Opinion

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9 UNITED STATES DISTRICT COURT

10 CENTRAL DISTRICT OF CALIFORNIA

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Case No. 2:25-cv-06835-SPG-MBK

12 MARY MACCARTHY, an individual,

13 Plaintiff, ORDER GRANTING MOTION TO

14 v. REMAND [ECF NO. 15]

ARCEE AI, INC., a Delaware Corporation

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and DOES 1 through 50, inclusive

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Defendants.

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18 Before the Court is a Motion to Remand (ECF No. 15 (“Motion”)) filed by Plaintiff

19 Mary MacCarthy (“Plaintiff”). Defendant Arcee AI, Inc. (“Defendant” or the “Company”)

20 timely opposed (ECF No. 18 (“Opp.”)), and Plaintiff replied (ECF No. 28 (“Reply”). The

21 Court has read and considered the parties’ submissions and concludes that the Motion is

22 suitable for decision without oral argument. See Fed. R. Civ. P. 78(b); C.D. Cal. L.R. 7-

23 15. Having considered the submissions, the relevant law, and the record in this case, the

24 Court GRANTS the Motion.

25 I. Background

26 A. Factual Background

27 Arcee AI was founded by Mark McQuade, as its Chief Executive Officer; Jacob

28 Solawetz, as its Chief Technology Officer; and Brian Benedict, as its Chief Revenue

1 Officer. See (ECF No. 3-1 (“Compl.”) ¶ 9). Plaintiff was personally recruited by Benedict

2 for a position as the Company’s Head of Growth and Marketing. See (id. ¶ 10). Shortly

3 after she joined the Company, Benedict allegedly began to make “inappropriate, gender-

4 coded” comments about Plaintiff, including by commenting on “her physique,” asking

5 “intrusive questions about her dating life,” and using “sexually explicit language.” (Id.

6 ¶ 11). After the Company received a $24 million funding round in June 2024, Benedict’s

7 behavior allegedly escalated. See (id. ¶ 13). He began to yell, demean, and threaten to fire

8 Plaintiff and another female executive on a “near-daily” basis. (Id.). Plaintiff’s male

9 colleagues told her they “had never witnessed him subject male employees to similar

10 treatment.” (Id. ¶ 14).

11 In August 2024, Plaintiff met with Benedict to discuss his behavior. See (id. ¶ 19).

12 However, Benedict refused to apologize or change his behavior. See (id.). On January 28,

13 2025, Plaintiff reported Benedict’s conduct to McQuade and Solawetz. See (id. ¶ 24).

14 Shortly thereafter, McQuade began to “systematically exclude[] Plaintiff from key

15 meetings” and withhold “essential information needed to execute her responsibilities as

16 Head of Product Marketing.” (Id. ¶ 30). In late March 2025, McQuade told “a senior male

17 employee that he wanted to fire Plaintiff but felt it was too soon after her hostile workplace

18 complaint,” so “he would find a ‘legally safe’ reason to oust her as soon as he could.” (Id.

19 ¶ 33). In early April 2025, the Company’s Human Resources Department scheduled a

20 meeting between McQuade and Plaintiff, where McQuade “implicitly pressur[ed] her to

21 resign.” (Id. ¶ 38). In May 2025, McQuade “remove[d] . . . four women who had filed

22 hostile workplace complaints,” “presenting the women’s terminations as part of a

23 ‘Reduction in Force.’” (Id. ¶ 43). “On May 21, 2025, Plaintiff questioned the lack of

24 transparency around the layoffs and pointed out the disparate treatment of women.” (Id. ¶

25 46). Plaintiff was summarily terminated the same day. See (id. ¶¶ 46–48).

26 B. Procedural Background

27 Plaintiff filed this action in the Los Angeles County Superior Court on June 13, 2025,

28 alleging claims for gender discrimination, sexual harassment, retaliation, and wrongful

1 termination under California law. See (id. ¶¶ 51–106); see also (id. at 26). Plaintiff served

2 Defendant on June 27, 2025, and Defendant timely removed to federal court on July 25,

3 2025. See (ECF No. 1 (“Notice of Removal”) ¶ 4); see also (ECF No. 3-2, Ex. B, at 2). In

4 the Notice of Removal, Defendant invokes the Court’s diversity jurisdiction, alleging that

5 Plaintiff “is a citizen of the State of California” and Defendant is “a Delaware corporation

6 with its principal place of business and headquarters in Florida.” (Notice of Removal ¶¶ 13,

7 15). On August 28, 2025, Plaintiff filed this Motion to Remand. See (Motion).

