‘Absent unusual circumstances, courts may award attorney’s fees under § 12 | 1447(c) only where the removing party lacked an objectively reasonable basis for 13 | seeking removal. Conversely, when an objectively reasonable basis exists, fees should 14 | be denied.”
How later courts described this case
- ‘Absent unusual circumstances, courts may award attorney’s fees under § 12 | 1447(c) only where the removing party lacked an objectively reasonable basis for 13 | seeking removal. Conversely, when an objectively reasonable basis exists, fees should 14 | be denied.”
Written by the judges who cited it.
The opinion
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8 UNITED STATES DISTRICT COURT
9 CENTRAL DISTRICT OF CALIFORNIA
10 ADENIKE JOSEPH, an individual Case No. 2:19-cv-04987-AB (GJSx)
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Plaintiff,
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v.
13 ORDER GRANTING PLAINTIFF’S
VITAS HEALTHCARE MOTION TO REMAND
CORPORATION OF CALIFORNIA, a
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Delaware corporation,
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Defendant.
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I. INTRODUCTION
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Pending before the Court is Plaintiff Adenike Joseph’s (“Plaintiff”) Motion to
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Remand. (“Motion,” Dkt. No. 7). Defendants VITAS Healthcare Corporation of
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California (“Defendant”) filed an opposition, and Plaintiff filed a reply. (Dkt. Nos. 9,
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12.) For the reasons set forth below the Court GRANTS Plaintiff’s Motion.
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II. BACKGROUND
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Plaintiff filed the Complaint in this action in Los Angeles County Superior
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Court and Defendant removed it on the basis of diversity jurisdiction. See Notice of
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Removal (Dkt. No. 1), Compl. (Dkt. No. 1-3). The Complaint asserts eight state
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claims arising out of alleged racial discrimination, retaliation, wrongful termination
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and related wrongdoing that Plaintiff experienced while employed as a Registered
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1 Nurse Supervisor at VITAS Healthcare of California, a hospice care provider, from
2 about July 3, 2017 to about April 17, 2018. See Compl. ¶ 12.
3 Plaintiff alleges several instances of discrimination starting on or about
4 September 2017 when a racist comment was directed at her by a VITAS human
5 resources employee. See Compl. ¶ 14. Plaintiff alleges several additional instances of
6 discrimination/retaliation, and asserts she was eventually terminated because “she no
7 longer felt comfortable working for VITAS.” Compl. ¶ 20.
8 Plaintiff now seeks to remand the case back to state court. Plaintiff argues that
9 Defendant has not established that its principal place of business is not California—a
10 fact necessary to establish diversity of citizenship between the parties. Plaintiff further
11 argues that she directed all of her complaints to supervisors and managers of VITAS
12 Healthcare of California and the Human Resources Department was located in the
13 Encino Office in California. Plaintiff had no contact with any supervisors, directors or
14 human resources staff outside of California.
15 III. LEGAL STANDARD
16 A defendant may remove a civil action filed in state court to federal court. 28
17 U.S.C. § 1441(a). The removal statute is strictly construed against removal. Takeda v.
18 Nw. Nat. Life Ins. Co., 765 F.2d 815, 818 (9th Cir. 1985). If any doubt exists as to the
19 right of removal, federal jurisdiction must be rejected. Gaus v. Miles, Inc., 980 F.2d.
20 564, 566-67 (9th Cir. 1992).
21 For an action based on diversity of citizenship, the parties must be citizens of
22 different states and involves an amount in controversy over $75,000. 28 U.S.C. §
23 1332(a)(1). A corporation is a citizen of both (1) the State where it is incorporated,
24 and (2) the State where it has its principal place of business. 28 U.S.C. § 1332(c)(1).
