Papa v. Computacenter United States Inc.

Background

James Papa filed this action in New York State Supreme Court against Computacenter United States Inc. (CC), Deutsche Bank Securities, Inc., DB USA Corporation, Deutsche Bank AG, and Marc Senatore. Papa alleged five claims under New York law, including whistleblower retaliation under New York Labor Law § 740, tortious interference with his business relationship with CC, negligence, and conspiracy to commit tortious interference.

According to the complaint, Papa worked for CC and supervised a team assigned to Deutsche Bank’s headquarters. He reported to Senatore, a Deutsche Bank vice president, who allegedly exercised significant control over the team and could order CC to hire and retain members of it. After Papa reported that an unauthorized person had entered Deutsche Bank’s technology rooms and accessed a CC laptop connected to Deutsche Bank’s network, Papa was suspended and later fired by CC at the direction of Deutsche Bank, including Senatore.

CC and the Deutsche Bank defendants removed the case to federal court, asserting diversity jurisdiction. Papa and Senatore were both residents of New Jersey. Papa moved to remand, meaning to return the case to state court, arguing that Senatore’s presence prevented complete diversity. The defendants argued that Senatore had been fraudulently joined—that is, added without a genuine claim against him to defeat federal jurisdiction.

Analysis

The court explained that the defendants had the burden to establish federal jurisdiction and faced a heavy burden to prove fraudulent joinder. The court could disregard Senatore’s citizenship only if there was no possibility that Papa could assert a claim against him in state court, with factual and legal uncertainties resolved in Papa’s favor.

The court examined Papa’s whistleblower-retaliation claim under New York Labor Law § 740. That law prohibits an employer from retaliating against an employee who reports conduct the employee reasonably believes violates the law or creates a substantial and specific danger to public health or safety. The court noted that New York uses an “economic reality” test to determine whether an individual qualifies as an employer, focusing especially on the person’s power to control the workers.

The court found that Papa’s allegations provided a possible basis for treating Senatore as his employer under that test. Papa alleged that Senatore directly supervised him, controlled the IT services delivered to Deutsche Bank, could cause CC to hire and retain team members, and participated in directing Papa’s termination after his report. The court also found that Papa alleged enough facts to support a reasonable belief that the security breach involved illegal conduct, even though he did not identify the precise law he believed had been violated.

Because the defendants did not show that Papa’s whistleblower claim against Senatore had no possibility of surviving in state court, they did not prove fraudulent joinder. Senatore’s presence therefore defeated diversity jurisdiction. The court did not decide the ultimate merits of Papa’s claims.

Disposition

The court granted Papa’s June 4 motion to remand. It directed the Clerk of Court to remand the action to the New York State Supreme Court, County of New York.

The court denied Papa’s request for costs and attorney’s fees under 28 U.S.C. § 1447(c). It determined that the defendants had an objectively reasonable basis for seeking removal. The opinion does not rule on the defendants’ separate motions to compel arbitration or, alternatively, dismiss under Rule 12(b)(6); those motions were still scheduled for later submission.