Spall v. Stryker Corporation
- Edward Chen
- 3:21-cv-04292
- U.S. District Court · Northern District of California
- 5
In Spall v. Stryker Corporation, Judge Chen denied remand because Scott Courts was fraudulently joined and diversity jurisdiction existed without him.
Joanna Spall’s request to return the case to state court was denied, and Scott Courts was dismissed from the action; the case remained in federal court against Stryker Corporation.
What happened
In Spall v. Stryker Corporation, Joanna Spall sued Stryker Corporation and Scott Courts under California’s Fair Employment and Housing Act, alleging sexual harassment and retaliation. Stryker removed the case from state court to federal court, and Spall asked the court to send it back.
The court decided that Spall had not properly completed the required administrative process for her claims against Courts. Her verified complaint to the Department of Fair Employment and Housing came more than one year after the alleged harassment ended, and her earlier intake form did not replace the required verified complaint under the law then in effect. The court therefore found that Courts had been fraudulently joined for purposes of federal jurisdiction.
The court denied Spall’s motion to remand and dismissed Courts from the action. Judge Edward M. Chen concluded that, without Courts, Spall and Stryker were citizens of different states and the federal court could exercise diversity jurisdiction.
The detailed version
- Spall v. Stryker Corporation · No. 3:21-cv-04292
- Edward Chen
- Aug. 26, 2021
Background
Joanna Spall alleged that Scott Courts sexually harassed and retaliated against her from August 2017 through November 2018 while she worked for Stryker Corporation. The opinion identifies Spall and Courts as California residents and Stryker as a Michigan corporation. Spall filed several claims under California’s Fair Employment and Housing Act in Alameda County Superior Court. Stryker removed the case to federal court based on diversity jurisdiction, which generally applies when the parties are citizens of different states and more than $75,000 is at stake.
Spall moved to remand, meaning she asked the federal court to return the case to state court. She argued that Courts’ presence defeated complete diversity because he and Spall were both California residents.
Fraudulent Joinder and Administrative Exhaustion
The court explained that a nondiverse defendant does not defeat diversity jurisdiction if that defendant was fraudulently joined. In this context, fraudulent joinder is a legal term describing a situation in which a plaintiff cannot establish a state-law claim against the nondiverse defendant; it does not necessarily imply an intent to deceive. The removing defendant bears a high burden to show that there is no possibility the plaintiff could establish a claim against that defendant under state law.
The court focused on whether Spall had exhausted the administrative remedies required before bringing a Fair Employment and Housing Act lawsuit. The court stated that the applicable law required filing a verified written complaint with the Department of Fair Employment and Housing within the relevant deadline and obtaining a notice of the right to sue.
Spall submitted an intake form on September 30, 2019, but did not file her verified complaint until February 6, 2020. Stryker argued that the verified complaint was filed more than one year after the alleged harassment ended in November 2018. Spall argued that the earlier intake form satisfied the deadline.
The court rejected that argument. Relying on California authority and related federal decisions, it held that an intake form or other unverified communication did not substitute for the required verified complaint. The court noted that California had amended the statute effective January 1, 2020, to provide that filing an intake form could relate back to the later verified complaint. But the court stated that this amendment took effect after the one-year deadline for Spall’s verified complaint and that, under the amended law, her claims against Courts would likely have been properly exhausted.
Disposition
The court concluded that Stryker met its burden to show that Spall’s claims against Courts had never been exhausted and were barred. It therefore found that Courts was fraudulently joined. With Courts removed from the case, the court found complete diversity between Spall and Stryker and held that federal diversity jurisdiction was proper.
The court denied Spall’s motion to remand and dismissed Courts from the action. The order stated that it disposed of Docket No. 12.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.