25 As a rule, the parent company and its subsidiary are treated as distinct entities. Thus,
26 in a suit involving a subsidiary, the Court will look to the state of incorporation and
27 principal place of business of the subsidiary, and not its parent. Danjaq, S.A. v. Pathe
28 Communications Corp., 979 F.2d 772, 775 (9th Cir. 1992).
1 The Supreme Court in Hertz Corp. v. Friend adopted the “nerve center” test to
2 determine where the principal place of business is located. “Principal place of
3 business” means “the place where a corporation’s high-level officers direct, control,
4 and coordinate the corporation’s activities” or “the nerve center.” Hertz Corp. v.
5 Friend, 559 U.S. 77, 78 (2010). The Court added that a corporation’s “nerve center”
6 usually will be the corporation’s headquarters. Id. However, the nerve center is the
7 headquarters provided that the headquarters is “the actual center of direction, control
8 and coordination… and not simply an office where the corporation holds its board
9 meetings.” Id. The Court further clarifies that jurisdictional manipulation will not be
10 tolerated. The Court stated that if the alleged nerve center turns out to be “nothing
11 more than a mail drop box, a bare office with a computer, or the location of an annual
12 executive retreat – the court should instead take as the ‘nerve center’ the place of
13 actual direction, control, and coordination, in the absence of such manipulation.” Id.
14 The burden for establishing diversity of jurisdiction remains with the
15 Defendant. Hertz., at 96. “Competent proof” must be provided to support their
16 allegations. “[T]he mere filling of a form” for example, “the Securities and Exchange
17 Commission’s Form 10-K listing a corporation’s principal executive offices without
18 more would not be sufficient proof to establish a corporation’s nerve center.” Id. at 97.
19 IV. DISCUSSION
20 In this case, it is undisputed that Plaintiff is a citizen of California and that
21 VITAS Healthcare of California is incorporated in Delaware. But the parties disagree
22 on where Defendant’s principal place of business is located. Plaintiff argues that
23 Defendant’s principal place of business is in California – not where its headquarters is
24 located. (Mot. 1:9-12). Defendant claims that its principal place of business is the
25 headquarters in Miami, Florida, and that its office in Encino, California is merely an
26 administrative office. (Opp’n. 5:8-9).
27 Although Defendant has the burden of proving diversity of jurisdiction as the
28 party asserting federal jurisdiction, the only evidence it has put forward is a
1 declaration of Dean Robertson, the Assistant Vice President, Senior Corporate
2 Counsel of VITAS Healthcare Corporation and a 10-K form for Chemed Corporation.
3 See Robertson Decl. (Dkt. No. 9-1) and Exh. D thereto.
4 The Robertson Declaration falls short for several reasons. First, the Declaration
5 does not clearly establish a foundation for Robertson’s claimed knowledge about
6 Defendant. The declaration states that Robertson is an Assistant Vice President,
7 Senior Corporate Counsel of VITAS Healthcare Corporation (Robertson Decl., ¶ 4),
8 but this is not the same entity as Defendant, which is VITAS Healthcare Corporation
9 of California, and the Declaration does not explain what the legal relationship between
10 these entities is. Thus, Robertson has not asserted any foundation for knowing about
11 Defendant.
12 Second, the contents of the Declaration do not establish that Defendant’s
13 principal place of business is in Florida. Robertson states that the Defendant’s
14 headquarters are located in Miami, Florida. (Id.) This statement alone is not sufficient
15 to prove that the Defendant’s headquarters are also its principal place of business.
16 And, Robertson’s additional assertions are conclusory and unsubstantiated so they are
17 insufficient to establish that Defendant’s principal place of business is in Miami. In
18 particular, Robertson states that a “large majority of the officers of Defendant live and
19 work in Miami, Florida,” id., but this lacks foundation and Robertson has not provided
20 an exact number of officers, their identities, their locations, nor their positions within
21 VITAS Healthcare Corporation of California – facts needed to substantiate this claim.
22 Similarly, Robertson’s conclusory statement that management decisions take place in
23 Miami, Florida is not substantiated. Furthermore, the Declaration does not prove that
24 the Defendant’s principal place of business is where the headquarters are located. The
25 Supreme Court has emphasized that a corporation’s headquarters will not always be
26 the “nerve center.” Rather, the headquarters is the “nerve center” only if it is where
27 the high-level officials “direct, control and coordinate the corporation’s activities.”
