. § 1331.” Peralta v. Hisp. Bus., Inc., 419 F.3d 1064, 1069 (9th Cir. 2005).

Diversity jurisdiction requires complete diversity between the parties and that the amount

in controversy exceeds $75,000. See Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 267

(1806); 28 U.S.C. § 1332(a); Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 373 (1978)

(“[D]iversity jurisdiction does not exist unless each defendant is a citizen of a different State

from each plaintiff.”); Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th

Cir. 2003) (“Jurisdiction founded on 28 U.S.C. § 1332 requires that the parties be in complete

diversity and the amount in controversy exceed $75,000.”); Lee v. Am. Nat. Ins. Co., 260 F.3d

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UNITED STATES DISTRICT COURT

JS-6

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES – GENERAL

Case No.: 8:24-cv-00890-FWS-JDE Date: July 2, 2024

Title: Cynthia Padock v. Amazon.com, Inc., et al.

997, 1004 (9th Cir. 2001) (“The diversity jurisdiction statute, as construed for nearly 200 years,

requires that to bring a diversity case in federal court against multiple defendants, each plaintiff

must be diverse from each defendant.”). If a party is a partnership, limited liability company, or

other unincorporated association, the court must consider the citizenship of each of the partners,

including limited partners, or members, must be alleged. Carden v. Arkoma Assocs., 494 U.S.

185, 195-96 (1990); Johnson, 437 F.3d at 899. If a party is a corporation, the complaint must

allege both its state(s) of incorporation and principal place of business. 28 U.S.C. § 1332(c);

Harris v. Rand, 682 F.3d 846, 850 (9th Cir. 2012). If a party is a natural person, the complaint

must allege their state of domicile, which is their permanent home, where they reside with the

intention to remain or to which they intend to return. Ehrman v. Cox Commc’ns, Inc., 932 F.3d

1223, 1227 (9th Cir. 2019).

“If at any time before final judgment it appears that the district court lacks subject matter

jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c). “The removal statute is strictly

construed against removal jurisdiction, and the burden of establishing federal jurisdiction falls

to the party invoking the statute.” California ex rel. Lockyer v. Dynegy, Inc., 375 F.3d 831, 838

(9th Cir. 2004) (citing Ethridge v. Harbor House Rest., 861 F.2d 1389, 1393 (9th Cir. 1988));

Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (“Federal jurisdiction must be rejected if

there is any doubt as to the right of removal in the first instance.”) (citing Libhart v. Santa

Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979)).

III. Discussion

Plaintiff argues that this case should be remanded because the parties are not completely

diverse as 28 U.S.C. Section 1332 requires. (Mot. at 4.) The parties agree that Plaintiff and

Whole Foods are citizens of California, Amazon and Prime Now are citizens of Delaware and

Washington, and the amount in controversy exceeds $75,000. (See Mot. at 4; Opp. at 10.)

They dispute only whether Whole Foods’ citizenship can be disregarded under the doctrine of

fraudulent joinder. (See id.) In sum, the court’s subject matter jurisdiction depends upon

whether Whole Foods was fraudulently joined, which in turn depends on whether Plaintiff

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES – GENERAL

Case No.: 8:24-cv-00890-FWS-JDE Date: July 2, 2024

Title: Cynthia Padock v. Amazon.com, Inc., et al.

could possibly state a claim against Whole Foods as an employer. (See Mot. at 14-15; Opp. at

2.)

“In determining whether there is complete diversity, district courts may disregard the

citizenship of a non-diverse defendant who has been fraudulently joined.” Grancare, LLC v.

Thrower ex rel. Mills, 889 F.3d 543, 548 (9th Cir. 2018) (citing Chesapeake & Ohio Ry. Co. v.

Cockrell, 232 U.S. 146, 152 (1914)). However, courts apply both a “strong presumption against

removal jurisdiction,” Gaus, 980 F.2d at 566, and a “general presumption against fraudulent

joinder,” Hamilton Materials, Inc. v. Dow Chem. Corp., 494 F.3d 1203, 1206 (9th Cir. 2007)

(citation omitted). Accordingly, “[a] defendant invoking federal court diversity jurisdiction on

the basis of fraudulent joinder bears a ‘heavy burden’” of proving fraudulent joinder by “clear

and convincing evidence.” Grancare, 889 F.3d at 548; see also Hamilton Materials, 494 F.3d

at 1206 (citing Pampillonia v. RJR Nabisco, Inc., 138 F.3d 459, 461 (2d Cir. 1998)).

A defendant may establish fraudulent joinder through: “(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.” Hunter v. Philip Morris USA, 582 F.3d 1039, 1044 (9th Cir. 2009)

(quoting Smallwood v. Ill. Cent. R. Co., 385 F.3d 568, 573 (5th Cir. 2004)). Under the second

method, “if there is a possibility that a state court would find that the complaint states a cause of

action against any of the resident defendants, the federal court must find that the joinder was

proper and remand the case to the state court.” Hunter, 582 F.3d at 1046 (quoting Tillman v.