8 II. Legal Standard

9 Federal courts are courts of limited jurisdiction, having subject-matter jurisdiction

10 only over matters authorized by the Constitution and Congress. See Kokkonen v. Guardian

11 Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). A defendant may remove a civil action

12 filed in state court to federal court if the federal court would have had original jurisdiction

13 over the suit. See 28 U.S.C. § 1441(a). Federal courts have original jurisdiction where an

14 action arises under federal law, 28 U.S.C. § 1331, or where each plaintiff’s citizenship is

15 diverse from each defendant’s citizenship and the amount in controversy exceeds $75,000,

16 exclusive of interest and costs, 28 U.S.C. § 1332(a).

17 Once an action is removed, a plaintiff may seek remand by making either a “facial”

18 or “factual” challenge to the defendant’s jurisdictional allegations in the notice of removal.

19 Harris v. KM Indus., Inc., 980 F.3d 694, 699 (9th Cir. 2020). “A facial attack accepts the

20 truth of the defendant’s allegations but asserts that they are insufficient on their face to

21 invoke federal jurisdiction.” Id. (internal quotation marks and citation omitted). “A factual

22 attack contests the truth of the allegations themselves.” Id. (internal quotation marks and

23 citation omitted). Where a plaintiff seeks remand of the action by mounting a “factual”

24 challenge to the removing defendant’s jurisdictional allegations, the burden is on the

25 removing defendant to provide “competent proof” showing by a preponderance of the

26 evidence that the jurisdictional requirements are satisfied. Id. at 701. When determining

27 jurisdiction based on a factual attack, a court may view evidence beyond the complaint and

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1 need not presume the truthfulness of the removing party’s allegations. See Safe Air for

2 Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004).

3 There is a “strong presumption” against removal jurisdiction, and “[f]ederal

4 jurisdiction must be rejected if there is any doubt as to the right of removal in the first

5 instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (citation omitted); see

6 also Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir. 2009).

7 III. Discussion

8 Plaintiff argues that both she and Defendant are California citizens and, as such, the

9 Court lacks diversity jurisdiction. See (Motion at 3). In support, she argues that

10 Defendant’s principal place of business “may[]” have been in Florida when the Company

11 was founded, but “the weight of the evidence . . . strongly supports the reality that

12 Defendant’s principal place of business is now San Francisco.” (Id.). In response,

13 Defendant does not contest Plaintiff’s citizenship but argues that its principal place of

14 business is in Florida, not California. See (Opp. at 5). Because 28 U.S.C. § 1332(a)

15 requires complete diversity, the Court cannot hear this case if both Plaintiff and Defendant

16 are citizens of California. See Grancare, LLC v. Thrower by & through Mills, 889 F.3d

17 543, 548 (9th Cir. 2018) (diversity jurisdiction requires that each plaintiff has different

18 citizenship than each defendant); see also Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996).

19 Plaintiff has submitted five declarations in support of her Motion: (1) an initial

20 declaration on her own behalf; (2) a supplemental declaration on her own behalf; (3) a

21 declaration from Nicole Kim, the Company’s former Vice President of Marketing; (4) a

22 declaration from Chris Smith, a former Principal Solutions Architect at the Company; and

23 (5) a declaration from Michael Nason, the Company’s first engineer and one of the earliest

24 members of the Company’s technical staff.1 Defendant, in turn, has submitted a declaration

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1 See (ECF No. 15-3, Declaration of Mary MacCarthy (“MacCarthy Decl.”); ECF No. 28-

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1, Supplemental Declaration of Mary MacCarthy (“Suppl. MacCarthy Decl.”); ECF No.

27 28-2, Declaration of Nicole Kim (“Kim Decl.”) ¶ 2; ECF No. 28-3, Declaration of Chris

28 Smith (“Smith Decl.”) ¶ 2; ECF No. 28-4, Declaration of Michael Nason (“Nason Decl.”)

¶ 2).

1 from Mark McQuade.2 Defendant has also filed an evidentiary objection to Plaintiff’s

2 initial declaration in support of her motion to remand. See (ECF No. 20). However,

3 Defendant has not filed any objection to the Supplemental MacCarthy Declaration, the Kim

4 Declaration, the Smith Declaration, or the Nason Declaration. Because the statements in

5 those declarations are sufficient to raise doubt as to whether the Court possesses subject

6 matter jurisdiction, see Gaus, 980 F.2d at 566, the Court declines to address Defendant’s

7 evidentiary objections to the initial MacCarthy Declaration.

