Bhagwandin v. Xyphos Biosciences, Inc.
- Jacquelyn Corley
- 3:22-cv-02818
- U.S. District Court · Northern District of California
- 3
In Bhagwandin v. Xyphos Biosciences, Inc., Judge Corley ordered the defendant to explain why the case should not return to state court for lack of jurisdiction.
The order affects Vikash Bhagwandin and Xyphos Biosciences, Inc.; Xyphos was required to explain why the case should remain in federal court, while the case’s location remained unresolved.
What happened
In Bhagwandin v. Xyphos Biosciences, Inc., the plaintiff sued his former employer in state court under California law, claiming retaliation for reporting suspected violations of federal drug regulations and wrongful termination.
The defendant moved to dismiss after removing the case to federal court, arguing that the claims raised an important federal question. The court found that the retaliation claim did not necessarily depend on whether federal law was actually violated, because California law protects an employee’s reasonable belief even if that belief is mistaken.
Judge Corley vacated the scheduled hearing and ordered the defendant to explain in writing why the case should not be sent back to state court for lack of federal jurisdiction. The order did not decide the motion to dismiss or remand the case.
The detailed version
- Bhagwandin v. Xyphos Biosciences, Inc. · No. 3:22-cv-02818
- Jacquelyn Corley
- June 23, 2022
Background
Vikash Bhagwandin sued Xyphos Biosciences, Inc., described in the opinion as his former employer, in San Mateo County Superior Court. He asserted two California-law claims: retaliation under California Labor Code section 1102.5 and wrongful termination in violation of public policy. The complaint alleged that Xyphos retaliated against him after he reported conduct he reasonably believed violated regulations under the federal Food, Drug, and Cosmetic Act.
Xyphos removed the case to federal court, claiming that the federal court had federal-question jurisdiction because deciding the state-law claims would necessarily and substantially depend on federal law. Xyphos also filed a motion to dismiss.
Jurisdiction Analysis
The court explained that federal courts must independently determine whether they have subject-matter jurisdiction, meaning legal authority to hear the case. A federal question generally must appear on the face of the plaintiff’s properly pleaded complaint. Federal jurisdiction over a state-law claim may exist when the claim necessarily raises an actually disputed and substantial federal issue that can be resolved in federal court without disrupting the balance between federal and state authority.
The court rejected the apparent basis for federal-question jurisdiction. California Labor Code section 1102.5 protects an employee who discloses a reasonable suspicion of illegal activity. The employee does not have to prove that the reported activity was actually illegal. Therefore, Bhagwandin could prevail even if his belief that the conduct violated the Food, Drug, and Cosmetic Act was mistaken and the conduct was lawful. The federal law was consequently not necessarily raised or disputed by the state-law claims.
The court also stated that no other basis for federal-question jurisdiction, or for diversity jurisdiction, was apparent from the complaint.
Order
The court vacated the June 30, 2022 hearing on the motion to dismiss and ordered Xyphos to show cause in writing by June 28, 2022, why the case should not be remanded to state court for lack of subject-matter jurisdiction. The order did not itself remand the case and did not rule on the motion to dismiss.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.