R.J. Reynolds Tobacco, 340 F.3d 1277, 1279 (11th Cir. 2003)); see also Grancare, 889 F.3d at

549 (“A claim against a defendant may fail under Rule 12(b)(6), but that defendant has not

necessarily been fraudulently joined.”).

Defendants argue Whole Foods was fraudulently joined under the second theory,

contending that Plaintiff cannot establish a cause of action against Whole Foods because

“Plaintiff’s own allegations in the Complaint make clear that Whole Foods did not employ her,”

and “[t]o the extent that Plaintiff specifically references Whole Foods in the Complaint, those

allegations show that she did not work for Whole Foods and knew that she did not.” (Opp. at

11-16; see Dkt. 1 ¶¶ 18-29); see Hunter, 582 F.3d at 1044. In response, Plaintiff maintains

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES – GENERAL

Case No.: 8:24-cv-00890-FWS-JDE Date: July 2, 2024

Title: Cynthia Padock v. Amazon.com, Inc., et al.

Whole Foods may be liable under three theories: (1) ostensible agency liability, (2) joint

employer liability, and (3) integrated enterprise liability (single employer liability). (Mot. at 6

(citing Compl. ¶¶ 6-7); Reply at 3.)

The court finds Amazon has not met its heavy burden of demonstrating by clear and

convincing evidence that Whole Foods was fraudulently joined. The parties agree that Plaintiff

may only assert employment-related claims against entities that served as her “employer.” But

“[t]he question whether an entity functions as an employer typically involves a ‘careful factual

inquiry.’” Vernon v. State of Cal., 116 Cal. App. 4th 114, 125 (2004). For example, regarding

Plaintiff’s argument that Defendants form an integrated enterprise, courts consider four factors

in determining “whether two corporations should be considered a single employer”:

(1) interrelation of operations, (2) common management, (3) centralized control of labor

relations, and (4) common ownership or financial control. Laird v. Cap. Cities/ABC, Inc., 68

Cal. App. 4th 727, 738 (1998). Common ownership or control alone is never enough to

establish parent liability, and courts often deem centralized control of labor relations the most

important factor. Id. Similarly, regarding Plaintiff’s argument that Whole Foods may be liable

as a joint employer, courts consider the “totality of circumstances that reflect upon the nature of

the work relationship of the parties,” with the most important factor being “the right to control

and direct the activities of the person rendering service, or the manner and method in which the

work is performed” on a day-to-day level. Gebran v. Wells Fargo Bank, N.A., 2016 WL

7471292, at *8 (C.D. Cal. Dec. 28, 2016) (cleaned up).

Given the factual issues involved in determining who may properly be considered an

employer, “district courts generally have not found the question of employer status suitable for

resolution in the fraudulent joinder context.” McBee v. Raytheon Techs. Inc., 2024 WL 182282,

at *4 (C.D. Cal. Jan. 16, 2024) (collecting cases); see Maggiulli v. Wells Fargo & Co., 2018

WL 2021435, at *3 (C.D. Cal. Apr. 26, 2018) (remanding and recognizing concern with finding

no possibility of recovery against a possible employer “before discovery has commenced in this

lawsuit”); cf. Overrated Prods., Inc. v. Universal Music Grp., 2018 WL 1136881, at *3 (C.D.

Cal. Mar. 1, 2018) (“Because alter ego is a factual determination encompassing a host of

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES – GENERAL

Case No.: 8:24-cv-00890-FWS-JDE Date: July 2, 2024

Title: Cynthia Padock v. Amazon.com, Inc., et al.

factors, the Court cannot summarily decide this issue without reaching the merits of Plaintiff's

claims. Moreover, Defendants rely on summary judgment decisions to support their arguments,

but here, Plaintiff has not even had the benefit of discovery yet. As such, Defendants’ argument

is one for the state court to decide.”) (cleaned up). “Thus, even when a defendant presents some

evidence that weighs against allegations of employer status, district courts have not concluded

that the burden of showing fraudulent joinder has been met.” Id.; see also Bustamante v.

Sleepmed Inc., 2022 WL 18358946, at *2 (C.D. Cal. Aug. 5, 2022) (noting that inquiry into

what entity or entities may be considered the plaintiff’s employer “is fact-specific and no one

factor is dispositive”) (citing Vernon, 116 Cal. App. 4th at 124-25 (noting that “[t]here is no

magic formula for determining whether an organization is a joint employer” because a court

“must analyze myriad facts surrounding the employment relationship” (cleaned up))); Atneosen

v. XPT, Inc., 2022 WL 1400847, at *7 (N.D. Cal. May 3, 2022) (“Defendants have not shown

that Plaintiffs cannot prevail on their claims as to XPT, Inc. and/or NIO USA, Inc. as a matter

of law. Accordingly, the court cannot find that either entity was fraudulently joined. The court

lacks subject matter jurisdiction over this action and grants Plaintiffs’ motion to remand.”).