8 According to those declarations, the Company was initially “fully remote” and

9 “there was no dedicated physical office space.” (Nason Decl. ¶ 3); see also (Kim Decl.

10 ¶ 3). However, as the Company sought to raise additional capital, “one of its primary

11 investors, who also served as [the Company’s] only board member, began pressuring

12 leadership to establish a presence in the San Francisco Bay Area.” (Kim Decl. ¶ 4); see

13 also (Suppl. MacCarthy Decl. ¶ 4). By the end of 2024, the Company planned to open a

14 San Francisco office, see (Kim Decl. ¶ 6), and “the consistent message internally was that

15 the [C]ompany’s headquarters would be moving to San Francisco,” (Smith Decl. ¶ 4).

16 Around the same time, the Company began encouraging employees to relocate to

17 San Francisco, see (MacCarthy Suppl. Decl. ¶ 7), and at least some employees were

18 required to relocate as a condition of their continued employment, see (Nason Decl. ¶¶ 6,

19 8, 11). In February 2025, McQuade told employees that Benedict was leaving the

20 Company because he refused to relocate to San Francisco. See (MacCarthy Suppl. Decl.

21 ¶ 6); see also (Smith Decl. ¶ 7). In or around March, Luke Atkins, who succeeded Solawetz

22 as the Company’s Chief Technology Officer, relocated to San Francisco. See (Smith Decl.

23 ¶¶ 3, 5–6); see also (Suppl. MacCarthy Decl. ¶¶ 8, 11). In spring 2025, the Company began

24 to set up a new San Francisco office. See (Suppl. MacCarthy Decl. ¶ 12). In May, the

25 Company “began using a new address on Market Street in San Francisco on many of its

26 internal documents.” (Kim Decl. ¶ 9). The Company also “officially instructed

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28 2 See (ECF No. 19, Declaration of Mark McQuade (“McQuade Decl.”)).

1 [employees] to communicate to customers that [its] headquarters was now located in San

2 Francisco” and updated “all sales and marketing materials [to] . . . list a San Francisco

3 mailing address.” (Smith Decl. ¶¶ 7–8). In June, McQuade and his family moved to

4 Burlingame, California. See (Suppl. MacCarthy Decl. ¶ 5); see also (Nason Decl. ¶ 10).

5 Based on the evidence summarized above, Plaintiff has provided sufficient facts to

6 show that the Company’s “high level officers direct, control, and coordinate the

7 [Company’s] activities” from California, not Florida. Hertz Corp. v. Friend, 559 U.S. 77,

8 80–81 (2010) (company’s principal place of business determined by location of corporate

9 “nerve center”). Therefore, the Court lacks diversity jurisdiction and, as such, GRANTS

10 Plaintiff’s Motion to Remand. However, the Court DENIES Plaintiff’s Motion insofar as

11 Plaintiff seeks fees and costs. See (Motion at 9–10). Under 28 U.S.C. § 1447(c), “[a]n

12 order remanding the case may require payment of just costs and any actual expenses,

13 including attorney fees, incurred as a result of the removal.” However, absent unusual

14 circumstances, courts will only award fees and costs under § 1447(c) where “the attempted

15 removal was objectively unreasonable.” Houden v. Todd, 348 F. App’x 221, 223 (9th Cir.

16 2009); see also Martin v. Franklin Cap. Corp., 546 U.S. 132, 136 (2005). In support of

17 removal, Defendant has submitted evidence to show that the Company’s 2023 Delaware

18 franchise tax report, 2024 federal income tax return, and 2024 Florida business license all

19 list the Company’s principal place of business at an address in Venice, Florida, as do the

20 Form 1099 that the Company issued to Plaintiff for fiscal year 2024 and Plaintiff’s May

21 2025 pay statement. See (ECF Nos. 19-1, Ex. 1, 19-3, Ex. 3, 19-4, Ex. 4, 19-6, Ex. 6, 19-

22 7, Ex. 7). Although this evidence is insufficient for Defendant to meet its burden, the

23 attempted removal was not objectively unreasonable.

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2 Conclusion

3 For the foregoing reasons, the Court GRANTS the Motion.

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5 IT IS SO ORDERED.

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7 ||DATED: October 31, 2025 --—__

UNITED STATES DISTRICT JUDGE

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