28 Hertz. at 78. Here, the Robertson Declaration does not establish this.
1 Third, Robertson refers to a form 10-K which he claims shows that Defendant’s
2 headquarters are in Miami, Florida. (Robertson Decl. ¶ 5, Ex. D. ) The Declaration
3 specifically directs attention to pages 24 and 25 of the Form 10-K as indicating
4 Defendant’s headquarters, but there is no such information on those pages.
5 Furthermore, the form 10-K does not belong to the Defendant, it belongs to Chemed
6 Corporation. There is no explanation or breakdown on the corporate relationship
7 between Chemed Corporation and the Defendant. But assuming that Chemed
8 Corporation is the parent company of the Defendant, and even if he !0-K did reflect
9 Chemed’s principal place of business, this does not establish Defendant’s principal
10 place of business. Similarly, Robertson states that the California Secretary of State
11 website shows that Defendant’s headquarters are in Miami, but the website merely
12 shows that Defendant’s address is in Miami, see Robertson Decl. ¶ 5, Ex. C, and an
13 address is not equivalent to a principal place of business. Thus neither pages 24 and 25
14 of Chemed’s 10-K form nor the webpage from the Secretary of State provide further
15 clarity on the issue at hand.
16 Defendant’s evidence is aimed at showing that its headquarters is in Miami,
17 Florida, instead of proving that the officers “direct, control and coordinate” the
18 Defendant’s activities from their headquarters in Florida. Not only is a self-serving
19 declaration without corroborating evidence insufficient, Ravishanker v. Mphasis
20 Infrastructure Servs., Inc., No. 5:15-CV-02346-EJD, 2015 WL 6152779, at *2 (N.D.
21 Cal. Oct. 20, 2015), but also the Supreme Court has held that a form 10-K without
22 more is not enough to establish a corporation’s nerve center. Hertz, supra at 97. Here,
23 the Robertson Declaration lacks foundation, omits necessary facts, is conclusory, and
24 is uncorroborated, and the Form 10-K is for a company other than Defendant and does
25 not establish Defendant’s principal place of business. This evidence falls short. Also,
26 despite the fact that the burden of proving diversity jurisdiction is on the Defendant,
27 Defendant focused on challenging Plaintiff’s ability to establish California as the
28 principal place of business instead of effectively establishing that Miami, Florida is
1 | VITAS Healthcare of California’s principal place of business. Because the removal
2 | statute is strictly construed and any doubts must be resolved against exercising
3 | jurisdiction in removed cases, the uncertainty, lack of clarity, and doubt regarding the
4 | Defendant’s principal place of business means the Court must remand the case to state
5 | court. In sum, Defendant has not met its burden of establishing complete diversity of
6 || citizenship between the parties and therefore has not established that this Court has
7 | diversity jurisdiction over this case. The motion for remand is therefore GRANTED.
8 The Court denies Plaintiff's request for attorneys’ fees because the removal was
9 || not objectively unreasonable and there are no unusual circumstances that would
10 | otherwise warrant a fee award. Martin v. Franklin Capital Corp., 546 U.S. 132, 141
11 | (2005) (‘Absent unusual circumstances, courts may award attorney’s fees under §
12 | 1447(c) only where the removing party lacked an objectively reasonable basis for
13 | seeking removal. Conversely, when an objectively reasonable basis exists, fees should
14 | be denied.”).
15 | V. CONCLUSION
16 For the foregoing reasons, the Court GRANTS Plaintiff's Motion to Remand.
17 | The matter is remanded to Los Angeles County Superior Court.
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20 | Dated: August 27, 2019 .
1 HONORABLE ANDRE BIROTTE JR.
UNITED STATES DISTRICT COURT JUDGE
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