This case presents the kinds of factual issues regarding who may be considered Plaintiff’s

employer, including under the integrated employer test, that make a finding of fraudulent

joinder improper. See McBee, 2024 WL 182282, at *4; Maggiulli, 2018 WL 2021435, at *3.

Plaintiff offers evidence that she worked inside a Whole Foods store, shopped Whole Foods

products using Whole Foods shopping carts, put the items she collected into Whole Foods bags

with Whole Foods receipts, and received help performing her duties from employees and

management wearing Whole Foods aprons or buttons. (Dkt. 15-3 [Plaintiff’s Declaration, “Pl.

Decl.”] ¶¶ 3-5.) In addition, Plaintiff declares, “When I worked at Whole Foods, I asked my

managers who I am working for – Whole Foods or Amazon. They told me that they are all the

same.” (Id. ¶ 7.) Perhaps most compelling is Plaintiff’s evidence that the human resources

representative to whom she sent her employment-related complaints, Jennifer Sorace, had an

email signature listed her title as “Reg. HR Business Partner | WFMoA - SoCal & PNW

soracej@amazon.com GSF HR Resources | HR POC List.” (Pl. Decl. Ex. 1 (emphasis added);

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES – GENERAL

Case No.: 8:24-cv-00890-FWS-JDE Date: July 2, 2024

Title: Cynthia Padock v. Amazon.com, Inc., et al.

see Compl. ¶¶ 11-12, 27-29 (describing the complaints Plaintiff sent Sorace); Sorace Decl. ¶ 8

(“For Human Resources issues during her employment, Plaintiff could contact me as the

Regional Human Resources Business Partner” or other human resources employees.”). To

determine whether Whole Foods could possibly be considered Plaintiff’s employer, a court

would have to weigh all of this evidence and consider how it applies to several factors. See

Laird, 68 Cal. App. 4th at 738; Gebran, 2016 WL 7471292, at *8. The court finds that doing so

in this case at this early stage without the benefit of discovery is inappropriate. See McBee,

2024 WL 182282, at *4; Maggiulli, 2018 WL 2021435, at *3; Overrated Prods., 2018 WL

1136881, at *3.

To be sure, Defendants have presented evidence that Whole Foods was not Plaintiff’s

employer, and have also presented argument that Plaintiff’s agency, joint employer, and

integrated enterprise theories are legally unworkable. (See generally Opp.) They also explain

that Sorace’s email signature merely “indicated that [she] assisted Prime Now employees who

worked as shoppers at Whole Foods stores in Southern California,” (Sorace Decl. ¶ 11.) In the

end, it may be that Whole Foods is not liable as Plaintiff’s employer. But courts remand cases

even when the potential liability against the purportedly-fraudulently-joined-defendant, “while

possible, is actually quite unlikely.” Waterman, 2018 WL 287171, at *7. And the court finds

that at this stage, Defendants have not shown by clear and convincing evidence that Plaintiff

cannot possibly state a claim against Whole Foods as her employer.1 See Grancare, 889 F.3d at

1 For example, many of Defendants’ arguments focus on the fact that Plaintiff seeks to use

agency and integrated enterprise theories to hold liable not the principal, but rather the

subsidiary. (See Opp. at 8, 10-11.) But courts regularly remand cases in which the plaintiff

seeks to hold a subsidiary liable as an employer. See, e.g., Bustamante, 2022 WL 18358946, at

*2 (remanding case in which the plaintiff contended both the parent company (BioSerenity) and

the subsidiary (SleepMed California) could be liable under a joint-employer theory,” when the

plaintiff “produce[d] evidence that she worked at SleepMed California's location in Pasadena,

California and scheduled appointments for patients who were treated by SleepMed California”);

Cohen v. Valeant Pharms. N. Am., LLC, 2018 WL 3409212, at *2 (S.D. Cal. July 13, 2018)

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES – GENERAL

Case No.: 8:24-cv-00890-FWS-JDE Date: July 2, 2024

Title: Cynthia Padock v. Amazon.com, Inc., et al.

