Tom Richardson v. Costco Wholesale Corporation, et al.

Background

Tom Richardson alleged that he suffered an injury at a Costco location in South San Francisco. He sued three defendants in state court: Costco Wholesale Corporation, which the order identifies as a Washington State corporation; Eddie Bello, a Costco employee who resides in California; and Beth Monroe, another Costco employee who resides in California. Richardson asserted claims for general negligence and premises liability.

The defendants removed the case to federal court based on diversity jurisdiction. Richardson moved to remand, arguing primarily that Bello and Monroe were California citizens and therefore defeated diversity between the parties.

Fraudulent-joinder issue

Costco did not dispute that Bello and Monroe were California residents. Instead, it argued that their citizenship should be disregarded because they had been fraudulently joined. Fraudulent joinder is a jurisdictional argument that a plaintiff either misstated jurisdictional facts or cannot establish a claim against a nondiverse defendant in state court.

Costco relied on the second form of that argument and had the burden to show that Richardson could not possibly establish a claim against Bello or Monroe. The court stated that the case had to be remanded if there was any possibility that a state court would find Richardson had stated a cause of action against either employee.

Court’s analysis

Richardson alleged generally that each defendant, including Monroe, maintained, managed, and controlled the Costco premises in a way that created an unreasonable risk of harm. He also alleged that each defendant knew, or should have known through reasonable diligence, about the condition of the premises and failed to repair it, protect against it, or warn him.

Costco submitted a declaration stating that Monroe did not work at the South San Francisco warehouse on the day of the incident because it was her day off. Costco argued that she therefore was not in control of the building, had no responsibilities there, and could not have known about the dangerous condition.

The court found that neither side had provided evidence about Monroe’s specific employment position during the period before the incident. It therefore remained possible that Monroe’s role allowed her to maintain, manage, or control the premises in a way that created an unreasonable risk of harm, even though the injury occurred on her day off. The court concluded that Richardson’s allegations and Costco’s evidence did not eliminate that possibility.

Disposition

The court held that Costco had not shown Monroe was fraudulently joined. Monroe’s California citizenship therefore counted for diversity purposes and destroyed diversity jurisdiction. The court granted Richardson’s motion to remand and remanded the case to the Superior Court for the County of San Mateo.

The order did not evaluate whether Bello was fraudulently joined.