549 (“A claim against a defendant may fail under Rule 12(b)(6), but that defendant has not

necessarily been fraudulently joined.”); McBee, 2024 WL 182282, at *6 (“The propriety of

remand based on fraudulent joinder depends solely on whether a claim against the purported

sham defendant may be stated, not whether one has been or may be stated based on the present

or future evidentiary record. . . For that reason, courts routinely grant motions to remand even

where, as here, a plaintiff has not yet stated a viable claim against the purportedly fraudulently

joined defendant and/or the present evidentiary record would not support liability as to the

purportedly fraudulently joined defendant.”) (cleaned up); Maggiulli, 2018 WL 2021435, at *3;

Waterman v. Wells Fargo & Co., 2018 WL 287171, at *7 (C.D. Cal. Jan. 4, 2018) (“The present

pre-discovery evidentiary record does not mean all that much, as the question is not whether

Plaintiff has already proven that WFB and WFC are an ‘integrated enterprise,’ but whether it is

possible for Plaintiff to state a claim against WFC under that theory.”); Gebran, 2016 WL

7471292, at *9 (“Plaintiff may still be able to amend her Complaint and offer evidence that

WFC qualifies as a joint employer under the integrated enterprise test. Accordingly, the Court

declines to find that Plaintiff fraudulently joined WFC.”); Scates v. FedEx Ground Package

Sys., Inc., 2020 WL 5759121, at *5 (C.D. Cal. Sept. 25, 2020) (remanding despite

determination that “Plaintiff fails to show that FedEx Corp. exercised control over her work

activities” because “FedEx Ground has not met its burden of establishing that Plaintiff is

(granting motion to remand, explaining that “[w]hile Defendants have provided evidence that

Plaintiff was technically employed by the parent company (VPNA) and not the subsidiary

(SPI), they have not shown by clear and convincing evidence that Plaintiff would be unable to

hold SPI liable as a joint employer as a matter of law, especially under the relevant ‘totality of

circumstances’ and ‘integrated enterprise’ tests”); Troisi v. Cannon Equip. Co., 2009 WL

249789, at *7 (C.D. Cal. Jan. 30, 2009) (“At this stage, the Court need not and should not

resolve whether Plaintiff will ultimately prevail in its claims against Cannon West[, subsidiary

of Cannon Eqipment]. The Court must only determine if there is at least a possibility of

liability as[] to Cannon West. Based on the facts alleged in the complaint, the Court finds that

there is.”).

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES – GENERAL

Case No.: 8:24-cv-00890-FWS-JDE Date: July 2, 2024

Title: Cynthia Padock v. Amazon.com, Inc., et al.

incapable of amending her Complaint to state a valid claim against FedEx Corp. on a joint

employer theory”).

Based on the court’s finding that Defendants have not shown by clear and convincing

evidence that Plaintiff cannot possibly state a claim against Whole Foods, the court concludes

that Defendants have failed to meet their burden of showing that Whole Foods was fraudulently

joined such that its citizenship should be disregarded for purposes of establishing diversity

jurisdiction. Considering Whole Foods’ citizenship means that the court lacks subject matter

jurisdiction over this case and it must be remanded. See Caterpillar Inc., 519 U.S. at 68 (stating

diversity jurisdiction “applies only to cases in which the citizenship of each plaintiff is diverse

from the citizenship of each defendant.”); Kuntz, 385 F.3d at 1181 (“For a case to qualify for

federal jurisdiction under 28 U.S.C. § 1332(a), there must be complete diversity of citizenship

between the parties opposed in interest.”). Therefore, the Motion is GRANTED and this case

is REMANDED to Orange County Superior Court.

Finally, Plaintiff asks the court to award her $11,050 in attorney fees under 28 U.S.C.

§ 1447(c). (Mot. at 12; Reply at 7.) “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. “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. Franklin Cap. Corp., 546 U.S. 132, 141 (2005). “Conversely, when an

objectively reasonable basis exists, fees should be denied.” Id. “[R]emoval 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.” Lussier v. Dollar Tree Stores, Inc.,

518 F.3d 1062, 1065 (9th Cir. 2008). Whether to award costs and expenses is within a district

court’s discretion. See Jordan v. Nationstar Mortg. LLC, 781 F.3d 1178, 1184 (9th Cir. 2015).

After reviewing the parties’ arguments and the evidence presented, the Court exercises its

discretion to decline awarding fees here. Defendants’ argument that Whole Foods was

fraudulently joined did not lack any objectively reasonable basis, nor was Defendants’ asserted

basis for removal clearly foreclosed by relevant caselaw. See Martin, 546 U.S. at 141; Lussier,

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES – GENERAL

Case No.: 8:24-cv-00890-FWS-JDE Date: July 2, 2024

Title: Cynthia Padock v. Amazon.com, Inc., et al.

518 F.3d at 1065; Waterman, 2018 WL 287171, at *8 (“Given that removal in this action was at

least colorable, Plaintiff’s request for costs and attorneys’ fees is DENIED.”). Accordingly, the

court DENIES Plaintiff’s request for attorney fees.

IV. Disposition

For the reasons stated above, the court GRANTS Plaintiff’s Motion and REMANDS this

action to Orange County Superior Court as case number 30-2024-01387272-CU-OE-NJC.

Initials of Deputy Clerk: mku